Telegraph | Sport | Leeds enjoy a profit as Bates ties up loose ends
Leeds enjoy a profit as Bates ties up loose ends
By Mihir Bose
(Filed: 16/06/2005)
Five months after Ken Bates flew in from Monte Carlo to rescue Leeds United, the takeover of the Yorkshire club has finally been completed, and the Championship side are on course to make a £5 million profit for the season just ended.
That profit, however, is almost entirely due to transfer activity. And although there will be more sales over the next 12 months - they have just sold Aaron Lennon for £1 million to Tottenham - Leeds are expected to make a loss of around £6 million for next season.
Bates said: "When I first arrived at Leeds it was on life support machine but it is now in intensive care.''
One of the most delicate jobs has been to upgrade the electricity wiring at Elland Road, which was 40 years old and, according to Bates, was "an accident waiting to happen like the Bradford City fire".
However, because of the way the previous board reduced the huge debt, it is only now that Bates has taken complete control.
The previous owners, Adulant Force, did a deal with the bondholders, who had lent £60 million, by paying them £2 million in full settlement.
However, this had an anti-embarrassment clause which stipulated that if within six months there was change of control which involved more than £5 million, the new owners would have to pay the bond holders a further £6 million. So in January, Forward Sports Foundation, in which Bates has an interest and is also managed by him, bought only 50 per cent and had an option to buy the remaining shares.
Now Silkey, an offshore investment bank, have got the other 50 per cent, completing the deal.
There could be future investment in the club but the immediate task for Bates is to try to reclaim Elland Road and the training ground which were sold by Adulant Force for £8 million. Both can be bought back for around £18 million and, given that their value would be £43 million, they could be great assets.
Bates has raised ticket prices for the first time in five years and, although slightly fewer were sold, Leeds have still made a profit.
Bates is making no bold promises that Leeds will be back in the Premiership next season. ''There are seven clubs which could make it back and we will be one of the seven,'' he added.
Should Leeds return in the next two seasons, a further £5 million will be payable to the bondholders.
Leeds enjoy a profit as Bates ties up loose ends
By Mihir Bose
(Filed: 16/06/2005)
Five months after Ken Bates flew in from Monte Carlo to rescue Leeds United, the takeover of the Yorkshire club has finally been completed, and the Championship side are on course to make a £5 million profit for the season just ended.
That profit, however, is almost entirely due to transfer activity. And although there will be more sales over the next 12 months - they have just sold Aaron Lennon for £1 million to Tottenham - Leeds are expected to make a loss of around £6 million for next season.
Bates said: "When I first arrived at Leeds it was on life support machine but it is now in intensive care.''
One of the most delicate jobs has been to upgrade the electricity wiring at Elland Road, which was 40 years old and, according to Bates, was "an accident waiting to happen like the Bradford City fire".
However, because of the way the previous board reduced the huge debt, it is only now that Bates has taken complete control.
The previous owners, Adulant Force, did a deal with the bondholders, who had lent £60 million, by paying them £2 million in full settlement.
However, this had an anti-embarrassment clause which stipulated that if within six months there was change of control which involved more than £5 million, the new owners would have to pay the bond holders a further £6 million. So in January, Forward Sports Foundation, in which Bates has an interest and is also managed by him, bought only 50 per cent and had an option to buy the remaining shares.
Now Silkey, an offshore investment bank, have got the other 50 per cent, completing the deal.
There could be future investment in the club but the immediate task for Bates is to try to reclaim Elland Road and the training ground which were sold by Adulant Force for £8 million. Both can be bought back for around £18 million and, given that their value would be £43 million, they could be great assets.
Bates has raised ticket prices for the first time in five years and, although slightly fewer were sold, Leeds have still made a profit.
Bates is making no bold promises that Leeds will be back in the Premiership next season. ''There are seven clubs which could make it back and we will be one of the seven,'' he added.
Should Leeds return in the next two seasons, a further £5 million will be payable to the bondholders.
