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You are in Sport Leeds United Latest Whites NewsLeeds United: We have turned the corner says Umbers
Published: 30 January 2015
Andrew Umbers.
11 comments
New Leeds United chairman Andrew Umbers is confident the financial restructuring put in place at Elland Road will allow the club to break even at the end of next season. Phil Hay reports.
The job of Leeds United chairman fell to Andrew Umbers at a time of internal strife last week. He accepted the post against the backdrop of a banned owner, a squad threatened by relegation and a club with battles left to fight.
On paper it read like crisis management but Umbers sees the landscape differently. In his view the crisis at Elland Road came last May when, less than a month after Massimo Cellino’s takeover, the Italian was advised to admit defeat immediately and call in the administrators.
Umbers had joined Cellino’s staff that month, asked to help him by “two leading attorneys in the Italian FA.†“At the time, Massimo and I were advised by accountants and other experts that the club should go into administration,†he says.
“Massimo had run Cagliari for 23 years and for the last 15 years, that club made 10 million Euros per annum. He knows how to run a football club. We did a root-and-branch strategic review and we didn’t accept that this football club should go into administration. But the backdrop was pretty awful.â€
There are numerous ways of painting the mess in explicit terms. As the club’s most recent accounts show, Leeds – largely under the ownership of Gulf Finance House – lost over £22m in the 2013-14 year. They are presently subject to a Financial Fair Play (FFP) transfer embargo because of it. Loans of more than £20m are owed to GFH, and redundancies last summer were sweeping. Umbers estimates that staffing levels at United have fallen by 37 per cent since then.
“The situation has dramatically improved,†he says. So much so that Umbers expects Leeds to be FFP compliant and out of embargo by the time the summer transfer window opens. Definitely? “Yes. We’ve submitted our FFP analysis. We’re already planning for what we need to do squad-wise for the 2015-16 season.â€
Umbers’ projection is that in this financial year, Leeds will lose between £7m and £8m. That figure constitutes a drop of around 66 per cent. He claims that money owed to “cash creditors†has more than halved and says “our objective is to finish the 2015-16 season at or around break even.†Talks about reducing GFH’s loans are well advanced, he claims. “That will mean our debt is minimal.
“If you have a club with little debt and which is getting close to break even, it’s an advertisement for the way Massimo has run the business. But also, it’s long overdue at Leeds United.â€
It is indeed. Leeds broke even several times while Ken Bates was chairman, often helped by the sale of players, but the past few years have turned the club into a money pit. On top of GFH’s liabilities, Cellino and companies connected to him have loaned the club more than £12m. Umbers says Cellino’s total injection is “over £20m.†Capital or loans? “His cash commitment is over £20m – at a time when the company is still losing money and still restructuring.â€
Umbers, a 50-year-old Yorkshireman, was appointed to the board of directors at Elland Road last month. His career history shows a spell as managing director of Credit Suisse and other senior executive jobs. He was an investment banker for 30 years. But he is recognised in Leeds as the man who helped facilitate the sale of United by Bates to GFH in 2012, claiming at the time that the deal would create “the right legacy to build on the prudent stewardship of Ken Bates.†The reality was very different.
“I was engaged by Ken Bates to try and find a buyer,†he says. “My question would be, why would someone want to sell a club if there were still potential improvements to be made? At the end of the day, GFH were the only buyer that came forward. And Ken Bates decided to sell.â€
Umbers says he is reluctant to “apportion blame†to previous regimes for the problems Cellino took on. “The ironic thing about GFH is that they didn’t do anything. When you look at their period of management of Leeds, they took over a club and they left it to run itself rather than providing the help it needed. They neither managed nor mismanaged anything.
“But they put cash into the club. They put in real cash. It’s not for me to say why they decided to sell but when you can’t learn how to drive a car, you get a chauffeur. You bring somebody else in. That’s why Massimo was asked to buy the club. GFH were very fortunate in my opinion to find Massimo Cellino. He’s shown how capable he is of restructuring it.â€
GFH remain as minority shareholders and still control 25 per cent of the club. Shared ownership is something Cellino seems to tolerate reluctantly. Is the Bahraini bank a worthwhile partner? “With respect, the question is the wrong one,†Umbers says. “They owned a 100 per cent of the club and they only sold 75 per cent. It was their decision to keep 25 per cent. That’s why there’s a partnership.â€
Cellino himself is absent from Leeds, banned from running the club until April 10. The Football League disqualified him last week over a tax conviction imposed on him in Italy last March, leading to Umbers’ appointment as chairman. Umbers says his position is permanent.
He talks about the need to re-engage with the local community, claiming the connection was broken by past regimes. The Leeds United Foundation will continue to operate under Cellino. Club officials have met with senior figures at Leeds City Council to discuss numerous issues, including the building of a new training ground. The council’s chief executive, Tom Riordan, wrote a statement of support for Cellino in his appeal against Football League disqualification.
“They supported us on the basis that they’ve had the right representations from us,†Umbers says. “We have massively interesting developments that we’re working with the council on. More about that next month.â€
Umbers says that with Cellino absent, Leeds are financially sound. “We have a very healthy cash balance in our bank account.†What is less healthy is United’s league position; 20th in the Championship, five points clear of relegation. Umbers admits that relegation would have severe consequences – “of course attendances would drop, of course commercial income could drop†– but claims the restructuring of the past nine months would guard against collapse. “This club would still be around,†he insists.
For 70-odd days, the ship is his to steer. “It’s a privileged position,†Umbers says, “and what we’re trying to do doesn’t take six months. It takes a minimum of two years. To start with you have to put in the hard yards and make the club financial viable.†In his opinion, Leeds are on that course.
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Comments (11) oldest newest highest rated lowest rated featured
30/01/2015 1:47 PM GST
COACHKING Well we have read about three statements from Andrew Umbers over the weeks and we have already worked out that when he speaks you do not believe one word.
Will the lies, false propaganda and base level bullsh1t ever stop?
30/01/2015 1:22 PM GST
SECTION 20 I have a programme somewhere upstairs dated about April/May 2007 where Bates - in his programme notes - said exactly the same, about us turning the corner. 6-7 weeks later we were in administration.
Our only hope is that we don't go into administration again before the close season due to the points deduction, although even then we'd carry the deduction forward.
This might be the Range Rover administration if the Italian guy gets busted again for tax non payment.
Which other club could go into administration because of a f*cking Range Rover!!!
30/01/2015 12:16 PM GST
FATCIGAR Umbers is speaking in his capacity as Leeds Chairman, and the fact that break even can be achieved is good news. You can take this statement at face value, including the projected loss for this financial year of between 7 and 8 million. Hopefully this will be covered by a further loan from the owners - we all know how Bates would have covered it.
30/01/2015 12:04 PM GST
CHEERUPCOSTHINGSCANONLYGETBETTER "30 years spent as an investment banker" is hardly a glowing reference in the aftermath of the world banking crisis and continual revelations regarding how banks have abused client's trust and manipulated interest rates for their own gain. Mr Umbers has certainly mastered the art of dodging every salient point, by being "reluctant to apportion any blame" whilst putting a masking spin on practically every point raised.
The point about GFH needing to "get a chauffeur" to drive the business in view of their own inexperience; I distinctly recall Ken Bates stating that he was providing advice on how to run the football club throughout the protracted GFH take over process and justified hanging around the club for months afterwards for that purpose (to supposedly provide a seamless handover to GFH!). Now if Mr Umbers was party to all the relevant facts regarding the current financial status of the club and GFH's plans for the club, (with Uncle Ken supposedly acting as their business advisor and mentor!!) how come he isn't fully aware of and willing to disclose just where blame does lie? (pardon the pun).
I am not at all impressed by this appointment and fear that it is yet another poor decision by Mr Cellino. Hope I'm wrong but the potential for it to go wrong quickly appears as clear as appointing Dave Hockaday was always going to end in disaster. Only my suspicious opinion and I hope that as we consolidate our form on the pitch and climb the table, we can all talk about football rather than concern ourselves regarding boardroom politics. MOT
1Reply
30/01/2015 11:22 AM GST
KA01_2 I agree with others that we need to be careful taking at face value what people like Andrew Umbers say. We need to consider them and judge based on what else we KNOW, not on rumour and conjecture.
The danger is that we become over cynical and critical and doubt everything we are told. Trusting and believing nobody will not help the situation.
We don't have to believe everything everybody says but by the same token we shouldn't disbelieve everything and don't pre-judge.
Try to keep an open mind.
30/01/2015 10:53 AM GST
1LEEDS LAD Mr Umbers please can you also clarify the below points :-
(1) If the cash from McCormack can not be used for the purchase of Elland Road, why can it not be used to buy out GFH or reduce debt ? Where is the money ? Can Cellino even afford to buy out GFH ?
(2) Why has the debt issue gone from Cellino saying the club is in serious trouble to no apparent problems, all within the space of a few weeks ? Someone is clearly not telling the truth.
(3) Do you say that the Farnham Group are liars when you state "GFH were the only buyer that came forward. And Ken Bates decided to sell." ? In addition to this, Cellino claims he is inundated with "billionaires" wanting to buy the club.
(4) Why have you avoided answering the question about Cellinos £20m cash injection ? You was asked if it is cash or loans ( are the club paying interest ?. This remains unclear.
(5) Please explain what the £20m loans from GFH where used to pay, and if this was of ANY benefit to the club or the fan base ? Your will defiantly know these details.
(6) Why did you feel that selling to GFH was "the right legacy to build on the prudent stewardship of Ken Bates." It was clear from their parent company financial accounts that they where in deep debt, lacked resources, and had no skills in running a football club. You say you are "unwilling to apportion blame on past regimes", but as YOU was the paid "deal broker", do you not feel you should carry a large portion of that blame ?
(7) You state the club needs to "re-engage with the local community". Do you feel that your appointment as Chairman, is a good way of doing this ?
(
Can you assure the fans that the club "breaking even" by the end of next year will not require the sale of the "crown jewells", ..... if not we are little better than balancing the books the "Bates way".
PLEASE DO NOT INTERVIEW LIKE A POLITICIAN, TELL THE FANS WHAT THEY WISH TO KNOW !
2Replies
30/01/2015 8:04 AM GST
Jeepo When I read some comments on here I tell myself that I must have been reading a different article.
Massimo Cellino or liquidation?... that is long and short of it all.
You can't compare Bates and MC until he has been in the club for a similar amount of time. He is putting his own money in (loans or otherwise) to stabilise us. Going into liquidation is the easy way out, just like people who are crap with their money filing for personal bankruptcy....a chickens way out!
Basically, if it's true that for 75% of his tenure at Clagari he made 10 million euros a year, then "respect" to him. I know he bought and sold players to do that, but he still did that in a league that doesn't pay anywhere near what the PL and Championship do and with attendances that my local team gets (Swindon Town!).
I like the fact that the club are dealing with the council again as that can only help with the planning of new facilities; no matter how much money an owner has got/can get, if the council says no, then it is NO!
You can never totally trust a "suit" but if MC has this guy on board then he must be worth having. Mr Umbers will work hard for whoever pays his salary, just like any of us. You don't have to like your "boss" to work for/with them. As long as he gets the job done for MC, I couldn't give a flying monkey's wee bag if he has worked for Smurf in the past.
Let's get over and beyond the futile mumbles about this all being a front and that Bates is still the owner?! Mr Bates certainly has left a stain on us all, but how long shall we stay under that cloud for when we can now (hopefully!) do something that can steer this mighty ship back into calmer seas?
If you love something you are prepared to fight for it. We simply need all the off field stuff to stop (that IS totally down to MC!) so we can get on and build. I still think we are on a 5 year journey back to the PL and as such I am maybe a bit more relaxed as I don't expect things to happen as quickly as others do......although I hope that I am totally wrong!!
MOT
4Replies
30/01/2015 7:12 AM GST
MORLEDGE In my opinion yes cellino has loaned club 20m etc and loaned from gfh but if you look at alot of clubs they all do it even abramovic and the man city owners they loan the club it.
30/01/2015 6:49 AM GST
CHOFFY 8 ALLTHE PIES Very worrying. As I've said all along this "debt" is not a debt in reality. Loans from GFH and exorbitant "management fees" are why we have debt. Not because of players bought or salaries or running costs. The owners are/were charging THEMSELVES to run the club and expecting the club to pay them (our owners!)....and now Massimo is doing that himself! I note in the article that he has LOANED Lufc 20 mil. So we have to pay him back. So that's ANOTHER debt to an owner who already own us. No wonder he's always in court. Surely this "charging yourself" malarkey is some kind of accountancy scam?!
1Reply
30/01/2015 3:40 AM GST
OZTYKEAGAIN I'm not thrilled by Mr Umbers' (past?) associations with Bates and GFH, but if he's been put in charge then good luck to him.
3 points tomorrow against 'Udders, thanks.
30/01/2015 2:20 AM GST
THERES ONLY ONE CLIVE I can't wait for the open top bus parade when we break even!
I still think GFH repossessed the club from Ken Bates.
Why did he suddenly sell after all those years, especially when he's still hanging around over the road?
What is an investment bank doing buying a football club?
Why could they only get a deluded scout to manage the club?
Why did they sell to the first crackpot that came along after only a year?
And as Umbers says, they did nothing.
2Replies
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