The Monstrous Melvyn Levi? Or Perhaps The Prophet of Leeds TimPM June 8, 2012 Leeds United Ken Bates has had plenty to say about Melvyn Levi over the years. Some of that was actionable in court with the potential to be criminal. There are strong feelings on both sides, and plenty of vitriol from one. With the history here tracking back to 2004 – eight years ago – perhaps we should re-cap what happened while he was at Leeds for the younger fans among us? History Krasner’s era at Leeds (Levi was a director during that time) saw Leeds relegated, and eventually sold on. The Yorkshire Consortium had saved the club from administration in 2004, and set about cutting Leeds’ astronomical debt to manageable levels. Demotion from the Premiership was a bitter blow, but one almost certain when the Yorkshire Consortium took over in April. It was a horrific time to be a Leeds fan. Ridsdale had given us Rio Ferdinand for a record of around £18m. The price for that was the sale of most of our best players a few years later. In the Championship, Leeds had parachute payments of £7m for two years – a far cry from today’s £12m for four years. In the Premiership, the Yorkshire Consortium had faced debts of over £100m. In the Championship, Leeds’ wage bill was four times the average. There were added problems for the club – not only were they over budget, but they had paid far over the odds for players and couldn’t shift them. The board had no alternative but to sanction the sale of our best players – including Alan Smith whose only option was a move to Manchester United (since Manchester United were the highest bidder to offer cash up-front). Smith’s move saved Leeds the equivalent of another year of parachute payments. £6m was paid by Manchester United, while a further £1m in payoffs was waived by Smith as a goodwill gesture for the club he supported. The Yorkshire Consortium ended up in power struggles, and became very unpopular. Not surprising, given the necessity of selling some of Leeds’ best talent, and Elland Road and Thorp Arch. Both facilities were re-purchasable at well below market value (Bates’ failure to repurchase Thorp Arch in time despite the sale of Fabian Delph for around £6m, was his failing). Elland Road is still re-purchasable for around £12m – far below market value. As you might expect in a split boardroom, there were heroes and villains. Shaun Harvey (through his links to Bradford City’s chairman who had recklessly built up big debts) joined the board, while David Richmond left. Shaun Harvey was quite right in 2004, when he stated: The be all and end all of football clubs is football, football clubs are the 11 men who make up the starting line-up on a Saturday afternoon. Fans are not interested in finance and administration, or how much the board of directors achieve. They care about what happens on the pitch – and that is their club as they see it. “The be all and end all of football clubs is football” – what happened, Shaun? Why are you going along with financial over-extension on facilities you must realise have little to do with the quality of football and have little chance of paying for themselves? Eventually, the consortium found the debt burden too great – they weren’t wealthy by footballing standards – and decided to sell to ex-Chelsea owner Ken Bates (a man whose club was rumoured to have racked up debts as large as Leeds before selling to Abramovich). The consortium had cut debts of over £100m to around £20m. What terrible work. By 2007 Ken Bates and Shaun Harvey would take Leeds into administration. Harvey had previous experience with clubs entering administration, as his club Bradford City had experienced it twice while he was on the board. The previous board having aggressively cut expenditure and having reportedly reduced Leeds’ debts to around £20m, Ken Bates took Leeds into administration with a balance sheet reading roughly £35m of debt. Great job, Ken. To make matters worse, Leeds were relegated to the third division that season for the first time in their history. During the murky administration process, Ken Bates apparently regained control of the club. Melvyn Levi, one of the club’s creditors (having put his personal wealth into the club), gave an interview outside Elland Road: At the end of the day, I just want the best for Leeds United. That’s all we ever came into it all for, for Leeds United. We wanted to make sure that they would survive, but we feel that they ought to survive under a better regime than Ken Bates. At the end of the day, here we are at a magnificent football club, unfortunately in the First Division. If Mr Bates does retain the club I wish him all the very best and hope that he will get us out of here and back into the Championship. However, I don’t think he’s the right man for the job, personally. Mr Bates said he’s looking for further investment. Of course the club always needs investment. But I tell you now, this club to get back to where it should be in the Premiership requires somebody with deep pockets. Probably between £30-50m. We can’t be scratting around with bits and bats of money. The only way Leeds United – this fabulous club this great club- is ever going to get back to the Premiership is with somebody with big pockets. An American, big operators, somebody with the club at heart. And yes, maybe it all wants redeveloping why not? That’s not a problem for me. But at the end of the day if it is going to get redeveloped, let it get redeveloped for the benefit of the citizens of Leeds and for the club, not for an individual’s pockets. Many fans have begun saying this over the past year or two (some a lot longer) – here was the prophetic Melvyn Levi warning us back in 2007. Right Strategy, Wrong Time. And he was right – and here’s why. The Mirror have published illustrations of the wages-revenue ratio of Premiership and Championship clubs using figures from Deloitte analysis. The figures (below) show the only clubs spending less of their revenue on wages than Leeds are Manchester United and Blackpool. Blackpool have notoriously “hit lucky” on promotion to the Premier League, given a massive payment to their owner, and virtually accepted relegation straight back to the Championship. Spending a season in the Premier League on Championship wages, no wonder their ratio is so low. Meanwhile, Manchester United are a one-off club. Prior to the Premiership, Manchester United’s last league win was in 1966-7 – the seventh of their history. Since 1992’s launch of the Premiership they have won 12 times, and benefited massively from the ludicrous income to be had from success in modern football. Meanwhile, Arsenal and Tottenham are the only 2 other clubs to spend at a ratio within 10% of Leeds’ figures. What do Arsenal, Tottenham and Blackpool have in common? They are all clubs who want to maintain the status quo. For Blackpool, they set out to maintain their position and become a perennial playoff team. Arsenal want to continue to build on their place as a top English club (they have won the 2nd most titles, joint with Chelsea, since the Premier League’s creation) as a sustainable business – maybe we should ask why they haven’t won or even challenged for a few years now? – and Tottenham are building on their position as a top-half team, but again making no significant gains despite flashes of brilliance. The teams that rise in the leagues are the ones who spend some money. Norwich City spent at 79%, Swansea City spent at 149%, Queens Park Rangers spent at 183%. Frightening figures, yes, but QPR’s effective buying of the title would only take Leeds 91% of their turnover because of the tremendous size of this club. Norwich’s 79% is only 43% of Leeds’ turnover. And turnover rises when the club shows ambition, and rises still further when the club does well. As Levi said: we can’t be scratting around with bits and bats of money.” Because by foolishly over-extending ourselves financially on “bricks and mortar” – much of which the club doesn’t even own, we are reducing ourselves to pauperage on the playing side of things. It all really boils down to one question: does Ken Bates want to put the club in some kind of stasis until the speculated financial implosion in football occurs, or does he want to chase promotion? Chasing promotion could have been done with Bates at the helm – could have. By now, Leeds have spent (according to Levi) over £3m on the latest court case, Shaun Harvey has admitted under oath that the club have spent “a fortune” on what has been described as a “personal vendetta”. And Bates has not ruled out an appeal on the latest court case, while Levi has hinted at another. Medical evidence at court has shown the Levi’s health has been adversely affected by what has legally been ruled harassment from Ken Bates. You can’t blame him for looking to take Bates and his media organs to the cleaners. Meanwhile, Leeds have borrowed somewhere in the region of £5m on corporate development because (as Lorimer said on Yorkshire Radio) some curtains were tatty and some carpets were worn. I’ve heard rumours that the loan is at fairly unfavourable terms – which is of course unverifiable for us outsiders. Meanwhile, according to our chairman, the club were spending £4m over budget on the playing squad when Simon Grayson was sacked. The initial laughably low budget of around £9.5m looks to have tied Leeds’ hands while the best targets sorted their careers out. The late rise in budget seems to have forced us into speculative deals with injury-plagued Mika Vayrynen and Mikael Forssell, while Danny Pugh was drafted in at a time when Leeds had no first-choice left-back and Max Gradel’s sale was on the cards. £500,000 on Pugh might be used to beat Grayson with – but by September, who was still available? Warnock Walks? And it’s happening all over again. Warnock appears to have been talking to The Mirror. The famous phrase ‘sources close to’ suggests an unofficial chat. According to The Mirror, Ken Bates has failed to deliver ‘promised cash’ and Warnock: claimed he had been offered a budget to give Leeds a shot at winning promotion to the Premier League when he joined in February, but the reality has been different. Leeds now face a second year running, losing our best players and letting the hot properties pass us by. Signing a team good enough for promotion over one year is a massive task; that’s why most clubs do it over a few years. How can we do that when our balance-sheet requires us to either sell off our best talent, or deny them lucrative contracts when they prove to work well for the club? If we lose Robert Snodgrass, will we really find another with a snap of the fingers? Think of the points Snoddy won us by himself last season! With Warnock having been badly affected by the sudden death of his friend and former Forest owner Nigel Doughty, the in-demand manager is seeking one last challenge to achieve what would be a record 8 league promotions for one manager. Warnock was visibly delighted to be at Leeds, looking in awe at his surroundings at Thorp Arch during his initial interview, but he will not stick around forever based on a promise – why should he? And now our owner Ken Bates has crossed the line. He has terrorised a couple of O.A.P.’s using his playthings – a loss-making radio station and a programme column which Shaun Harvey seemed to me to hint he would find difficult to edit. Ken Bates’ past shows a man who has made a fortune from next to nothing. But it also shows a man who has left businesses in a poor state. In 2007 Ireland’s Independent would write: As depositors of the former Irish Trust Bank, which went bust in 1976, can testify, dealing with Bates can be a costly business. Bates was, meanwhile, hardly bathing in the love of fans at Oldham, or Chelsea (who were at the time rumoured to have the same debts as Leeds- that lynch-pin of Bates’ cautionary tales of overspending) when he left. And that leaves us questioning, as does Melvyn Levi: [Is he] a fit-and-proper person if there’s been an injunction awarded against him and he’s harassed somebody where the judge said that the harassments were capable of being criminal? Perhaps Levi summed it up perfectly, when he said: Believe it or not, I haven’t got any bad feelings against Mr Bates, I just don’t understand his motives.