LEEDS UNITED SUPPORTERS TRUST PUBLIC MEETING SUMMARY NOTES: 20-06-2012

Meeting held at The Magic Sponge, 7.30pm, 20^th 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.

Comments

[jon cheetham]

Is the take over anything to do with Don Revies son in the Emirates?

[Gary Cooper]

no Jon.