Leeds United, A Riposte: If You Think Bates Is Right You Need Your Head Reading

Yesterday David Robinson wrote an article arguing that Ken Bates is right for Leeds United. Everyone is allowed an opinion, but here's why he was wrong on all counts based on my knowledge of the situation...
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Yesterday David Robinson wrote an article arguing that Ken Bates is right for Leeds United. Everyone is allowed an opinion, but here's why he was wrong on all counts based on my knowledge of the situation...

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Football fans like nothing more than a good debate and there's a fairly huge one raging at Leeds United right now. For the first time in years, positive action has been taken by Leeds United Supporters Trust's 4,500 members to campaign for change at the very top of the club. Like any debate, there are two sides to the argument and on Sabotage Times yesterday David Robinson gave his view in favour of Ken Bates' chairmanship at Elland Road. Unfortunately, David's five-point argument contained a number of myths and inaccuracies that left me compelled to respond. So, to redress the balance, below I have tried debunk some of the things David believes are positive about Ken Bates. Everything I write below is based on knowledge of Leeds United's accounts, other financials and quotes from Bates himself and his directors. Let's not also forget that for these five points David believes are positive, there are around 100 more issues with Bates' tenure that could be criticised. This is just the start…

Point One.

David's view that under Ken Bates there is no danger of us overspending on players and their wages is quite obvious. It goes without saying. But let's not kid ourselves that spending money on players is a bad thing, which it is often perceived to be. Any football economist will tell you that the teams who spend the most money on their players, by their nature, are more successful than those who spend less.  But while the memories of Peter Ridsdale are still fresh in Leeds fans' memories, it's worth pointing out a football club being in debt is not always a bad thing. In fact, if you read Simon Kuper's excellent piece in one of the early editions of The Blizzard, it will tell you that clubs who are not in any debt are actually restricting themselves. The premise being that with that extra £50m or so debt, they could make the difference between success and failure. The main issue is when this debt becomes unsustainable - like with Ridsdale. Another example of unsustainable debt at the same time of Leeds' collapse was Bates' time at Chelsea.

Bates got lucky because Roman Abramovich bought Chelsea around a week before they had to cough up a £23million payment on their borrowings

The difference between the Bates and Ridsdale though was that while Ridsdale ran up around £100million of debt on players and high wages, Bates took out a £75million eurobond on Chelsea Village - his hotel & leisure dream - and had debts totalling nearly £100million. Both clubs were mismanaged and had unsustainable debt. The difference was that Bates "got lucky" - not my quote but that of our current manager Neil Warnock, speaking about Bates in his book. Bates got lucky because Roman Abramovich bought Chelsea around a week before they had to cough up a £23million payment on their borrowings. Of course, if Abramovich hadn't turned up, Chelsea would have been in administration and forced to sell players the same way Leeds did. They would no doubt have followed the path we ended up going down. Ridsdale "lived the dream" - a dream of making Leeds United one of Europe's footballing super powers. Bates also lived the dream - he built Chelsea Village. So coming back to Leeds' current situation. David may argue we will never overspend in the way that Ridsdale did, which is clearly a good thing, but what about overspending on property? £7million went on the East Stand, there's also been major work on Billy's Bar, Howard's Restaurant, the new Pavilion and West Stand changes for away fans. Bates recently estimated he'd spent £20million on Elland Road already. Most of that money has come from club costs that could have been added to spending on the team, giving us a better chance of promotion. In Bates' letter to season ticket holders last summer, he hinted at taking out a loan for the £7million work on the East Stand - what did he secure this against? Not property, because we don't own any, so most likely it will be future ticket and season ticket sales - and if this is the case, it is an extremely risky plan considering the huge fall in attendances this season and the huge amounts we already have to pay on rent for Thorp Arch and Elland Road. So is overspending on players a bad thing? For Leeds United, in the current climate, it is. It is for most clubs, but because there are so many other factors at Leeds like construction work and debt-ridden Yorkshire Radio, it's impossible for us to even have that option to overspend. An option which, however way you put it, would give us a much better chance of promotion.

Point Two.

The debate of why Ken Bates 'bought' Leeds United in 2005 is one that has been done to death and the only Bates himself can know the genuine reasons. There are plenty of theories on this and David's version that Bates is doing it as a 'football challenge' along with the obvious profits is just one. As David says, there are easier ways to make lots of money. Unfortunately, in 50-odd years of business, Ken Bates hasn't found one that places him amongst the super-rich - a place he's craved since his time in the British Virgin Islands, although that's another story altogether. Because he has never made it to the levels of the super-rich, he's found a way to get the publicity he craves while making ample amounts of cash. That's being the owner and chairman of a football club. He could obviously make the money through football without the publicity. There are plenty of people who do it - Stan Kreonke at Arsenal very rarely even gives an interview. But Ken is different, he wants to be centre stage, he craves the publicity. The fact I'm writing this now and you're reading it means he's getting just that.

Taking failing companies and attempting to turn them around is something he's done all his life - to differing degrees of success

When he sold Chelsea, he made it clear he was considering retiring but that never happened. So did he come to Leeds to make money? He had just made £17million-plus from selling Chelsea - aged 70. He had plenty to live on for the rest of his life. So what motivated him to 'buy' Leeds? Taking failing companies and attempting to turn them around is something he's done all his life - to differing degrees of success. Maybe he saw a chance to make more money, although I don't think this is priority. Maybe he saw a chance to build another Chelsea Village? He did say on his first day: "They have more land up here so I could create Elland City rather than Chelsea Village." It could have been money, it could have been property, it could have been his business drive. Was it football? The last seven years suggests not. Three years in League One and a relatively small budget for the size of the club and overall spending power are all arguments against this. That's not to say he doesn't enjoy the football side of it, but it is more of a minor thing in the grand scheme of things. As Bates himself says: "In my view a football club is a property business that hosts a football match 25 days a year and is shut for the other 340 days." I could go on, but football doesn't seem like Bates' real motivation just a conduit for him to carry out his real passions; construction and himself. Regarding his ego, take this piece on Bates at Chelsea about him deceiving people for his own personal gain…- it sums him up perfectly. He loves the attention. Just listen to his weekly radio interviews on the radio station he owns and his programme column that serves to be another tool in which draw attention. So what motivated Bates to come to Leeds… Football? Not really. Money? To an extent. Property? Probably. Ego? Definitely.

Point Three.

Firstly, let's not get away from the fact that Elland Road was, and still is in some places, very run down and in need of refurbishment. I can see the need for updating certain areas of the ground which were dated. The East Stand wasn't one of these. The £7million redevelopment of the East Stand last summer was just the first phase in the an overall five-phase project that could end up costing Leeds United £80-90m . It is a project which many can see its failings - three and five star hotels in Beeston? A nightclub? Does anyone really think these will work as a viable business? It didn't work on the Kings Road in Chelsea, so why would it in Beeston? So the first phase was around 20 new corporate boxes and a couple of suites. That cost us £7m. It doesn't take a genius to work out that this will take many, many years to turn a profit, even with the non-matchday revenues taken into consideration. Also, from my seat in the West Stand, it's clear to see plenty of these empty on matchdays and also the old corporate boxes underneath aren't even sold out. So is the demand there? Not at the moment. Maybe it will be in the long-term, if we're promoted back to the Premier League. But that's still a big if. And who says it will definitely make a profit, even then?

I don't think making money for himself is Bates' key motivation but property and ego are

Also let's not forget how this was financed in the first place, plus the fact we don't own Elland Road which is another thing altogether. As I said above, I don't think making money for himself is Bates' key motivation but property and ego are. So having a vanity project like the East Stand makes every sense. He may not make bagfuls of money, but he'll live his property-building dream while having a lovely perch to sit on for everyone to see him. So is having these corporate boxes to the detriment of the team? I believe it is. Whether it is a loan or just our season ticket money being spent on the project, it's money that could be spent on the team. That's extra money on top of the current budget and the money wasted on Yorkshire Radio and the unaccounted-for money under 'other' which stood at £5m in the last accounts. Let's also not forget that the £7million is just a small percentage of the debt we'll be in if the five-phase project is ever completed. Those debts will be at the same levels as Chelsea before Bates "got lucky" - what happens if we don't get lucky?

Point Four.

David wants sustainability with the playing squad but we're anything-but sustainable at the moment. We do, as you suggest, bring through and develop players instead of forking out high wages for players. However,  nearly every single one of these players who we have developed have been sold. Our entire business model currently requires a player or two to be sold every season to to turn a profit. Over the years, the reason we've made profits and been 'sustainable' as David puts it was because we sold players like Delph, Gradel, Howson, Schmeichel, as well as a large number of academy players. Also, when we have developed talented players to push us up to the next level, many of them like Beckford, Johnson and Kilkenny have left on free transfers because we refuse to meet their increased wage demands. Overall, this is clearly unsustainable. Howard Wilkinson told The Square Ball in a interview that usually six out of 10 signings would work out well for a manager. So that's four who are poor. With our current transfer budget being so limited, that number is likely to be even higher because you're forced into taking more risks on players. If you then started selling some of the six that worked out, which we have to do to balance the books, or don't agree new contracts with them, then of that 10 initially signed you're going to be left with two or three good players and four or more bad ones. Over time, and moving up through divisions means a larger turnover of playing staff, you're going to end up with a heck of a lot of bad players on your books while the good ones have moved on. So we're still left with Becchio and Snodgrass (for how long?) but there are far more players on our books that aren't good enough, filling up the wage budget.

The argument that Bates has timed any promotion to perfection is nonsense

Our current method of squad building is anything-but sustainable. A much more sensible option would have been to keep together a core of quality players by handing them new contracts earlier and then adding quality signings. The hap-hazard, punt in the dark, current transfer policy isn't working. That policy isn't just down to the manager either. He has to work within a budget and Gwyn Williams, as technical director, and Shaun Harvey, as chief executive, must also take responsibility as they have the final say before Bates signs off any transfers. Finally, and very importantly, the point about the £5million is wrong. We have to pay back £4.75m (£250k has already been paid) to creditors, who lost out in the administration, if we're promoted before 2017, not the end of this season. So the argument that Bates has timed any promotion to perfection is nonsense.

Point Five.

Again, this point is misguided and ill-informed. Let's deal with last season's collapse. In January, it was clear that new signings were needed. Every fan could see it and there was huge disappointment that we didn't sign anyone when we were crying out for new defenders and new midfielders. Ultimately, the lack of signings cost us. Was the budget there? If it was, it wasn't used. Would Grayson have decided to not sign players if he had that budget? I very much doubt it. Anyway, that's an aside to the overall point about lack of investment in the squad. The accounts make it clear, as I have mentioned several times, that there is money available to increase the spending on players and wages. Leeds United's wage budget currently stands at around a third of our overall revenue, which when you consider what other clubs spend, it's one of the lowest wages-to-revenue ratios of any football club in the country. That's without taking into consideration Yorkshire Radio losing money or the cost of construction projects, which hold us back from spending even more. My belief is that we are clearly underspending on what we can afford to as a football club. And that's not just wages either. Take, for example, the amount gained in player trading by the club since the 2007 administration. Up to the latest accounts of 2009/10, it stands at a total of £8,094,000. That's all profit and does not include the money made on the more recent sales of Schmeichel (£1m), Gradel (£2.25m), Kebbie (£500k) or Howson (£2m). Where has this money gone? Let's also not forget that the accounts show fans contribute around two-thirds of our overall revenue in tickets, food, drink and merchandise with the rest coming from sponsorship etc.

It should be made clear that any investment in the squad is not coming from Bates

Meanwhile, according to the most recent accounts, the company Bates now owns (Forward Sports Fund) after his takeover last year has put just £59,000 into Leeds United in total. So it should be made clear that any investment in the squad is not coming from Bates. Has that budget been enough in recent seasons to give us the best possible chance of promotion? I'd argue it hasn't and our current position suggests it wasn't. Could it have been more? Undoubtedly. Simon Grayson thought so too, hence why he spoke out towards the end of his reign. He also did this privately, with Lee Dixon revealing Grayson's thoughts during the BBC's coverage of the Burnley match.

One final thing… David said "we might now be looking at a team that Ken Bates took from League One to the Premiership in super quick time." Ken Bates arrived at Leeds United seven years ago. In that time, he piled on debts, took us into administration, got us relegated and a 15-point deduction, meaning Leeds United reached its lowest ever Football League position. The fact that two years of moderate success on the pitch has now lead us to be in exactly the same position (10th in the Championship) as we were seven years ago shouldn't been seen as some miracle. Leeds United - the football club, and its fans - have suffered hugely under Bates. David can sugar coat it however he wants but the facts above speak for themselves.

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