How the cash should be spent…

GFH Board member Hisram al-Rayes has stated that Neil Warnock will be provided with funding to improve his first team squad, if the never-ending takeover saga reaches a successful conclusion.

Speaking to CNBC Arabia, al-Rayes said;

“We have a separate budget from the purchase total to buy better players to achieve promotion to the Premier League”

Those words should be music to the ears of most Leeds United fans, but the more pessimistic supporters can be forgiven for not counting their chickens.

Ever since promotion from League One, Ken Bates has been promising Leeds United fans a “transfer warchest” prior to every transfer window. So commonplace is this promise, it’s generally shrugged off as little more than a white lie. much like telling your kids that Santa Claus won’t be coming if they continue to misbehave.

Funnily enough, behavioral control is generally the reason Ken Bates uses it too. Whenever fans are dissenting due to the continued lack of investment in the first team squad, it takes nothing more than a subtle hint at transfer funds being made available for the next transfer window to calm everyone down. Many an uprising has been quashed with such suggestions.

In fact, the trick has been repeated so many times, so closely resembling the words of previously broken promises, I’ve started to question whether Yorkshire Radio – the Ken Bates-owned radio station used to air such messages – is simply recycling old interviews.

Fortunately though, should we reach a stage where al-Rayes’ promise can be tested, Ken Bates won’t be part of the equation any more and that should be enough to lower the level of cynicism Leeds United fans apply to every statement the club currently makes.

Of course, a new ownership structure will itself be put under intense scrutiny from the thousands of fans who have walked away and GFH will need to try and win them back. While most of those supporters would be happy to see a new ownership that communicates better with the fanbase, Leeds United has been through a lot in the last decade and throughout every turmoil, promises have been broken. That’s why al-Rayes’ comments may have been a bad idea.

I appreciate the difficult position GFH are currently in and all things considered, it’s nice to see them trying to provide fans with reasons to be cheerful. But the friendly, cheerful response they receive today will quickly backfire. The longer this saga goes on, the angrier Leeds United fans get and the more GFH publicise themselves and continue to promise Leeds United fans a better future they aren’t yet in a position to deliver, the more they make themselves targets for blame.

It’s not that Leeds United fans don’t understand the delay lies with Ken Bates, it just doesn’t matter, GFH will be seen as just another name on the depressingly long list of people who promised Leeds United fans the world and failed to deliver. It’s the hope that kills us.


48 Responses

  1. Martin Badger Chadwick

    i suppose i should be excited about this little snippet of news but as the article says this has been promised many a time before and the takeover is taking sooooo long that i cant get excited about it anymore.
    im sorry but the initial excitement and hope became hunting online for rumors and news and now i honestly think if and when it finally completed it will be celebrated with a “meh, about time”

  2. Nathan Snowden

    “So commonplace is this promise, it’s generally shrugged off as little more than a white lie. much like telling your kids that Santa Claus won’t be coming if they continue to misbehave”

    So you mean I have been behaving these past 28 years for NOTHING???

  3. Paul Crosbie

    In some ways it is a good thing that our takeover has descended into this total farce, a complete and utter joke , yet another reason for our fans to be laughing stocks in the football community.
    Leeds fans need to keep things in check. If this none takeover had gone through quickly and not taken nearly half a year FFS!!!!!! we would have held GFH up to be really serious players whereas now we must surely realise if it ever goes through we will need patience and lots of it. We must all surely know now that GFH are limited , they are not the ‘Dare to Dream ‘ types, they are the ‘ Eventually we hope to buy ER ‘ types.
    Same as it ever was for Leeds I suppose , high hopes with massive dissappointment to follow. In hindsight would have preferred not to have had the original announcement of a possible takeover through LUST or whoever it was , never mind the wish lists from GFH we are getting now, we could then all have enjoyed our summer whilst the grown up business types could play their silly bugger games until one of them ‘won’

    • TimPM

      For me the difference is that they are willing to fund the side as an investment. I actually think Bates might’ve in time, but he dug a financial hole making that a bit difficult.

      • Chareose

        Worse owners than ken bates ?? What a bizarre comment, I don’t see how anyone can be worse ? Or invest less in the team, or cause more off the feild issues??? People need to stop being so negative and give the new people the chance they deserve!

      • Irving08

        Their statement was foolish. What do they mean ‘better players’ – if we are still in contention in January, what do they propose doing, reo,acing players who have got us there ? Cleverer and more knowledgeable people would have made a more general statment such as ‘supporting the efforts of the present Manger and the team in their endeavours to reach the Premiership’. That’s one thing – for another, it is obvious they are having difficulty raising the capital – hence all the crass crowing about TV money; and they will be no more transparent in reality than Bates, who for all his manifold faults, knows his stuff and is is a heavyweight compared to these people, who seem to think that a load of flannel will make us welcome them with open arms. sure we want a friendlier chairman, but we don’t owners who have no ground under their feet and consequently will either tell fans anything to keep them sweet or say nothing at all.

      • Irving08

        Sorry typos: …second line, replacing…..; three lines from bottom, want owners……

      • Will23

        Again, agree.

        Bates probably cannot believe how will have managed to come across such a gullible organisation as GFH.

        I fear for LUFC if GFH takeover. These guys really know nothing other than an ability to pronounce on glib matters about “marching on together” and all that usual crap as if they were politicians trying to win our votes with empty rhetoric.

        As for Haigh, I would be interested to know how many LUFC games he has ever been to.

    • Irving08

      It seems to be money they lack, not dreams. Some of us have always maintained that there could be worse owners than Bates; I fear GHF may fall into that category.

      • Will23

        Dreamers. Just what we need!

        Rhetorical claptrap would seem to be their forte. They seem full of it.

      • Chareose

        this is odd as i seem to be reading different information to you….. The new buyers say they want leeds to return to the Premiership….they say they will invest money in the team and the make the team strong… erm why does that make them dreamers ? Worse than Bates ? and why are they talking clap trap ?
        No doubt youd prefer to remain under the stewardship of wise old head Kenneth Bates who has taken us through two administrations, relegation and 8 years outside the top flight……
        Yes the buyers are idiots for wanting to invest in THE PRODUCT rather than the Bates method, invest in infrastructure and exec boxes only to wonder where all his customers have gone at the end of it…….

      • Will23

        Too many of their statements are simple-minded expressions of their dreams of reaching the promised land of the Premiership coupled with the “marching on together”, “big club”, “great fans” empty rhetoric aimed at placating fans, particular the cheerleading type of fan who prefer emotions over the “cold” hard stare of reasoning and an examinaton of facts.

        Anyone can make assertions in the absence of cold facts. It’s proving them that is always the difficulty!

        Besides, wanting a new owner does not mean the grass will be greener with GFH than with Bates. Besides, Bates has made similar comments as GFH in the past (but was let down by Grayson, sorry could not resist!).

        So, I am going to own a Ferrari one day and marry the best looking girl in the land. That makes me thrilled with anticipation of when that day will arrive! ;-)

        So, GFH, just given me the facts please, save me the dreams and the excuses of hiding behind a confidentiality agreement. Quite what is confidential about how they will fund the deal is beyond me.


    • Sunnyleeds

      We are told that GFH have already provided funds last summer. So part of the current success is due to them. Could be that their hands are tied, and Bates is holding back, enjoying the moment in punishing Leeds fans and waiting for a bigger sum, i.e blackmailing.

  4. Tare

    No way anything could kill us boy there is always rainbow and silver lining ahead. This very “thin squad” thinking here gives me some vibes here. To the core of this team here: No passengers, true pros, no mercenaries and few Academy boys: a recipe for success. Tare

    • Irving08

      This team is the first I have really warmed to at Elland Road since the last year of George and the first two of O’Leary’s. It has a rare fighting spirit and ‘team-first’ ethic. You can’t buy that.

      • Will23

        Would have to agree with you here (but not on the artistic offerings of Leeds City Gallery or the HMI!)

  5. john wilson

    Yeah that’s right but unfortunately it depends on the investors that GFH.are trying to attract – min £1m each – to purchase the club and Leeds getting promoted quickly so that the club can be sold. If they.are not promoted quickly big big problems because more investors will be needed. If no investors forthcoming there would have to be a firesale of assets. Find out about what people say about GFH by googling. GFH do not have the resources to purchase the club without additional investment. They are in it for the short term

    • Reverend Ike

      The “£1 million each” email was clearly a fabricated wind-up.

      I believe the comment in the video was simply intended to reassure fans that GFH had access to funds beyond what is needed for the purchase. It seems obvious that promotion is necessary to realise the best return for those purchasing the club, and promotion will not happen without additional funds for player transfers …

  6. rob

    you trying to dampen our optimism again i see? why i read your garbage i dont know!

    • TSS

      I’m not trying to dampen anyone’s optimism, simply stating the facts and offering a prediction of how our fans’ mood will change if this continues much longer.

      Our fans expect everything yesterday, al-Rayes’ words – even though they’re clearly meant with the best intentions – are torment to Leeds United fans. Take a look at WACCOE and the level of cynicism that’s developed. I’ll give it a week before fans start blaming GFH for teasing them with the thought of what could be. It’ll no longer be a statement made with good intentions, but a statement designed to put pressure on Bates by leveraging the emotions of Leeds United fans. And it won’t be the first time they’ve turned on someone they previously liked, it’s a never-ending cycle (not exclusive to WACCOE either, just an example).

      As for the latter part of your comment, you were blessed with the gift of free will. No one’s forcing you to read something you dislike and hurl abuse like a child.

      • Tare

        Well we are all right then boys, all rosy and hell to pay…Tare

  7. tim campbell

    We’ve been down the ‘warchest’ road before, however this time £15 – 20 million should allow warnock the muscle hes been looking for. My take on the situation is that the owners are be pinning their hopes on promotion this season and at the very worst next season. Sound familiar (ridsales plan was pinned on qualifying for champions league football each season.)

    • Kalich

      15-20 wow tim those sound like astronomical figures mate , fuck I will be happy with new water bottles , that will be an accomplishment in its own , MOT

  8. anythinggoeshere

    why do you always blame Ken Bates? The fact is takeovers take a long time, they probably have to deal with lots of share holders not just Bates. As for how we should spend money if we get it, I think we need someone who can sit and keep possesion in midfield, we cannot keep possesion after going in front, so invite pressure on ourselves, we also need more creativity in the final third

  9. Deano

    Bates is one of those types a bit like my 75 year old business landlord. no matter what, you just cant do business with them.They are like deadwood and cant be budged. Ken wont do business with any one from GFH except their chairman he said in his interview the other day that there are some things that only chairman to chairman can agree word of Advice GFH stop sending the board members over to try seal the deal it needs to be only the my opinion though Bates enjoys all this attention it makes him feel important and the big business man. Trouble is Bates is also not stupid and he also knows that with promotion and himself still as chairman he would be able to also get his white whiskas around that media revenue also and with the way the Team are performing at the moment im afraid fans that maybe his mouth is starting to water.The only way us fans will see Ken Bates leave the club is in a wooden box with shiny gold handles

  10. Lufc1979ish

    We moaned when they kept quiet and now were moaning when they have stated their intentions. As you say the delay lies at ken bates’ door and I can’t see what else GFH can do right now. They should be given the benefit of the doubt until they are in charge and the January transfer window opens.

  11. Mike

    Good article and points well made. Irving08 makes a valid observation also. I understand those who would be critical of his point, but sadly nothing about the publicly available documents ( they are a quoted company after all) suggests GFH have anything like the money necessary. Quite where they will get it is anyone’s guess. The danger is they are making an investment gamble, perhaps borrowing via an off balance sheet vehicle to find the deal in the hope of not only a promotion but remaining in the PL with their return Ono investment coming from tv money. But what if the club is not promoted? This league must be after all the tightest anyone can remember Will they seek to sell to realise their investment gains? Who knows, but some scepticism is bound to arise.

  12. John Summers

    Be carful what u wish for. I’ve a sneaky feeling this GFH won’t be the knights in shining armour we’ve dreamt of. They have one goal for Leeds United, PROFIT. If the fail in their gamble for success we’ll be left with yet another mountain of debt

  13. mrbigwheels

    Yet more blustering from GFHC. Are they the ‘has beens’ in this saga with other suitors very close to grasping the ‘sleeping giant’?. Quite possibly so, imo. As you quite rightly state TSS… ”It’s the hope that kills us”
    Perhaps we should move on?. Leave them behind?. Dismiss the torment of their heady, empty approach for our club?. We should divert our attention to following Warnock and his team. They seem to be getting on with it and have a faith that will surely see success both on and off the playing field, I agree with Irving… ”It has a rare fighting spirit and ‘team-first’ ethic. You can’t buy that”… Well said that man. Warnock and his staff are rooted to their cause so I will cling to that and take my inspiration as to the clubs future, from that point alone.
    Hope there is some Barnsley bashing going on tomorrow. Come on Leeds.

  14. Ashley Brancker

    I see the fact that the league is tightly contested as an opportunity not a threat. It means that it would probably take less player investment ££’s to get promoted than a season where you have the likes of a fallen giant like Newcastle or West Ham in the Championship like we’ve seen over the past few years. A few mililion in January should at least give us a shot at going up through the play offs if not automatically. Alternatively the following season, with a bit more investment and maybe the persuasion for Warnock to stay on if funds are available, should see us up in the 2013/14 season…. It would realistically take good management and about £5-6 Million to see us up i think.

    • Irving08

      Generally, at this level, good management trumps money, given the fairly even and ‘market inefficient’ spread of talent throughout the division: the few outstanding players there are such as Zaha and Austin (and I’d say Snoddy when he was here) will probably go to Premier clubs….

  15. Ashley Brancker

    Plus, the way they are talking it is clear the deal is going to go through at some stage, its just stalling for whatever reason. just because their sources of finance arent clear through publically made documents doesnt mean it isnt there!! They have even confirmed it wont be a leveraged buy out (YEP yesterday)

  16. Yorkshirian

    If the cash does come flowing in, I hope we get Diouf and Tonge signed-up. They’re fitting in, and by January, will represent some consistency. Maxi G might also fit the bill in that respect.

  17. bd

    im going back to ER once Bates has gone instead of listening to matches on the radio. As long as the new owners communicate with the fans and let us know their plans and dont insult us its all good.
    I think warnock only needs a few more players (1 striker, 1 winger and 1/2 defenders) as he has a good time with youngsters in it which is important (bryam looks great and Lees and white will hopefully get better)

  18. Old Whitey

    Depression has already set in here i’m afraid; i don’t care that the YEP claims it’s not a levearaged buy out because like everyone else in the real world we know GFH has no money of it’s own; therefore in order to fulfil it’s promises it needs to come up with around £100 million; in their own words they give the value of LUFC at between £50 and £60 million and then they add in the £60 million from the promised land tv rights and they’ve got their money back and can and likely will sell us on; any fool will realise the same investment and more will be needed to keep us in the PL and that’s their investment profits down the drain for the next five years. like all bankers they are only interested in the bottom line, even then they’ve been sailing close to the wind having been on the brink of insolvency for three of the last four years; should that not say something to even the most optimistic of us? frying pan Fire springs to mind. MOT

  19. fringo

    Don’t you think that he’s just taken the promise of never-never land to another level? How do we know these GFH are not Bates’ bankers? What has everything added up to so far? Nothing really.

  20. Will23

    Sadly, this takeover, if successful, will result in as an opaque ownership arrangement as with Bates.

    GFH will not, I repeat, not, be open with fans. This is another offshore arrangement but with more smoke and mirrors than Bates. The financial statements of GFH Capital are not published so we will not know anything more about our owners financial circumstances than we do with the present structure.

    We will not be able to prove if GFH Capital have raised finance from external investors or used their own internal funds. We would only have their word for the structure and “my word is my bond” is a long lost principle.

    They have already proven themselves as willing to resort to marketing rhetoric with the purpose of winning over the fans. We all want to believe to hope for better things after 8 wasted years under Bates, but such emotions are at risk of overshadowing the real yet still hidden facts of the acquisition.

    • Irving08

      And I have to agree with you there too, Sir – but I do think the Art Gallery merits your further investigation, ‘Contested Ground’ (which you could not have seen) in particular.

  21. rolo493

    In my opinion the first signiture they should secure is Neil Warnock! The team he has built with no real money and after losing the “Big players” shows what a great manager he really is

    • allanw

      I could not agree more……give him a two year contract and see if not only will he get us in to the Prem but win it!!!

    • Dc

      Completely agree. Just look at the job Hughes is doing at QPR, I am sure Warnock would have done a better job. This is the problem though clubs are always looking for that big name rather than someone like Warnock who can steady the ship and build. QPR will be overtaking us next season.

  22. Will23

    ***What follows is not saying GFH’s involvement is bad for our club. Any new funding coming into the club is to be welcomed, but not wihtout first answering questions.***

    It is about asking questions and trying to provide an understanding based on the limited options available to GFH Capital in the funding of this deal.

    Crucially, the funding of the deal should NOT fall as part of a confidentiality agreement with Bates so I can only conclude there is a confidentiality arrangement between GFH and someone other than Bates.

    We want transparency, not ducking and diving like with our Dear Barrow Boy Leader.

    Haigh needs to confirm to all fans the source of the money and if GFH Capital are fully bearing all the risk. If the LUFC investment loses money, are those losses borne by GHF group?

    If solely an internal investment, it can only be really from three sources:

    1. From GHF Capital’s own profit reserves which have been built up over the years from buying & selling businesses and not paid out as dividends, but rather retained in the business for reinvesting in new opportunities (eg LUFC). As GFH Capial’s accounts are private we will never know the strength of their balance sheet and how much spare capital they have.

    2. From a fresh injection of capital from the bank, the parent company of GFH Capital? We do know the weakness of the bank’s financial position. That is very well publicised. This would be a worrying funding approach as it would mean GFH Capital (subsidiary)has limited free spare money (unless they sold off some investments).

    3. From a bond issue at parent or subsidiary level, meaning a debt and interest payable to bondholders. GFH seem to discount this funding approach in their statements.

    It is worth noting that irrespective of GFH Bank’s (parent) own balance sheet, GFH Capital could have a strong balance sheet of liquid funds sloshing around waiting to be invested. What is the source of that money is something GFH Capital fail to make *absolutely* clear in an unequivocal statement. We cannot see GFH Capital’s balance sheet and so will never know.

    Alternatively, are GFH Capital running the investment as a private equity fund operation? Again, their statements to do date do not preclude this option.

    GFH Capital could well be 100% equity owner of the club from a legal perspective but offer units to third parties to invest in a specific “Football/Sports fund” which GFH market to private/commercial investors and which includes LUFC as one/the sole investment within that fund.

    For example, Legal
    & General offer the chance to buy units in their “UK Equity Fund”. L&G administer that fund and decide which shares make up that fund. L&G set a benchmark target return they want from that fund. They run it.

    Each month I pay £100 to L&G and they use that money to buy a basket of £100 of shares. I do not directly own those shares, but instead my share in the fund is represented by a number of units. I own units. L&G own the shares, but they are bought with other people’s money. L&G have little risk.

    L&G charge me for their administration costs on a % of fund value basis. The more the shares increase in value the more money L&G make from their charges.

    With GFH Capital, it could
    be a similar type of arrangement though with much needed differences. Since L&G do not run the companies in whose shares they own and I can sell my units when I want. GFH could not run this fund like that.

    It would have to be on a minimum investment value and on a minimum time basis after which the fund would be realised with a sale of the underlying investment. Say 5 years.

    It may be that the private investors need to commit to up to, say, £10m each over the 5 years, to be drawn down as and when needed via a capital call. This is how private equity property fund partnerships work. So, the intial capital buys the investment, and subsequent capital calls help providing the needed working capital to run the club and buy players.

    So, these private investors each put “£100″ into the GFH “UK Football Club Equity Fund”. GFH own and run the fund, and own the underlying investments directly. GFH make a profit from charging those investors a fee.

    GFH use these “£100″ to buy the club and then players. GFH themselves put NO money into the fund themselves.

    So GFH Capital issue a press statement that says they will own 100% of the equity of LUFC. They say they are funding the deal and not acting on behalf of a consortium.

    This comment does not preclude the involvement of private investors buying units in LUFC which are sold to them by GFH Capital as part of a *fund*.

  23. barnzy

    lets be honest we will see davide somma starting a game before this takeovers complete


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