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      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.


      - 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
















      Cost of Sales





      Admin Exps





      Operating Profit/(Loss)










      Staff Costs





      Other Admin*

























      Accountancy Fees





      Other Known











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




























      Cost of Sales







      Admin Exps







      Operating Profit/(Loss)













      14 months



      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.


      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). 


      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


      Ticketus 2 LLP Loan Repayment








      Director Bonus


      Sport Capital


      Working Capital Shortfall





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


      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.


      Proposed fans share scheme from the Trust

      Leeds United Supporters’ Trust would like to start canvassing opinions from fans about our Fan Share Scheme proposal, that will allow fans to buy a stake in the club and ensure supporters have a voice at Elland Road.

      The scheme will be open to all individuals, groups, businesses etc without discrimination or prejudice. It will be administered by the Trust, who over the last twelve months have undertaken the work required to be in keeping with Financial Conduct Authority (FCA) regulations, and with our responsibilities as an Industrial and Provident Society (IPS).

      The proposal is to offer two donation options.

      The first is to donate to a fixed sum that would provide a pot of money with which shares in the club could be bought outright. The size of the shareholding bought would be negotiable dependent on the amount pledged.

      The second is to make monthly donations by direct debit or standing order to provide an annual sum that can be invested in the club to buy additional shareholdings, or for specific purposes as the donators choose. Use of this money would be written into any agreement with the club’s owners.

      We are planning to have a scheme in place whereby donators who would like to make a fixed upfront donation but don’t have the cash available would be able to use an affordable loan system, so they could donate upfront to the fund and then pay the money on a monthly basis. Loans would be granted alongside a savings scheme, so that repayments would also build up a small savings fund for each donator at the same time. With this scheme we hope that all fans will have the opportunity to donate.

      As part of the Trust’s constitution a LUST board member would be required to have a non-executive place on the board at Leeds United to facilitate the Fan Share Scheme. To ensure a fully independent and democratic process, alongside this any donator will be able to nominate themselves for a second place on the board, which will be voted for by all the other donators. This will be a condition of the Fan Share Scheme.

      The amount of any financial donation will not buy the donator any more power or authority than any other. Each donation will give the donator one vote: one donator, one vote.

      As a legal requirement of the rules that govern LUST as an IPS, enforced by the FCA, all donators will become free members of LUST.

      Donators can choose one or both donation options.

      We plan to begin canvassing opinions on this scheme next week, but feel that with the situation at the club at the moment it is important to give our members, supporters’ groups and Leeds fans the chance to think about these proposals.

      The canvassing exercise will not commit anyone to any financial obligations; we will use the feedback to make informed decisions about our financial plans going forward.

      The scheme is not dependent upon who gains control at Leeds United. LUST can and will work with any owner to ensure that supporters have a voice, and that their money can be used for the future benefit of the club.



      Further to publishing our email to the Football League this morning, we realise that we need to clarify the intention of the email, and explain what we are asking of the Football League.

      The Football League get information about member club finances on an annual basis that gives them a view on each club's situation, and recently during their consideration of Massimo Cellino's takeover, the League will have had access to up-to-date information about the financial state of Leeds United, information that nobody else outside the club has access to. 

      The League have powers to act if they are concerned about the financial well-being of any of their member clubs. Given the information they have about the club's finances, and given the reports today that players have not been fully paid, we are asking the League to take any steps it can to help ensure the financial stability of the club.

      The Football League have certain powers they can use in situations like these, and under their own regulations are obligated to use them. This appears to be a critical time for our football club and we believe the Football League should be using their powers to hold the club's owners to account.

      Regarding 'force majeure', it is our view that the circumstances around Cellino's failure to buy the club could be considered an event the club's management couldn't control, similar in principle to other events described in the Football League's regulations. As such we believe that the League should consider this aspect before applying any future penalties to Leeds United that might arise out of our current situation.

      We apologise if the email was not clear to our members, and hope that this has clarified our meaning and intention. In short, we are very concerned by events at Elland Road, and we are
      calling on the Football League to do whatever it can to assist our club.

      We hope this clarifies our comments earlier today and ask to direct any questions, if you have them, to chairman@lufctrust.org.


      leeds united: A plea from the fans to the Football League

      Following is an email that has been sent this morning to Andy Williamson, Chief Operating Officer of the Football League;

      Mr. Williamson,

      Further to the recent rejection by the Football League regarding Mr. Cellino’s proposed takeover of Leeds United, we urgently call upon them to ensure that they will do everything within their power to honour the duty of care to Leeds United as one of their member clubs.

      We understand that as part of the process regarding a change in ownership, Leeds United have provided the Football League with detailed financial plans and proof of funds going forward. Further to the decision that they have made, we are sure that the Football League will be aware of the financial impact that this will have on Leeds United and therefore we demand that they take every available action open to them in order to ensure that they act in the best interest of their member club and do all that they can to ensure financial stability is maintained. With reports in the press today suggesting that Players have not been paid, this action needs to be swift in order to avert a major crisis.

      Whilst we understand that the Football League has not caused the situation that Leeds United find themselves in today, they have contributed to the outcome and do have the power and responsibility to act in order to protect their member club rather than punish them. Clause 16 of the Football League Regulations sets out the parameters within which we expect them to act in order to ensure financial stability remains however, should this prove unsuccessful we would expect leniency to be applied when considering any actions under clause 12.3 as we believe the current situation should be classed under Force Majeure.

      Your Faithfully,

      Gary Cooper


      Leeds United Supporters Trust


      (EDIT) - In laymans terms, this email is to reminding the Football League of their obligations and asking them to ensure our owners', as per the assurances they gave when taking control of the club, are being fulfilled.

      We will keep everyone updated on any replies or communication following the email here and on our social media - Facebook Twitter


      Trust Statement: GFH and the future of LUFC

      Now that the Football League has made its decision on Massimo Cellino's eligiblity to own Leeds United, the board of LUST feel that answers must come quickly about the future of our club.

      Our members, and the wider fan base, are understandably concerned about the course the club will now take. When GFH bought the club the fans were promised long-term stability, but little more than a year later Leeds United is again at the centre of a long-running takeover process that is overshadowing every part of the club. 

      Since the end of November the news has been dominated by GFH's attempts to sell Leeds United, with the result that we find ourselves in March with no sale, and no evidence of a plan B.

      It is time for the people who own and run the club to make substantial and concrete statements about what they are going to do now. 

      While David Haigh has promised in the press that the club will not go into administration, the letter that Gibson Dunn solicitors sent to the Football League last week warned that delays to Cellino's takeover could cause "potentially irreparable damage to the Club," and the fans need to be told as a matter of urgency what this means.

      Leeds United Supporters' Trust also request that GFH urgently explain their stance towards other potential buyers following the rejection of Mr Cellino's bid. Everyone is aware that other bidding interest exists, we believe that GFH now need to either meet with all interested parties to discuss the details of their bid, or give clear reasons to concerned supporters why they will not even consider bids many believe would move the club in the right direction.

      Finally, the board of LUST call on the Football League to say what they are going to do to safeguard the future of one of their members.  Against the backdrop of mounting debts, and a current owner who appears to only want to engage with one prospective buyer, the Football League has clearly stated it will not accept the application of that buyer.  Where does that leave Leeds United? In the spirit of their new financial fair play regulations and given that the Football League will have seen the more recent financial information than anyone else, we hope that they have fully considered their duty of care to Leeds United as a member club. We trust that they will be doing everything within their power to ensure the financial situation at Leeds United is stable and sustainable.