Times 4/5/07
Administration seals Leeds relegation
Leeds United have been relegated to League One after going into administration today, triggering an instant ten points deduction, the Football League has confirmed.
Their demotion from the Championship was all but certain already after their 1-1 draw with Ipswich Town left them trailing Hull City by three points with a goal difference deficit of nine.
Shortly after KPMG's appointment as administrators they agreed to sell the club to a newly-formed company called Leeds United Football Club Limited, with Ken Bates, Shaun Harvey and Mark Taylor as its directors. The sale of the club is subject to approval by its creditors who will meet before the end of May to consider a Company Voluntary Agreement, whereby they would forgo some of their debt. The Football League would also need to approve the sale.
However, the former Chelsea chairman could not resist criticising former club officials for incurring huge debts.
"The action (going into administration) taken brings to an end the financial legacy left by others that we have spent millions of pounds trying to settle," said Bates. "But the important thing now is not to view this as the end, but the beginning of a new era."
"The financial burden of the past finally pushed the club into administration following the issuing of a winding up petition by HM Revenue & Customs who will be one of the company's major creditors. The other parties who will suffer the biggest financial loss are institutions from which the board arranged funding: Astor Investment Holdings, Krato Trust and Forward Sports Fund who collectively will lose in excess of £22million."
A statement from KPMG revealed the club had debts "totalling approximately £35 million, with a cash injection of approximately £10m required to continue trading".
It also revealed that customs recently issued a winding-up petition for approximately £5m and had this debt not been paid by June 25 the club may have been forced into liquidation.
"The administrators understand from discussions with the Football League that the administration will result in the immediate deduction of ten points from the club's current points total in this year's Championship," the statement added. "This means that next season the club will start the campaign in League One with no points deducted."
"This agreement has been reached quickly to maximise the possibility of survival of this major football club, to minimise uncertainty for all the club's stakeholders and supporters and to allow the club to plan ahead for next season. There is now a big decision for the creditors to make at their forthcoming meeting."
Comment: Rick Broadbent
The word from Elland Road this morning was that Ken Bates was looking remarkably chipper for a man whose club was supposedly on the brink of ruin. Now we know why. Although Leeds' relegation was confirmed by the club going into administration and incurring a ten-point penalty, Bates emerged still in control of the club and with a heavily reduced debt.
With Simon Morris, a former director, in the latter stages of putting a takeover bid together, which was to include developing an arena and entertainment complex around Elland Road, and the prospect of a bid from Dominic Marrocco, who had spoken of bringing Mike Tyson with him as fitness coach, Bates moved swiftly. The club went into administration yesterday afternoon and then out again.
Ironically, Leeds' ineptitude on the pitch rendered the ten-point penalty irrelevant. The club was already relegated, barring a miracle against Derby County on Sunday, and so administration has probably never looked so tempting. Quite what the Inland Revenue make of it is another matter, but it is scarcely any wonder Bates looked happy as he rolled into work this morning. It is not every day that you can justifiably celebrate relegation as a positive move after all.
Leeds' rise and fall 1989-2007
Times Online and Agencies
1989-90: Leeds promoted to top flight for the first time in seven seasons.
1990-91: Finish fourth.
1991-92: Edge out Manchester United to win the First Division title.
1995-96: Beaten 3-0 by Aston Villa in League Cup final.
1996-97: Howard Wilkinson sacked after poor start to the season and replaced by George Graham. Peter Ridsdale becomes the club's chairman.
1998-99: Graham departs for Tottenham Hotspur, with assistant manager David O'Leary taking charge.
1999-2000: Qualify for Champions League but beaten in UEFA Cup semi-final by Galatasaray. United supporters Christopher Loftus and Kevin Speight stabbed to death before the first leg in Istanbul. Players Jonathan Woodgate and Lee Bowyer involved in incident which left an Asian student hospitalised, resulting in lengthy court case.
2000-01: Reach Champions League semi-finals, going out to Valencia but miss out on qualification for following year's tournament.
2001-02: Finish fifth in Premiership, missing out on Champions League qualification.
2002-03: O'Leary sacked before start of season, Terry Venables takes over. Rio Ferdinand sold to Manchester United for £30million. Venables sacked in March 2003 with Peter Reid appointed as his successor. Chairman Peter Ridsdale resigns from the board, the club struggling with net debts of around £79million. Leeds finish 15th in Premier League.
2003-04: Reid is sacked. Eddie Gray appointed caretaker boss until end of season and club are relegated. Gerald Krasner's consortium takes control of club, assuming debts of £103million.
2004-05: Kevin Blackwell is appointed as manager but Elland Road and the club's training ground is sold, along with further cuts to the playing staff. Leeds finish 14th in Championship.
2005-06: Former Chelsea chief Ken Bates buys a 50% stake in the club for £10million, saving them from administration. Leeds finish fifth but are beaten in play-off final by Watford.
2006-07: Blackwell is sacked. Dennis Wise appointed manager at Elland Road along with former Chelsea team-mate Gus Poyet as his assistant. Wise appoints summer signing Kevin Nicholls as Leeds' new skipper. After the February 10 game with Crystal Palace, Wise reveals a 'mole' had leaked the Leeds team to Palace prior to kick-off. Wise insisted the mystery player "will never play for this club again". The culprit has yet to be named. The following month, Nicholls was dropped and stripped of the captaincy after requesting a return to former club Luton Town.
April 28 - Relegation to League One is all-but confirmed as Leeds draw 1-1 at home to Ipswich while Hull City win 1-0 at Cardiff. It means Leeds trail Hull by three points and Hull's goal difference is superior by nine goals, leaving Leeds with only a mathematical chance of escaping relegation on Sunday when they travel to Derby County and Hull face Plymouth Argyle at home.
May 4 - Administrators are appointed at Elland Road and they quickly agree to sell the business and its assets to a newly-formed company called Leeds United Football Club Limited, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor. The sale has to be approved by creditors at a meeting later this month and by the Football League. Going into administration means the club incur a 10-point deduction which confirms their relegation to League One.
Comment: Leeds take the fall now in hope of rising again
Robert Lindsay
Ken Bates has found a clever way out of some of Leeds' debts by putting it into administration and forming a new company to buy it back instantly.
As chairman and controller of the club, having paid £10 million for such control two years ago, it was Mr Bates who called in the administrators KPMG. Today we hear that he has formed a new company Leeds United Football Club Limited and persuaded KPMG to hand the club over to this new company. It is unlikely he will pay anything for this.
The administrators made clear that the club needs a £10 million cash injection to stay alive and presumably Mr Bates and his backers will have to stump up this money.
The club has £35 million in debt and one of the creditors is Her Majesty's Revenue and Customs, which has been demanding £5 million in tax payments and willl liquidate the club and sell off its few assets if it has not been paid by June 25.
Creditors have to vote on the deal. While the football debts (players' wages, etc) must be paid if the club is to contiunue, other creditors face the choice of forgoing some of the £35 million they are owed or risk the club being broken up and then taking their place in the queue, behind the Government and banks, for its few assets.
They may be praying for a white knight billionaire to ride to the rescue. But Leeds has been floundering for years and there have been no signs of one up to now.
By timing the administration now, when Leeds were already heading for relegation to football's third tier, the club can take the 10-point penalty automatically imposed for entering administration up front and start next season with a clean slate. And perhaps renewed optimism.
Administration seals Leeds relegation
Leeds United have been relegated to League One after going into administration today, triggering an instant ten points deduction, the Football League has confirmed.
Their demotion from the Championship was all but certain already after their 1-1 draw with Ipswich Town left them trailing Hull City by three points with a goal difference deficit of nine.
Shortly after KPMG's appointment as administrators they agreed to sell the club to a newly-formed company called Leeds United Football Club Limited, with Ken Bates, Shaun Harvey and Mark Taylor as its directors. The sale of the club is subject to approval by its creditors who will meet before the end of May to consider a Company Voluntary Agreement, whereby they would forgo some of their debt. The Football League would also need to approve the sale.
However, the former Chelsea chairman could not resist criticising former club officials for incurring huge debts.
"The action (going into administration) taken brings to an end the financial legacy left by others that we have spent millions of pounds trying to settle," said Bates. "But the important thing now is not to view this as the end, but the beginning of a new era."
"The financial burden of the past finally pushed the club into administration following the issuing of a winding up petition by HM Revenue & Customs who will be one of the company's major creditors. The other parties who will suffer the biggest financial loss are institutions from which the board arranged funding: Astor Investment Holdings, Krato Trust and Forward Sports Fund who collectively will lose in excess of £22million."
A statement from KPMG revealed the club had debts "totalling approximately £35 million, with a cash injection of approximately £10m required to continue trading".
It also revealed that customs recently issued a winding-up petition for approximately £5m and had this debt not been paid by June 25 the club may have been forced into liquidation.
"The administrators understand from discussions with the Football League that the administration will result in the immediate deduction of ten points from the club's current points total in this year's Championship," the statement added. "This means that next season the club will start the campaign in League One with no points deducted."
"This agreement has been reached quickly to maximise the possibility of survival of this major football club, to minimise uncertainty for all the club's stakeholders and supporters and to allow the club to plan ahead for next season. There is now a big decision for the creditors to make at their forthcoming meeting."
Comment: Rick Broadbent
The word from Elland Road this morning was that Ken Bates was looking remarkably chipper for a man whose club was supposedly on the brink of ruin. Now we know why. Although Leeds' relegation was confirmed by the club going into administration and incurring a ten-point penalty, Bates emerged still in control of the club and with a heavily reduced debt.
With Simon Morris, a former director, in the latter stages of putting a takeover bid together, which was to include developing an arena and entertainment complex around Elland Road, and the prospect of a bid from Dominic Marrocco, who had spoken of bringing Mike Tyson with him as fitness coach, Bates moved swiftly. The club went into administration yesterday afternoon and then out again.
Ironically, Leeds' ineptitude on the pitch rendered the ten-point penalty irrelevant. The club was already relegated, barring a miracle against Derby County on Sunday, and so administration has probably never looked so tempting. Quite what the Inland Revenue make of it is another matter, but it is scarcely any wonder Bates looked happy as he rolled into work this morning. It is not every day that you can justifiably celebrate relegation as a positive move after all.
Leeds' rise and fall 1989-2007
Times Online and Agencies
1989-90: Leeds promoted to top flight for the first time in seven seasons.
1990-91: Finish fourth.
1991-92: Edge out Manchester United to win the First Division title.
1995-96: Beaten 3-0 by Aston Villa in League Cup final.
1996-97: Howard Wilkinson sacked after poor start to the season and replaced by George Graham. Peter Ridsdale becomes the club's chairman.
1998-99: Graham departs for Tottenham Hotspur, with assistant manager David O'Leary taking charge.
1999-2000: Qualify for Champions League but beaten in UEFA Cup semi-final by Galatasaray. United supporters Christopher Loftus and Kevin Speight stabbed to death before the first leg in Istanbul. Players Jonathan Woodgate and Lee Bowyer involved in incident which left an Asian student hospitalised, resulting in lengthy court case.
2000-01: Reach Champions League semi-finals, going out to Valencia but miss out on qualification for following year's tournament.
2001-02: Finish fifth in Premiership, missing out on Champions League qualification.
2002-03: O'Leary sacked before start of season, Terry Venables takes over. Rio Ferdinand sold to Manchester United for £30million. Venables sacked in March 2003 with Peter Reid appointed as his successor. Chairman Peter Ridsdale resigns from the board, the club struggling with net debts of around £79million. Leeds finish 15th in Premier League.
2003-04: Reid is sacked. Eddie Gray appointed caretaker boss until end of season and club are relegated. Gerald Krasner's consortium takes control of club, assuming debts of £103million.
2004-05: Kevin Blackwell is appointed as manager but Elland Road and the club's training ground is sold, along with further cuts to the playing staff. Leeds finish 14th in Championship.
2005-06: Former Chelsea chief Ken Bates buys a 50% stake in the club for £10million, saving them from administration. Leeds finish fifth but are beaten in play-off final by Watford.
2006-07: Blackwell is sacked. Dennis Wise appointed manager at Elland Road along with former Chelsea team-mate Gus Poyet as his assistant. Wise appoints summer signing Kevin Nicholls as Leeds' new skipper. After the February 10 game with Crystal Palace, Wise reveals a 'mole' had leaked the Leeds team to Palace prior to kick-off. Wise insisted the mystery player "will never play for this club again". The culprit has yet to be named. The following month, Nicholls was dropped and stripped of the captaincy after requesting a return to former club Luton Town.
April 28 - Relegation to League One is all-but confirmed as Leeds draw 1-1 at home to Ipswich while Hull City win 1-0 at Cardiff. It means Leeds trail Hull by three points and Hull's goal difference is superior by nine goals, leaving Leeds with only a mathematical chance of escaping relegation on Sunday when they travel to Derby County and Hull face Plymouth Argyle at home.
May 4 - Administrators are appointed at Elland Road and they quickly agree to sell the business and its assets to a newly-formed company called Leeds United Football Club Limited, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor. The sale has to be approved by creditors at a meeting later this month and by the Football League. Going into administration means the club incur a 10-point deduction which confirms their relegation to League One.
Comment: Leeds take the fall now in hope of rising again
Robert Lindsay
Ken Bates has found a clever way out of some of Leeds' debts by putting it into administration and forming a new company to buy it back instantly.
As chairman and controller of the club, having paid £10 million for such control two years ago, it was Mr Bates who called in the administrators KPMG. Today we hear that he has formed a new company Leeds United Football Club Limited and persuaded KPMG to hand the club over to this new company. It is unlikely he will pay anything for this.
The administrators made clear that the club needs a £10 million cash injection to stay alive and presumably Mr Bates and his backers will have to stump up this money.
The club has £35 million in debt and one of the creditors is Her Majesty's Revenue and Customs, which has been demanding £5 million in tax payments and willl liquidate the club and sell off its few assets if it has not been paid by June 25.
Creditors have to vote on the deal. While the football debts (players' wages, etc) must be paid if the club is to contiunue, other creditors face the choice of forgoing some of the £35 million they are owed or risk the club being broken up and then taking their place in the queue, behind the Government and banks, for its few assets.
They may be praying for a white knight billionaire to ride to the rescue. But Leeds has been floundering for years and there have been no signs of one up to now.
By timing the administration now, when Leeds were already heading for relegation to football's third tier, the club can take the 10-point penalty automatically imposed for entering administration up front and start next season with a clean slate. And perhaps renewed optimism.