Leeds United: 2012 Report; Debts Grow into Millions, Problematic for Future?; Sale to GFH Capital Needed?

We’ve already talked about the situation surrounding Leeds’s finances before: to put it simply, Leeds United was not as hunky dory financially as Ken Bates would like to have people believe. The financial reports for the year have been published, and it shows that had the sale to GFH Capital not gone through, things would have got increasingly worse:

Leeds City Holdings, the parent company, lost £3m, a not insignificant sum.

The football club itself, ‘Leeds United Football Club’, lost £2.2m before player trading. As we have often stated, Leeds were, under Ken Bates, reliant on a model revolving around the sale of the likes of Gradel, Snodgrass et al. at a profit, putting managers in an awfully difficult situation where budgets were repeatedly slashed. So where the sale of Howson etc. was supposedly inevitable, once Premier League interest came, this is not the case. Leeds United under Ken Bates NEEDED to sell the crown jewels last year, and did so.

Leeds United Media and Yorkshire Radio lost £122k between them (the latter losing a whopping £100,000). Keeping things in-house certainly working for the best, eh Ken?

The Centenary Pavilion, one of Leeds’s efforts at diversifying income away from match-days, lost £233,000. It is alright having the best conference facilities between Wetherby and Sheffield, but it doesn’t matter when no one is there to fill them.

The group lost £536,000 overall, a massive drop from the £2,988,000 profit that was made in 2011. Is this much of a surprise, with attendances falling and the club losing masses of money in merchandise due to an increasingly embittered fan base?

Furthermore, the club entered into an agreement on 7th of July 2011 where it sold “£5 0m of season tickets” for the 2012/13 season and the 2013/14 season to Ticketus 2 LLP. Ticketus are, of course, infamous for their role in the Rangers downfall. It must be assumed that the figure is five, and not fifty, otherwise the situation is worse than thought. This was used to fund the East Stand development, which, whilst nice and all, surely won’t bring in £5m over the next two seasons to service this debt?

Preference shares worth £4m upon a “change in control” were sold to Lutonville Holdings Limited on the 21st of December 2011.

Leeds City Holding closed with a debt increase from £1.3m to a whopping FIVE MILLION, TWO HUNDRED THOUSAND POUNDS. Ken Bates, as much as he liked to delude everyone, did not leave Leeds United debt free.

Was the sale to GFH Capital an unmissable inevitability? The reality is Ken’s regime could probably not sustain itself in the face of such financial issues.

Follow Amitai Winehouse on Twitter (@awinehouse1).


16 thoughts on “Leeds United: 2012 Report; Debts Grow into Millions, Problematic for Future?; Sale to GFH Capital Needed?”


  2. I would have more confidence in the blog if it actually contained some substance rather than just bare statistics. The East Stand development has created 100’s of seats at between £2k and £12k per season, probably more than covering the borrowings, creating long term earnings.
    How much of the pavilion loss was due to the development costs there.
    Yes KB has driven a lot of fans away and that was starting to hurt.
    How much of the development is sustainable investment and how much of the blog is the usual bias?

  3. Well it seems that no matter how you interpret the finance, things are not good. It is no wonder that GFH can’t go out and spend a packet. It seems that they have to balance the books first? Perhaps the agreement included Ken paying off some of the debts, but that seems unlikely. So a slow build up it will be, but that is better than bust again! Lets hope that we get one or two decent signings in and start to develop a base to build from. Looks as though it is not going to happen this year, so more turmoil and up heaval over the summer and start from scratch. That is what it looks like! Lets just hope that David Haigh has the where-with-all to sort things out!

  4. What did GFH pay a reported 52m for exactly? You can’t tell me they didn’t know the state of the club finances after 7 months due diligence and they certainly must have known there were no assets.

    Also, if the club stay in the Championship GFH lose money on their investment which is a possibility they don’t seem too concerned about. Why aren’t they investing in the playing squad to try and get up. Would a further investment of 5mill plus salaries break them after spending 52mill on nothing.

    Given the above, I’d like to borrow a few mill from GFH.

  5. Sorry Normanbitesyourlegs but you appear to miss the point, the £600 seats are not full and even in the Prem they are only likely to be full 3 or 4 times a season. The Prawn Sandwich Brigade fill the expensive seats at £2k to £12k ( probably averaging £4k) most weeks bringing in huge amounts of money. My comments were about the total lack of substance to the financial comments. if you work on break even finances and then spend £7 million on a player (I wish) you have made a £7 million loss. What is not mentioned when the finances are presented with a bias like this is that you have a £7 million asset.

  6. Lies, damn lies and statistics. KB was not the saviour of Leeds. He doesn’t even like Leeds. He’s in it for himself and nothing more.

  7. Ken Bates buys the club while in League1 and carrying £20m of debt. Sells the club in the Championship with £5m worth of debt. Not sure how this could be construed as anything other than a successful tenure?

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