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Leeds United; Know the past to understand the present

Those who cannot remember the past are condemned to repeat itGeorge Santayana

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The £1.5m loaned to Leeds United by Massimo Cellino last week is a further addition to the list of liabilities which demonstrate that the Whites owe three of the parties that have attempted to purchase a controlling stake of the club in the past quarter.

It is reported that Cellino’s contribution in anticipation of his likely takeover has been used to meet the wage bill for January and current managing director David Haigh via the Sport Capital group put forward a sum of £1m to cover the wage bill back in November last year.

Leeds United entered administration on 4th May 2007 and was put into Creditors Voluntary Liquidation on 15th February 2008. The joint liquidators agreed 231 claims for unsecured creditors totalling £18,531,050. A second interim dividend of 2 pence in the pound was declared to those unsecured creditors with admitted claims in October 2011, bringing total dividends paid to date to 4 pence in the pound. The liquidators stated at the time that there was unlikely to be any further significant dividends available to unsecured creditors unless Leeds United achieved promotion to the Premier League before the start of the 2017/2018 season. Perhaps more alarmingly for the financial wellbeing of the club was that the same liquidators report stated that an additional £4.75m of consideration will be paid on the condition that the club achieves promotion to the Premier League before the 2017/2018 season.

All the reports coming out of Leeds United is that the club is surviving on borrowed funds. The East stand was redeveloped to the tune of £7m, mortgaging the development against prospective season-ticket revenue. However the season-ticket revenue for the current season was whisked away when Leeds United had to settle with Ticketus for a debt to the tune of £3.3m. The shirt sponsorship deal with Andrew Flowers’ Enterprise Insurance was paid upfront and those in the know suggest it was gobbled up in securing a new deal for Ross McCormack. The fact that Enterprise Insurance served a winding-up petition on the 29th of January which is due to be heard in the High Court on 17th March puts serious doubt on whether Flower’s company will see out its deal which is due to run until the 2016-17 season.

In 2007 Leeds United were deducted 10 points after going into administration and were relegated to League One. If the same situation were to happen today they would slip from 11th to 19th and would sit just 5 points off the relegation zone. We cannot predict what the owners of Leeds United will do, be that current owners Gulf Finance House or potentially Massimo Cellino. Unless a fresh injection of finance is put into the club, the debts will continue to mount.  Cellino’s bid is reported to be £25million but with the casualties of two key sponsors in the form of Enterprise Insurance and Flamingo Land will Leeds United be staring into the breach once again as they did in 2007? The words of Andrew Flowers tick all the right boxes for how this once great football superpower can return to the heights of Champions League Football and give the city of Leeds the Premiership football team it deserves:-

I am a lifelong supporter and sincerely believed that I could make a real contribution towards the goal of promotion to the Premier League and at the same time provide the stability and sound financial governance the club desperately needs.”

Andy Boyde – Sports Consultant


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Transfer Window for Managers – Necessary or Needless?

John Hartson was quoted recently that his manager whilst at Celtic Martin O’Neill had said that even the best managers are only three or four games away from the sack.

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There has been a growing trend that has seen Malky Mackay, Steve Clarke and most recently Brian Laudrup lose their positions as managers of Cardiff City, West Bromich Albion and Swansea City respectively from off field intervention. In the 2012-13 season there were 63 managerial changes in English Football, 43 sackings and 20 resignations. In real money, that equates to over 2/3rds of the 92 clubs changing their manager during the season.

Gary Neville has advocated a Manager Transfer Window which would replicate that which is in place for players. If a club appoints a manager at the start of preseason in the summer then they will have done that because they believe him to be the right man for the job. Why then should they sack the manager less than 10 games into his tenure. Alex Ferguson is perhaps the best example of why a club should stand by a manager. Ferguson is arguably the most successful manager in British football and in the current climate at any other club he would be out of a job based upon the start he made at Manchester United.

Paul Ince has spoken out about the protection afforded to young managers:-

Why would the Steven Gerrard’s and the Jamie Carragher’s want to go into management when there’s no protection for them…It’s OK that we can protect players because they’re on contracts. We can sell them in January, and if they don’t want to go, they stay, it should be exactly the same as a manager.”

Where the system would not work is if we look at the case of Paolo Di Canio at Sunderland where he had publicly criticised players and ultimately had lost the dressing room. Once the players have made their minds up they can’t play for a manager an intervention has to be made to stop the rot, the club could not wait until January to alter their fortunes. In the case of Sunderland that change was to bring in Gus Poyet to replace Di Canio and Sunderland now find themselves in 14th place in the league albeit just 2 points off the relegation zone.

The manager that must feel most aggrieved following recent events is Leeds United’s Brian McDermott. It was rumoured that would be buyer of Leeds United, Italian Massimo Cellino, had requested that McDermott include a bench spot for Gianluca Festa, the former Middlesbrough defender, to sit and observe the midweek game against Ipswich Town. The request was denied by Brian McDermott who most probably felt undermined at an obvious successor in the wings being sat behind him breathing down his neck. McDermott was relieved of his duties as manager on the Friday preceding the Whites 5-1 victory over local rivals Huddersfield Town and reinstated less than 24 hours later by Bahrain owners GFH Capital.       

McDermott spoke up regarding his sacking stating:-

Whether it [his sacking] was illegal or not, I don’t know. But whoever sacked the manager has to own the football club

The situation begs the question why do players get protection in the form of 4 to 5 year contracts and never endure the threat of dismissal for poor performance where this is the norm for a manager?

John Hendrie and Jim Pearson – Sports Consultants

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