Leeds United takeover talks: All signs point to a deal in the offing
Yorkshire Evening Post 30/5/12
Chief football writer Phil Hay looks at the implications of Leeds United’s takeover talks announcement.
Ken Bates has a stock response to anyone who approaches him with promises of meaningful investment in Leeds United.
“We have two golden rules,” he said last year, 24 hours after revealing himself as the club’s new owner. “We say ‘the identity of a proposed investor, proof of funds in a London bank.’ That usually gets rid of most of them.”
In the past decade, rumours of impending investment at Leeds have often proved to be no more than speculation but the fact that an interested party were present at Elland Road six days ago suggests the individuals concerned have already cleared the first hurdle facing them.
The group, described as North American, took a tour of United’s stadium and their training ground at Thorp Arch last Thursday as whispers of a buy-out began to circulate in the city around them.
It was an intriguing end to a concerning week in which doubts surfaced about the club’s ability to fund either the number or the quality of signings planned by Neil Warnock for his first full season as United manager.
Warnock made his first summer signing on May 4, paying £500,000 to land Jason Pearce from Portsmouth, but his attempt to follow up that deal with a £400,000 purchase of Joel Ward was frustrated by Leeds’ failure to put up the fee.
Ward slipped through Warnock’s fingers on Monday, joining Crystal Palace instead, and other proposed signings are under threat. The YEP understands that Warnock has been similarly unable to finalise an agreement to bring Derby County midfielder Paul Green – another of his targets – to Elland Road on a free transfer.
The lack of progress in the transfer market, at a time when Warnock hoped his squad would begin taking shape, pointed to two possibilities: a shortage of available cash at Elland Road or the potential arrival of new owners.
Bates, United’s chairman and majority shareholder, has rarely given any indication of a willingness to relinquish control but confirmation of discussions in Leeds last week has given the idea some credence.
A statement from Leeds read: “The club can confirm that talks are taking place regarding investment for the long-term future. “The club has always publicly stated that it would welcome potential investment but has maintained a belief whereby the quality of the investor is the most important factor in terms of the long-term development of Leeds United.”
The YEP has been told of a second consortium with an interest in purchasing Leeds, though the group are not believed to have made contact with United.
A source involved in the consortium, which has links to both England and the Middle East, admitted they were “some distance away” from being ready to table a bid for Leeds and said investment in another English club was also under consideration.
Leeds have long been seen as one of the more attractive investments in English football, despite the fact that the club do not own either Elland Road or their Thorp Arch training complex and pay more than £2million annually to lease both properties.
The club have made pre-tax profits totalling more than £10million since the summer of 2007 and posted a gain of £3.5million at the end of the 2010-11 financial year.
United’s rental agreement for Elland Road includes a buy-back clause which, according to the club’s most recent set of accounts, would cost £14.85million to exercise.
Richard Cramer, a specialist in sports law with Front Row Legal in Leeds, told the YEP: “My objective view is that Leeds as a club are a good investment but anyone who plans to get heavily involved at Elland Road is going to need serious money. They won’t get the club at a snip.
“In the first instance, I can’t see the club being cheap to buy and there’s a lot more to this than simply taking over. After that you’ve got the cost of investing in infrastructure – dealing with the stadium and the training ground for example – and the cost of building a squad good enough to take Leeds into the Premier League.
“Even then you’ve got the pressure to continue on the up and up. I don’t see the supporters accepting what happened to Burnley or Blackpool – where you go up for a season and come straight down with parachute payments to play with. The club are an attractive proposition, provided you’ve got the right financial credentials and the right vision.”
United expect to raise transfer funds through the summer sale of transfer-listed midfielder Adam Clayton, and the club stand to receive compensation if winger Aidan White turns down a new contract and leaves Elland Road.
Leeds are also likely to listen to offers for Ross McCormack, who has rejected the club’s offer of a new deal and is out of contract in 12 months’ time, but cash received through substantial outside investment could spectacularly change the landscape facing Warnock.
United underwent a change of ownership as recently as April of last year when Bates announced that he was buying a 72.85 per cent stake in the club from previous owners, Forward Sports Fund (FSF).
Leeds were heading for a seventh-placed finish in the Championship at the time but the club struggled to make a sustained challenge for promotion this season, ending the campaign in 14th place.
Their income in the past 12 months is likely to have been affected by a notable drop in attendances and the club are committed to using season-ticket money from both the 2012-13 and 2013-14 campaigns to repay a loan taken out to fund the recent development of the East Stand at Elland Road.
Cramer said: “If I was advising anyone about investment in English football then I’d certainly suggest they look at Leeds United.
“But you’d need to show the colour of your money to get involved there and it seems clear to me that investment is needed at Elland Road. You don’t get the impression that there’s a huge amount of cash available.”
Chief football writer Phil Hay looks at the implications of Leeds United’s takeover talks announcement.
Ken Bates has a stock response to anyone who approaches him with promises of meaningful investment in Leeds United.
“We have two golden rules,” he said last year, 24 hours after revealing himself as the club’s new owner. “We say ‘the identity of a proposed investor, proof of funds in a London bank.’ That usually gets rid of most of them.”
In the past decade, rumours of impending investment at Leeds have often proved to be no more than speculation but the fact that an interested party were present at Elland Road six days ago suggests the individuals concerned have already cleared the first hurdle facing them.
The group, described as North American, took a tour of United’s stadium and their training ground at Thorp Arch last Thursday as whispers of a buy-out began to circulate in the city around them.
It was an intriguing end to a concerning week in which doubts surfaced about the club’s ability to fund either the number or the quality of signings planned by Neil Warnock for his first full season as United manager.
Warnock made his first summer signing on May 4, paying £500,000 to land Jason Pearce from Portsmouth, but his attempt to follow up that deal with a £400,000 purchase of Joel Ward was frustrated by Leeds’ failure to put up the fee.
Ward slipped through Warnock’s fingers on Monday, joining Crystal Palace instead, and other proposed signings are under threat. The YEP understands that Warnock has been similarly unable to finalise an agreement to bring Derby County midfielder Paul Green – another of his targets – to Elland Road on a free transfer.
The lack of progress in the transfer market, at a time when Warnock hoped his squad would begin taking shape, pointed to two possibilities: a shortage of available cash at Elland Road or the potential arrival of new owners.
Bates, United’s chairman and majority shareholder, has rarely given any indication of a willingness to relinquish control but confirmation of discussions in Leeds last week has given the idea some credence.
A statement from Leeds read: “The club can confirm that talks are taking place regarding investment for the long-term future. “The club has always publicly stated that it would welcome potential investment but has maintained a belief whereby the quality of the investor is the most important factor in terms of the long-term development of Leeds United.”
The YEP has been told of a second consortium with an interest in purchasing Leeds, though the group are not believed to have made contact with United.
A source involved in the consortium, which has links to both England and the Middle East, admitted they were “some distance away” from being ready to table a bid for Leeds and said investment in another English club was also under consideration.
Leeds have long been seen as one of the more attractive investments in English football, despite the fact that the club do not own either Elland Road or their Thorp Arch training complex and pay more than £2million annually to lease both properties.
The club have made pre-tax profits totalling more than £10million since the summer of 2007 and posted a gain of £3.5million at the end of the 2010-11 financial year.
United’s rental agreement for Elland Road includes a buy-back clause which, according to the club’s most recent set of accounts, would cost £14.85million to exercise.
Richard Cramer, a specialist in sports law with Front Row Legal in Leeds, told the YEP: “My objective view is that Leeds as a club are a good investment but anyone who plans to get heavily involved at Elland Road is going to need serious money. They won’t get the club at a snip.
“In the first instance, I can’t see the club being cheap to buy and there’s a lot more to this than simply taking over. After that you’ve got the cost of investing in infrastructure – dealing with the stadium and the training ground for example – and the cost of building a squad good enough to take Leeds into the Premier League.
“Even then you’ve got the pressure to continue on the up and up. I don’t see the supporters accepting what happened to Burnley or Blackpool – where you go up for a season and come straight down with parachute payments to play with. The club are an attractive proposition, provided you’ve got the right financial credentials and the right vision.”
United expect to raise transfer funds through the summer sale of transfer-listed midfielder Adam Clayton, and the club stand to receive compensation if winger Aidan White turns down a new contract and leaves Elland Road.
Leeds are also likely to listen to offers for Ross McCormack, who has rejected the club’s offer of a new deal and is out of contract in 12 months’ time, but cash received through substantial outside investment could spectacularly change the landscape facing Warnock.
United underwent a change of ownership as recently as April of last year when Bates announced that he was buying a 72.85 per cent stake in the club from previous owners, Forward Sports Fund (FSF).
Leeds were heading for a seventh-placed finish in the Championship at the time but the club struggled to make a sustained challenge for promotion this season, ending the campaign in 14th place.
Their income in the past 12 months is likely to have been affected by a notable drop in attendances and the club are committed to using season-ticket money from both the 2012-13 and 2013-14 campaigns to repay a loan taken out to fund the recent development of the East Stand at Elland Road.
Cramer said: “If I was advising anyone about investment in English football then I’d certainly suggest they look at Leeds United.
“But you’d need to show the colour of your money to get involved there and it seems clear to me that investment is needed at Elland Road. You don’t get the impression that there’s a huge amount of cash available.”