Out came the bunting in Leeds in April when Massimo Cellino purchased the club from outgoing (well basically at that point absent) GFH Capital. The Football League for all their input and general stalling had their decision to bar him from being a Director of the club overturned, and it was all systems go.
Well not quite it seems.
Sure Cellino and his family have set up shop in LS11, Edoardo and Ercole are now directors of Leeds, along with Massimo’s accountant Daniel Arty. He’s brought in Benito Carbone as a consultant. But to be frank Leeds United is either a Journalists wet dream right now – or their worst nightmare. Daily, something new comes out of the club, perhaps sometimes hourly, none of the news coming out though is about the players we might be adding to the squad, pre season or our Manager’s future.
As Carbone put it last week they are focusing on the economic dimension right now.
To summarise as best we can..
Cellino was frank in his exchanges with the Leeds United Supporters trust when he met them now 2 weeks ago. The club – nett – is losing £1m per month. He was (and we presume remains) concerned about the wage bill at Elland Road versus income.
Ken Bates messed that up by mortgaging season ticket income for 2 seasons to Ticketus, GFH Capital it seems didn’t really help matters much by borrowing sums to plug up that hole. Sums which are repayable in some cases to either themselves or their associated businesses, namely what they put in they were only ever going to get back – in addition to a sale price.
Winding up petitions have been an issue, HMRC, Andrew Flowers and Sports Capital have all had these filed against Leeds United. Cellino has settled all bar one (the latter). The nett effect of that challenge sadly has been the freezing of the clubs main bank account. Cellino seems well within his rights to challenge the winding up petition. Due or not, he cuts an increasingly frustrated figure as he faces up to a complete mess at Elland Road. He seems to have had little in the way of forbearance from the former owners or their associates as he tries to accomplish this. Certainly an opportunistic air surrounds the latter winding up petition.
Cellino has had to carry out a full business structure review at Leeds, and has asked questions which quite frankly none of us really want to face up to. Can we afford to run the academy? Can we afford to sign new players? On the face of it – no. Not if we carry on as we have before.
In the similarly dark days of Ken Bates lest we forget, this was the structure put in place post-administration. Yes that’s right, this came from a clean slate 7 years ago! With our major structural debts wiped out!
In some respects the apparent financial chaos at Leeds is the answer to the question many of us asked during Bates’ tenure, namely – where has all the money gone?
For Cellino to consider redundancies on the scale he has at Leeds and to challenge the amounts of rent we pay on Elland Road and Thorp Arch is telling. He has moved from I will buy Elland Road back next week to not being allowed to buy it from the nebulous Teak Holdings. Lesser men would by now have either asked for help from outside investors or else put the club back up for sale. But Cellino really is up to his neck in it now, before he can even consider selling this Vauxhall Viva, hes got to put a new engine in it, wheels, tyres, seats.. You get the picture.
In addition to all of this its widely reported today that he has in principle agreed to sell Cagliari to a group of Americans for a reported £67m (subject to a planning permission being granted for the Club’s new stadium). He’s been very clear already though. That money is not a green light for Leeds United to behave like the proverbial drunken lottery winner, the structure at the club has to be fit for purpose, lean and deliver tangible value. All things that GFH Capital promised.
The backdrop to much of these machinations is the ongoing presence of GFH Capital and IIB on the board at Leeds United. As 25% stakeholders between them, and with Salah Nooruddin still Chairman they retain an active voice in the running of the club. Cellino’s assertions over their running and financing of the club is hardly likely to sit well though with them. If the press are to be believed Salem Patel and Nooruddin have been absent from Elland Road for several months. Nooruddin apparently does intend to return to Elland Road, but oh to be a fly on the wall at that first board meeting..
But with a club allegedly earning £100k a day but spending £200k where do transfers come into it?
Leeds have shed c£3m-£4m of wages with the release of Varney, Brown, Pugh, Diouf and Ashdown, they’ve also released the likes of the Turners, Tiesse, Ariyibi and Lenighan from their books too.
The likely upcoming sales of the likes of Peltier, Kenny, Morison and Norris will only make that number greater, but they are not the answer long term to our financial difficulties.
It is all too visible that Leeds have simply not moved in the transfer market yet. With a frozen bank account, and an inability to sell season tickets online that task looks all the harder. Just how on earth did the club get into such a mess?
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The real risk here is open season on our squad. With it visible to all and sundry that Leeds need cash the offers will surely come in for the likes of Byram, McCormack, Murphy, Mowatt, Smith, Lees, Pearce and White. And to be honest if things really are that bad – do Leeds really have much of an option but to consider those offers?
In that situation you really are talking about avoiding administration as priority one, then avoiding relegation as issue 2 – and that’s before the season has even kicked off!
The only revelations around the football side of matters seems to be Cellinos insistence on the players observing their 25 day annual holiday entitlement and returning to Elland Road on 2nd June for pre season, that and the temporary closure of Thorp Arch. The former issue according to the Daily Star is to commence a week long Boot Camp to improve the fitness of the squad, the latter one borne out of necessity as we cannot afford to run the place according to Cellino.
Neither will sit well with McDermott it seems. He has become something of a Zen-Master in the face of unreasonable behaviour in the last 12 months. Publicly questioned for going on holiday at the end of the season by his new boss (when apparently he was visiting his sick mother in hospital) he has apparently only communicated in writing with our new president. His nose rubbed in it as it appeared at least that the retained and released list was completed by Redfearn, Carbone and Cellino in his absence, one wonders just how long McDermott can continue and that does little for the club in terms of adopting a proper transfer policy. Whether Luke Dowling? Seemingly in limbo for over 8 months now, it appears the Sporting Director of Cagliari may well be on his way to Leeds (according to the Italian Press) to arrange transfers. McDermotts careful planning and transfer targets seem to be near-immaterial – so where does that leave him with this squad?
This may well be one of our least well planned pre seasons. A root and branch review of Leeds United may well be overdue, but we appear as a club to be lurching broken into the next season, reminiscent of the period after losing the play off final in 2006 to Watford. All funds had been put in place to get us back to the PL, when that didn’t work it was plan B, push out Blackwell, don’t back him in the transfer market and get Wise and Poyet in as quickly as possible. The net result was of course catastrophic and is a lesson to all chairman that they are best served fixing the finances, and managing their managers – not trying to manage the football, something in fairness Ken Bates didn’t repeat.
It may well be that Leeds do start bringing in new players in June and July, and that some further outgoings take place, but it’s essential now that Leeds do something short to medium term. Staying in the Championship isn’t as easy as just turning up, possibly the most competitive of all the domestic leagues it is critical that Leeds can compete. Blending youth with what remains of experience in our team is a start, but Leeds still lack that match winner we’ve talked about so often, and still carry too many of the Warnock side. Worrying times for Leeds fans and players.
Reporter – Matthew Brown – Bolton