Are Leeds having financial problems again? TSS August 11, 2011 Leeds United 43 Comments Something doesn’t smell right at Elland Road. Over the course of the summer, our transfer spending has been almost non-existent despite a sizeable sum received for Kasper Schmeichel and ‘amazing’ season ticket sales. It started when we lost Bradley Johnson and Neil Kilkenny because they believed Leeds United’s extended contract offer was derisory and that they could do better elsewhere. Right they were too, with Johnson now playing in the Premier League for Norwich City and Kilkenny reported to be earning more money at Championship “giants” Bristol City! Then there’s the players we’ve failed to sign. Despite publicly stating he wanted to come to Elland Road and Simon Grayson admitting he was interested, Michael Johnson ended up at Leicester City. We apparently can’t afford to pay a third of Alan Smith’s wages, were snubbed by Keith Andrews and Lee Bowyer who favoured a move to the mighty Ipswich Town, Jonathan Woodgate decided a relegation battle with Stoke City was preferable to rejoining The Whites and we still haven’t agreed a fee for Nick Montgomery despite reports of Sheffield United desperately wanting to get his wages off their books. The list goes on and on. If the fans are frustrated by events at Elland Road, imagine how Simon Grayson must feel when he’s continuously told we can’t afford to pay the same wages as Ipswich Town and Bristol City; clubs with a significantly lower turnover. Ken Bates will tell you that greed is to blame and he’s not going to pay “over the odds” for these players, but aren’t the “odds” relative to what other teams at our level can pay? The transfer market is exactly that – a market! As such, players valuations are based upon whatever clubs are willing to pay for them, not what Ken Bates decides is appropriate. It’s exactly the same as your local supermarket – prices alter according to supply, quality and demand. If you want a bottle of fine French wine, you know you’re going to be paying significantly more than you would for a an entire case of Lambrini or Tesco’s home brand. Things don’t become expensive for the sake of it, they become expensive because other people are willing to pay that price. But the problem isn’t that we can’t afford to sip on a bottle of Château Pichon Longueville – unless you’re sitting in the best executive boxes from Manchester to Newcastle, and even then you’d probably have to bring your own – but that we are incapable of filling the gaps in our cellar with Lambrini. Take Alexandre Mendy for example, who Ken Bates is reported to have blocked a move for – this guy was a free agent for Heaven’s sake, I sincerely doubt his wage demands were over-inflated. It all makes me wonder if all is not well behind the scenes at Elland Road. Has the pointless redevelopment of the East Stand left us in yet another financial crisis? Fans should bear in mind that when Roman Abramovich took over at Chelsea, The Chelsea Village complex Bates built had left the club in serious financial difficulties, so much so that the new owner decided it was best to focus his attention back on football with Chairman Bruce Buck reasoning “all the football fan wants, really, is football.” Wise words indeed. Being the stubborn old fool he is however, Bates has never admitted Chelsea Village was a complete disaster that brought the club to the brink of financial ruin. Instead, he’s following the same path again, trying desperately to prove the concept works with his latest victim, Leeds United FC. If you can’t sell hotel rooms in the upmarket borough of Chelsea, you’re not going to stand a much better chance in a run-down part of Leeds. I mean, imagine for a minute that you’re a Whites fan travelling from overseas to see your beloved Leeds United play. Do you spend your weekend in a modern city centre hotel, with a bustling nightlife, countless places to eat and a myriad of entertainment options on your doorstep, or do you instead choose a Big Mac and a bar fight in Beeston? All depends on the entertainment you say? How does live muggings straight outside your window sound? OK, so I’m exaggerating a little, but my point is a valid one. Very few people are going to choose LS11 over LS1 – after all, there’s hardly a shortage of suitable hotels in the city centre. They build one per month nowadays. Maybe I’m looking a little too hard for signs of trouble after we all missed them under Peter Ridsdale, but seeing Ken Bates try to replicate a building project that almost bankrupted Chelsea and hearing nothing but reports of players we’ve missed out on for various financial reasons has me drawing uncomfortable conclusions. orangina we spent all this money building a hotel and yet we can’t even afford to loan anyone decent grrr no wonder I don’t feel so bad not going to the Boro game! this is a joke! I support the team of course but the prices of the tickets do not reflect the quality on the pitch I’m fed up of Bates. All for prudence given what the excesses of Ridsdale and co did to the club but this is beyond a joke! @amjbeck67 we are not in debt we are finacial sound trust me GezW Why trust you? Are you a qualified accountant? Do you sit on the board of Leeds United or Outro Ltd? Fingers i"m a qualified accountant, i've seen the accounts and we are financially sound, simple as that. Do you not think Gradel and Snoddy would have gone if we needed money? Just because we are not spending, doesn't mean we're skint. It amazes me that people haven't learnt from the Ridsdale. We don't have the revenue to compete with Scum or Liverpool, the club has been up for sale countless times and no billionaire has bitten, so please, stop fuc.king whining. Paul Read Bates' failure with Chelsea Village worked out better for Chelsea than for Leeds. Paul1019 It is possible we the club is in financial strife again. What you should remember is that even though the last set of books showed a profit , in reality it was only transfer fees that allowed that . The profit of £15,000 only came about because of sales of around £1.75m. We also have to remember that this club and its name in financial circles is mud. The club will not be trusted by banks for many years , if ever certainly whlie Bates is in charge. . Its like you running up a credit card debt and then defaulting and refusing to pay…..who is gonna give you another credit card? I would also expect that HMRC will have withdrawn any 'Pay later' facility from Bates. He cannot be trusted , they will want their money off him UPFRONT and quite right too, in their view he took all the tax payers money last time and spent it! Combine all that with the lavish spending on empty executive boses. and of course the fact that fans are deserting the con of the 'membership' scheme and reduced season tickets and hey presto… his great business plan starts to crumble perhaps….. Rich I dont know what your talking about mate. I really like the look of the East Stand and I think that it is a great idea to “build a conservatory on a council house”!!!!!!!!!. I think your being soft on Bates. He is the scum of the earth. I read your article on whether he is the ‘saviour’ of Leeds and completely agreed also. The sooner he leaves the better for every single person with even the slightest affiliation to LUFC. FP Bates’ words “if you want premiership football you’re going to have to pay premiership prices” – ok then Bates, I’ve kept my part of the deal since you said that, now why are we staring league one in the face? @zeccad I don't believe we are in financial trouble. I also don't think its a good idea to compare the way our club is run and the money we are spending to other clubs who may well be gambling as we did in the past and it may be only a matter of time till they find themselves in trouble. TSS I apologise in advance for what you're about to witness. [youtube hMqI7W3b1Uk http://www.youtube.com/watch?v=hMqI7W3b1Uk youtube] Tom I feel ill _dje As ever, the problem remains how to punish Bates without punishing Leeds United. Hitting in the pocket is the only way to make him take note, but to do so would threaten the limited squad finances already at place, probably leading to key player sales, even more of a yes man manager, and flirting with relegation. So in three seasons time we might finally get Bates to sell up on the cheap, but in League One, without Snodgrass, Gradel, Howson, Becchio or Nunez, and possibly with a chairman who is just as deluded. Answers on a postcard…. EYLEEDS Basic economics dictate that you can only spend what you can afford, but businesses also need to invest in resources if they want to grow. Being financially prudent is all well and good but if we just tread water in the championship we will eventually go backwards as a club. Does Bates not have any business sense? You don’t have to do a ‘Ridsdale’ but lack of investment is also unsustainable in the long run. If we can’t afford to borrow any money to boost the playing squad then alternative investment should be sought. If Bates wasn’t so obtuse he could sell 25% of the club, invest the money to help get us promoted and his remaining share would be worth far more. I don’t think Bates is bleeding us dry, but he is simply not able to take us any further forward without new investment from someone. Mark__R Good post EYLEEDS. I totally agree. Treading water is where the club is at, and it's not meeting the fans expectations. Unless there is investment the team will stagnate, and as you say we'll go backwards as a club. MOT Horsforth White No-one will invest with Leeds – all interested parties disappeared the day after he "won" control & he has been pleading for them to give him money without getting any say in how it's spent ever since – right TSS? TSS Pretty much mate. I wouldn't do business with him, that's for sure. henry_v The word here is frustration!! You will never get the better of Ken Bates!! He is as slippery as a barrel full of eels that have been coated with WD40! He has everything so tightly closed at Elland Road, with everyone in fear for their jobs. HE IS NEVER IN THE WRONG – EVER!!! He has been thanked enough for 'saving the club'. Right this minute we are going nowhere!! The prize of the Premiership is so big that you have to gamble to have any chance of promotion. It may be possible with buttons, but the chances are so slim that they are not worth considering! The Championship is taking the same form as the Premiership. Clubs that spend to improve their squads rising to the top. Clubs like ours falling in below with a slight chance of the playoffs. We are not 'Mighty Leeds' anymore, and our rivals know it!! The elite in our league are snapping up all the best players, like the big 4 in the Prem'. We have our own league just below, hoping for a playoff place, and fearing relegation! What Ken is doing makes no sense at all. He is not stupid yet he is doing everything wrong. Now that he has become the owner officially, he is meddling too much in the day to day. I cannot figure out what is going on. They asked this question on Alan Brazil's Talksport this week. "Why is the Leeds squad so weak, and why aren't they bringing in players". I did not listen to the rest of the show so I don't know what our fans said during the phone in. Paul1019 mentions that the banks don't trust Ken! You have picked on an institution so greedy and devious, they make Ken look like the new Ghandi!! Stefan Williams Hansen I hope we're not paying the price for Bates having to buy back the club from the other shareholders (himself really)earlier this year. A Glazier type of deal. I for one would really like to know where all the money goes. Who owns TA and ER now? lufcboy If we have no money I think that Snoddy, Mad Max and Grayson may have gone by now. Anyone know who the mystery striker was that we were going to sign but were unable to, due to the agents demands (not heard that one before LOL). liam morley white sam vokes mate look on his wikipedia number1inyorkshire have we built a hotel ???? to sell all those executive boxes he needs to have a decent team ,they are only gonna be full on match day no one is gonna sit there on a gloomy Tuesday when we are away at Portsmouth . he is building executive boxes in a time of recession ,if i was the builder i would want paying up front ,you can see it now DOM LIITTLEWOOD ON rogue customers, customers who get loads of building work done and don't pay and go into admin owing millions tonight the case of KEN BATES …….. if we are in the sch-tum he does need investigating ,surely he wouldn't dare with all he said about RISDALE we have to remember Chelsea nearly went out of business owing over £100.000 000 til abramovich arrived that was at the hand of bates who over stretched on the building work . leeds united can not be loosing money and must in real terms be one of the most desirable for take over aside from we have no assets ????? whitey I believe we are not in debt at all, we have the ability to spend £7 on a stadium WE DO NOT EVEN OWN! Who spends £7 million on something they dont own? jammin although it is unlikely that we own it, im sure we will have an option of some sort to purchase it. The council (if they are still the owners?) wont have anyone else lined up to buy it and it will be worth bugger all as housing land. Although a stubborn old mule, there must be some logic behind the corporate box side of things, im sure its not a Bates dictatorship and that the FD and other Directors will have reviewed the construction works to increased income potential. Still frustrating as would rather it went on a new back line! mark Im convinced he's trying to sell us soon. No high wages on the wage bill, no one on long tem contracts, turning a profit etc. All looks good to potential buyers mattbb1 We're a business that has a big turnover, moderate wages – <30% of that , & some rental committments – but no less than mortgage payments for clubs that `own' their ground. Bates' exp on the east stand will almost certainly have trashed our cashflow, I've seen it many times in business.. what hes probably fuming about is that hes now got to come clean and spend some money on the team, but is being stymied at each attempt as he has so little cash. To get it he'll have to go to the bank, who hes no doubt promised he wont ask for more money as he's maxed his credit card.. I dont think were having difficulties but I do think hes made a misjudgement and there is a risk that we will end up in difficulties. My view of things would be to sell Snodgrass. Hes got the longest contract, youd get c£10M of cash for him, and even if our tight fisted old chairman spent £3m of that on fees, and £2m on wages (upping Gradels contract – therefore increasing his value) and funding 4 players on his beloved £10K a week for a year, he would still have £5m for his ridiculous vanity project. I think this is what he will do shortly. Mdomo do you really think we would get 10m for snoddy… try about 4m! what we want for him and what people would pay would be very different!! TSS Agree with Mdomo unfortunately Matt. No chance we'll get anywhere near £10m. mattbb1 what the heck does that heart symbol mean?…. i typed in 30% Peterv Here's another take. Given Grayson's transfer and loan dealings – McShefferey, Collins, Bessone, Paynter, Livermore and unless he improves soon Brown, to mention just a few – and the players he puts out on loan until they prove to be any good ( which others knew all the time anyway) – Somma, Lees, Clayton, Nunez, that he can't judge players and/or can't develop them at Leeds? Perhaps with Bates apparently blocking the signing of Mendy and the obvious strict transfer and wage budget that it relects his loss of confidence in Grayson's ability to identify the right purchases? I have no idea but I guess Grayson's mistakes, if thats what they are have cost a lot of money in wages if not transfer fees. Dave Howson I simply can't believe we have financial problems with the wage structure thats been in place for a couple of years now, The Tv exposure since promotion, The cup Tv matches and the fantastic support. The last few weeks I begin to doubt KB myself, We can't match others in the Championship ? That beggars belief, As for cashflow he's just offloaded 3 of the biggest earners in Schmeical,Johnson and Kilkenny – and took in the Leicester cash. The Seasons not a week old and we have been on Tv twice – If the Mendy rumours are right there is something very wrong on the ambition front in the ER Boardroom. For all his critics Simons done well. (With little to spend and a smurf on his back) – You only hav to look at his record – He can't be blamed for the lapse of form last year – its the same players, look at the squad – Sam, Nunez , Lees and Clayton are showing good signs -Paddy will take time, and Bechio and Somma will be back…………. We HAVE to invest in the likes of Snoddy, Gradel Howson – If we dont show faith in these who would WANT to join us………..I am still a believer…LEEDS LEEDS LEEDS Mark__R Does it mean you'd love some of those moderate wages ? Great post by the way. MOT Paul South Wales Lol mattbb1, was wondering what that meant THOMAS clinch THANK YOU MR AND MRS BATES FOR ALL THE GOOD YOU HAVE DONE TO OUR BELOVED LEEDS UTD FC BUT ITS TIME TO ADMIT THAT YOU DONT AFFORD LEEDS UTD ANYMORE AND ITS TIME YOU SELL ALL YOUR SHARES TO SOMEBODY THAT CAN MAKE LEEDS UTD GREAT AGAIN OR ELSE WE SURE ARE GOING TO BE RELEGATED THIS SEASON WITH THIS KIND OF SQUAD. WE ONLY HAVE 4 CHAMPIONSHIP PLAYERS AND NO SIGN OF GOOD PLAYERS COMMING IN. IM THOMAS FROM MALTA BUT CRAZY FAN OF LEEDS UTD THAT SPEND ALL MY SAVEINGS TO COME AND WATCH LEEDS FROM MALTA NEARLY 12 TIMES A YEAR. I WISH ALL THE BEST TO MR AND MRS BATES. MOT Tim Campbell The one major contradiction will be if leeds decide to sell snodgrass or gradel for anything less than a VERY sizeable sum. Larry only said last week that the major objective was to hold on to these 2 key players. It will be very interesting indeed to see how this pans out. There really needs to be some transparency with our finances; but alas I am well aware that our finances are as transparent as the depths of Loch Ness – very murky and the possibility of something monstrous lurking there GezW Sign the petition and join the protest: http://www.petitiononline.com/mod_perl/signed.cgi… http://www.facebook.com/#!/pages/Bates-Out-Protes… Chareose the building costs have come in over what he expected, thats whats happened. its the most logical argument…… if bates was merely being a stingy bastard grayson would have walked by now, wouldnt anyone ? Even so it doesnt excuse bates, our money shouldnt have been spent on such a pointless project……a bloody museum ffsakes ???!!! I will be at the protest against Bates. Cheers Grant Sidebottom no bates knows what he’s doing.. Grant Sidebottom i.e. chelsea John Thorner Sings ” WHERE’S ALL OUR MONEY GONE? ,WHERE’S ALL OUR MONEY GONE?, WHERE’S ALL OUR MONEY GONE?,WHERES ALL OUR MONEY GONE? Louise Lufc Demes get out of my club..get out of my club..you chelsea bastard get out of my club ! Grant Sidebottom nah knows what he’s doing Craig Woodhead We are financially sound but he’s spending it in the wrong areas. Great new facilities for part time supporters sipping champagne and eating salmon en croute to watch a team that is going nowhere and loan players that nobody else wants. Bates you are a disgrace, put up for sale n fuck off Steve Colbert You gotta admit somethings not right when u have our ‘targets’ rejecting us for ipswich etc . What do these guys know that we don’t?