The Leeds Thread

[Glasgow Loon]

All packed up ready for another saturday to wednesday jaunt to yorkshire.

Hopefully the football will be better than the recent fare we have seen but given the player only got patial payment of their wages am not going to hold my breathe.

[Glasgow Loon]

Well it seems like Cellino is going to be the new owner as he wins appeal to the Independent QC.

I hope the FL dont take it to the high court and we are left to get on with it.

All 35 pages of the judgement are in the link below:-

http://www.mishcon.com/assets/managed/docs/downloads/doc_2742/cellino_v__fl_ltd_pcc_decision.pdf

[repeat_offender]

All packed up ready for another saturday to wednesday jaunt to yorkshire.

Hopefully the football will be better than the recent fare we have seen but given the player only got patial payment of their wages am not going to hold my breathe.

It's bad enough travelling 15 minutes up the road to watch some of the dire performances we've endured since Christmas, commuting from Scotland quite another.

Hats off to you.

Edited April 7, 2014 by repeat_offender

[Glasgow Loon]

Well at long last we have a new owner, just need the FL to ratify it.

Lets hope it also kicks the players into gear starting at watford tonight.

Have to admit the last trip was fine apart from the football but thats what you get following any team the good and the bad and boy have we been bad.

[repeat_offender]

Well at long last we have a new owner, just need the FL to ratify it.

Lets hope it also kicks the players into gear starting at watford tonight.

Have to admit the last trip was fine apart from the football but thats what you get following any team the good and the bad and boy have we been bad.

I have to say I wasn't surprised when I saw the result.

You'd hope the team would be able to get something out of Blackpool at home on Saturday but they way the team is performing at the moment nothing would surprise me.

DId you hear the WLR interviews with Cellino & Bates? Jaw dropping stuff right enough!

The latest breakdown of the clubs holding company accounts make grim reading (breakdown from the supporters trust).

Accounts here http://www.scribd.com/doc/217018247/Leeds-City-Holdings-Ltd-Report-and-Financial-Statement-Year-Ended-June-2013

Trust financial analysis of LUFC account 2013

FINANCE UPDATE - 2013

Now that the latest accounts (to June 2013) have finally landed we have undertaken a review and have the following summary for our members.

HEADLINES

- Turnover decreased by 8% from £31.1m to £28.6m (compared to 4% in 2011/12)

- Gate receipts decreased by 17% from £11.3m to £9.7m (compared to 12% in 2011/12) with average attendance down by 7.7% - perhaps reflecting lower ticket prices as a factor

- Staff costs to turnover ratio increased from 57% to 70% (51% in 2010/11)

- Overall admin costs increased from £9.8m to £13.3m (£8.6m in 2010/11)

- “Unknown” admin costs increased from £5.2m to £6.2m (£4.5m in 2010/11)

- Directors received £794k compared to £347k in 2011/12, with one director awarded a £440k bonus.

- Yorkshire Radio has had an impact of £1.5m on the loss in the year as LUFC have been forced to write off all the amounts they were owed by them.

- Profits from net player trading of £2.0m helped reduce the overall loss from £11.6m to £9.6m.

- The current debt stands at £24.7m compared to £14.6m on a like for like basis 1 year ago

- Money gained from the court case win against WYP (of £1m) was put towards clearing payments of the preference shares – controlled by Ken Bates

These accounts show the situation at Leeds United as at the end of June 2013 which was before the widely reported further funding that has been injected into the club by Cellino, so in all likelihood the debt has grown since.

Despite what has been claimed, GFH have actually invested nothing into Leeds United but have instead loaded further debt onto the club and managed to record the biggest annual loss since 2004 (the immediate post-Ridsdale era).

While Ken Bates and Shaun Harvey were in control for 50% of this period and undoubtedly laid the foundations for the performance in areas such as the decreased gate receipts, it is only during the second half of the year that we see the debt escalating at a pace, which would suggest that this is when the costs started to spiral. As we have stated in the past, it was always our view that performance was going to be worse in 2012/13 (had the old regime remained in place) than the season before it, but even we are shocked at just how dramatically it has deteriorated.

Summary of Leeds United Football Club Limited Numbers

Excluding Player Trading

2013 2012 Variance Variance £’000 £’000 £’000 % Turnover 28,568 31,080 (2,512) (8%) Cost of Sales (5,558) (5,582) (24) 0% Admin Exps (33,304) (27,672) (5,632) 20% Operating Profit/(Loss) (10,294) (2,174) (8,120) (374%) Staff Costs 20,004 17,828 2,176 12% Other Admin* 13,300 9,844 3,456 35% *Includes: Rent 1,893 1,861 32 2% Depreciation 1,477 1,193 284 24% Accountancy Fees 140 112 28 20% Other Known 3,570 1,444 2,126 148% Unknown 6,220 5,234 986 19%

Post Administration Figures for Leeds City Holdings (Excluding Player Trading)

2013

2012

2011

2010

2009

2008 £’000 £’000 £’000 £’000 £’000 £’000 Turnover 29,322 33,097 34,475 27,533 23,535 23,249 Cost of Sales (6,190) (6,559) (6,376) (5,883) (4.930) (4.166) Admin Exps (33,760) (29,557) (26,486) (22,789) (21,384) (18,217) Operating Profit/(Loss) (10,628) (3,019) 1,613 (1,139) (2,779) 866 14 months

Turnover

Turnover has steadily declined since its peak under the Bates Regime back in 2011/12 season, as some fans decided to vote with their feet in order to protest against the running of the club. This meant that we were always expecting a fall this season as GFH were tasked with trying to repair the relationship with the fans. Gate receipts fell 17% and account for £1.6m of the £8.1m increase in losses during the season. Unsurprisingly merchandising fell by a similar percentage (and added a further £875k to the deficit); the remainder of the Turnover items (TV revenue, Central distribution and Commercial activities) more or less netted out meaning that total decrease in Turnover accounted for £2.5m of the overall increase in losses.

Wages to Turnover

While turnover decreased, the badly needed investment in the playing squad did happen. However, the figures suggest that it was more of an investment in total number of playing staff rather than an increase in quality. The overall squad grew from 46 playing staff (including apprentices) to 58 during the year (a 26% increase). Overall wages increased by 12% in comparison; there was some reduction in other staff, but given that the largest part of the wage bill relates to Playing staff and management (which also increased from 17 to 20 people), it seems safe to assume that the average amount paid to the playing staff actually decreased.

While we have always called for an increase in the wages to turnover ratio, the method under which this has been achieved during the year in question is not really what we had in mind. With turnover down (by £2.5m) and the number of playing and management staff increasing dramatically (at an additional cost of £2.2m), the ratio went from 57% to 70%. It is highly unlikely that Leeds United will have the lowest ratio in the division anymore but, while the quantity side of this equation has been fulfilled, the quality of the additional spending does not seem to have noticeably improved. We would not call for this ratio to be exceeded next season (or beyond), in fact if anything it needs to decrease, but we would definitely suggest to the new management that a reduction in quantity and increase in quality needs to be the focus.

Costs of the Directors has increased dramatically which can largely be explained by the increase in number of Directors, as well as the significant bonus payment made to one of them (£440k).

Other Costs

It is this area where we have seen the most shocking situation. We have always maintained that the ‘other’ costs at Leeds United were excessive, therefore to see a £3.4m increase in these was deeply concerning. In terms of the increase, we can see that £1.5m of this relates to a one-off cost associated with the closure of Yorkshire Radio (where the debt owed to Leeds United by the radio station had to be written off), a further £0.6m relates to increased admin costs associated with player transfers and £0.3m relates to the legacy of Bates building works. The remaining £1m of additional costs is unknown, taking what was already a bewildering £5.2m figure up to £6.2m. Undoubtedly much of these are likely to be legal costs associated with the takeover but it seems any hope of light being shed on these unknown expenses under the regime of GFH has been disappointingly shattered.

We still believe this is an area Massimo Cellino can find savings in and hope that it will go some way to reducing future losses.

Cash

As we expected cash has been in short supply at Elland Road, and this became even more apparent with the recent reports of a wages crisis at the club. Given the huge increase in costs and the reduction in revenues this is no surprise, but it is obviously a situation that cannot be sustained. Just how close we came to another Administration event may never come to light but the accounts reflect a situation where the club was living a hand to mouth existence for some time and this situation would have had to come to a head but for the introduction of a new cash injection.

Group Companies

The Group situation is perhaps the one area where it appears that GFH took the painful decisions and acted correctly. Yorkshire Radio was closed down having made further losses (which impacted the football operations) and some consolidation appears to have occurred making the family a bit more manageable in size. However, the eternal promise made by Ken Bates regarding non matchday incomes has still yet to materialise as the combined efforts of the non footballing side of things resulted in a turnover of £754k and costs of £1.09m (an overall loss of £334k).

Debts

In six months GFH appear to have added a further £10m (net) to the debt left behind by Ken Bates, much of which is in the form of short term loans. The list below details the current situation regarding debts at the club.

Preference Share payment to Lutonville £0.1m Ticketus 2 LLP Loan Repayment £2.3m Compass £1.3m Brendale £11.3m Berrydale £2.0m Director Bonus £0.2m Sport Capital £1.8m Working Capital Shortfall £5.7m TOTAL DEBT £24.7m

If the contingent payment of £4.8m to the Administrators is included this figure increases to £29.5m (assuming we get promoted by 2018).

Conclusion

If we thought when we parted company with Ken Bates that things could not get any worse, that has quickly been dispelled by these numbers. This does not mean that Ken was in anyway better for the club, nor is he absolved from blame in our opinion. Many of the issues relate directly to the state of the club that he handed over (falling revenues, disgruntled fans) and the long term decisions he took (Yorkshire Radio and the building obsession), but what is clear is that GFH did not seem equipped to manage these situations and had no obvious plan to do it. They took over the club with no funding and have had to react to each cash crisis as it arose by finding loans as and where they could. It seems obvious why they needed so desperately to sell. However, perhaps the profitable running of the club was never a real concern, as the GFH financial statements appear to show that in spite of all this they have managed to make a profit out of this sorry state of affairs. GFH reported that they made a US$6m profit out of their holding in Leeds United by selling shares in the club (Leeds United Holdings) to strategic investors. Like Leeds United, those investors seem not to have been quite as fortunate as GFH in terms of profit as reports suggest the club has been sold to Massimo Cellino at a value nearer to what they originally paid.

As is always the case finances never tell the full story but, while GFH do not appear to be able to run a profitable club, they do seem to be able to make a profit out of a loss making enterprise.

[JakeSAFC]

Think it's time to say goodbye to egg

[7-2]

If Leeds go tits up with the new guy I hope the Football League sue the QC that overturned their decision for every penny he has. I'm sick of about every decision made in life these days ending up in the extremely lucrative hands of the legal profession when somebody doesn't get what they want.

[sergie's no1 fan]

I give it till Christmas before Leeds fans want this crook out the club.

Can't believe there were so many happy on twitter about it. Then again it was either him or Administration by the looks of it.

Complete shambles. First thing to happen in the summer will be to sell McCormack for 5-6 million.

[Glasgow Loon]

The Football League have confirmed that Massimo Cellino can take up his position as a director of Leeds United.

Following last week's successful appeal against the League's initial ruling, the game's governing body met on Thursday and have rubber stamped his ability to become a director of the club.

A Football League spokesman said: “At its meeting in London today, the Board of Directors of The Football League considered the outcome of the recent appeal by Massimo Cellino under the Owners’ and Directors’ Test.

“In making its original decision, the Board took the view that Mr Cellino’s recent conviction in Sardinia was for an act that ‘would reasonably be considered to be dishonest’ and that he was therefore subject to a disqualifying condition.

“In the current absence of detailed reasons for the conviction from the Sardinian Court and having taken into account the principles of Italian law, an independent QC reached a different conclusion.

"On this basis, Massimo Cellino is cleared to be a Director of Leeds United.”

Edited April 10, 2014 by WE ARE LEEDS

[JakeSAFC]

I give it till Christmas before Leeds fans want this crook out the club.

Can't believe there were so many happy on twitter about it. Then again it was either him or Administration by the looks of it.

Complete shambles. First thing to happen in the summer will be to sell McCormack for 5-6 million.

Cellino won't sell our best player

[Glasgow Loon]

Cellino won't sell our best player

There will be a big clear out and if there is an offer of £5-6m for McCormack he will go.

[Glasgow Loon]

Here's a list of whos contract runs out when:

June 2014

GK - Alex Cairns
GK - Jamie Ashdown
CB - Richard Bryan
CB - Ross Killock
RB - Lewis Turner
LB - Adam Drury
LB - Charlie Taylor
LB - Danny Pugh
CM - Michael Brown
CM - Nathan Turner
CM - Paul Green
CM - Simon Lenighan
WM - Gboly Ariyibi
FW - El Hadji Diouf
FW - Luke Varney

June 2015

GK - Eric Grimes
GK - Paddy Kenny
CB - Marius Žaliukas
RB - Lee Peltier
LB - Aidy White
LB - Stephen Warnock
CM - David Norris
CM - Michael Tonge
CM - Rodolph Austin
CM - Zac Thompson
FW - Dominic Poleon
FW - Lewis Walters
FW - Luke Parkin
FW - Matt Smith
FW - Noel Hunt

June 2016

CB - Jason Pearce
CB - Scott Wootton
CB - Tom Lees
RB - Sam Byram
CM - Chris Dawson
CM - Luke Murphy
FW - Robbie McDaid
FW - Steve Morison

June 2017

CM - Alex Mowatt
WM - Cameron Stewart
FW - Ross McCormack

[JakeSAFC]

There will be a big clear out and if there is an offer of £5-6m for McCormack he will go.

McCormack, Byram, Mowatt and Smith will not be sold imo

[repeat_offender]

Haigh walks, spy cameras in the boardroom and the bogs, WYP called in to investigate theft, never a dull moment at LS11 http://www.theguardian.com/football/2014/apr/11/leeds-united-managing-director-resigns-massimo-cellino-david-haigh

[Glasgow Loon]

A win at our bogey ground and hopefully sends Barnsley down as well.

Roll on monday another 5hr drive to ER and hopefully a 3rd win on the trot.

[sergie's no1 fan]

Perfect opportunity to get rid of deadwood like Brown. Contributes nothing. Try and offload as much shite as possible in the summer.

Hate to say it but I do think Brian McD isn't up to the job. His signings have turned out to be poor so far from what I can see.

Poisoned chalice though.

[Glasgow Loon]

A shambles of a line up how can you pick 4 central midfielders is beyond belief.

He has picked some poor team line ups this season and his time is up am afraid.

Roll on the summer clear out begining with Mcd.

[TheScarf]

McCormack to Leicester is one I got told about last night from a friend based in Leeds. Could be a go'er. £5-6 Million no bother.

[JakeSAFC]

McCormack to Leicester is one I got told about last night from a friend based in Leeds. Could be a go'er. £5-6 Million no bother.

He won't leave, Cellino won't let him.

[repeat_offender]

He won't leave, Cellino won't let him.

Cellino gave that impression during his infamous WhiteLeedsRadio conversation with TNS, lets wait and see, the financial situation at Elland Road was dire make no mistake.

Cellino on the McCormack transfer (from whiteleedsradio interview, credit armchair white for the transcript)

MC “I worked there I said, no season ticket. Why [we have to rush?] Do the supporters get season ticket in February, its not fair. The season ticket you have to sell in May when they know which division we’re doing. When we’re going to tell them what we’re doing. When we’re going to buy back the stadium because the stadium belongs to Leeds, not to the fuc***g people that ‘s threatening our stadium. Then we start the season ticket. In May. I no, I never did season ticket in February. What we should do that? And they told me, “because we don’t have the money to pay wages”, I’say ‘I pay the wages’ but we don’t pay the season ticket, OK?

They was going to selling McCormack to Cardiff, for £4,000,000. I stopped them, I said I don’t sell. A nice player, we shouldn’t sell.[unintel] … only one boot [unintel] we’re selling that. .

TNS “yeah”

MC “We’re selling it”

TNS “So you stopp….”

[crosstalk]

TNS “You stopped the transfer?”

MC “Yes. Call McCormack. Ross. I tell him. The 31st of January, he came in Leeds, OK, 5 o’clock in the afternoon. He came to talk with me, to ask me to be transferred to Cardiff for four million pound. I told him, “Get the fu*k out of here, I don’t sell anyone,. Go to train yourself”

TNS {laughs} Go on Massimo, good man. Good man.

MC {excitably] Its all good. Its all good. [unintel] Its like if you have a bar, [or a pub?] and you sell your refrigerator to buy the beer. Where you fuc***g put the beer if you don’t own a refrigerator any more? [unintel] the assets of the team are the players, not the employees, not David Haigh*** If you have the good player [unintel] All the wages that they pay, that’s investment, that’s [unintel] because they’re the guys that make us laugh, that make us enjoy. The players, the good ones. Why you have to… I sell the bad ones, the good ones, I keep.

He's going to need deep pockets to dig us out of current financial mess.

Edited April 23, 2014 by repeat_offender