THEY'RE GOING DOWN, THEY'RE GOING BUST

Last updated : 29 October 2003 By Editor
Alan Smith completed a day of sheer despair for Leeds by hurling a bottle into the crowd and hitting a woman on the head in the Carling Cup defeat by Manchester United.

The Leeds striker's frustration boiled over just after being booked when a home fan threw a Lucozade bottle on to the pitch in the dying minutes of extra time, following Eric Djemba- Djemba's 117th-minute winner for United.

A spokesman for West Yorkshire Police said: "We are aware of the incident. We have spoken to the Match Commander at Elland Road but at this moment we are not able to make any comment. We will have to see what happens in the morning."

Smith told a friend after the game: "The bottle was thrown on to the pitch and I think it was aimed at a Manchester United player. I just picked it up and threw it into the crowd. I didn't mean to hit anyone or hurt anyone and it was not malicious."

Smith's action will inevitably land him in trouble with the FA, but went unseen by ref Paul Durkin.

Leeds boss Peter Reid said: "I honestly didn't see the Alan Smith incident so can't comment. We can't feel sorry for ourselves and have to get on with it. I have to get results and I will."


Meanwhile could they be salvaged?
Leeds are pinning their hopes on Saudi Arabian oil tycoons to save them from financial disaster.

Sheikh Abdul din Mubarak Al-Khalifa, a billionaire and fan who was at last night's Carling Cup defeat, joined deputy chairman Alan Leighton in a £4.4million cash injection in return for shares, which rose nearly 24 per cent yesterday to 3.25p.

Sheikh Abdul will try to persuade his wealthy countrymen to do the same, which would rescue the club after yesterday's record pre-tax losses of £49.5m.

The bleak figures are not helped by the revelation that Leeds are still paying £1.2m a year to Robbie Fowler and Robbie Keane, who have moved to Manchester City and Spurs, and Danny Mills, who is on loan at Middlesbrough.

Chairman Prof John McKenzie, said: "Lots of rich people are Leeds fans and if one of them can be persuaded on board, then fine


From the Independent:
Two seasons ago, they cheered their team all the way to the semi-finals of the European Champions' League, the world's most prestigious football club tournament. But yesterday, supporters of Leeds United discovered what a terrible price their short-lived success had exacted from the club's finances.

As if publication of the worst set of financial results in the history of a British football club were not enough, Leeds United dropped an even bigger bombshell: half a dozen of their best players - including England internationals Paul Robinson and Alan Smith - are mortgaged to a previously little-known finance company [RI regulars will already know this from last season’s BackBeat].

Now the club, which yesterday announced losses of £49.5m for the past financial year, finds itself in the same position as a homeowner mortgaged to the hilt who falls into negative equity when the value of his property collapses.

For Leeds, the problem is trying to keep up the "mortgage payments" when its fortunes on the field have deteriorated and gate receipts have suffered a corresponding fall.

It has also demonstrated the increasing power of Ray Ranson, a retired professional footballer, who has come to wield enormous influence off the field through his financing firm, the catchily-titled Registered European Football Finance (REFF).

When Leeds bought Mark Viduka from Celtic for £6m three years ago, for example, not a penny was put up by the club. The whole amount came from Registered European Football Finance. In return, Leeds pays back an agreed sum every month.

These deals are a recipe for disaster. Since the club does not have to put the cash up immediately, it is tempted to live beyond its means. If the player performs well and his potential transfer value goes up, REFF may be persuaded to increase the loan. The extra cash raised can then be spent on other players, putting the club even further into debt.

It is not even necessary to buy a player to raise cash against his value. Budding stars who have been brought up through a club's youth scheme can be "mortgaged", with REFF putting up a loan that can then be used to assist further the transfer-market spending spree.

But if the player turns out to be a dud, the club is left with negative equity and possibly falling gate receipts. As City analyst Vinay Bedi at investment firm Wise Speke said: "This is the equivalent of buying an expensive home and then losing your job."

It gets worse. Of the Leeds debt of nearly £80m, insurance companies are owed £60m. This has been borrowed by securitising gate receipts - in layman's terms, the insurance companies have first call on the money the fans pay at the turnstiles.

If Leeds United is unsuccessful - its current Premiership position is next to the bottom having only won three matches out of 20 so far (against Chesterfield, Middlesborough and Blackburn Rovers) - then fewer fans turn up at the matches. In that event Leeds, not the insurers, has to stand all the shortfall.

The accounts show a loss on player trading of £17m, which gives a pretty stark indication of how the leasing company swallows up cash when mortgaged players are sold. Meanwhile the wages bill has reached 88 per cent of revenue despite the saving on salaries of the dear departed.