Leeds United’s accounts have never provided much joy to long-suffering fans, but the most recent are the worst the club has published in some time.

Submitted at the beginning of this month and available online today, Leeds United’s latest accounts show the financial state of the club from July 2012 to the end of June 2013, a period which covers the takeover of GFH Capital from Ken Bates.

The headlines include;

  • £9,949,000 total losses
  • Turnover down to £29.322m, a drop of £3.775m
  • Loans of more than £11m from GFH-owned company, Brendale Holdings Ltd.
  • Gate receipts down by more than 14%, from £11.368m to £9.721m
  • Merchandise sales down almost 13%, from £6.747m to £5.873m
  • “Other” commercial revenues down by more than 8%, from £9.665m to £8.884m
  • Rent for Elland Road and Thorp Arch cost £1.839m
  • Total debts believed to now stand at over £30m

The document makes for grim reading, highlighting the poor financial health and substantial losses which forced Ken Bates to find a buyer. It also shows the poor job GFH Capital have done in getting the situation under control and why they too, have been desperately scrambling for the exit.

It’s no secret the club continues to lose money at an alarming rate with the shortfall now believed to stand at £1m per month. This money has to come from somewhere or the club ceases to be, so while you can’t really criticise GFH for pumping the money in (by way of ongoing loans), their failure to get things under control has left behind substantial debts Massimo Cellino will now have to deal with – the big question is, how much interest is being charged on these loans and what are the terms of repayment?

Like most football clubs, the majority of our turnover (around 66%) goes on wages. An unnamed director (believed to be Shaun Harvey) did pretty well for himself, netting a bonus of £440,000 on top of his already substantial £265,449 salary. Still, it’s less than the club pay a lot of our players and Shaun Harvey did work his socks off (allegedly).

There’s a rather bizarre payment of £100,000 to El Hadji-Diouf’s charity within these accounts too. It seems pretty odd for a club to be making charitable donations while haemorrhaging money at an alarming rate, but this might just be an unusual clause in his contract?

Things can only get better?

If there’s a silver-lining to all this, it’s that our situation improves somewhat at the end of the current season. Ken Bates took out a sizeable loan against future season ticket sales to cream clad the East Stand which has now come to an end, so every penny generated from season ticket sales will go straight into the club next season (instead of whatever was left over after repaying loans like this season) – this alone puts us a couple of million pounds ahead of these accounts.

Alongside that, the contracts of several senior players (including Michael Brown and Danny Pugh) come to an end this season. Since wages continue to be our biggest expense, a reduction here is the best way to get us back on level-terms.

Also worth noting is Massimo Cellino’s plans to repurchase Elland Road and Thorp Arch. The club paid £1.839m in rent to the year ending 2013, and while it’ll cost Cellino an eight-figure sum to repurchase them, doing so adds a lot more to value of Leeds United Football Club than he’ll pay. It also reduces the clubs outgoings, which is vitally important with Financial Fair Play rules now kicking in (something Cellino will be well-versed in already since they’re a UEFA rule and Cagliari have to comply too).

The long and short of it is, Massimo Cellino has his work cut-out for him. His takeover of the club has already cost him significant sums of cash and it’s going to cost him a lot more before he can sit back and enjoy the ride. The best way to improve Leeds United’s situation is promotion, but he has to be wary of FFP rules in the meantime and try to get this club back on an even keel. Not an easy task.

39 Responses

  1. spellz

    Nothing shocks me about the state were in at the moment, when we do not think we can dig even deeper into a bleak peril we somehow find a way. there is so many reasons we are in so much debt as a club, one being, our club like to fuck over the only thing keeping it alive…… THE FANS, we are constantly lied to and manipulated in to believing it is all fine new investors constantly on the way “they are going to pump money into our club and everything will be rosy” we must be the most gullible fans in the world truthfully, as every apparent do-gooder that comes through the gates leaves with a number of hate banners but with a huge wad of cash in their back pocket.

    So what happens when you kill the life and blood of a club, the morale of the fans?…. they turn away, we also need to cut the deadwood from our squad that are being paid £25k a week like NOGOAL CNUT, I mean what is he being paid for? it seems like some form of dodgeball as he does not even look like he wants the ball half the time, start from scratch with players at a quality that are young and ready and are on nothing wages wise but want to be the next big thing.
    Also a tenth of a million to a diouf sponsored charity wtf is that about? we need Cellino to come in and actually be the shrewd critical business man he looks like he is and somehow turn the clubs finances and fortunes on the head, I mean Cellino has a big if not impossibly mammoth job on his hands to make a profit with our club but if he does I think he would deserve a stand to be named after him.

    M.O.T AA.

    • TSS

      Cellino got Noel Hunt confused with Jimmy Kebe. Hunt was speaking on Twitter the other night saying he doesn’t earn close to half that figure.

      • decky

        Surely we are not paying Jimmy Kebe his full 25k a week wages? And if he is really injured then a) why did we sign him in the first place and b) why has he not been sent back by now. MCDERMOTT OUT.

      • TSS

        He’s the only person who makes sense when you hear Cellino’s comments.

        We signed him with a view to buying in summer, so I’m guessing there’s no provision in his contract for Reading footing the bill if injured in the meantime.

      • Chris7286

        probably why GFH were telling Brian who he could and couldn’t play. We wouldn’t want people activating clauses and such like.

      • Irving08

        Well they want shooting for even entertaining those sort of wages at this level. If I am not mistaken Kebe had injury problems at Reading too.

      • Irving08

        Even a quarter of them would be generous.
        Most ineffectual forward we’ve had since Frank Strandl – irritating fellow too.

      • Irving08

        Hunt, that is. Billy P.will have his advocates, but I recall him having a good game. And he was likeable.

  2. mrbigwheels

    When are GFH actually leaving the building?… Oh. Most ‘biggies’ must have already gone as none of them have been seen at a match since Christmas…
    Yes Mr Chairman……….. You are a disgrace.

    Anyone care to talk about the ownership shituation at the end of these financial results… The FL might well be interested in that bit of pass the parcel Club share management/ownership. Great possibility they weren’t notified.

    Talk about digging holes and burying yourself.
    Please pot off GFH and go buy Valencia.

  3. markman

    Lets hope Mr Cellino has deep pockets.
    Very good of him to pay so much for the club when its accounts says its almost broke.
    He has already said the squad is to large and the deadwood has to go.
    personally i would keep, the skipper,smith,murphy,poleon,mowatt.
    wootton and lees are desperately short of confidence,a good pre season should sort that and Byram
    not the same player since his injury and lack of a pre season, seems to be suffering from second seasonitis. the rest are simply not good enough.

  4. Chris7286

    Why is anyone surprised about the debt? It was never a secret we had a lot of it. Why do you think GFH bought Leeds off Bates for £50mil and Cellino is buying us for £25mil. He had this all worked out long before this report was released and you can trust him to get a grip of everything pretty sharpish.

    • TSS

      Can’t remember exact figure, but it was nothing close to £50m GFH paid. (Their accounts submitted to Bahrain SE showed actual price paid).

  5. Thommohawk

    Cellino has his work cut out but so do we and the players, nobody is out of the woods just yet.

    Massimo will just chuck a load of money at the club to get it out of shit creek – which is what we’ve needed for years but haven’t had hence running from loan to loan for a decade.

    Thinking on it the only players I’d keep of the current team (not counting youngsters like Poleon, Mowatt etc) are Kenny, Butland (sign him), Byram, McCormack, Smith…..That’s all. Everyone else isn’t good enough or doesn’t bring enough to the table in my opinion.

    Cellino will know this but that entire defence wants gutting as does the midfield.

  6. maxwatson

    If you read the accounts, the actual payments to staff and players (and the player payments include signing on fees) including employer national insurance, goes from £18.5m to £20m. Including NI, >500k of the increase goes to an unnamed director by way of increases + bonus (my reading is that that same director was employed in 2012, so that narrows it down to Shaun Harvey, but I could be wrong – i.e. could be highest paid director 2012 compared to highest paid director 2013 and different people).

    If you look through, the big items in here are:
    – reduction in revenue in various categories of about £4m. I assume this is due to all categories being mortgaged by Bates (?)
    – nobody seems to be commenting on the £4.1m payment on “preference shares” back to Ken Bates, of which £3.2m is an effective repayment of the original cost of the shares (taken out 2012), £800k is a “premium” and £107k is admin fees. Looking at the cash table, the £3.2m plus presumably, player sales and revenue factoring (mortgaging to ticketus etc) covers a loss to invest £8m in the stand that Bates didn’t own (?). The preference share mechanism makes it look as if the cash position was >£7m worse in 2013 than in 2012, just on this item – a 3.2m shortfall in 2012 was made up in “equity funds” (actually a short term high interest loan), then carried through into 2013 as debt, which GFH have effectively passed through to Cellino. Bates quickly pocketed £800k.

    i.e. the 2012 losses and their consequences are hidden in the 2013 books.

    I actually don’t think the position is as bad as everyone is making out, or at least these books basically say that Bates didn’t cover the 2012 loss (caused by stand investment), but passed it through to GFH, who in turn have passed it to Cellino. But the main issue with these accounts is a one off idiotic decision by Bates to spend a lot of money, carried through and escalated by the financing mechanism (in fact Bates effectively lent himself 3.2m and took an 800k premium to cover losses he incurred).

    The next set of accounts are likely to show that the player costs have gone up significantly – no ability to offload Warnock’s players, transfer fees and slightly more expensive players. BTW in terms of the value for money of the squad, the number of playing staff goes from 37 to 48 but the total cost goes up by less than 10%, tells you all about the average quality of player we now have (or had in December).

    BTW if anyone thinks I’m defending GFH, claiming they were putting money in, while actually just loading the club with debt, is indefensible (two parts, both the act and lying about it).

    And another observation is that these accounts are an argument for the Cellino approach of having the sporting director select the squad. If you have a manager in for 1 year and players come in for 2+ years (the minimum in most cases) you’re stuck with a load of players you can’t offload and the guy who bought them isn’t there to take responsibility.

    • Irving08

      Thanks Max, but if you are not defending GFH, you might have been more explicit in questioning their financial management, which has been pretty abysmal, hasn’t it ?

      • maxwatson

        I think their stewardship of the club has been abysmal. They’ve consistently lied through their teeth to the fans, the football’s been terrible and they have run off at the end with a sack of money and obviously not given a damn about the club.

        But these books don’t show financial mismanagement (much as everyone wants that to be the narrative) – the next set (2013-2014) might, but we haven’t seen them and won’t for a year. There’s nothing you could pick out and say “that was crazy”. Basically they’ve made about £10m loss and most of that is explained by financial landmines laid by and in the interest of Kenneth William Bates. I doubt anyone else coming in would have made anything much less than £10m loss. In fact, if we had a decent owner who was funding the club as they claimed to be doing, they’d likely have made a far bigger loss – two of the clubs promoted from the Championship last season lost £30m.

        I expect the next set of books to show about a similar loss, the shortfall in revenue is probably going to be the same and the costs will have gone up significantly, maybe 4-5m. So another £10m loss, loaded on as debt, of which about 50% is due to Bates mortgaging revenue.

        The size of the loss is not THAT abnormal. But they haven’t put in a penny of their own money, they’ve just converted any loss to debt and loaded it onto the club. While claiming to be funding the club. In other words, they lied to us throughout.

      • Irving08

        Thanks again. Fair point about their loading of deb (lucky for them and us that they found an owner with a deep pocket).
        Yet we seem also to have paid a price for their PR (ticket promotions) and lack of football knowledge (playing side).
        I agree with you about the need for a Director of Football.
        Persoanl message to Massimo: please can we have our programme back. I’m fed up with squinting.

    • TSS

      Yep, fair summary. Since these accounts we’ve started losing even more, so GFH absolutely share blame for mess we’re in, but Bates started the downward spiral.

      Not sure I agree with Director of Football approach, simply because it never seems to work in England. We’ll see…

      • maxwatson

        Agreed on DoF in normal circumstances but if you fire a manager a season I don’t see how you have a choice.

        Half time and 2-0 down. Urgh.

  7. Stelufc

    How the hell did shun Harvey become head if the football league? half of this debt was under his highly paid “watch”.

    Also what was that huge bonus for? services to British sock manufacturers?

  8. Bluesman

    If your club is in decent financial position you have the leverage to get the tight players. Leeds have only got the players they could get. Go down the list of managers who looked for quality signings and the were let down! We have half a good squad and the remainder are decent, but not quiet good enough to meet our expectations of them. They are therefore struggling with the expectations placed on them. I think. BM only has a couple of games to prove himself. I think Cellino will then bring in people to support him.

  9. PAUL W

    Non of the under-performing Leeds players are worth more than £10000 per week and they should be ashamed, because they have practically done “NOTHING” on the pitch since mid-December.
    As for Kebe, first he was ill and then he suddenly found a hamstring injury from somewhere, even though he wasn’t playing at the time.
    Why doesn’t McDermott just say that Kebe can’t cope with playing for such a big club as Leeds?
    The players wages were always going to increase the clubs debt, because the Leeds squad is probably the biggest in the Championship, with at least 37 players in it.
    Both McDermott and Haigh should have made an effort to reduce the size of the squad at the end of last season, but instead it has grown out of control.
    I really think that Cellino will sort Leeds out and things will start to be exciting, instead of depressing.

  10. mrbigwheels

    So we’ve got going on £30m of dept….real time… the Club own nothing… oh… McC and Byram, there’s a few mill… but in my head this shower of Bates, Harvey, Haigh and the potless Bank managers were taking this Club to the abyss that many of us have looked into before…. Hope someone sacks the lot of them, these ‘fit and proper’ men… right out of the City, for once and for all along with their lies, their dishonesty, their slime and their chancer tactics.

    Long live LUFC.

    • Irving08

      This is what growth investors do MBW; they accept a high price/earnings ratio, hoping for a big pay off. GFH never disguised this fact.
      Massimo will take a more balanced approach; he’ll be looking for some value too.
      Yet another formation tonight, I’d love to be a pacey Watford wide player. Hunt seems to be the new Austin, by the way.

  11. leedsjock

    £30 million debt from 6 mths figures and the GFH directors gave themselves a massive pay increase is nothing short of fraud.
    This is going to be a tough job for Cellino to turn around so he deserves massive respect for taking this on.

  12. Helen LUFC

    Doesn’t really matter about the figures to us fans, nothing we can do about it. Cellino will have to sort it out, sounds like he’s not too bothered. A lot of money to us, probably sod all to him. He’ll be more worried about any transfer block for stepping over the line financially, I think. I bet he’s desperate to get rid of some of the rubbish we have at the club. He’s gone quiet on the Brian front, take that as a new manager must be in the background. Could be Zola? Bound to be an Italian so there is easy communication between Cellino and the manager. If I were Brian I’d come out with a bullet proof vest on after half time. Cellino will probably fire him from his seat in the crowd, quite literally.

    • Irving08

      So he should with yet another formation, let alone some of the players he’s picked. McDermot has compeletely undermined the players by making them feel inadequate due to his confusing and confused decisions. The Huddersfield manager, to judge by his interviews, seems to be cut from the same cloth. Each are Mangers that try to compensate for lack of personal authority by trying to be too clever with team selections and tactics.

      • Helen LUFC

        Brian will get sacked tonight I imagine. Pointless keeping him now. Can’t believe Cellino won’t sack him later on. There’s no way he’ll give McDermott his money to spend on new players after seeing this.

  13. Frostbittensock

    Nevermind all this, it’s history albeit puts us in the red, what really concerns me is that we could end up in a relegation battle.
    This squad is nothing short of useless, no composure, no fight, no passion.
    Leeds needs a good clear out and i hope that starts tonight.

    • Helen LUFC

      Leeds need a good clear out? I agree, need a strong laxative to clear all the shit out of the club. Michael Brown can start us off.

      • Frostbittensock

        This is the worst I have ever seen (heard) Leeds play – Sack them all, Ross is a one man team and Butland is plain shit!!!
        I have seen better football played in Sunday League.

  14. BMcD OUT

    How the hell can anyone back McDermott, I think Cellino should pay the compo and get shut and get someone in that doesn’t look like a rabbit in the headlights and make poor excuses game after game.

    • luke

      Shut the fuck up, take a look at the players for once, how shit are they all except McCormack and maybe Pearce? This guy is dealing with complete shit, league one players at best and trying to get them to perform in the championship when most of them couldnt give a shit. Id like to see mourinho have a crack at managing this pile of wank,

  15. Matthew

    It’s about time the literal circus tent that has enveloped this club be removed and the clowns ejected. None of these performances are acceptable, not at all. Cellino has to remove McDermott before we get dragged into a very real relegation fight.


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