Guardian Unlimited Football | News | Bates takeover offers hope for suffering Leeds
Before anyone hails Ken Bates as the man who will transform Leeds United's fortunes it is worth remembering that before Roman Abramovich arrived at Chelsea they were around £80m in debt and confronted by the possibility of administration. Despite having transformed the club in his time at Stamford Bridge it was done at considerable cost so only those with selective memories will cast him as a saviour at Elland Road.
Bates is entitled, however, to believe yesterday's £10m takeover has not only stopped the rot but offered hope. Leeds had been hurtling towards administration and a 10-point penalty that would have left a financially shipwrecked club third from bottom of the Championship and contemplating relegation to the third division. There is no telling what might have happened after that but the long-suffering Leeds supporters will no longer have to consider the possibility of a regular Yorkshire derby against Doncaster Rovers.
The matter of restoring Leeds to the Premiership, and keeping them there, is not so clear cut. Bates does not have the bags of gold to do an Abramovich or even come close. Leeds are still £24.5m in debt and they have spent virtually the entire season in the lower reaches of a division so mediocre the Sunderland manager Mick McCarthy recently declared "every team was as bad as each other".
Bates's first job will be to peruse Kevin Blackwell's record since his promotion to manager last summer. There are mitigating circumstances to Leeds' position behind the likes of Preston, Burnley and Derby but Bates has never been inclined to listen to excuses and Blackwell should be acutely aware that his new employer sacked Gianluca Vialli at Chelsea only five games into the 2000-01 season and three months after the FA Cup had been won.
Dennis Wise's name has already cropped up as a possible replacement and, despite a public declaration from Bates that he is "not looking to bring anyone else in", Blackwell certainly seems prepared for the worst. "I'm sure he will assess things," he admitted. "Someone who puts his own money into a club may decide he wants his own man and I have to respect that."
As a former goalkeeper, Blackwell will have also picked up on the fact that when Bates was exploring the possibilities of investing in Sheffield Wednesday he declared on more than one occasion that he would sack Chris Turner as manager. Bates does not believe former goalkeepers are cut out for the role and Blackwell will have to convince him there are exceptions to the rule.
"I've just started building something here and I hope I get a chance to finish it," he added. "But whatever happens I think I can look back on the situation here and say that if I leave the club it is in a lot healthier state now than when I found it."
Bates set out his appraisal of his new club. "It is no exaggeration to say Leeds are very hard up. It's going to be a tough job and the first task is to stabilise the cash flow and sort out the remaining creditors," he said. "But there is light at the end of a very long tunnel. For the past year it has been a matter of firefighting - now we can start running the club again.
"The first thing is to stabilise the team and the finances. Getting to the play-offs would be a bonus but I'm not quite sure if that's realistic. Certainly, I wouldn't like to win promotion this year because if you go up too soon you will just come straight back down."
Instead, he believes a more realistic ambition is to "get promotion in the next couple of seasons" and after that he does not consider it unreasonable to "establish ourselves, get into the top six and back into Europe".
As for Wise, Bates snapped: "It's a load of bollocks."
Uppermost in his thoughts will also be the buying back of the club's stadium, as well as their training ground at Thorp Arch near Wetherby. When the club's debts were at their worst, peaking at £103m 10 months ago, both assets were sold to the Manchester-based property developer Jacob Adler.
In a smart PR move, designed to win over the Leeds supporters, Bates said he planned to initiate talks with Adler "in due course". He added: "Fans could ensure that no would-be property developer will be able to end the playing of football atElland Road."
The appointment of a new chief executive would help to quicken that process and, to that end, it was highly conceivable that Bates would turn to one of his most trusted former colleagues at Stamford Bridge. A pity for him, perhaps, that Trevor Birch made it clear last night he would not entertain the idea of resuming their working relationship.
Bates has brought on board two other former employees, Chelsea's former finance director Yvonne Todd and lawyer Mark Taylor, but Birch said he would not leave his new position as a partner at Deloitte. "I've left football behind," he said, adding of Bates: "I think he's got enough knowledge to do the job himself."
Bates immediately set about showing just that by paying off an overdue £1.2m instalment that was owed to the Inland Revenue as part of a £3.5m debt.
Along with the outgoing chairman Gerald Krasner, Simon Morris, Melvyn Levi and Melvin Helme have all resigned as directors. Peter Lorimer, the former Leeds player, has been retained in another tactical PR move and Bates has asked Krasner to remain at the club in an advisory capacity. Krasner, who has done a better job than many people seem willing to give him credit for, will carry on working behind the scenes, albeit on a temporary basis.
"We saved the club from extinction," he said. "We solved 80% of the club's problems and, with no doubt, Ken will solve the rest. When Leeds are back in the Premiership and winning silverware I will be somewhere smiling quietly, knowing we played some part in it."
The negotiations were so quick that many Leeds fans will not even have had time to digest exactly what was happening. Bates, under the guise of a Geneva-based company known as the Forward Sports Fund, approached the club on Monday and offered to buy a 51% stake for £10m. Lawyers on both sides worked round the clock to get a quick agreement, finalising the deal at 2.27am yesterday.
Bates bought Chelsea for the grand total of £1 in 1982 and, despite all of Leeds's difficulties, he will consider he has another bargain. "This is a great club," he said. "It has just fallen on some hard times."
On the new board
Yvonne Todd
A loyal servant to Bates at Chelsea, where she served as finance director for 17 years. When she joined in 1988, the club were on their way to relegation from the old First Division. By the time she left last year, they were an established top-six Premiership club with a redeveloped stadium and a star-studded team. But the holding company was also £80m in debt before Roman Abramovich stepped in. Insiders say Todd worked well with Bates but that it was clear who held the purse strings. The most complex deals she assisted with were a series of moves in the early 1990s to transfer the club's assets into a new holding company, saving the club from the threat of insolvency.
Mark Taylor
While Bates was at Stamford Bridge, Taylor worked on a string of complex deals on behalf of the then chairman and Colin Hutchinson, then chief executive. He was Chelsea's lawyer of choice, advising on a string of deals which he handled through his own company Mark Taylor & Co, culminating in the £60m deal that saw Abramovich take over and netted Bates £17m.
What Leeds owe£4.5m To be paid over four years and the amount owed to directors, including Gerald Krasner, Simon Morris and Melyvn Levy
£3.6m Amount owed in income tax and VAT
£8.8m Amount owed to former managers, players and agents
£7.6m Other creditors and bondholders
£ 24.5m Total estimated outstanding debt
Before anyone hails Ken Bates as the man who will transform Leeds United's fortunes it is worth remembering that before Roman Abramovich arrived at Chelsea they were around £80m in debt and confronted by the possibility of administration. Despite having transformed the club in his time at Stamford Bridge it was done at considerable cost so only those with selective memories will cast him as a saviour at Elland Road.
Bates is entitled, however, to believe yesterday's £10m takeover has not only stopped the rot but offered hope. Leeds had been hurtling towards administration and a 10-point penalty that would have left a financially shipwrecked club third from bottom of the Championship and contemplating relegation to the third division. There is no telling what might have happened after that but the long-suffering Leeds supporters will no longer have to consider the possibility of a regular Yorkshire derby against Doncaster Rovers.
The matter of restoring Leeds to the Premiership, and keeping them there, is not so clear cut. Bates does not have the bags of gold to do an Abramovich or even come close. Leeds are still £24.5m in debt and they have spent virtually the entire season in the lower reaches of a division so mediocre the Sunderland manager Mick McCarthy recently declared "every team was as bad as each other".
Bates's first job will be to peruse Kevin Blackwell's record since his promotion to manager last summer. There are mitigating circumstances to Leeds' position behind the likes of Preston, Burnley and Derby but Bates has never been inclined to listen to excuses and Blackwell should be acutely aware that his new employer sacked Gianluca Vialli at Chelsea only five games into the 2000-01 season and three months after the FA Cup had been won.
Dennis Wise's name has already cropped up as a possible replacement and, despite a public declaration from Bates that he is "not looking to bring anyone else in", Blackwell certainly seems prepared for the worst. "I'm sure he will assess things," he admitted. "Someone who puts his own money into a club may decide he wants his own man and I have to respect that."
As a former goalkeeper, Blackwell will have also picked up on the fact that when Bates was exploring the possibilities of investing in Sheffield Wednesday he declared on more than one occasion that he would sack Chris Turner as manager. Bates does not believe former goalkeepers are cut out for the role and Blackwell will have to convince him there are exceptions to the rule.
"I've just started building something here and I hope I get a chance to finish it," he added. "But whatever happens I think I can look back on the situation here and say that if I leave the club it is in a lot healthier state now than when I found it."
Bates set out his appraisal of his new club. "It is no exaggeration to say Leeds are very hard up. It's going to be a tough job and the first task is to stabilise the cash flow and sort out the remaining creditors," he said. "But there is light at the end of a very long tunnel. For the past year it has been a matter of firefighting - now we can start running the club again.
"The first thing is to stabilise the team and the finances. Getting to the play-offs would be a bonus but I'm not quite sure if that's realistic. Certainly, I wouldn't like to win promotion this year because if you go up too soon you will just come straight back down."
Instead, he believes a more realistic ambition is to "get promotion in the next couple of seasons" and after that he does not consider it unreasonable to "establish ourselves, get into the top six and back into Europe".
As for Wise, Bates snapped: "It's a load of bollocks."
Uppermost in his thoughts will also be the buying back of the club's stadium, as well as their training ground at Thorp Arch near Wetherby. When the club's debts were at their worst, peaking at £103m 10 months ago, both assets were sold to the Manchester-based property developer Jacob Adler.
In a smart PR move, designed to win over the Leeds supporters, Bates said he planned to initiate talks with Adler "in due course". He added: "Fans could ensure that no would-be property developer will be able to end the playing of football atElland Road."
The appointment of a new chief executive would help to quicken that process and, to that end, it was highly conceivable that Bates would turn to one of his most trusted former colleagues at Stamford Bridge. A pity for him, perhaps, that Trevor Birch made it clear last night he would not entertain the idea of resuming their working relationship.
Bates has brought on board two other former employees, Chelsea's former finance director Yvonne Todd and lawyer Mark Taylor, but Birch said he would not leave his new position as a partner at Deloitte. "I've left football behind," he said, adding of Bates: "I think he's got enough knowledge to do the job himself."
Bates immediately set about showing just that by paying off an overdue £1.2m instalment that was owed to the Inland Revenue as part of a £3.5m debt.
Along with the outgoing chairman Gerald Krasner, Simon Morris, Melvyn Levi and Melvin Helme have all resigned as directors. Peter Lorimer, the former Leeds player, has been retained in another tactical PR move and Bates has asked Krasner to remain at the club in an advisory capacity. Krasner, who has done a better job than many people seem willing to give him credit for, will carry on working behind the scenes, albeit on a temporary basis.
"We saved the club from extinction," he said. "We solved 80% of the club's problems and, with no doubt, Ken will solve the rest. When Leeds are back in the Premiership and winning silverware I will be somewhere smiling quietly, knowing we played some part in it."
The negotiations were so quick that many Leeds fans will not even have had time to digest exactly what was happening. Bates, under the guise of a Geneva-based company known as the Forward Sports Fund, approached the club on Monday and offered to buy a 51% stake for £10m. Lawyers on both sides worked round the clock to get a quick agreement, finalising the deal at 2.27am yesterday.
Bates bought Chelsea for the grand total of £1 in 1982 and, despite all of Leeds's difficulties, he will consider he has another bargain. "This is a great club," he said. "It has just fallen on some hard times."
On the new board
Yvonne Todd
A loyal servant to Bates at Chelsea, where she served as finance director for 17 years. When she joined in 1988, the club were on their way to relegation from the old First Division. By the time she left last year, they were an established top-six Premiership club with a redeveloped stadium and a star-studded team. But the holding company was also £80m in debt before Roman Abramovich stepped in. Insiders say Todd worked well with Bates but that it was clear who held the purse strings. The most complex deals she assisted with were a series of moves in the early 1990s to transfer the club's assets into a new holding company, saving the club from the threat of insolvency.
Mark Taylor
While Bates was at Stamford Bridge, Taylor worked on a string of complex deals on behalf of the then chairman and Colin Hutchinson, then chief executive. He was Chelsea's lawyer of choice, advising on a string of deals which he handled through his own company Mark Taylor & Co, culminating in the £60m deal that saw Abramovich take over and netted Bates £17m.
What Leeds owe£4.5m To be paid over four years and the amount owed to directors, including Gerald Krasner, Simon Morris and Melyvn Levy
£3.6m Amount owed in income tax and VAT
£8.8m Amount owed to former managers, players and agents
£7.6m Other creditors and bondholders
£ 24.5m Total estimated outstanding debt
