Tuesday, October 24, 2006

Sound familiar ?

This is a report of the 2002-02 season at Leeds United:

It was not the first time that the question of money had been raised as a major issue. The Guardian carried the following report a month earlier: "The scale of the financial implications of Leeds United's underachievement this season became clear yesterday when the chairman Peter Ridsdale announced that they had lost almost £14m in this financial year and that they would have to sell £30m-worth of players this summer in order to reduce their debt by £15m to £20m.

"Leeds are believed to have received a bid of £30m for Rio Ferdinand alone but would not countenance selling their captain, so the mooted sale of Mark Viduka to Roma should account for half the £30m. Internazionale and Juventus have offered a similar sum for Olivier Dacourt but his season has been affected by injury and the likelihood of him not making France's World Cup squad will affect his value. Despite all the speculation surrounding Harry Kewell, Leeds have not received one bid for the Australian.

"The ease or difficulty of reaching the £30m figure then depends to a degree on how Leeds finish this season. Were they to secure a Champions League place, their players would end their season on a high note and values would rise correspondingly. However, if Elland Road experiences another downturn, the marketability of fringe players such as Stephen McPhail and Robbie Keane will decrease. The manager David O'Leary will also want to bring in at least two new faces, so Ridsdale's estimate that up to six players may leave the club could be correct.
"He said: 'One of the transfers will probably be more than £10m with three or four more smaller deals made up of squad players who are not regular first-teamers. The amount left for the manager to spend will depend on European qualification.'

"The situation has been forced on Leeds as they try to reduce long-term borrowings that have risen to more than £85m after a £90m spending spree that has brought no silverware. An indication of how results-driven the economics are is that when they topped the Premiership in September, Leeds's shares were worth 14p. Yesterday they fell to 7p.

"Ridsdale was speaking after Leeds unveiled a £13.8m full-year loss which served to compound fears in the City that the stock market-listed club has borrowed too much in its quest for success on the pitch. Leeds have had the squad independently valued at £198m but the City values the entire club at just £25m. But Ridsdale remains bullish. 'There are a lot of people waiting for Leeds to have a hiccup,' he said, 'but we're committed to a strategy of building one of Europe's biggest clubs and all our shareholders support us. We have no concerns about either our cash or debt levels.'

"A sign of Ridsdale's confidence, or concern, is that along with his fellow director Allan Leighton he is preparing to buy out one significant investor in the club, the bank UBS Warburgs, who own 11%. At yesterday's prices that would cost around £3m.

"Explaining the yearly loss, Ridsdale said the uncertainty surrounding the Lee Bowyer-Jonathan Woodgate trial and the injuries to Lucas Radebe and Michael Bridges had forced Leeds to carry more players on their wage bill than they had originally wanted. 'We didn't know who was going to be available to the manager,' he said. 'It was not an ideal situation.'

"Ridsdale also insisted that plans to move to a new stadium and fund it by selling naming rights were unaffected by the impending player sales. He said: 'We're in discussions with three multinationals over naming rights and already have one indicative offer.'"
It was an astonishing turn of events and few supporters could recall when financial pressures had put the club's on-field performances so much in the shade.

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