You Can Probably Guess Who Blinked First

By on Aug 31, 2007 in English League Football, Finance | 3 comments

So, it looks like he (and, by extension, they) have got away with it. The HMRC have dropped their court case against Leeds United, and Ken Bates has, as a result, got himself a bargain. A debt-free football club with a massive stadium, some very valuable real estate (in the name of a conveniently anonymous sounding holding company based in the British Virgin Islands) and the potential to get into the Champions League, for a low, low price. Quite what the reasoning behind the HMRC’s decision was is open to question. It’s entirely possible that they looked at the status of Ken Bates and thought that pursuing a tax exile would be a fruitless task, but equally possible that they concluded that he has played a very clever game, and beaten them.

So, how galling is this, then? I’m still hearing continuing bleating from West Yorkshire about the injustice of their fifteen point deduction by the Football League, so let us just remind ourselves of how this deduction came about. Leeds’ original CVA was failed after HMRC challenged the feeble offer that was made by all creditors. The administrators, KPMG, proposed a sale of the club rather than entering into a new CVA, and Bates was the winner (although whether any of the rival bids actually stood a chance is open to question). Leeds United, therefore, exited administration without a CVA in place, and this is against Football League rules. The league had to act. Their rules are in place to prevent the asset-stripping of clubs, and to ensure that clubs run themselves prudently, rather than running up enormous debts and then using sleight of hand and a few off-shore shell companies to rid themselves of the the debt. The Football League’s procedures for dealing with internal disciplinary matters have been in place for as long as the Football League has. Leeds appealed against the League’s decision (which, whilst unprecedented, was not without merit – especially as they have now closed the loophole which allows clubs to enter administration when they choose to minimum the damage caused by the standard ten point deduction for entering into administration in the first place), and the appeal failed.

They are now appealing again to the FA, but it would be folly to believe that this decision will be over-turned. Bates, who was fired over the Wembley fiasco by the FA, is unlikely to have the tact and diplomacy required to stand a chance of getting this done. The result of this is we’re left with the slightly nauseating sound whining from in and around Elland Road over it all. Since coming out of administration, Leeds have been spending their money reasonably freely on new players and training staff. Just today they confirmed that they will be paying SPL club Motherwell an undisclosed fee for their highly-rated young goalkeeper Alan Martin. They’re spending money that other League One clubs would be delighted to have to spend, and they’re doing it shamelessly. How big a punishment was this fifteen deduction, in any case? They’ve already seen off 60% of it by winning their first five matches. The 100 points required for promotion is still very much in their sights.

There is one other small point that I would like to add at this point: Ken Bates spent the whole of the summer telling the whole world that HMRC was the bogeyman. It was all their fault, and none of it was his. Well, here’s the deal: you see that tax money? That £7m? That’s your money. My money. Public money. Every single penny of it that isn’t paid back to the tax people has been taken from the public purse. You don’t need me to run off a list of all the things that a few million pounds could buy. Maybe, in the grand scheme of things, it’s not a fortune, but don’t be fooled into thinking that it is a completely insignificant amount of money. £3.5m would pay for twenty houses to be built for key workers. It would pay the wages of over one hundred nurses for a year. I’m angry at HMRC for folding like this – it’s our money that they’re dicking around with, and such expediency would not be extended to the rest of us. HMRC issued a winding up order against Halifax Town this week for £100,000.

The fact of the matter is that Leeds United’s supporters should be using every means available to dislodge Bates. The example that he has set could have far-reaching implications across football as a whole. Every step that he has taken will have provided inspiration to every tax-dodger and asset-stripper looking to make a quick buck out of the game that belongs to you and me. Every step of the way, Ken Bates has pushed the door open a little wider for them. Anti-Bates chants are not enough. He’s seen it all before, and he doesn’t care. Let me spell this out once and for all – Ken Bates does not have the best interests of the supporters of Leeds United at heart. There should be a sustained campaign of civil disobedience against him. I’m saying this because the Leeds United Supporters Trust and the supporters of Leeds United have been so shamefully inactive in this respect. To that end, I will continue to consider them as culpable for Bates’ being their as anyone else. I’ll be happy for them to prove me wrong, but I simply cannot see this happening.

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    3 Comments

  1. Excellently put. I simply could not agree more, particularly about the relative inactivity of Leeds fans and the Supporters’ Trust. From whining about the serious position that they find themselves in because of Bates’s presence, it is now simply a matter of whining about the (to my mind relatively light in the circumstances)penalty of fifteen points. If they get promoted, they won’t give a monkey’s. You tend to think they get what they deserve.

    Gervillian Swike

    September 1, 2007

  2. On the matter of HMRC still going after the full amount outstanding from Leeds United:

    I still believe that this was a capitulation. They were owed £7.7m and should (as I understand that they would from anyone else) settle for no less than this. Having withdrawn from the court case, I can’t see where they can go with it, but I’d be less than surprised if they settled for the same few pence in the pound as everybody else under the strange arrangement that KPMG bartered when the CVA was withdrawn.

    200percent

    September 1, 2007

  3. Have you read Tom Bower’s ‘Broken Dreams’? Slightly out of date now, but leaves you in no doubt what a scumbag bates is.

    It’s essential reading for anyone who was shocked by the Allardyce Panorama. Anyone who had read the book (which names names and gives plenty of detail) just shrugged their shoulders and said, ‘Yes, we know’.

    Thom Cuell

    September 3, 2007

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