The Leeds United Supporters Trust have released an article on their site, in which Rob Wilson, referred to as a “football finance expert” by the BBC, and interviewed by the YEP in March when the last set of Leeds’ accounts was made available, comments on various aspects of Leeds United’s finances.

The accounts that Wilson commented on in March have since had to be re-submitted by the club after L.U.S.T.’s financial experts found several errors. Wilson told the L.U.S.T:

I found your findings concerning. Your claims expose some, to be frank, poor attention to detail on behalf of the auditors and do not fill me with confidence in the firm.

Nevertheless, Wilson believes that the accounts covering the 2010-11 season (our first season back in the Championship) are good from a business point of view. However, Wilson also commented that the club could be more ambitious in playing-side investment:

There is a degree of balance that is needed and while it is good that the financial position is good I do believe that there is flexibility now to be more aggressive in the transfer market.

I would expect the breakdown of expenditure to be more heavily focused on the football and first team squad side of the business as opposed to other things,

He also judged that a wage-turnover ratio of around 51% is not something to be disagreed with, and is “enviable”. Wilson agreed with the L.U.S.T. when they asked if a 60% wage-turnover ratio was sustainable.

The Supporters Trust, meanwhile, comment:

Both Rob and ourselves feel that the concentration should be on football as our main business activity, the core of the club.

Unfortunately this great financial achievement [the 51% ratio] meant that we only finished 14th last season, so it is unlikely that Reading and Southampton, while only managing to attain ratios of 90% & 100%, looked down on us from their promotion spots with much envy; nor would Norwich the season before with an 80% ratio. We do not advocate spending beyond our means to achieve the goal of promotion like these clubs have done; we are not in the fortunate position of having owners such as they do that have kept them afloat with cash injections.

The L.U.S.T. also offer an estimate of the cost of dropping attendances and match-day spending, which they put (based on member feedback) to uncertainty that the income will be invested in the team. The L.U.S.T. put this figure at £2.5m, while an increase of wage-turnover ratio to 60% would cost only £1.5m.

Some other interesting figures to come from that article include Leeds’ spending on developments since exiting administration in 2007 until June 2011, £16.1m, Leeds’ income from player sales in the same period, £13m, and Leeds’ spending on players in the same period, only £7m.

Rob Wilson also commented on L.U.S.T.’s cash analysis, concluding:

The club needs to sell more tickets and attract better sponsorship. To do this you need some more team investment and, in my opinion, a better more associated relationship with the fans.

The article also covers issues to do with the Takeover, Due Diligence, and covers the topics summarised here in more depth. View the full article here.

24 Responses

  1. pete58

    2:04 PM on 13/09/2012
    There are apparently 27 companies registered at companies as having a financial interest in Leeds United.

    Adulant Force Limited
    Charmed Garden Limited
    Donald Masse
    Elland Road Limited
    Fan Radio Limited
    FSF Limited
    Halton Sports Limited
    Homer Trust
    Leeds City Holdings Limited
    Leeds City Limited
    Leeds First Limited
    Leeds United 2007 Limited
    Leeds United Association Football Club Limited
    Leeds United Centenary Pavilion Limited
    Leeds United Financial Services Limited
    Leeds United Investment Limited
    Leeds United Media Limited
    Leeds United Retail Limited
    Leeds United Stadium Limited
    Lutonville Holdings Limited
    Outro Limited
    Roman Heavies Limited
    Sporting Consulting Group Limited
    The Leeds United Foundation
    Treliss Designs Limited
    Yorkshire First Limited
    Yorkshire Radio Limited

    At Forest there were 4. MOT.

      • TSS

        If memory serves, that was the one he used to “save” Leeds United in the first place. Most of the companies listed above are inactive (including Romans Heavies)

      • djedjedje

        Getting burnt by ROMAN Abramovich over Chelsea obviously still hurt the old dear!

      • pete58

        sigmund freud’s got a season ticket in the stadium of ken’s mind. lol.

    • Tare

      At least in Finland it is to avoid taxes e.g. if the mother company is off shore and registered in lets in Virgin Islands then it can loan money to subsidiaries and then avoid to pay any tax for capital money. Well known spin in financing sector. This kind of pig’s holes are giving a lot of jobs for certain “consults”! Tare

  2. djedjedje

    Interesting article. The conclusion of the ‘expert’ chap that we are being run in an orderly albeit underwhelming and underproductive way will no doubt irritate some who wanted a ‘smoking guns’ expose. Whilst that’d have been a good bit of fuel to the anti-Bates fire, I’m not sure we really want to welcome a gigantic financial deficit in the accounts. Now, time to sell-up you old duffer!

    • Irving08

      Did anyone seriously think there would be a smoking gun ? Might Bates’ response be that our 50% should still be sufficient for a good manager to get us promotion (it is still more than Reading spent in absolute terms, for example). And putting on our ‘business heads’ our reply would be what ? – that he is relying on a bottomless pit of loyalty that may not there. Or did Bates have a quite different agenda all along ? – one geared to exit, for example (as he does now) ?

    • Irving08

      What an odd bloke Bates is: he could have had most of us eating out of his hand instead he has alienated us and for what ? He does not seem to be driven by vanity even for there is no glory to be had in a stand. He could have been …..Warnock, perhaps.

      • TimPM

        In view of his even ongoing dismissiveness of the number of fans who disagree with him, you might question how well informed of the general mood at the club he was?

      • Irving08

        Indded: all despotisms suffer from this weakness: the subordinates are afraid to tell them the truth. He doesn’t seem to have had a ‘favourite’ or licensed jester even. Lorimer, in theory, could have been the truth teller, but the years of pub life, alas, appear there to have taken their toll.

  3. Pentonville

    Here are where the money from player sales has gone: (from the article above)

    With all the loans and share sales we are hearing about, it is even more concerning to discover that our sister companies have all received financial assistance from the club that we believe are still outstanding at this time. As at the end of the accounting period 30 June 2011, these amounts were reported as follows:
    £1.6m loaned to Yorkshire Radio Limited£2.7m Loaned to Leeds United Centenary Pavilion Limited£255k Loaned to Leeds United Media Limited
    This totals nearly £4.6m, which makes us wonder whether, if it had been repaid, we would still have needed to borrow £5m from future season ticket sales. We are unsure if further assistance has been provided to any of these companies since this date.”

  4. Sunnyleeds

    I believe that it is the style of how Bates manages that irrates the larger part of the fans. The club has a sound financial base but with no liquid cash. His emphasis to spend twice as much on capital over spending on players brought in is not a bad thing, but circumstances dictate that after the club had to come out of administration and clear the mountain of debt, the fans could not wait any longer to be out of the Premier League. So ground improvements could have been taken up at a later stage. What transpired was that with ground development, the club ran out of cash and had to sell its sivlerware. The club now needs hard cash badly, but I do not see this as a major problem

  5. Simon O'Rourke

    So LUST went searching for a major expose, and all they got was a statement that the club could be investing a little bit higher in wages/player purchases. That must have pissed them off no end. So here we are again: another none-story circulated by LUST. These instances just keep piling up.
    If I actually thought they could be trusted by an investment corp, I’d suspect they are trying to prepare the club for a somewhat hostile takeover.

  6. Matthew

    The club could of given Snoddy, Howson, Gradel, Johnson and Beckford 20k a week and still would of been operating on a wage structure of just under 20 million, with a 32 million income. Frankly Bates investing in anything but the team has made that kind of thing impossible from a financial standpoint.

    • TimPM

      Isn’t it telling that when QPR ‘bought the league’ they only spent 20odd mil and that’d be less a ratio of wages for us to spend than sensible Norwich and Southampton spent… ——————


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