I got bored half way through when he kept reiterating that it was Cellino's fault that GFH are still creaming money off the club.
I suppose refreshing that he isn't suggesting GFH and Cellino aren't in it together. > On 4 Mar 2016, at 16:52, [email protected] wrote: > > 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. 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