An Evening of L.U.S.T.
The Scratching Shed 21/6/12
...which was not as R-rated as you might imagine, though Gary Cooper’s eyes did light up momentarily at the mention of custard. The Leeds United Supporters Trust held another meeting on Wednesday evening and ended up discussing (predictably) mostly the proposed takeover of Leeds United. LUST revealed some basic information about the interested parties they have spoken to, explained their decision to agree to pass on players’ disillusionment to the fans, and updated members on the various legal proceedings currently leeching Leeds United of money.
Brick Walls
LUST were asked when the last time they had had meaningful contact with the Club’s board was. Gary Cooper responded:
Motives
Gary Cooper gave his personal opinion on Ken Bates’ motives as chairman of Leeds:
The Supporters Trust then mentioned the loss-making companies owned by Leeds United, for example Yorkshire Radio and the Pavilion. LUST concluded:
LUST’s chair said:
Buyers
The Supporters Trust said that they had spoken to three separate parties regarding investment or takeover of Leeds. They mentioned that there had been firm offers as far back as 2007, which had all been rebuffed by Bates. There were two approaches in February and March of this year by at least two different groups. There are still numerous groups interested in buying Leeds, and all the parties LUST have spoken to appear to be in a better position than Mr. Bates to take the club forward. All the parties LUST spoke to see the repurchase of Elland Road as a priority.
LUST then announced:
LUST confirmed that they understand that there are two more lawsuits to come. Melvyn Levi will take Bates and Leeds to court again, while Bates (on behalf of Leeds) has decided he wants to sue West Yorkshire Police. The Weston case in Jersey, which “Ken Bates told us was a wonderful victory” is stayed and has been transferred to London High Court, from Jersey. LUST believe Mr Bates probably didn’t want that to happen because different types of evidence can now be used which will probably be more helpful to Weston. These two actions probably spell more financial bad news for Leeds, especially given even successful court cases have still cost Leeds very significant sums in the past.
Meanwhile, The Supporters Trust have had a reply from Ofcom regarding Mr. Bates’ leaking of personal information of LUST board members on the radio (which has parallels to his behaviour against Mr. Levi). Ofcom has made a preliminary decision but LUST are not allowed to disclose the specifics.
Companies House has also taken issue with Leeds’ accounts following ‘remarkable errors’. They have asked Leeds to re-submit the accounts. A set of accurate accounts acknowledged by Companies House will help any due diligence.
The New Regime - Outro 2011 (June 2011 accounts)
1. As at 30 June 2011 Outro had invested 500k into LUFC and temporarily loaned them a further 975k of their cash (which has now been repaid) however, they have also taken 4.6m of cash from LUFC and loaned it to various other related companies (Leeds United Media getting 255k, Leeds United Pavilion getting 2.7m, and whilst it cannot be verified, YR probably got the remaining 1.6m). LUFC do owe 255k to their relations so, in total we can see that Outro has taken a net 3.8m cash out of Leeds United Football Club Limited.
2. Since Admin (4 accounting years ago), the club has received 12.6m in cash from the sale of players and reinvested 7.2m back into the playing squad, they are also currently due a further net amount of 419k in cash (from player trading). This will be a net cash gain of 5.8m.
3. Conversely, since admin, 9.6m has been spent on buildings and improvements, with a further 6.5m earmarked to be spent in the near future (so a total 16.1m). Given the size of this investment it is little wonder that the club needed the cash injections from a loan of 5m and the 3.2m from the preference share award.
4. There remains a working capital shortfall at the club that continues to be funded by utilising future season ticket sales income but, with part of this money now being promised elsewhere for the next two seasons (due to the terms of the 5m loan) there is going to be less of the 8m cash to go round.
5. Over the 4 years, the Football Club has made an Operating Profit (excluding Player trading) of 737k on a turnover of 107m. Sadly, this year we cannot tell how much was added to the 1.47m already paid to R M Taylor as he stepped down from the board. But we are told Shaun and Yvonne have taken combined salaries of 299k.
6. Unfortunately other LCH group companies haven't fared as well as LUFC during the year with the Pavilion losing 197k, LU Media losing 2k (both of which were included in LUFC last year), YR losing 86k and LCH itself losing 157k. This takes the combined losses for the other Group companies over the 4 year period (excluding those that might have occured whilst being part of LUFC) to 4.2m.
Other key stats for those that are interested:
Wages to T/O 46% (v 45% last year) [alternatively, by adding Soc Security, could be quoted as Staff cost to T/O at 51% (v 50% last year)]
Wages totalled 14.9m (v 12.4m last year)
Rent totalled 1.8m (up 4% on last year)
http://lufctrust.squarespace.com/blog/2012...ers%27+Trust%29
Meeting held at The Magic Sponge, 7.30pm, 20th June 2012.
Present for the Trust, Gary Cooper, Aidan Booth, Patrick Bushell, Lee Hicken, Ashley Tabony, Paul Keat and Adam Carruthers.
1. Meeting commenced at 19.35 with an update from Trust Chairman:
Firstly a letter ref the accounts had been sent to Baker Tilly & Companies House. Baker Tilly have politely declined our invitation to discuss the accounts; however Companies House say the matter does warrant investigation due to basic errors, amongst other things.
The Levi court case - noted similarities with the dispute over alleged DPA breach. Preliminary decision made, but cannot divulge outcome. Awaiting developments.
Ongoing takeover, investment talks. Back in February, Mr Bates asked us to put our money where our mouth was, nobody could envisage what happened. People did come forward. Local business men and groups who represented considerable wealth.
We have to be very careful what we can say, as we cannot jeopardise ongoing talks. We must not become a spanner in the works, and we need to protect confidentiality.
Lots of other work going on too but this obviously overshadows other matters.
2. Investment/takeover:
Leeds United are a very attractive proposition, nobody we have spoken to wants to invest. They want to buy the club, not just make an investment in the current board.
Our members have also told us that they want change at Leeds United.
Players whose representatives we have spoken to share our vision. They want the board to show ambition.
Question about how many groups interested. Trust: we know there people interested, we have spoken to 3 groups. We don't know how many are talking to the club right now.
When is it going to happen? Trust: not a simple process, we do need to ask the club, we can just speculate. We can guess at the end of month, first week in July is the "gut feeling" based on media etc. Issue is possibly the complicated financial structure of the club.
The Trust admitted that it was amazing just how quickly the club admitted they are in talks.
The length of time also points to a takeover not investment .
The Trust Chairman also appealed to the club to tell fans what is going on.
The meeting was then opened up to questions from the floor
3. Questions from the floor:
Question - Would the Trust accept Ken Bates staying on. Trust: it's not up to us, we have to accept whatever happens and play with the cards we are dealt.
Question - is the money for new players' contracts from the new owners or not? Trust :We don't know this.
Question - Does the current transfer policy reflect the takeover situation? It would be a remarkable coincidence if not. Trust: Something so far down road, if the club does pay a fee, it would point to the fact we are very close.
Question about End of Season party and alleged heavy handed treatment by stewards. Trust Chair: Amanda Jacks has written full report and we are going to have a meeting with FSF and WYP. Will use official bodies to take next steps. The Trust has spoken at length with someone at the club, they mentioned that we were refered to as fanatical hooligans in the pre-match briefing who were hell-bent on trouble. It is noted that the WYP were superb and we would like to extend out thanks once again for their co-operation.
Question about feedback from previous attempts. Trust: moving goalposts, high prices etc. Why now? Possibly the financial situation of the club might have changed? Cash flow appears an issue from our Summer transfer dealings.
Question about ongoing court case. What is the effect on takeover? Trust Chair: we have been approached by Melvyn Levi and Weston. Previous ruling in Jersey court, Bates claimed it was a victory to the tune of £190k. We have already spent a rumoured £1.5m, now it is to be taken to High Court in London. We don't think the club will not want this as the disclosure is different in London from Jersey? Possibly more bad news around the corner for the club?
Question - Assuming takeover did not happen, is there any grounds for Fit and Proper Person challenge? Trust: Levi is looking into that, we are not involved in this.
Question from Twitter - When was the last meaningful contact with club? Trust: It was with Shaun Harvey over ticket block. Last was the phone call from Bates saying: Trust Chair was told that he was an enemy of Leeds United. It is not for want of trying. We did have a club liaison officer, who tried really hard, but ignored by the club. Trust Board met Mr Harvey after they joined board and said become a RMC and we will talk to you. A Trust member spoke to Lorimer after last game of the season and said he'd like to come and talk to us. We wrote to him and invited him, he has not answered yet.
Question ref players contacting us. With hindsight was it a good decision and any ramifications? Trust: They do care and share our anxiety about the future. They wanted us to come forward, we had an option, we made judgement call and said they deserve their voice. From our members it was a 50:50 split, we don't regret doing it.
Question would we be interested in talking to Jonny Howson. Offer made. Trust: We are working on something similar.
Question about weekly show on BBC Radio Leeds. Trust: It is a possibility. We do work with The Square Ball and other bodies. Radio Leeds should be putting on something, as we don't have anything else of note for fans. YR hardly represents an impartial voice for fans.
Question about RMCs coming out of club? Trust: We cannot say too much about RMCs as we are working on a couple of things with RMCs. This is part of Fans United movement.
Question about Trust dialogue with any new owners. What is our policy and would we be working on things that are important for the club? Have we got something ready? Trust: We are ready. Our approach is cast in stone. We have experience of working with investors so hope that would continue. We have the vision statement and lots of work behind it. The people we have spoken to are keen to speak to the fans, and recognise the value of Trust. In fact we are constantly surprised how many people from far afield have seen the vision.
The feedback we have had is that everyone who has seen it has bought into the vision.
Question - will people buy into the vision? Trust: The power of it was from the fans. The players have seen it too.
Question - What is our plan B? What if takeover doesn't happen? Trust: You make a good point. There are a couple of plan Bs, we know there at least 2 which are watching with great interest, so not stuck with current board. If it does fail, we need to work with what we have. But there will be a huge groundswell. New information will come to light, will cause uproar and cause fans to demand change. We hope it does not come to a Plan B situation.
The fans would take it out of our hands. We would have to ask members & fans, and take their lead.
Question ref. finances, after 4 years of decent profits, why does there appear to be a cash flow issue? Trust: The Trust, in absence of their financial experts, explained that the club is expensive to run and looking at the recent accounts there are fairly high "additional expenses", high capital project expenditure, falling crowds, falling ST numbers, all of these aspects might affect cash flow. Then there are other issues such as the preferential shares, and the mortgaging of season ticket revenue etc. all of which could point to a poor cash position. The board stressed that there is no suggestion of any wrong doing by the current board as the accounts are audited and everything mentioned above is legal. The complexity of accounting practices make it difficult to understand the true cash position. The board also mentioned the other loss making businesses, and the football side apparently funding them, but again it is difficult to tell with any real certainty whether this has an effect.
Question - do we have any reason to believe talks in jeopardy? Trust - no reason at all.
Question - if it goes wrong where does it leave Ken Bates? Trust: There are plan Bs, as mentioned above.
Question - how come we have cash flow problems when we are spending all the money on building projects? Trust: the two things are linked. If we are spending large sums on capital projects, that might mean less to spend on the football side, but this is just conjecture.
Question from Twitter, What are the scale of ambitions of potential possible bidders? Trust: all we have spoken to share the vision, thay have expressed the wish to invest funds to comfortably get us up into PL and do well there. Definitely significant funding has been mentioned.
Question - are we still talking to players Trust: yes, and question about buying ER & TA, yes that is in plans.
Question about qualifying the ambition of potential buyers Trust: we have not seen their books, but by reputation they are big players, who fans will have heard of. The Trust Chairman has sat in offices with reputable people, people we have spoken to have previously expressed an interest in Leeds and gone quite far down the road. If you are a buyer, you know the club cannot be paralysed until the start of the season or you jeopardise success on pitch. Need to move this forward quickly to give us a chance, but just speculation of who is talking to Leeds at the moment.
Question about Warnock going to Monaco to hand notice in, came out on LOL about positive discussions. Trust: it sounded positive.
Question about cash flow position - The club is profitable, if the club is a "cash cow", why shouldn't it continue like this? Do we have a willing seller? Trust: We have no proof that the club is a "cash cow". on the question is he a willing seller? This is not known either.
Question about free Trust membership Trust: Trust Board are going to discuss this tonight. We have trialled this season, but our income has doubled, due to shareholding going up to 500+, with several life time members and thanks to donation. It has been a success and we would like to continue, it we do need your help. Richard C mentioned T-shirts, all profit goes to Trust.
4. Any Other Business
Possible game at Magic Sponge against ex players, we will update on this.
Leeds fans United is ongoing.
Trust Chair extended thanks to Aidan. His commitment and contribution to Trust is incredible, public thanks extended. Seconded by board & supported from the floor.
Second event is the the stewarding meeting, Gary is hoping to nail Amanda down to a date for this.
From the floor thanks to Gary and the board. Gary thanked all participants.
Date of next meeting to be confirmed.
Meeting closed at 21.05
5. Post Meeting Input
In terms of why we have no cash despite profits - Cash and Profit are 2 very different things, in the very long term they have a close relationship but, in the short/medium term items like building works have to be paid for up front with cash. However, in the case of LUFC the building work can be spread over a period of up to 22 years in the profit & loss account. Similarly when we exited Admin there were debts that had to be settled (with cash) amounting to c.£7m, but, these debts are allowed to be spread over 50 years in the profit & loss account. There is also the tax issue, where £2m of old tax losses (from Old co.) were added back to the accounts to create a profit this year.
On the related topic of why we need funding (i.e. why don't we have any cash), simply put, we know that the following cash has come into the business since Admin - £0.5m from FSF to buy the club + £5.8m net cash in from Player Trading + £5m loan (against ST money) + £3.2m cash for the preference shares. This adds up to £14.5m. We also know the following cash has gone out of the business, £4.4m (net) loaned to sister companies + £16.1m on capital projects, so a total of £20.5m. Therefore on this basis there is a cash shortage of £6m. Of course cash is generated by the football activities (gate receipts etc) which is why we don't have a -£6m figure in the bank but, this helps to explain why there is a problem.
...which was not as R-rated as you might imagine, though Gary Cooper’s eyes did light up momentarily at the mention of custard. The Leeds United Supporters Trust held another meeting on Wednesday evening and ended up discussing (predictably) mostly the proposed takeover of Leeds United. LUST revealed some basic information about the interested parties they have spoken to, explained their decision to agree to pass on players’ disillusionment to the fans, and updated members on the various legal proceedings currently leeching Leeds United of money.
Brick Walls
LUST were asked when the last time they had had meaningful contact with the Club’s board was. Gary Cooper responded:
The last meaningful contact I had with the Leeds United Board was when Mr Harvey kindly told us he would only sell tickets to whoever he wished to. Other than that, was probably Mr. Bates’ last diatribe about the club where he called us “rude” “ignorant” and… “a camel”. I’m not sure what he meant by that – many people ask! In terms of meaningful, the last meaningful contact I had with Ken Bates was when he called me “an enemy of Leeds United”.The Trust then went on to mention a conversation with stewards after their “end of season party” in the newly refurbished East Stand:
We had an interesting conversation with Peter Lorimer before the last game of the season outside the Pavilion. Mr. Lorimer made an offer to us that he would like to come to one of our meetings and address us all. We wrote to Mr. Lorimer and thanked him very much for his kind offer and openly invited him to any meeting at a time and date of his choosing … he hasn’t answered.
The debrief the stewards got before the event was that we were all going to be classic hooligans. …We went there made some noise and blew balloons.One audience member mentioned that the stewards had confiscated one of the Trust’s balloons off his eight year-old son. Presumably, this is not then one of the regular children to phone club-owned Yorkshire Radio and proclaim what a nice man Mr. Bates is!
Motives
Gary Cooper gave his personal opinion on Ken Bates’ motives as chairman of Leeds:
I don’t think Ken Bates is in it for the glory of Leeds United. I think Ken Bates is in it for the glory of Ken Bates. And fair play to him – that doesn’t make him right, wrong, left, right up or upside-down.LUST also drew upon the research of some of their more financially-minded volunteers to echo our own conclusions on the accounts:
You don’t need to be [an expert]: it’s quite clear to see that there are cashflow issues at Leeds United.The Trust also mentioned the apparent necessity of a £975,000 loan from Outro Limited (connected to Mr. Bates) to the club to avoid deficit in the 2010-11 accounts. This was in a season the club finished 7th, held outstanding talent very cheaply on the books (Max Gradel, Jonny Howson, Robert Snodgrass, Bradley Johnson, Kasper Schmeichel), and the year before the club embarked on a development project costing over £5m. An audience member noted the coincidence of the sale of Kasper Schmeichel and Max Gradel in the summer after the accounts.
A lot of businesses in administration are profitable businesses. One of the biggest killers of businesses are cash-flow problems
The Supporters Trust then mentioned the loss-making companies owned by Leeds United, for example Yorkshire Radio and the Pavilion. LUST concluded:
The football side of the business is a cash-cow that is funding numerous loss-making businesses.Vision
The football side is funding failing businesses.
LUST’s chair said:
I came across an obscure channel on Sky recently, called Leeds TV. What struck me about the channel representing this city, was the person representing Leeds United was one Jonny Howson. I think that says it all, really.LUST concluded that the mission statement is at the heart of the Supporters Trust and so it must reflect the community which put the statement together. They act according to the wishes expressed by members and will continue to do so.
[Regarding the recent approach from disillusioned players] We wondered should we give the players a voice the same way as the fans, the council and West Yorkshire Police. Should we give them a voice and be criticised? ‘greedy bloody players, stupid bloody board’. We made a judgement call and we stick by it.
We would like to back up the current players with former players and staff … who do not have the worry of a financial penalty.
We felt with potential owners that we would have to show them our mission statement. But a lot of people from a long way away had already read our mission statement, were impressed, and approached us.
The mission statement is a joint piece of work from people who wear that badge on their shirt, on their hearts, etc.
Buyers
The Supporters Trust said that they had spoken to three separate parties regarding investment or takeover of Leeds. They mentioned that there had been firm offers as far back as 2007, which had all been rebuffed by Bates. There were two approaches in February and March of this year by at least two different groups. There are still numerous groups interested in buying Leeds, and all the parties LUST have spoken to appear to be in a better position than Mr. Bates to take the club forward. All the parties LUST spoke to see the repurchase of Elland Road as a priority.
LUST then announced:
When Mr Bates told us there was no money in Yorkshire that wasn’t exactly true. We’ve had some very prominent businessmen and interested parties come from both Leeds and the wider Yorkshire area, as well as groups from all over the world. It’s a best kept secret that Leeds United is a very attractive club and a very attractive brand to buyers.The Litigation Game
The one thing each and every person we’ve spoken to has said is that they want to buy Leeds United. They have no interest in working with Mr Bates – that is no criticism of him. But no-one wants to invest money in him. They want invest money to buy the club. Period.
The increasing majority [of LUST members] have said they want to see a change at the top.
LUST confirmed that they understand that there are two more lawsuits to come. Melvyn Levi will take Bates and Leeds to court again, while Bates (on behalf of Leeds) has decided he wants to sue West Yorkshire Police. The Weston case in Jersey, which “Ken Bates told us was a wonderful victory” is stayed and has been transferred to London High Court, from Jersey. LUST believe Mr Bates probably didn’t want that to happen because different types of evidence can now be used which will probably be more helpful to Weston. These two actions probably spell more financial bad news for Leeds, especially given even successful court cases have still cost Leeds very significant sums in the past.
Meanwhile, The Supporters Trust have had a reply from Ofcom regarding Mr. Bates’ leaking of personal information of LUST board members on the radio (which has parallels to his behaviour against Mr. Levi). Ofcom has made a preliminary decision but LUST are not allowed to disclose the specifics.
Companies House has also taken issue with Leeds’ accounts following ‘remarkable errors’. They have asked Leeds to re-submit the accounts. A set of accurate accounts acknowledged by Companies House will help any due diligence.
The New Regime - Outro 2011 (June 2011 accounts)
1. As at 30 June 2011 Outro had invested 500k into LUFC and temporarily loaned them a further 975k of their cash (which has now been repaid) however, they have also taken 4.6m of cash from LUFC and loaned it to various other related companies (Leeds United Media getting 255k, Leeds United Pavilion getting 2.7m, and whilst it cannot be verified, YR probably got the remaining 1.6m). LUFC do owe 255k to their relations so, in total we can see that Outro has taken a net 3.8m cash out of Leeds United Football Club Limited.
2. Since Admin (4 accounting years ago), the club has received 12.6m in cash from the sale of players and reinvested 7.2m back into the playing squad, they are also currently due a further net amount of 419k in cash (from player trading). This will be a net cash gain of 5.8m.
3. Conversely, since admin, 9.6m has been spent on buildings and improvements, with a further 6.5m earmarked to be spent in the near future (so a total 16.1m). Given the size of this investment it is little wonder that the club needed the cash injections from a loan of 5m and the 3.2m from the preference share award.
4. There remains a working capital shortfall at the club that continues to be funded by utilising future season ticket sales income but, with part of this money now being promised elsewhere for the next two seasons (due to the terms of the 5m loan) there is going to be less of the 8m cash to go round.
5. Over the 4 years, the Football Club has made an Operating Profit (excluding Player trading) of 737k on a turnover of 107m. Sadly, this year we cannot tell how much was added to the 1.47m already paid to R M Taylor as he stepped down from the board. But we are told Shaun and Yvonne have taken combined salaries of 299k.
6. Unfortunately other LCH group companies haven't fared as well as LUFC during the year with the Pavilion losing 197k, LU Media losing 2k (both of which were included in LUFC last year), YR losing 86k and LCH itself losing 157k. This takes the combined losses for the other Group companies over the 4 year period (excluding those that might have occured whilst being part of LUFC) to 4.2m.
Other key stats for those that are interested:
Wages to T/O 46% (v 45% last year) [alternatively, by adding Soc Security, could be quoted as Staff cost to T/O at 51% (v 50% last year)]
Wages totalled 14.9m (v 12.4m last year)
Rent totalled 1.8m (up 4% on last year)
http://lufctrust.squarespace.com/blog/2012...ers%27+Trust%29
Meeting held at The Magic Sponge, 7.30pm, 20th June 2012.
Present for the Trust, Gary Cooper, Aidan Booth, Patrick Bushell, Lee Hicken, Ashley Tabony, Paul Keat and Adam Carruthers.
1. Meeting commenced at 19.35 with an update from Trust Chairman:
Firstly a letter ref the accounts had been sent to Baker Tilly & Companies House. Baker Tilly have politely declined our invitation to discuss the accounts; however Companies House say the matter does warrant investigation due to basic errors, amongst other things.
The Levi court case - noted similarities with the dispute over alleged DPA breach. Preliminary decision made, but cannot divulge outcome. Awaiting developments.
Ongoing takeover, investment talks. Back in February, Mr Bates asked us to put our money where our mouth was, nobody could envisage what happened. People did come forward. Local business men and groups who represented considerable wealth.
We have to be very careful what we can say, as we cannot jeopardise ongoing talks. We must not become a spanner in the works, and we need to protect confidentiality.
Lots of other work going on too but this obviously overshadows other matters.
2. Investment/takeover:
Leeds United are a very attractive proposition, nobody we have spoken to wants to invest. They want to buy the club, not just make an investment in the current board.
Our members have also told us that they want change at Leeds United.
Players whose representatives we have spoken to share our vision. They want the board to show ambition.
Question about how many groups interested. Trust: we know there people interested, we have spoken to 3 groups. We don't know how many are talking to the club right now.
When is it going to happen? Trust: not a simple process, we do need to ask the club, we can just speculate. We can guess at the end of month, first week in July is the "gut feeling" based on media etc. Issue is possibly the complicated financial structure of the club.
The Trust admitted that it was amazing just how quickly the club admitted they are in talks.
The length of time also points to a takeover not investment .
The Trust Chairman also appealed to the club to tell fans what is going on.
The meeting was then opened up to questions from the floor
3. Questions from the floor:
Question - Would the Trust accept Ken Bates staying on. Trust: it's not up to us, we have to accept whatever happens and play with the cards we are dealt.
Question - is the money for new players' contracts from the new owners or not? Trust :We don't know this.
Question - Does the current transfer policy reflect the takeover situation? It would be a remarkable coincidence if not. Trust: Something so far down road, if the club does pay a fee, it would point to the fact we are very close.
Question about End of Season party and alleged heavy handed treatment by stewards. Trust Chair: Amanda Jacks has written full report and we are going to have a meeting with FSF and WYP. Will use official bodies to take next steps. The Trust has spoken at length with someone at the club, they mentioned that we were refered to as fanatical hooligans in the pre-match briefing who were hell-bent on trouble. It is noted that the WYP were superb and we would like to extend out thanks once again for their co-operation.
Question about feedback from previous attempts. Trust: moving goalposts, high prices etc. Why now? Possibly the financial situation of the club might have changed? Cash flow appears an issue from our Summer transfer dealings.
Question about ongoing court case. What is the effect on takeover? Trust Chair: we have been approached by Melvyn Levi and Weston. Previous ruling in Jersey court, Bates claimed it was a victory to the tune of £190k. We have already spent a rumoured £1.5m, now it is to be taken to High Court in London. We don't think the club will not want this as the disclosure is different in London from Jersey? Possibly more bad news around the corner for the club?
Question - Assuming takeover did not happen, is there any grounds for Fit and Proper Person challenge? Trust: Levi is looking into that, we are not involved in this.
Question from Twitter - When was the last meaningful contact with club? Trust: It was with Shaun Harvey over ticket block. Last was the phone call from Bates saying: Trust Chair was told that he was an enemy of Leeds United. It is not for want of trying. We did have a club liaison officer, who tried really hard, but ignored by the club. Trust Board met Mr Harvey after they joined board and said become a RMC and we will talk to you. A Trust member spoke to Lorimer after last game of the season and said he'd like to come and talk to us. We wrote to him and invited him, he has not answered yet.
Question ref players contacting us. With hindsight was it a good decision and any ramifications? Trust: They do care and share our anxiety about the future. They wanted us to come forward, we had an option, we made judgement call and said they deserve their voice. From our members it was a 50:50 split, we don't regret doing it.
Question would we be interested in talking to Jonny Howson. Offer made. Trust: We are working on something similar.
Question about weekly show on BBC Radio Leeds. Trust: It is a possibility. We do work with The Square Ball and other bodies. Radio Leeds should be putting on something, as we don't have anything else of note for fans. YR hardly represents an impartial voice for fans.
Question about RMCs coming out of club? Trust: We cannot say too much about RMCs as we are working on a couple of things with RMCs. This is part of Fans United movement.
Question about Trust dialogue with any new owners. What is our policy and would we be working on things that are important for the club? Have we got something ready? Trust: We are ready. Our approach is cast in stone. We have experience of working with investors so hope that would continue. We have the vision statement and lots of work behind it. The people we have spoken to are keen to speak to the fans, and recognise the value of Trust. In fact we are constantly surprised how many people from far afield have seen the vision.
The feedback we have had is that everyone who has seen it has bought into the vision.
Question - will people buy into the vision? Trust: The power of it was from the fans. The players have seen it too.
Question - What is our plan B? What if takeover doesn't happen? Trust: You make a good point. There are a couple of plan Bs, we know there at least 2 which are watching with great interest, so not stuck with current board. If it does fail, we need to work with what we have. But there will be a huge groundswell. New information will come to light, will cause uproar and cause fans to demand change. We hope it does not come to a Plan B situation.
The fans would take it out of our hands. We would have to ask members & fans, and take their lead.
Question ref. finances, after 4 years of decent profits, why does there appear to be a cash flow issue? Trust: The Trust, in absence of their financial experts, explained that the club is expensive to run and looking at the recent accounts there are fairly high "additional expenses", high capital project expenditure, falling crowds, falling ST numbers, all of these aspects might affect cash flow. Then there are other issues such as the preferential shares, and the mortgaging of season ticket revenue etc. all of which could point to a poor cash position. The board stressed that there is no suggestion of any wrong doing by the current board as the accounts are audited and everything mentioned above is legal. The complexity of accounting practices make it difficult to understand the true cash position. The board also mentioned the other loss making businesses, and the football side apparently funding them, but again it is difficult to tell with any real certainty whether this has an effect.
Question - do we have any reason to believe talks in jeopardy? Trust - no reason at all.
Question - if it goes wrong where does it leave Ken Bates? Trust: There are plan Bs, as mentioned above.
Question - how come we have cash flow problems when we are spending all the money on building projects? Trust: the two things are linked. If we are spending large sums on capital projects, that might mean less to spend on the football side, but this is just conjecture.
Question from Twitter, What are the scale of ambitions of potential possible bidders? Trust: all we have spoken to share the vision, thay have expressed the wish to invest funds to comfortably get us up into PL and do well there. Definitely significant funding has been mentioned.
Question - are we still talking to players Trust: yes, and question about buying ER & TA, yes that is in plans.
Question about qualifying the ambition of potential buyers Trust: we have not seen their books, but by reputation they are big players, who fans will have heard of. The Trust Chairman has sat in offices with reputable people, people we have spoken to have previously expressed an interest in Leeds and gone quite far down the road. If you are a buyer, you know the club cannot be paralysed until the start of the season or you jeopardise success on pitch. Need to move this forward quickly to give us a chance, but just speculation of who is talking to Leeds at the moment.
Question about Warnock going to Monaco to hand notice in, came out on LOL about positive discussions. Trust: it sounded positive.
Question about cash flow position - The club is profitable, if the club is a "cash cow", why shouldn't it continue like this? Do we have a willing seller? Trust: We have no proof that the club is a "cash cow". on the question is he a willing seller? This is not known either.
Question about free Trust membership Trust: Trust Board are going to discuss this tonight. We have trialled this season, but our income has doubled, due to shareholding going up to 500+, with several life time members and thanks to donation. It has been a success and we would like to continue, it we do need your help. Richard C mentioned T-shirts, all profit goes to Trust.
4. Any Other Business
Possible game at Magic Sponge against ex players, we will update on this.
Leeds fans United is ongoing.
Trust Chair extended thanks to Aidan. His commitment and contribution to Trust is incredible, public thanks extended. Seconded by board & supported from the floor.
Second event is the the stewarding meeting, Gary is hoping to nail Amanda down to a date for this.
From the floor thanks to Gary and the board. Gary thanked all participants.
Date of next meeting to be confirmed.
Meeting closed at 21.05
5. Post Meeting Input
In terms of why we have no cash despite profits - Cash and Profit are 2 very different things, in the very long term they have a close relationship but, in the short/medium term items like building works have to be paid for up front with cash. However, in the case of LUFC the building work can be spread over a period of up to 22 years in the profit & loss account. Similarly when we exited Admin there were debts that had to be settled (with cash) amounting to c.£7m, but, these debts are allowed to be spread over 50 years in the profit & loss account. There is also the tax issue, where £2m of old tax losses (from Old co.) were added back to the accounts to create a profit this year.
On the related topic of why we need funding (i.e. why don't we have any cash), simply put, we know that the following cash has come into the business since Admin - £0.5m from FSF to buy the club + £5.8m net cash in from Player Trading + £5m loan (against ST money) + £3.2m cash for the preference shares. This adds up to £14.5m. We also know the following cash has gone out of the business, £4.4m (net) loaned to sister companies + £16.1m on capital projects, so a total of £20.5m. Therefore on this basis there is a cash shortage of £6m. Of course cash is generated by the football activities (gate receipts etc) which is why we don't have a -£6m figure in the bank but, this helps to explain why there is a problem.
