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Leeds finances

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moomba

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Expect to announce an annual loss of between £40-45 million later this week. Debts reportedly remain at around £80 million. Hard to see a way out now, they are fast running out of assets to sell, and you would expect any half decent player they have to be on the way out cheaply within the next 12 months.

Relegation is a distinct possibility, and administration will follow shortly after. With points penalties now being imposed on broke clubs, it could be a long stay in the Nationwide. And will an administrator have the same reluctance to sell Smith, Lennon, Milner etc as a board member would.

Not the end of the world for the club if it all goes wrong but it is going to be a long long time (if ever) before Leeds reach the heights they were at a few years ago. Shinners will be so disappointed.

Moomba
 
Start by selling off Smith, Robinson, Viduka and Mills (making it permanent) and start giving some guys like Richardson, McMaster and Killgallon a proper go. Then get rid of Monkey Man and see how we go then...
 
That's it.
Guess it is time to face reality.
Can't put it off any longer...

We will have to put Jamie McMaster on the market. :(
I was afraid this day would come.

I will start the bidding war at 35 million?
 
We're ****ed, the main priority for the club should be survival. If that means 10 years in the lower divisions so be it, as long as we are alive there's always a chance of getting back up there eventually.
 

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Originally posted by year of the roo
. Then get rid of Monkey Man and see how we go then...
Click to expand...

What the hell?
What would that achieve?
We just got rid of TV two seconds ago.

IT IS NOT THE MANAGER, IT IS THE CATTLE.

It is a simple fact of any sport. A great coach can't bring glory unless you have the team to do it. The board can't afford to buy decent players so basically we are stuffed and Reid can't do a damn thing.

Don't blame Reid.
Sacking him will do nothing.
 
Yeah, lets sack the manager and bring someone new in, that would make it 4 in just over a year. That is just stupid and isn't conducive with success on field.

We had no luck yesterday but we are still at a very early stage in the league and only about one game from midtable. A little early to worry.
 
Frankly Leeds are in deep deep crap and I fear we are going to be relegated. Can't see any way we can stay up unless a huge turn around happens.

Looks like It will be Nationwide next year for LUFC, so sadly I'll probably have to support Leeds in hte Nationwide league, and I guess I'll probably follow Fulham in the EPL as well until Leeds get back.
 
Originally posted by bogan_blue
Frankly Leeds are in deep deep crap and I fear we are going to be relegated. Can't see any way we can stay up unless a huge turn around happens.

Looks like It will be Nationwide next year for LUFC, so sadly I'll probably have to support Leeds in hte Nationwide league, and I guess I'll probably follow Fulham in the EPL as well until Leeds get back.
Click to expand...

Chin up Leeds fans - Karl's about to jump ship - you are bound for Europe after all.
 
Well I was slightly out, they have announced a loss of just under £50 million. A couple of interesting points to have come out of this morning:

- Apparently Viduka was brought of Celtic on a lease type deal, where Leeds paid £6 million, but are only entitled to a third of his future transfer fees (presumably the rest goes to Viduka or Celtic)

- A Middle Eastern businessman will be in the corwd for the United game tonight, I think the board are hanging their hats on him being a middle eastern football investor in the next few months.

- I heard an interview with Prof McKenzie, he reckons that their will be no sales resulting from this loss, and that the club are currently running on a break even basis (I find this very hard to believe). Can't say he impressed me in the interview overall.

Anyway, I am sure more will come out over the next day or so.

Moomba
 
Here is what I managed to got off BBC Sport

Leeds losses: facts and figures
All the key details from Leeds' 2003 results, as well as a rundown of the recent high-profile departures.

Mired in debt:

For the year ended 30 June 2003, Leeds United plc made pre-tax losses of £49.5m (compared to £33.9m in 2001/02) and an operating loss (excluding player transfers) of £25.4m .

What's gone DOWN
- Turnover fell 21% to £64 million, compared to £81.5m the previous year.
- Average Premiership attendances were 39,128 in the 12 months up to 30 June 30 this year, from 39,752.
- Season ticket sales dropped from 27,132 to 26,136.
- Gate receipts dropped to £10.7m, a fall of £300,000.
- Television and broadcasting income fell by 36% to £21.9m from £34.2m. TV revenue from cup games fell £4.6m.
- Merchandising fell by 9% to £7.4m from £8.1m.
- Losses as a result of transfers fell, from £20.3m to £17m.
- Leeds United plc's tangible assets fell to just over £60m, compared to £109m a year earlier.

What's gone UP
- The wage bill rose £3m to £56.6m representing 88% of turnover compared to 66%.
- Administrative expenses before transfers increased by £4.7m to £76.4m.
- Closing net debt rose £100,000 to £78m.

The Elland Road exodus:

PLAYERS

Rio Ferdinand
(Signed November 2000, £18m; sold July 2002, £30m)
The sale of England defender Ferdinand to Manchester United was on the cards before Terry Venables took over. Neither then manager Terry Venables nor then chairman Peter Ridsdale wanted to sell Ferdinand but debts forced their hand.

Robbie Keane
(Signed May 2001, £12m; sold August 2002, £7m)
Securing his services cost Leeds £12m, but just 15 months later they were prepared to cash in to ease the financial problems caused by failure to qualify for the Champions League. Tottenham snapped him up for just £7m.

Lee Bowyer
(Signed July 1996, £2.8m; sold January 2003, £100,000)
With just a season left on his contract and the player seemingly unwilling to sign a new one, Leeds did their best to sell Bowyer last summer. A £9m fee was agreed with Liverpool, but the move broke down after Reds boss Gerard Houllier expressed doubt about the players' commitment. They had to settle for a nominal fee soon after from West Ham - and Bowyer then moved to Newcastle on a free at the end of the season.

Olivier Dacourt
(Signed May 2000, £7.2m; sold June 2003, £3.5m)
The Frenchman's relationship with Terry Venables was less than harmonious with the player clearly keen to leave Elland Road. He joined Roma initially on loan before making the move permanent in the summer.

Robbie Fowler
(Signed November 2001, £11m, sold January 2003, £6m)
The former Liverpool striker was hampered by injury during his brief spell at Elland Road. When Manchester City came in for him the board felt they could not turn down the £6m on offer, especially considering the depressed state of the transfer market.

Jonathan Woodgate
(Trainee, sold January 2003, £9m)
Described as Leeds' crown jewel, Woodgate was seen as the pivotal figure around which the team would be built after Ferdinand's departure. However, his controversial sale to Newcastle proved too much for many fans, who began protesting for the resignation of the board and chairman Peter Ridsdale in particular.

Harry Kewell
(Signed December 1995, trainee; sold July 2003, £5m)
Kewell made it clear he wanted out after the end of the season, and the £2m pay-off he and his agent received meant the Elland Road club effectively only received £3m from Liverpool when he moved to Anfield.

OTHER STAFF

The one-off compensation costs involved in changing first-team management and implementing other redundancies totalled £7.2m for the 12 months to 30 June.

David O'Leary
Left in acrimonious circumstances in June 2002, eventually agreeing a hefty compensation settlement believed to be in the region of £4m, the final instalment of which was paid in this financial year.

Terry Venables
Venables was brought in as manager by Peter Ridsdale to replace O'Leary. But he struggled to get results on the pitch, and fell out with the board off it as more players were sold off. Eventually left on 21 March, although he too received a hefty pay-off.

Peter Ridsdale
The chairman who 'lived the dream', awarding himself a salary in the region of £600,000 in 2001, but left a nightmare in his wake when he eventually resigned on 17 April 2003.

Six months to save Leeds
By Stuart Roach

Trevor Birch may have six months to save Leeds United from ruin. The former Chelsea chief executive steps aboard amid turbulent waters, aiming to keep afloat the ship Professor John McKenzie has steadied in his six months in charge.

At first glance, with the club £78m in debt and having just posted record losses of nearly £50m, not even Noah could prevent Leeds plc from sinking without a trace. But McKenzie's initial actions have at least laid the foundations for Birch's survival plan to be put into place.

Birch takes over on 1 November and will be judged, at least initially, on the next set of accounts due for release in March. By then, Leeds fans will be closer to seeing whether McKenzie's new regime is having an affect on the mess left behind by Peter Ridsdale's disastrous stewardship.

And Leeds' on-the-pitch plight will also be clearer. Relegation would cost an estimated £12m in lost television rights and gate receipts - and that would be the bale of straw to break Leeds' financial back. Premiership survival, coupled with McKenzie and Birch's plans for the future, would give Leeds some hope.

Birch's first task will be to progress the three key survival elements put in place by McKenzie on his arrival on 1 April.

Trading at break-even levels:

The chairman claims to be close achieving the first aim and will be expecting Birch to finish the job he has started. On the face of it, selling players remains the most obvious way out. But complicated player purchases have tied Leeds in financial knots. The figures released on Tuesday showed that, despite the sales of players including Rio Ferdinand, Harry Kewell and Lee Bowyer in the accounting period, Leeds lost £17m in transfers and saw their wage bill rise by £3m.

Much of the reason for that financial quirk is that Leeds bought several players by securing loans to raise the money for their transfer fees. In the case of Robbie Fowler, that meant repaying an £11m loan when United only realised £5m in selling him to Manchester City. The club also continue to pay some of Fowler's wages and part of Danny Mills' salary during his loan spell at Middlesbrough, while McKenzie has revealed Mark Viduka was purchased on lease and that selling him would only realise a third of his £6m fee.

The wage bill was further increased by one-off redundancy payments of £7.2m, £5.7m of which was payable to former managers Terry Venables and David O'Leary and their coaching staff. The absence of those payments from the next balance sheet will be boosted by the £5m in wages those redundancies realise.

Further reducing that wage bill will be a major target for Birch, though selling more players will represent a major gamble against relegation. McKenzie insists further players will only be sold if they request a move - and if the price is right. Even then, a January transfer window sale would not show up in the next set of figures.

More realistic will be avoiding the long-term contracts thrown around like confetti by the previous regime, with O'Leary sitting
on a 10-year deal that cost £4m to break.

Restructure debt repayments:

Negotiating improved terms in respect of repaying their debts is crucial to the club's future. At present, Leeds need to pay close to £7m in interest on their debts every year. Servicing that debt pile is "slowly strangling" the club, according to football analyst Vinay Bedi at stockbrokers Brewn Dolphin.

Addressing the interest payments is the critical role of the new management team, with Birch working closely alongside finance director Neil Robson. That could mean renegotiating a longer period of repayment in order to make progress against their debt, rather than simply meeting it year on year.

Attract cash investors:

Possibly the tallest order for Birch will be attracting investors to throw their money into Leeds. Supporter Allan Leighton has pumped £4.4m into the club, a welcome contribution but a drop in the ocean of debt Leeds are currently floating on. McKenzie has hinted at more investment in the new year, though that would come too late to show in the annual financial report due for release in March.

Birch has worked as an accountant and a director at Chelsea, a club whose finances were in a mess similar to that of Leeds before the arrival of Roman Abramovich. But if McKenzie and financial consultants Ernst and Young have failed to attract major money in the last six months, then Birch may also struggle to do so.

While £4.4m is welcome, Leeds need more like £44m - or even £444m - to turn their finances around. Ironically, Leeds' best hope of a financial white knight would be another Abramovich. And, while McKenzie claims he is learning Japanese, Arabic and Russian just in case a suitor rides Leeds' way, Birch may be twitching at the thought of another sugar daddy arriving at his club. Birch was effectively demoted at Chelsea when Abramovich's arrival prompted a move for Manchester United chief executive Peter Kenyon.

At least this time Birch has the chance to prove his worth.
 

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Leeds are certainly not the only club to suffer from financial mismanagement, but along with Fiorentina are probably the highest profile such club.

In Fiorentina's case, though, it was a case of the club's president taking money from the club to cover his personal debts, and even when they sold their stars there wasn't enough cash to save them.

Another such case is Tirol Innsbruck, who won three Austrian titles in a row (2000-01-02) but then got refused a professional license due to lack of funds and were kicked down to the amateur regional third level. As it turned out, club management embezzled funds and there wasn't anything left in the bank.
 
Though it's been a problem in Italy for a long time, a lot of football's current financial problems can be traced back to the expansion of European competition in 1999. Clubs gambled on making the CL big time, and as a result many have big problems.

The problem in Italy, in particular, is that you have a large number of clubs who want to win at all costs and as such make such huge investments that failure on the field will mean failure off it. That fans over there can be impulsive and over-demanding doesn't help either.

In most European leagues, what usually happens to a club who goes bust is that they are re-formed and start again at a lower non-professional level. This has happened to clubs like Pisa, Ternana and Catania in Italy (all of whom were once in Serie A at different periods of time) but all three have worked their way back up the divisions. Same thing has happened to a number of clubs in Spain (Logrones, Merida and Real Oviedo) and Germany (Munich 1860 in the 80s and Dynamo Dresden in the 90s).
Belgium has seen a number of clubs go bankrupt- Aalst and KV Mechelen were sent down to the third division, Molenbeek and Lommel have been absorbed by other clubs and Harelbeke are apparently extinct.

Holland still has a division between amateur and professional leagues with the professional clubs (37 as of 2003/04) also having an amateur section or affiliate in addition to the 000s of amateur clubs. A club can only field a team in the two professional divisions if it has a license to do so, and if it goes bust then its license may be withdrawn.
 

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Originally posted by David Votoupal
Leeds are certainly not the only club to suffer from financial mismanagement, but along with Fiorentina are probably the highest profile such club.
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Real Madrid survive only due to their hold over the banks and the Madrid City Council.

Cut that off and they'd be bankrupt.
 
Originally posted by moomba


- A Middle Eastern businessman will be in the corwd for the United game tonight, I think the board are hanging their hats on him being a middle eastern football investor in the next few months.
Click to expand...

He was at the Newcastle game also, supposedly a fan for 25 years. Leeds Martyrs Brigade has a ring to it, or perhaps Leedsbollah?
 
Wasn't Viduka on a similar deal when he was at Croatia Zagreb? I'm sure when he signed for Celtic the Melbourne Knights got 20% of the transfer fee.

I've heard of paying extra if a player reaches international status or a certain number of games, but the Viduka situation seems pretty rare.

Leeds are going down. :D
 
Originally posted by David Votoupal
Leeds are certainly not the only club to suffer from financial mismanagement, but along with Fiorentina are probably the highest profile such club.

In Fiorentina's case, though, it was a case of the club's president taking money from the club to cover his personal debts, and even when they sold their stars there wasn't enough cash to save them.

Another such case is Tirol Innsbruck, who won three Austrian titles in a row (2000-01-02) but then got refused a professional license due to lack of funds and were kicked down to the amateur regional third level. As it turned out, club management embezzled funds and there wasn't anything left in the bank.
Click to expand...

That was tragic for the Innsbrucker. Basically the situation was similar to Fitzror's, but they were winning titles rather than being seller dwellers.

Fiorentina had to change its name to Florentia Viola to be allowed to play in Serie C. But apparently everyone missed them so much that they were controversially allowed back into Serie B.

In England wasn't Leicester in the same situation, amongst other clubs like Leyton Orient etc.

The worst cases of debts in normally cautious Germany are at FC Kaiserlautern. They had to go to the extent to sell the rights for the imminant sale of the highly overrated Miroslav Klose to the local lotto ageny so that they can try and attempt to refinance the refurbishments to their ground in time for World Cup 2006. They were taken over by Swiss financier Rene Jaeggi and did a miraculous job last year to catch up a multiple point gap to the "Nicht-Abstiegplaetzen" and remain in the 1st Buli. They were docked 3 points at the start of this season, which considering how East German Dynamo Dresden got pummeled a few years back is totally unfair. But the DFB know that the drop would probably kill FCK. And would endanger its stadium redevelopments. FCK are still around the drop zone. The DFB are ****ting themselves, looking at 2006.

JF
 

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