Leeds United: Crunch time in talks on wages
Yorkshire Evening Post 26/3/14
Gulf Finance House and Massimo Cellino were in urgent talks last night amid entrenched disagreements over the payment of Leeds United’s wage bill for March.
United owner GFH and prospective buyer Cellino are at odds over which of them should meet this month’s salary costs, with staff at Elland Road due to be paid first thing tomorrow.
The club needed money in place by this morning to ensure that wages for March were delivered on time but reluctance on the part of both GFH and Cellino to shoulder a seven-figure bill led to frantic discussions yesterday.
Requests for an immediate cash injection are understood to have been made to third parties in the past 24 hours, with GFH and Cellino refusing to concede ground. United managing director David Haigh met with GFH chief executive Hisham Alrayes in London in an attempt to break the impasse.
The dispute comes as doubts about Leeds’ financial position grow on the back of comments made by manager Brian McDermott in the wake of a 4-1 defeat to Bournemouth on Tuesday.
Talking after full-time, McDermott hinted at concern among the club’s players and staff about whether or not they would be paid this month.
GFH, the Bahraini bank which has owned Leeds since December 2012, expects Cellino to provide cash for wages after agreeing to sell a majority stake in United to the Italian businessman last month.
Officials at GFH believe the £25m deal reached with Eleonora Sport Ltd – the company which Cellino is using to buy United – committed him to financing the club’s operating costs for the six months after his takeover was agreed. The bank appears increasingly reluctant to commit money to Leeds itself following long-standing attempts to sell a substantial portion of its shares in United and relinquish full control at Elland Road. But Cellino, whose proposed 75 per cent buy-out was blocked by the Football League on Monday, has helped to pay the last two monthly wage bills at Leeds and is understood to have refused to provide further funds while his takeover hangs in the balance. The 57-year-old is appealing against the Football League’s decision to bar him from buying Leeds on the basis of a conviction for tax evasion imposed on him by an Italian court last week.
Mishcon de Reya – the UK legal firm representing Cellino – is preparing to challenge the League’s ruling after the Italian was given 14 days to fight Monday’s judgement.
An irate Cellino spoke of severe financial pressure at Elland Road earlier this week, saying Leeds needed “help, blood and money” in “hours, not days.”
On Tuesday evening, McDermott talked of off-field events affecting him and his players, saying: “There’s all the talk of who’s going to be in (as owner), talk of who’s going to be paid. I’m not going to make excuses but it does affect (results).”
Asked if he thought wages for March might be delayed or unpaid, McDermott said: “I don’t know. I really don’t know what the situation is. “That comes up on Friday or Monday, whenever it turns up. Hopefully it can be resolved.”
GFH was asked by the YEP to confirm whether staff wages for March would be paid as planned. A spokesman for the bank declined to comment.
Cellino is thought to have invested several million pounds in United since reaching a takeover deal with GFH on February 1, some of which has been used to finance wages at Elland Road.
Leeds have also received loans from various other sources since last summer, a number of them from companies run by or connected to Haigh. Portions of that money were channelled towards operating costs at a club who are thought to be losing around £1million a month.
In an interview this month, Haigh, who until recently was employed as deputy chief executive at GFH’s private equity arm, GFH Capital, played down fears that the financial strain on Leeds might push the club towards administration.
“The club is in good hands,” he said. “It has money and there’s no chance of the club going into administration. None whatsoever. I keep hearing these whispers, where people have put two and two together to make 550. But the club is not in any kind of precarious financial position, either now or in the future. It’s not true and never has been.”
Gulf Finance House and Massimo Cellino were in urgent talks last night amid entrenched disagreements over the payment of Leeds United’s wage bill for March.
United owner GFH and prospective buyer Cellino are at odds over which of them should meet this month’s salary costs, with staff at Elland Road due to be paid first thing tomorrow.
The club needed money in place by this morning to ensure that wages for March were delivered on time but reluctance on the part of both GFH and Cellino to shoulder a seven-figure bill led to frantic discussions yesterday.
Requests for an immediate cash injection are understood to have been made to third parties in the past 24 hours, with GFH and Cellino refusing to concede ground. United managing director David Haigh met with GFH chief executive Hisham Alrayes in London in an attempt to break the impasse.
The dispute comes as doubts about Leeds’ financial position grow on the back of comments made by manager Brian McDermott in the wake of a 4-1 defeat to Bournemouth on Tuesday.
Talking after full-time, McDermott hinted at concern among the club’s players and staff about whether or not they would be paid this month.
GFH, the Bahraini bank which has owned Leeds since December 2012, expects Cellino to provide cash for wages after agreeing to sell a majority stake in United to the Italian businessman last month.
Officials at GFH believe the £25m deal reached with Eleonora Sport Ltd – the company which Cellino is using to buy United – committed him to financing the club’s operating costs for the six months after his takeover was agreed. The bank appears increasingly reluctant to commit money to Leeds itself following long-standing attempts to sell a substantial portion of its shares in United and relinquish full control at Elland Road. But Cellino, whose proposed 75 per cent buy-out was blocked by the Football League on Monday, has helped to pay the last two monthly wage bills at Leeds and is understood to have refused to provide further funds while his takeover hangs in the balance. The 57-year-old is appealing against the Football League’s decision to bar him from buying Leeds on the basis of a conviction for tax evasion imposed on him by an Italian court last week.
Mishcon de Reya – the UK legal firm representing Cellino – is preparing to challenge the League’s ruling after the Italian was given 14 days to fight Monday’s judgement.
An irate Cellino spoke of severe financial pressure at Elland Road earlier this week, saying Leeds needed “help, blood and money” in “hours, not days.”
On Tuesday evening, McDermott talked of off-field events affecting him and his players, saying: “There’s all the talk of who’s going to be in (as owner), talk of who’s going to be paid. I’m not going to make excuses but it does affect (results).”
Asked if he thought wages for March might be delayed or unpaid, McDermott said: “I don’t know. I really don’t know what the situation is. “That comes up on Friday or Monday, whenever it turns up. Hopefully it can be resolved.”
GFH was asked by the YEP to confirm whether staff wages for March would be paid as planned. A spokesman for the bank declined to comment.
Cellino is thought to have invested several million pounds in United since reaching a takeover deal with GFH on February 1, some of which has been used to finance wages at Elland Road.
Leeds have also received loans from various other sources since last summer, a number of them from companies run by or connected to Haigh. Portions of that money were channelled towards operating costs at a club who are thought to be losing around £1million a month.
In an interview this month, Haigh, who until recently was employed as deputy chief executive at GFH’s private equity arm, GFH Capital, played down fears that the financial strain on Leeds might push the club towards administration.
“The club is in good hands,” he said. “It has money and there’s no chance of the club going into administration. None whatsoever. I keep hearing these whispers, where people have put two and two together to make 550. But the club is not in any kind of precarious financial position, either now or in the future. It’s not true and never has been.”