Leeds United fans have looked on in envy as the likes of Chelsea, Manchester City and even Notts County have been bought out by rich businessmen with the intention of investing hundreds of millions to take the club to prominence.

Watching on from afar, many of us have wondered why these billionaire investors continually overlook our own club. Leeds is a one-club city with a population of 770,000 people. The club itself has a massive fanbase, a Premier League stadium and top-class facilities. It should be the ideal candidate for the next wealthy investor. So why does it remain in the hands of Ken Bates and Forward Sports Fund?

Paul Hayward from the Observer sent the debate national when he asked why no one had yet come in for Leeds United after the League Cup match against Liverpool, and Paul Hay from the Yorkshire Evening Post has since attempted to answer the question himself.

Hay argues that the reason no one has yet to come in for Leeds is that they are unable to maximise their potential whilst the team is stuck in League One. He also notes that the financial complications of the club, such as the excessive asking price people were quoted when we were in administration and the fact we still don’t own Elland Road and Thorp Arch are likely off-putting.

However much I like Phil Hay – and for the record, I think he’s a great writer who does the club a great service by always representing us in a favourable light – I disagree with him completely about the financial complications being an issue. If a billionaire tycoon wanted to buy Leeds United, a few measly million wouldn’t put him off.

I do agree that whilst we’re stuck in League One, the clubs potential can’t be maximised and for any potential investor, this is likely to be off-putting as they probably want to see the team battling it out with Manchester United, Liverpool and Chelsea as soon as possible, but then this didn’t stop the takeover of Notts County.

Before the takeover of Notts County, I’d always argued that the reason Leeds United hadn’t yet been the target of a billionaire was the position we’re currently in. Billionaire’s are impatient and used to getting what they want immediately. To get a team capable of battling for honours in the top flight and capable of achieving Champions League qualification, it’d take at least five years in my opinion. When you can takeover Manchester City and do it in a fraction of the time, why bother?

Leeds United itself and the current ownership could be a problem too. For a start, the owners are represented by Ken Bates, who caused Roman Abramovich a lot of problems after he sold Chelsea. Roman’s history was constantly scrawled across the tabloids as his business dealings came to light. Every billionaire will have been ruthless to get what they want and they’ll all have skeletons in their closet. Taking over Leeds United will no doubt get people searching.

Finally, there’s the ever-illusive board. If no one can actually locate the owners of the club, then how would you go about buying it? I suppose this would be done via Ken Bates, who claims not to know who the owners of Forward Sports Fund are, but then it’s not like he’s never lied before.

So for me, it’s the complicated ownership combined with the impatience of the uber-rich. Maybe I’m wrong, and I’m sure there’s alternative views, but I do think someone will come in for Leeds United sooner or later. Maybe once we’ve been promoted and stabilised in the Championship, we’ll start to look like a more attractive investment (or accessory as is so often the case).

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  • David Rowling

    I have some thoughts on this topic:

    1/ It may be that wealthy backers are already behind the club. It is possible that they do not seek the limelight – not everyone does. They recognise that it is a long term plan and do not wish to have the continual media hassle. They appointed Ken Bates due his understanding of club operation.

    2/ It may be that Ken Bates is fronting a group of backers with a view to making a good return on investment in the future. He would not be interested in selling at the moment as the true value will undoubtedly improve as we get promoted.

    Just a thought.

    • TSS

      Yeah, I guess the possibility that the current owners don’t want to sell at the moment should be taken into consideration too.

  • Rich

    I suspect it’s pretty simple. Your average billionaire will have no preference for one club over another in footballing terms. All they want is a clean purchase and potential for growth.

    I suspect that Mr Bates’ commercial reputation with previous club ownerships is such that anyone would see buying anything off him as a messy, complicated process in which it might take months to resolve the legal ownership of the club, ER and TA – whilst suffering the impression that you are being ripped off somewhere along the line.

    I don’t doubt that, had anyone ever made a serious offer, Mr Bates wouldn’t have held back in immediately calling it derisory in his programme notes.

    Still, I’m not actually sure I want a foreign billionaire in charge of the club. The second something goes awry with TV revenue or the like, they’d be off like a shot. I’m still waiting for the elusive local businessman who is both a fan and not a berk like PR Pete.

  • Thommo

    If wealthy backers were already behind the club, wanting a good return on investment, then why have they not bought Thorpe Arch. This would have been a great investment. Leeds City Council will receive guaranteed rental plus at least their money back and maybe more, when they eventually sell back to the club. No I’m afraid it’s just dear old Ken who holds the purse strings, with a few names thrown in to cloud the issue. When he was given the club back after administration, even though his offer was not the best, part of his propaganda was that he had wealthy backers waiting to invest. So why after, 2 years of very healthy profits very little spent and transfer money coming in, could the owners not be able to buy Thorpe Arch.(Each home gate of 20,000 @ £20 = £400,000 + food + drinks + club shop + programmes and all the other spin-offs brings in well over half a million pounds)

    • simcol68

      Thommo i couldn,t have wrote that any better myself spot on ,im sick of all these people saying get off ken bates back he,s steadied the ship and this that and the other what aload of crap at least we see it how it is

  • BillyofOtley

    If you take the emotion out of this and look at the potential numbers involved in purchasing Leeds United a league 1 club, I think you can quickly quantify why there has been no outside investment in Leeds United, despite its obvious potential.

    One thing we can all be sure of, since administration Leeds United has been run as a business with the primary objective of making a profit regardless of the impact on the pitch and if public information is to be believed they made £1m last year and £4m the year before. We all know there has been no speculation on players to get Leeds promoted ahead of time.

    As it is being run as a business I am sure the “investors” in the club, namely Forward Sports Fund and Astor holdings have an exit strategy. They will need the money back that they have “invested” in the club plus a profit and I presuming here that it is the £18m Astor holdings wrote off when Bates and FSF brought the club through administration and the additional £4m lent to Leeds by FSF. Therefore they will have set a value for Leeds United which they see as an appropriate return on their investment. They will also have set a time when they want that money back.

    So if you flip this on its head and look at it from an outside investors point of view. You are probably looking at £30m at least to satisfy Bates, FSF and probably in turn Astor. You then need another £20m to buy back the ground and Thorp Arch. Assuming we get promoted we may need another £10m investing in the squad to get us into the Premiership and probably another £30m to keep us up once were there…..with no guarantees this money would achieve that. I realise this is pretty simplistic but I have racked up quite a large bill to get us in the premiership and get us back to where we were before Ridsdale. I have not even gone in to the complexities of dealing with Bates and his unnamed backers.

    This will become an easier proposition for an investor to swallow the further we move up the football league, but I expect Bates to be here for a two or three more years yet, but equally I would be surprised if he is still here in five. I am hoping the money from Delph, Garbutt and the above profits will be but in the squad to get us out of the championship and then Bates will perform his exit upon promotion to the Premiership.

  • Neil Oddy

    Given Mr. Bate’s reputation (justified or not)would you want to enter into any financial dealings with him. Counting fingers after handshakes springs to mind.

  • Rob

    I used to teach in Thailand and one of the kids I taught was very close to Thaksin Sinawatra. When the Bangkok Post started on about how he wanted to buy an English club, I actually prepared a dossier for him all about Leeds and why we would be a brilliant investment, and sent it off with this girl, who was going to spend the weekend with him in Hong Kong. On the Monday, I anxiously saught her out and said DID HE READ IT? She said that he’d galnced through it but it was too late bc he had already signed all the papers to buy another club. Next day, it was revealed that he’d bought Man City.

  • cossie(LUFC)

    I might be mistaken but I seem to remember that one of the conditions to the sale of the club to Ken Bates was the fact he was unable to sell it on for 5 years, this would mean we are still 2 1/2 years away from some real investment.

  • El Tel

    Leeds remain a fantastic investment opportunity even in league one. Below is an extract from some correspondance I had with a group looking to purchase Liverpool a year or so ago. It was my attempt to win them over to a much better opportunity….

    My alternative is that DCI do not pay £750m to £900m to purchase a top four premiership club but pay under £30m to purchase a club from the 3rd tier of English football. Now normally this would be a ridiculous suggestion but please bear with me as I explain why I believe its is worth consideration.

    The first point is that this is no ordinary League One club but Leeds United FC. A club that maintained a top 5 premiership finish from 1997-1998 season to the 2001-2002 season and made it to the Champions League Semi-final in 2001. A team that, this season, took the biggest ever single team support to a final at Wembley stadium with an estimate of over 50,000 supporters. A team that had the biggest support of any team outside the premiership, beating several teams in the premiership. A team that, whilst having a very strong local support base also has a significant international profile with support in nearly every nation in the world.

    Let me outline a potential three year plan for xxx at Leeds United:

    Year 1: Purchase club, ground, and academy for around £50m.
    Modest investment in playing staff £5 to £10m
    Work with local government on plans to establish leisure quarter based around Elland Road

    Year 1 Accomplishments/Benefits:
    1. Excellent UK and good international media cover of purchase – xxx seen as an investor in football and not yet another outside company jumping onto the premiership gravy train
    2. Successful team generating large crowds and additional positive media coverage
    3. Win League One title with resulting UK and International positive media coverage
    4. Small operating profit achieved (excluding investments costs)

    Year 2: Further investment in playing staff: £50m
    Work begins on ‘Leisure Quarter’ developments and ground improvements: Investment to be confirmed
    Promotion of ‘Leeds United’ brand internationally

    Year 2 Accomplishments/Benefits:
    1. Successful team generating large crowds and positive media coverage
    2. Win Championship title with resulting UK and International positive media coverage and promotion to Premiership
    3. Break even/small loss (excluding investment costs)
    4. Positive local media regards investment in infrastructure and solid base being built for future income streams.

    Year 3: Significant investment in playing staff: £100m
    Completion of ‘Leisure Quarter’ developments.
    Further international promotion of Leeds brand

    Year 3 Accomplishments/Benefits:
    1. Successful team generating record crowds and positive media coverage
    2. Minimum of top half finish with stretch target of European qualification
    3. Greatly increased revenue stream resulting in small operating profit
    4. Positive international media regards how xxx have “turned around” the club and invested in football in a positive way.
    5. Income stream 365 days a year through investments.

    With a further £50m investment in playing staff then, at this point, Leeds United will be in a similar position as Liverpool are now and your plans for Liverpool should apply equally as well to Leeds United. This would have required an investment by xxx over three years of just £260m in the football side of the business and will generate revenues and profits on a par with Liverpool’s. To me this is a very sound longer term investment.

    As with Liverpool there are no guarantees of further success at this point. Manchester United, Chelsea and Arsenal will all be trying to win the Premiership title and the top European teams will be trying to win the Champions League. Most people believe that Liverpool have ‘punched above their weight’ in recent seasons by appearing in the Champions League final and any investor could find they are not perceived as achieving anything despite high investments as the Premiership title is impossible to guarantee.

  • Dje

    I’m quite happy not being owned by some imprecise, ill-defined and unknown quantity as the ‘foreign billionaire’. Ken Bates is murky enough for me, and he is much more reliable as he is only a poxy millionaire; someone who, through his lack of riches in the rich league of rich football club ownership, has to maintain an interest in the club and its finances in the mid-to-long-term (albeit if it is only for a handsome profit in a few seasons when he sells the club).

    I don’t think we yet fully understand the long-term impact of these billionaires coming into the English game. You only have to look at Portsmouth, Notts County, and that dodgy Thailand-guy at Man City, before the sheik rolled in, to see that the golden rainbow promised by these guys (and it is always guys, perhaps a case of penile dysmorphophobia?!) is less vivid than the one they deliver.

    Even the ‘big clubs’ – Liverpool, Man Utd and Chelsea – are in a vulnerable position in the global economic market. Man Utd and Liverpool have been bought by Americans with over-leveraged debt in the belief that they can ‘live the dream’ on an endless wave of increased revenue from merchandise and TV revenue. The similarities with the banking crisis and bank bailouts is quite startling (only I really can’t see the government bailing out Man Utd or Liverpool), as the state of the Icelandic banking (now national) crisis impacting on Gudmundsson and his over leveraged acquisition of West Ham shows. Add to that the potential deterioration of sterling and increased corporation and capital tax in the UK in the near future and the English Premier League is unlikely to bring in the returns it once did for outside ‘investors’, just as the new 50% tax rate and the decline of the pound to the Euro is undermining the EPL clubs from attracting players to come here, or competing in the European transfer market.

    Even at Chelsea, the augmenter of the ‘billionaire investor’, Abramovich has only lent the best part of £600m to the club. Admittedly he is unlikely to walkaway from a club that he is the sole financier to, but £600m is a horrendous debt tag to have around a club who still fail to out merchandise Liverpool and Man Utd in the global market. Seriously, who’d consider buying Chelsea for that sort of money? Even if the price tag was slashed to £300m I doubt even vulture-fund enterprises would take a sniff at the Chelsea carcass as the assets they hold would barely cover the price tag in a fire-sale.

    Finally, I’ve recently read in some right-wing rags about concerns about the Saudi billionaires, who are buying English clubs, being involved with financing international terrorism via Al Quida etc. It seems too convenient and lazy an association, and also slightly a racist presumption that ‘that lot are all the same’. But the number of former owners wanted for crimes in their home lands (Man City’s Thaksin Shinawatra in Thailand, Arkadi Gaydamak for corruption in Israel, and arguably Gudmundsson for crimes against the Icelandic nation), or abroad (Arkadi Gaydamak again, for selling illegal arms to Angola in the 1990s) is something that Britain and the English football game just don’t really need. If it is hard to defend Roman Polanski for raping a minor in the 1970s because he was an auteur filmmaker in Hollywood, and because ‘they have a different, more liberal or just lapsed moral code’ in Tinsel Town, then it is equally as hard to justify these men buying up English clubs with blood money just because one factional set of supporters reckons that only with their money can they one day dream of beating the scum.

  • Aaron P

    El Tel, just read your post, did you ever get a reply and if not, are you not tempted to try again? Alot can change in a year and our profile must have caught DCI’s attention after our game against their beloved Reds

  • ramblinjohn

    I think the time might come but not while we’re in league 1 – whatever we think baiut bates – and in the medium to longer term he is a big problem – in the short term he was the only port in the storm when he bought us and has given his managers enough to get us out of this – fortunately he has 3rd time round chosen the right manager. there are still better placed teams than us in the prem that could be a target for sale – wigan, bolton, wolves etc (am i right?) with easy tv money etc – but there’s not that many left and i’m still not sure why someone does get in for us cheap now cos a relatively small investment in the right personnel and we could be a debt-free goldmine! bates will sell – it wont be long before he needs the cash to pays the bills on the laughing academy/paddock he’ll be out to grass for soon.

  • tim

    Well well well!! Now the FL have to ratify the Leeds Council Thorpe Arch purchase and THEY want to know if the Club is owned by fit and proper people. I understand that if all is not revealed the Club can be suspended from the Foolball League – the sorry saga goes on!
    How about this as an idea of ownership? – Do you remember those US funds that lent Ridsdale about 60 million against forward season ticket sales and then could they have been the same guys who would only put their majority vote to Ken Bates during administration. Maybe they actually own the club and see this as a way of getting their money back through an eventual sale and Bates is just the front man. Why with all the transfer revenue couldn’t the club raise the Thorpe Arch funds themselves and is the money leaking out of the club? Just a thought and we will all know soon I think!