Bates’ Caterwauling Doesn’t Disguise Questions That Should Be Answered

By on May 5, 2011 in English League Football, Latest | 4 comments

At least Ken Bates now knows who owns the club he’s chaired for the last half-decade, as he’ll have written their name on the cheque for the “undisclosed sum” which has bought him majority ownership of Leeds United. Unless, of course, he’s just put a blank cheque in an envelope, addressed it to “Leeds United’s beneficial owners, Cayman Islands, West Indies” and trusted that the local postie is better informed about the club’s owners than, well, the club themselves, apparently. There’s some sort of irony in the news of Bates’ “purchase” of 73% of Leeds coming out just as Leeds themselves all but came out of promotion play-off contention in this year’s championship. The greatest pressure exerted on Leeds United to become transparent about their ownership appeared to be that applied by Premier League chief Richard Scudamore’s threat to apply ownership transparency regulations to individuals, should Leeds have won promotion via this season’s play-offs.

The “deal” for Bates’ company Outro – registered in the West Indies, oh surprise me do – was done on April 26th, at which point the Whites could still have pipped Nottingham Forest for sixth place. By the time Bates’ accession to the Leeds throne was in the public domain, Forest were all-but-mathematically sixth. And not even QPR suffering a 15-point deduction (to take a figure purely at random, as happened to Leeds themselves after exiting administration through the wrong hole in 2007) would have edged Leeds ahead of the hoops and into the arms of that ever-vigilant lover of regulations Scudamore. So, at long last, all questions about Bates’ business practices have been answered. And we can all get on with our lives, safe in the knowledge that Bates has not broken any company laws at any time during his Chelsea and Leeds careers ever.

Can we balls. Leeds’  announcement on May 3rd revealed nothing more clearly than their belief that May 2nd should be a public holiday every year, because so many of us were born on that day. The Guardian’s David Conn straight away asked the obvious question. Why did the offshore trusts sell a rising, still potentially Premier League club, to Bates rather than any number of far richer possible owners throughout the world? (a question which has turned Conn into an “international enemy”, according to Bates – one for the CV there, David?) Bates, by his own admission, is a relative pauper, with whatever wealth he possesses “tied up in assets” – at least that’s what he told the High Court two years ago, as part-explanation for never having put a penny into Leeds until that point.

There might ordinarily be something admirable in club owners refusing to go for the easy money and instead selling to the chairman who has presided over Leeds on-field resurgence over recent seasons. But it makes no sense whatsoever in the modern football financial world, unless Bates was the beneficial owner all along. And that is the frustrating thing about the Leeds ownership saga. Frankly, anyone who has taken any sustained interest in the ownership structure of Leeds since Bates became chairman, and the remarkably similar structure of immediately pre-Abramovich Chelsea, knows the identity of the anonymous beneficial owner(s), or at least their surname. They also know that what might otherwise seem a minor technical point did, in fact, have a material effect on Leeds’ exit from administration in 2007, and the wiping away of the club’s multi-million pound debts – not all of which were down to that most infamous of Leeds chairmen, Peter “PR-Pete” Ridsdale. As Leeds legend and then-director Peter Lorimer told the BBC in May 2006, Leeds had been,  “£25m” in debt,  and “had major problems until (Bates) took over. But he’s done a great job in bringing stability to the football club. We’re 12 months ahead of schedule in terms of Ken’s plans for the club. The next step will be consolidation in the Premiership (Leeds were due to play Watford in the promotion play-off final later that month). Or, if we lose, to push hard for promotion.”

Twelve months later, Leeds were relegated and in administration. And the debt had increased to £35m, despite Leeds huge gate receipts, healthy transfer profits, £5m from Chelsea as the result of a dispute over youth team players and over £1m gate receipts from the play-off final. The vote to take Leeds United out of administration was based on the club’s major creditors, Astor Investment Holdings, backing Bates as chairman, despite the financial calamity he’d just overseen. The company, which stated it was unconnected to Bates, loaned Leeds £17.6m and were prepared to lose it as long as Bates remained chairman.  That money effectively garnered 17.6 million votes for the proposals to exit a Bates-chaired Leeds from administration, without which those proposals would have failed by some distance. And had a connection between Astor and Bates been established, those votes could not have been cast anyway. But, as Private Eye magazine noted in June 2007, Astor’s “generosity knows no bounds and no other recipient.” And that is still the case. Scour the world for Astor since 2007, and whenever you started, you’d still be scouring. A “Where are they now?” article could be written in invisible ink and still cover all the details.

Astor are just one of many examples of financial dealings which make perfect sense if Bates was connected to the companies and not a lick of sense if he wasn’t. Indeed, Astor’s votes in themselves wouldn’t have got the CVA proposals over the line without the help of a firm of solicitors, who discovered in the nick of time that they were owed £273,615.32 rather than £59,756 – an increase which allowed the CVA vote to pass by inches. A stroke of luck? Or were Mark Taylor and Co. solicitors to one Kenneth William Bates? How rhetorical a question do you think that is? But whether or not he had links with all these companies, or to the beneficial owners of Leeds ever since (or brought one of them up), the bottom line is that the club is now owned and chaired by Kenneth William Bates. When you strip away all the uncertainties of the past, that is the one reality Leeds fans are left with and another key question remains: will this be good for the club or not? Since 2007, Leeds appear to have been run effectively. The slide down the Football League has been slowed, halted and almost entirely reversed. There seems little doubt that the club will be among the favourites for promotion to the Premier League this time next year.

If Bates’ track record in football is anything to go by, though, it wouldn’t necessarily be unfair to suggest that this initial success will slow, halt and reverse too. His football career has been proof-positive that what goes up must come down. Oldham Athletic in the 1960s and Chelsea in the noughties provide the evidence, with a bit of over-budget Wembley Stadium thrown in. And, to remind you, Leeds’s own debts increased considerably between 2005 and 2007, debts which were predominantly NOT down to the well-publicised financial mismanagement of previous regimes. Oldham Athletic’s initial success ended in Division Four (now League Two, by the curious mathematics of football brand marketing). Chelsea found a financial saviour in Roman Abramovich in the very nick of time as Eurobonds repayments threatened to drag the club under.

Wembley has financial implications for The FA to this day. And Leeds are now in the control of the very man who took them into administration. Not Peter Ridsdale. Not the various consortia who tried to clear up Ridsdale’s mess. But Kenneth William Bates… even though he wasn’t the owner and had no idea who was. It’s all old material, I know. Some of the more vitriolic commentary on Bates at Leeds may be inspired by frustrations that the old twister has twisted his way out of yet another regulatory corner. And if Leeds were to make the Premier League next year, there are countless people – from manager Simon Grayson through to the club’s stunningly loyal support – who deserve that success. But it is a positive aspect of human nature to see wrongs and want them put right. It is part of what makes people good. So when someone such as Bates can share in the success of good people by being an old twister – while taking pleasure from being that old twister – the vitriol and the questioning should continue. And it will.

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    4 Comments

  1. Just when are the football authorities going to work out that all these things can’t be coincidences? And when are they going to stop passing people who take football clubs into administration as ‘fit and proper’ and prevent them from regaining control of those same clubs?

    And when will we stop having to ask obvious questions to which everyone knows the answers, but pretends they don’t?

    This is so close to the Pompey situation it just needs a loan shark and a few foreign owners in tax havens thrown in …. (oops)

    SJ Maskell

    May 5, 2011

  2. If you read the comments at the bottom of David Conn’s Guardian article then it is clear that many Leeds fans care not a jot about how Bates has connived his way to full ownership. They are prepared to forgive him his faults simply because the club is still intact and that Bates has managed not to bankrupt them (as he has done withe several previous businesses).

    Mark

    May 6, 2011

  3. Mark,

    I think you’re right. A lot of Leeds fans do feel that way. I think most fans still do forgive faults for the reasons you describe. You’ve hit a nail on a head there.

    From the comments at the bottom of the Guardian article (including the ones which have now been moderated out of existence for daring to suggest a certain continuity at Leeds), a lot of fans do care a jot. But it is almost impossible from my relatively distant standpoint to gauge whether a majority care a jot or don’t. So I won’t make any claims one way or the other.

    A lot of the Guardian comments refer to Conn re-hashing old material. But these questions about Bates’ recent past need “re-hashing” because they are legal questions with consequences, they remain unanswered and therefore they must continue to be asked.

    Mark Murphy

    May 6, 2011

  4. I can only hope that David Conn and this excellent site keep up the pressure because it is an absolute certainty that the football authorities will do nothing to uphold their own rules.

    The Ken Bates business model won’t change and at some point in the not too distant future the Leeds fans with their heads in the sand will owe people like Conn a massive apology. No disrespect to the Leeds fans who are prepared to see through his bluster, but while Bates remains in charge I can never feel that Leeds have suffered enough.

    Steve

    May 6, 2011

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