Grim! Sent from my iPad
> On 4 Mar 2016, at 12:01, "[email protected]" <[email protected]> wrote: > > > > > Interesting take on finances - especailly HRMC and other court cases > > <!--#yiv4983086885 _filtered #yiv4983086885 {font-family:Calibri;panose-1:2 > 15 5 2 2 2 4 3 2 4;} _filtered #yiv4983086885 {font-family:Tahoma;panose-1:2 > 11 6 4 3 5 4 4 2 4;} _filtered #yiv4983086885 > {font-family:Roboto;}#yiv4983086885 #yiv4983086885 p.yiv4983086885MsoNormal, > #yiv4983086885 li.yiv4983086885MsoNormal, #yiv4983086885 > div.yiv4983086885MsoNormal > {margin:0cm;margin-bottom:.0001pt;font-size:11.0pt;font-family:"Calibri", > "sans-serif";}#yiv4983086885 a:link, #yiv4983086885 > span.yiv4983086885MsoHyperlink > {color:blue;text-decoration:underline;}#yiv4983086885 a:visited, > #yiv4983086885 span.yiv4983086885MsoHyperlinkFollowed > {color:purple;text-decoration:underline;}#yiv4983086885 > p.yiv4983086885MsoAcetate, #yiv4983086885 li.yiv4983086885MsoAcetate, > #yiv4983086885 div.yiv4983086885MsoAcetate > {margin:0cm;margin-bottom:.0001pt;font-size:8.0pt;font-family:"Tahoma", > "sans-serif";}#yiv4983086885 span.yiv4983086885EmailStyle17 > {font-family:"Calibri", "sans-serif";color:windowtext;}#yiv4983086885 > span.yiv4983086885BalloonTextChar {font-family:"Tahoma", > "sans-serif";}#yiv4983086885 .yiv4983086885MsoChpDefault > {font-family:"Calibri", "sans-serif";} _filtered #yiv4983086885 > {margin:72.0pt 72.0pt 72.0pt 72.0pt;}#yiv4983086885 > div.yiv4983086885WordSection1 {}-->•• > BY Moscowhite Last week here I wrote about how the prospect of analysing > Leeds United’s latest set of accounts sent me into a nostalgic reverie, first > for the Champions League era, then for John Pemberton. Well, it made sense to > me. The actual accounts dropped on Thursday, and to my surprise were a > madeleine sent from the Champions League era in which I’d sought blissful > escape before. The club used to publish accounts then too; if I remember > rightly, they were glossy affairs, A4 brochures packed with details about all > the great things Leeds United were doing, that proved how clever I’d been to > become a shareholder. Or at least they were like that for about a season, > because that’s about how long the peak of the Peter Ridsdale myth lasted > before the printing costs — the costs of everything, really — became too much > for the club to bear. The latest set of accounts don’t boast that way on a > colour-photo-of-kids-with-the-Kop-Cat level, but Massimo Cellino’s > introductory remarks do offer similar reassurances to Ridsdale’s, along with > a remarkable rewriting of history. “Striker Billy Sharp was the household > name which the fans craved,” apparently; I mean, he was a popular lad and > he’s definitely famous in Sheffield, but… “Further reinforcements were made > in the January transfer window, with Sol Bamba and Granddi Ngoyi both > arriving on loan from Palermo, while Edgar Cani joined from Catania.” > Seriously, why even mention Edgar Cani? Perhaps Massimo wanted to remind us > just how good we had it during this accounting period, before getting down to > the nitty gritty of the numbers. No matter how bad the accounts might look, > it had to be worth it for Cani, right? However bad the accounts might look, > it’s also worth bearing in mind that Cellino has admitted to Adam Pope and > Phil Hay that the next set of accounts will look worse; although they will, > he assures them, still be manageable. It’s an odd admission to make given the > headline spin around this set, which cover 2014/15 season, has concentrated > on the drastically reduced losses, and the reorganisation of the debts to > GFH; on the club being ‘fixed’. Cellino was more candid with Emanuele > Giulianelli on Thursday, telling him: “The next season has to be, finally, > the one in which I will have to manage the club in my own way. In these first > two seasons I have had to dedicate 90% of time, energies and money to > consolidate and stabilise a nightmare financial situation.” These numbers, > then, are the halfway point of the nightmare. The problem is, they don’t show > much evidence that Cellino knows how to wake Leeds United up. That 90% of > time, energies and money does appear, at first glance, to have been put to > good use where GFH are concerned, because the situation with the bank that > likes to say ‘Invoice payable’ is considerably better than it was in the last > set of accounts, when they were still being ushered from majority to minority > shareholders. They were paid £3m during this accounting period, leaving a > debt payable to them of £17m; instalment payments towards a total of £3.5m > will be paid annually, beginning this June, until June 2019; the remaining > £13.5m owed will be paid in full if the club is promoted to the Premier > League before June 2019, or on the tick from June 2019 until June 2032. > Crucially, these loans are no longer accruing interest, and almost a million > of interest has been paid back. Sadly, there is a calendar correlation > between the purchasing of our season tickets and the month in which the > annual payments will be made, suggesting GFH have got themselves first in > queue for when the Elland Road purse is at its fattest with the fans’ money; > which makes this a good moment to add the necessary asterisk to Cellino’s > ‘fixing’ of the situation with GFH, which is that he had plenty of > opportunities to fix this situation during his takeover, by not allowing the > situation to develop at all. Instead, every June, from now until 2032, GFH > will gather round their banking terminals to watch the magical transaction > and reminiscence about how they first felt when they realised Cellino wasn’t > going to do due diligence. ‘Oh Hisham, I can still see the look on your face! > I don’t know how you didn’t crack up! Hey, has anybody ever heard from that > Darren guy again? What was he called, was it Darren Hay?’ It’s unfortunate > that dealing with GFH has taken up so much of Cellino’s time, because while > he might describe this process as ‘fixing the club’, it’d be more accurate to > describe it as ‘fixing the problem he created with GFH, using our season > ticket money’; and because when he diverts his attention to actually, really > fixing the club — “manage the club in my own way” — he might find it even > harder to fix than GFH. The short version is that while Massimo has been > digging himself out of the hole he created with Hisham and Salah, the > football club itself has continued to slide into trouble. With GFH ‘fixed’, > administrative expenses were reduced from £37.2m — but only to £33.3m. > Operating losses were reduced from £17.8m — but only to £12.6m, around £1m a > month. Losses might have reduced but lots of other things did too, things > that you don’t want to reduce. Turnover was down by a million. Gate receipts > were slightly up but average attendances were down. Merchandise revenue was > down, commercial revenue was down. And that was for 2014/15. Average home > attendances for 2013/14 were 25,088, and for 14/15 were 24,276; so far this > season we’re at 22,615, without much incentive for fans to rush through the > turnstiles between now and the end of the season. The headline reduction in > pre-tax losses to £2m has an awful lot to do with player trading, also known > as ‘selling McCormack’; Cellino has said that losses will be worse in the > accounts for 15/16, and while Sam Byram might have a big impact on the > Premier League next season, he won’t have made a McCormack-sized impact on > our bottom line. The wage bill, down from £20.1m in 13/14 to £17.8m in 14/15 > has, according to Cellino been reduced further to around £13m for 15/16 — yet > even with that extra £4m saved, losses are still going to increase. While > league position — ah yes, league position — The problem with devoting 90% > effort to fixing GFH is that it was pure finance; a bank arguing with the son > of a rich businessman over debt restructuring. While that has been going on, > the football club has been taken to Brighton, and it has been thoroughly > embarrassed. The result on Monday night shouldn’t be seen as an anomaly, but > as a natural destination, and possibly a new level. Cellino might claim he > has been distracted, but he’s well into his second full season here. Steve > Evans has been head coach since October, and has just come through a transfer > window in which he claimed to have had his president’s full backing. These > days at Leeds United, it doesn’t get much more stable than that, and the > football club and the football team should be showing the fruits of both > their labours. Unfortunately, it is. That football has been an afterthought > to Cellino may well prove to be his downfall. If the best he can do for the > club financially is to bring it to the point where it needs to sell one > McCormack per season to balance the books, well, United wouldn’t be alone in > the Championship if that was the case. But we don’t have another McCormack. > We had a Byram, who has gone for a pittance; we have a Cook, a Mowatt, a > Taylor, perhaps a Kalvin Phillips, a Lewie Coyle. But the pressures of > operating losses of this size are such that we might not have time for > Phillips or Coyle to develop into players we could cash in on, before we have > to cash in. Thorp Arch, where we would turn for these players, has been a > major target for cost-cutting, and it says something about the staffing > situation at Leeds that Paul Hart — brought in to run the Academy — has been > making up the numbers on the first team bench with Evans and Raynor. Do we > have the coaches, the facilities, the scouting network to bring through the > next generation of players we need, either to fill first team shirts, or to > sell to keep the club afloat? Without players to sell, the solution for the > shortfall falls personally on Cellino. It’s interesting in the accounts that > his personal loan to the club of around £1m is the only loan to have been > repaid in full, almost as if he needed the cash back. Eleonora Sport, and > Eleonora Immobilaire, have loaned more, with parts of those loans turned into > shares, without which the losses would look even more severe. But given that > right now Cellino is effectively operating while banned by the Football > League, pending his various appeals, how confident can we be in Cellino and > Eleonora (the companies, not the daughter) being able to prop the club up > even in the medium term? Worth a paragraph, too, are the “number of legal > claims and various claims from H M Revenue and Customs outstanding against > the company” that merit just one paragraph in the accounts, a paragraph that > says, “There is significant uncertainty over their outcome. For this reason > no provision has been included in the balance sheet”; in other words, if the > multi-million pound legal cases we knew the club was fighting with former > sponsors and former employees, and the claims from HMRC that we didn’t know > the club was facing, go against the club, there is no cash reserve in the > loss making company to pay them. That situation is definitely worth a > paragraph. The magic bullet solution would be promotion to the Premier > League; GFH would be paid off, broadcasting revenue would go through the > roof, attendances would increase on the way up and sponsors would beat a path > to Leeds’ door, reversing all the downturns of the past season. But every > player sold to make up an operating shortfall makes the task of returning to > the Premier League more difficult; in fact, it makes everything more > difficult: getting fans to come and watch, getting sponsors to come and > sponsor, getting kids to buy replica shirts. Massimo Cellino, himself, has > made it more difficult. For a few months this summer it didn’t matter that > 90% of Cellino’s attention was on fixing GFH, because 100% of Adam Pearson’s > was on fixing the football club. Capable staff were being brought in, > sensible decisions were being made, United were benefiting from having an > experienced head giving thorough and diligent attention to the things > football clubs do. Elland Road was a brighter place after just a few months > of Pearson’s influence; where would a full season have got us? Higher than > 18th? Normality lasted four months; a spell with Matt Child as executive > officer was similarly brief. Paul Bell is in there now, doing something, but > he’s a commercial director, not a football man. Maybe the bewildering array > of drinks offers for the Bolton game are down to him (it’s two pints for £6 > before the game and two for £5 after and if Leeds win a pint is free but only > in the South Stand with a ‘match day meal voucher’ that is a mandatory > purpose unless you’re a season ticket holder — clear?). The magic bullet is > miles away. Success is miles away. Stable finances are miles away, unless you > count consistently losing north of £10m stable. However you slice it, the > situation at Leeds United is that more money is going out than is coming in, > players are being sold to cover the losses, as players are sold the team is > getting worse, and as the team gets worse less money is coming in. We can > argue whether Massimo Cellino should be blamed for all this, at which point > we have to acknowledge the job he’s done on GFH, and begin an argument about > whose fault that really was (yo, Ken, we were just talking about you!). But > arguments about blame obscure the real danger the club is in if it carries on > like this: losing money every season, and lacking the money or the knowledge > to rebuild the deteriorating infrastructure that could raise the money to at > least cover the losses. What these accounts ought to do is bring the > discussion around to Cellino to a new, sharper point. Rather than asking, ‘is > he the man to blame?’, we should be asking, ‘is he the man to solve this?’ •• > Sign uphere to get new articles by Moscowhite by email. > > DAVID BARKER > Manager > North Zone 7 > UK FSO > Ericsson > Unit 4, Midleton Gate, Guildford Business Park > GU2 8SG, United Kingdom > Phone +44 1483 30 36 66 > Mobile +447782326395 > Office +447782326395 > [email protected] > www.ericsson.com > > Legal entity: Ericsson Telecommunications Limited, registered office in > Registered Number in England & Wales: 942215 . This Communication is > Confidential. We only send and receive email on the basis of the terms set > out atwww.ericsson.com/email_disclaimer > > > -------------- next part -------------- > A non-text attachment was scrubbed... > Name: image001.gif > Type: image/gif > Size: 2367 bytes > Desc: not available > URL: > <http://mailman.greennet.org.uk/pipermail/leedslist/attachments/20160304/d62a0373/attachment.gif> > -------------- next part -------------- > A non-text attachment was scrubbed... > Name: image002.gif > Type: image/gif > Size: 1337 bytes > Desc: not available > URL: > <http://mailman.greennet.org.uk/pipermail/leedslist/attachments/20160304/d62a0373/attachment-0001.gif> > _______________________________________________ > Leedslist mailing list > Info and options: http://mailman.greennet.org.uk/mailman/listinfo/leedslist > To unsubscribe, email [email protected] > > > MARCHING ON TOGETHER _______________________________________________ Leedslist mailing list Info and options: http://mailman.greennet.org.uk/mailman/listinfo/leedslist To unsubscribe, email [email protected] MARCHING ON TOGETHER
