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).