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      Thursday
      Jul102014

      LUST: Do you have what it takes to join the Board?

      With Chairman Gary Cooper departing at this years AGM in September, a number of other Board members have been considering their positions and feel that it is the right time to step aside and let a new team push the Trust forward. However, a number of the existing Board have committed to stay on after September and provide the all important consistency and historic knowledge that will prove invaluable to any new team.

      Before departing, the existing Board would like to hear from all interested shareholders that would like a place on the Board.

      In the first instance we would ask those of you who are interested to email us at chairman@lufctrust.org answering the following 4 questions;    

      1) What do you understand about the Leeds United Supporters Trust?    
      2) How do you feel in taking on the responsibility of representing over 9,000 members?
      3) What is the main reason for putting yourself forward for this opportunity?    
      4) Do you have any experience in similar roles? Please give further details and examples.

      - Please include your name and a contact telephone number with your application
      - The closing date for applications is Thursday 24th July 2014.

      The Board will process all applications as quickly as possible.

      Constitutionally only Shareholders are able to sit on the Board however, members can upgrade by visiting the website HERE and following instructions.

      We look forward to hearing from you and considering your application.

      Please note: We will look to inform those considered within 7 days of their application. If you have not received an email reply after 7 days then your application was not successful. 

      Friday
      Jun202014

      Statement from the Chairman

      Since October 2009 it has been my privilege to serve as Chairman of the Leeds United Supporters Trust, working with some of the most honest and genuine people I have ever met. It has been a tremendous journey, and in more ways than I could have ever imagined the experience has mirrored the ups and downs that as Leeds fans we understand better than most. I have always done my best to voice the opinions of our members to the club, to the media and to anyone who has had an interest in Leeds United, and I have done so with purpose and conviction. I hope that the members of LUST appreciate that.

      Back in 2009 the Trust had 224 members, was disregarded and discredited by the club’s owner Ken Bates, and while it had good people on its board it didn’t feel like it was realising its potential. It was with that in mind that I joined and became Chairman, with a refreshed board and a determination to rebuild the Trust into a strong, credible organisation fit for the purpose of tackling the circumstances that the club and its supporters found themselves in. I am very proud to have been part of the team that built the Trust into what it is today: an organisation with a membership of over 9,000 and the ears of the local authority, local MPs, central government and the media, but most importantly with the ear of the club.

      We have achieved everything we set out to achieve and more. As a board our members could have asked little more of us, and as Chairman I couldn’t have hoped for more than we have achieved. In this respect I feel that my journey has come full circle and that now is as good a time as any to stand down, take a rest and hand the stewardship of one of the largest and most respected supporters’ trusts, not only in the UK but across Europe and the world, to someone who can continue to raise its profile, serve the best interests of its members and work with a new owner. The Trust faces new challenges, and having represented our members under two former owners to the very best of my ability I feel I can stand tall and proud of my efforts, and hand over the job to someone else.

      To my fellow board members I would like to express my sincere thanks for all of the time, the effort, the hard work and the dedication you have shown and given freely. It has not always been easy - we have tested each other’s patience at times, and the differences in opinion have often been as great as the results we have achieved. But quite simply I could not have wished for better people to support me and serve our members than all of you who have served on the board with me for the last near-on five years. My thanks to you all.

      To our members, who in their thousands have given us support, it has been an honour to serve you. I have not always agreed with the mandate you have asked us to follow, and I have had strong reservations about some of the opinions you have asked us to voice on your behalf, but the purpose of the Trust is to give you a voice - one voice, your voice - and I have always tried to make sure my personal opinions have not deterred me from making your opinions the priority and making sure they are heard. For giving me the opportunity to do that, and for giving me the kind of support that has been a source of great strength to me, I will always be so very grateful. You truly are the best supporters in the world.

      In many respects I got a lot more than I bargained for when I came to the chair. I knew it would be difficult, I knew that with my head above the parapet I would get shot at, and I expected to be the subject of a fair amount of personal attention, but I had no idea how much my family would be affected by it all. Had I realised the extent of the suffering I would be putting them through I probably would not have taken on the role at all. To my soul-mate, Kirsty, who has suffered more than most and paid a price for my ambition and for the ambitions of thousands of Leeds fans, I can only say thank you for supporting me all the way through this. Nothing can ever repay the debt of gratitude you are owed. To my kids, who have lost out on my time, my attention and often my patience while I struggled to serve our larger Leeds United family, I am forever grateful to you and love you all dearly.

      To those who have sniped, snarled, lied and judged from afar, and who will probably take a great deal of pleasure from my decision to stand down, I hope one day you have the pleasure of realising what ‘Marching On Together’ actually means. The Trust will go from strength to strength long after Gary Cooper is gone and will continue to represent its members - Leeds fans - which is a source of great comfort to me.

      Thank you to all who have supported me. I will always be proud to be a LUST member, and will continue to fulfil the duties of Chairman and to support the board in any way I can, but will stand down at this year’s AGM satisfied that I have achieved all I set out to do, knowing that LUST is in great shape and ready to face new challenges.


      It really has been emotional.

      Gary Cooper

      Proud ‘moron’ and ‘dissident’

      MOT

      Friday
      May302014

      LUST Members Survey May 2014 - The Results!

      A week ago we sent out a questionnaire to our members, to gauge your views on various matters relating to our club at the moment, and to get a feeling for how you wish the Trust to represent those views to the club's owners over the summer.

      We have been delighted by the response. Well over 1,600 of you took the time not only to complete the questionnaire, but also to add many comments and questions of your own, concerning the topics covered in our questions and much more besides.

      Please see the results below of the specific questions we asked you - these will form the basis upon which the Trust’s board will proceed on your behalf in the coming weeks and months.

      1. Do you wish for LUST to continue to pursue answers about the club's current financial situation?

        Count
       Yes 1513
      (95.10%)
       No 37
      (2.33%)
       Unsure 41
      (2.58%)
       Responses to this  question 1591

       2. Do you wish for LUST to continue to pursue answers with regards to the impact on the club's financial situation of previous owners Ken Bates and GFH?

        Count
       Yes 1371
      (87.05%)
       No 133
      (8.44%)
       Unsure 71
      (4.51%)
       Responses to this  question 1575

      3. Do you support the sweeping changes Mr Cellino is making to the club's structure?

        Count
      Yes 824
      (52.55%)
      No 107
      (6.82%)
      Unsure 637
      (40.63%)
      Responses to this question 1568

      4. Is the future of Thorp Arch important to you?

        Count
      Yes 993
      (63.25%)
      No 265
      (16.88%)
      Unsure 312
      (19.87%)
      Responses to this question 1570

      6. Are you content that GFH/IIB/Envest continue to own 25% of the club?

        Count
      Yes 31
      (1.98%)
      No 1432
      (91.27%)
      Unsure 106
      (6.76%)
      Responses to this question 1569

      7. Do you wish for LUST to continue working on its proposed ‘Fan Share’ scheme?

        Count
      Yes 1243
      (79.22%)
      No 87
      (5.54%)
      Unsure 239
      (15.23%)
      Responses to this question 1569

      8. Do you wish for LUST to engage Mr Cellino in discussions about the 'Fan Share' scheme?

        Count
      Yes 1258
      (80.28%)
      No 104
      (6.64%)
      Unsure 205
      (13.08%)
      Responses to this question 1567

      9. Are you concerned about Mr Cellino's forthcoming legal issues in Italy?

        Count
      Yes 653
      (41.75%)
      No 652
      (41.69%)
      Unsure 259
      (16.56%)
      Responses to this question 1564

      10. Do you support Mr Cellino as owner of LUFC?

        Count
      Yes 1129
      (72.33%)
      No 70
      (4.48%)
      Unsure 362
      (23.19%)
      Responses to this question 1561

      11. Do you wish for LUST to continue an honest and clear dialogue with the club, such as our recent meeting with Mr Cellino?

        Count
      Yes 1535
      (98.46%)
      No 12
      (0.77%)
      Unsure 12
      (0.77%)
      Responses to this question 1559

       

        Premier League
      Championship
      League 1
      League 2
      Conference
      Non-League
      Total
      Please rate this survey 513
      (34.18%)
      837
      (55.76%)
      117
      (7.79%)
      15
      (1.00%)
      9
      (0.60%)
      10
      (0.67%)
      1501
      Average
      1.8


      The file containing the mass of comments made by our membership runs to over 100 pages and will be passed in its entirety to the club’s owner. The link to download the full survey results is below (.pdf file size 2mb).

      Mr Cellino asked for an honest and open relationship with the Trust, and he now has much honest feedback to consider. We look forward to discussing your views with him.

      Many thanks once again to all who took the time to respond.

      Tuesday
      May132014

      Trust Chairman and Board members meet Massimo Cellino

      On Monday 12th May, Trust chairman Gary Cooper and board members Chris Coleman and Paul Keat met with Massimo Cellino for the first time since he successfully appealed to take over as majority owner of Leeds United from GFH Capital (GFHc).

      On behalf of our members we asked Mr. Cellino about the current state of the club and discussed our relationship going forward. As a supporters trust two major issues emerged from our meeting with Mr. Cellino. The first is our concern at the precarious financial health of the club. The second is how the trust fits into the wider picture and its role in taking part in discussions with any owner of the club.

      Recent press coverage will have made all Leeds United fans aware that the financial situation at the club is dire. Mr. Cellino pulled no punches when he explained to us that he had taken on huge debts from the GFHc era and an operating deficit of alarming proportions. He went into substantial detail and provided supporting documentation on expenditure. While it is not sensible or practical to list all the sums given, Mr. Cellino left us in no doubt about to the size of the task and the seriousness of the position the club is in.

      There are, however, two examples given that can be relayed to illustrate the gravity of the situation. Firstly, Mr Cellino told us the club is spending well over £100,000 a day on operating. Secondly, he informed us that the upcoming season ticket sales had been mortgaged prior to his arrival, but since taking over he had settled the loan in question.

      Mr Cellino told us he had been working hard on analysing the situation and that he had plans to restructure the club from all angles, looking at costs and methods, with a view to improving the club’s financial performance and viability. He also stated he was committed to doing so while investing sensibly in improving the quality of the squad.

      We raised the issue of a fan share scheme, but Mr Cellino said that such a scheme would not be viable until the financial future of the club was resolved. However, he said he had considered the idea of involving the fans in the purchase of Elland Road. This is something we hope to discuss again in the coming months.

      In summary, Mr Cellino asked nothing more than for us to trust him and for us to be honest with him with our members views. Gary Cooper assured him of our continuing honesty and asked for the same in return.

      On this final point in particular, the Trust board has subsequently taken the opportunity to reflect on its own position and our relationship with the club’s owners. 

      The Trust has faced a degree of criticism for having publicly engaged with GFHc when, aided by hindsight, it transpired they were doing great damage to the club’s financial health. The Trust understood that many supporters were angry the club had been managed in such a way, and that some Leeds fans were simply looking for somewhere to direct their anger. However, we considered these criticisms when relaying what Mr Cellino has told us.

      As a board we have concluded that the Trust’s position and function need to be made absolutely clear when dealing with the club’s owners, so as to avoid being the focus for criticism in the future, however misplaced we feel it is. 

      The Trust is governed by its constitution - a legal document that outlines the Trust’s goals and defines the way in which it is run. Among other things, the constitution requires two things in particular: 

      1. That the Trust seeks ownership of shares in the club;
      2. Where this is not practical or desired - there is no ‘one size fits all’ model for all Trusts and clubs - the Trust is required to seek dialogue with the football club, with a view to establishing some form of fan representation. 

      This is the case regardless of who owns the club, whether it is GFHc or Massimo Cellino. These aims are in place to try and make owners answerable to fans, and they will always be pursued even if it subsequently becomes apparent that the club’s owners have mismanaged the club or have been less than truthful in what they have told us. The goal is a degree of accountability.

      As a Trust we will continue to pursue this accountability and, with our position clear, we hope that our members and the wider fan-base will keep their focus on the information itself. We believe it to be a less wasteful use of energy for members and fans alike to compare the information against the available evidence, rather than attacking the Trust for simply doing its job and presenting it in the first place.

      We realise that to an extent the success of the Trust will always be determined by the willingness of the club’s owner to maintain an honest, ongoing dialogue with us. Therefore, we would like to thank Mr. Cellino for his candour and his willingness to produce documentary evidence to support his description of the parlous financial state of Leeds United.

      As is always the case, we hope our members will draw their own conclusions from the information presented and will continue to play their part in the dialogue we have established with Mr. Cellino. LUST will be canvassing its members to find out how you would like us to move forward in these discussions. Your responses will dictate our future actions and the representations we make on your behalf, so it is vital that you continue to give us your opinions.

      Encouragingly, Mr. Cellino has expressed his strong admiration for Leeds United fans. His passion serves as a timely reminder that our worldwide band of proud, loyal supporters are one of the few assets the club still possesses that give us the potential to return to the very top of the game. The Trust has great respect for the ongoing challenges faced at Leeds United, and we sincerely hope Mr. Cellino can finally deliver us a club befitting its fans.

      Wednesday
      Apr092014

      Trust financial analysis of LUFC Accounts 2013

      FINANCE UPDATE - 2013

      Now that the latest accounts (to June 2013) have finally landed we have undertaken a review and have the following summary for our members.

      HEADLINES

      - Turnover decreased by 8% from £31.1m to £28.6m (compared to 4% in 2011/12)

      - Gate receipts decreased by 17% from £11.3m to £9.7m (compared to 12% in 2011/12) with average attendance down by 7.7% - perhaps reflecting lower ticket prices as a factor

      - Staff costs to turnover ratio increased from 57% to 70% (51% in 2010/11)

      - Overall admin costs increased from £9.8m to £13.3m (£8.6m in 2010/11)

      - “Unknown” admin costs increased from £5.2m to £6.2m (£4.5m in 2010/11)

      - Directors received £794k compared to £347k in 2011/12, with one director awarded a £440k bonus.

      - Yorkshire Radio has had an impact of £1.5m on the loss in the year as LUFC have been forced to write off all the amounts they were owed by them.

      - Profits from net player trading of £2.0m helped reduce the overall loss from £11.6m to £9.6m.

      - The current debt stands at £24.7m compared to £14.6m on a like for like basis 1 year ago

      - Money gained from the court case win against WYP (of £1m) was put towards clearing payments of the preference shares – controlled by Ken Bates

      These accounts show the situation at Leeds United as at the end of June 2013 which was before the widely reported further funding that has been injected into the club by Cellino, so in all likelihood the debt has grown since.

      Despite what has been claimed, GFH have actually invested nothing into Leeds United but have instead loaded further debt onto the club and managed to record the biggest annual loss since 2004 (the immediate post-Ridsdale era).

      While Ken Bates and Shaun Harvey were in control for 50% of this period and undoubtedly laid the foundations for the performance in areas such as the decreased gate receipts, it is only during the second half of the year that we see the debt escalating at a pace, which would suggest that this is when the costs started to spiral. As we have stated in the past, it was always our view that performance was going to be worse in 2012/13 (had the old regime remained in place) than the season before it, but even we are shocked at just how dramatically it has deteriorated.

      Summary of Leeds United Football Club Limited Numbers

      Excluding Player Trading

       

      2013

      2012

      Variance

      Variance

       

      £’000

      £’000

      £’000

      %

      Turnover

      28,568

      31,080

      (2,512)

      (8%)

      Cost of Sales

      (5,558)

      (5,582)

      (24)

      0%

      Admin Exps

      (33,304)

      (27,672)

      (5,632)

      20%

      Operating Profit/(Loss)

      (10,294)

      (2,174)

      (8,120)

      (374%)

       

       

       

       

       

      Staff Costs

      20,004

      17,828

      2,176

      12%

      Other Admin*

      13,300

      9,844

      3,456

      35%

       

       

       

       

       

      *Includes:

       

       

       

       

      Rent

      1,893

      1,861

      32

      2%

      Depreciation

      1,477

      1,193

      284

      24%

      Accountancy Fees

      140

      112

      28

      20%

      Other Known

      3,570

      1,444

      2,126

      148%

      Unknown

      6,220

      5,234

      986

      19%

       

      Post Administration Figures for Leeds City Holdings (Excluding Player Trading)

       

       

      2013

       

      2012

       

      2011

       

      2010

       

      2009

       

      2008

       

      £’000

      £’000

      £’000

      £’000

      £’000

      £’000

      Turnover

      29,322

      33,097

      34,475

      27,533

      23,535

      23,249

      Cost of Sales

      (6,190)

      (6,559)

      (6,376)

      (5,883)

      (4.930)

      (4.166)

      Admin Exps

      (33,760)

      (29,557)

      (26,486)

      (22,789)

      (21,384)

      (18,217)

      Operating Profit/(Loss)

      (10,628)

      (3,019)

      1,613

      (1,139)

      (2,779)

      866

       

       

       

       

       

       

      14 months

       

      Turnover

      Turnover has steadily declined since its peak under the Bates Regime back in 2011/12 season, as some fans decided to vote with their feet in order to protest against the running of the club. This meant that we were always expecting a fall this season as GFH were tasked with trying to repair the relationship with the fans. Gate receipts fell 17% and account for £1.6m of the £8.1m increase in losses during the season. Unsurprisingly merchandising fell by a similar percentage (and added a further £875k to the deficit); the remainder of the Turnover items (TV revenue, Central distribution and Commercial activities) more or less netted out meaning that total decrease in Turnover accounted for £2.5m of the overall increase in losses.

      Wages to Turnover

      While turnover decreased, the badly needed investment in the playing squad did happen. However, the figures suggest that it was more of an investment in total number of playing staff rather than an increase in quality. The overall squad grew from 46 playing staff (including apprentices) to 58 during the year (a 26% increase). Overall wages increased by 12% in comparison; there was some reduction in other staff, but given that the largest part of the wage bill relates to Playing staff and management (which also increased from 17 to 20 people), it seems safe to assume that the average amount paid to the playing staff actually decreased.

      While we have always called for an increase in the wages to turnover ratio, the method under which this has been achieved during the year in question is not really what we had in mind. With turnover down (by £2.5m) and the number of playing and management staff increasing dramatically (at an additional cost of £2.2m), the ratio went from 57% to 70%. It is highly unlikely that Leeds United will have the lowest ratio in the division anymore but, while the quantity side of this equation has been fulfilled, the quality of the additional spending does not seem to have noticeably improved. We would not call for this ratio to be exceeded next season (or beyond), in fact if anything it needs to decrease, but we would definitely suggest to the new management that a reduction in quantity and increase in quality needs to be the focus.

      Costs of the Directors has increased dramatically which can largely be explained by the increase in number of Directors, as well as the significant bonus payment made to one of them (£440k). 

      Other Costs

      It is this area where we have seen the most shocking situation. We have always maintained that the ‘other’ costs at Leeds United were excessive, therefore to see a £3.4m increase in these was deeply concerning. In terms of the increase, we can see that £1.5m of this relates to a one-off cost associated with the closure of Yorkshire Radio (where the debt owed to Leeds United by the radio station had to be written off), a further £0.6m relates to increased admin costs associated with player transfers and £0.3m relates to the legacy of Bates building works. The remaining £1m of additional costs is unknown, taking what was already a bewildering £5.2m figure up to £6.2m. Undoubtedly much of these are likely to be legal costs associated with the takeover but it seems any hope of light being shed on these unknown expenses under the regime of GFH has been disappointingly shattered.

      We still believe this is an area Massimo Cellino can find savings in and hope that it will go some way to reducing future losses.

      Cash

      As we expected cash has been in short supply at Elland Road, and this became even more apparent with the recent reports of a wages crisis at the club. Given the huge increase in costs and the reduction in revenues this is no surprise, but it is obviously a situation that cannot be sustained. Just how close we came to another Administration event may never come to light but the accounts reflect a situation where the club was living a hand to mouth existence for some time and this situation would have had to come to a head but for the introduction of a new cash injection.

      Group Companies

      The Group situation is perhaps the one area where it appears that GFH took the painful decisions and acted correctly. Yorkshire Radio was closed down having made further losses (which impacted the football operations) and some consolidation appears to have occurred making the family a bit more manageable in size. However, the eternal promise made by Ken Bates regarding non matchday incomes has still yet to materialise as the combined efforts of the non footballing side of things resulted in a turnover of £754k and costs of £1.09m (an overall loss of £334k). 

      Debts 

      In six months GFH appear to have added a further £10m (net) to the debt left behind by Ken Bates, much of which is in the form of short term loans. The list below details the current situation regarding debts at the club.

      Preference Share payment to Lutonville

      £0.1m

      Ticketus 2 LLP Loan Repayment

      £2.3m

      Compass

      £1.3m

      Brendale

      £11.3m

      Berrydale

      £2.0m

      Director Bonus

      £0.2m

      Sport Capital

      £1.8m

      Working Capital Shortfall

      £5.7m

      TOTAL DEBT

      £24.7m

       

      If the contingent payment of £4.8m to the Administrators is included this figure increases to £29.5m (assuming we get promoted by 2018).

      Conclusion

      If we thought when we parted company with Ken Bates that things could not get any worse, that has quickly been dispelled by these numbers. This does not mean that Ken was in anyway better for the club, nor is he absolved from blame in our opinion. Many of the issues relate directly to the state of the club that he handed over (falling revenues, disgruntled fans) and the long term decisions he took (Yorkshire Radio and the building obsession), but what is clear is that GFH did not seem equipped to manage these situations and had no obvious plan to do it. They took over the club with no funding and have had to react to each cash crisis as it arose by finding loans as and where they could. It seems obvious why they needed so desperately to sell. However, perhaps the profitable running of the club was never a real concern, as the GFH financial statements appear to show that in spite of all this they have managed to make a profit out of this sorry state of affairs. GFH reported that they made a US$6m profit out of their holding in Leeds United by selling shares in the club (Leeds United Holdings) to strategic investors. Like Leeds United, those investors seem not to have been quite as fortunate as GFH in terms of profit as reports suggest the club has been sold to Massimo Cellino at a value nearer to what they originally paid.

      As is always the case finances never tell the full story but, while GFH do not appear to be able to run a profitable club, they do seem to be able to make a profit out of a loss making enterprise.