http://www.dailymail.co.uk/sport/football/article-2859023/The-damned-United-financial-meltdowns-chaos-surrounding-Massimo-Cellino-catalogue-crisis-Leeds-Millennium.htmlDamned United? From financial meltdowns to chaos surrounding Massimo Cellino... Sportsmail's Q&A of the catalogue of crisis at Leeds since the Millennium
Leeds are in crisis once again as Football League rule majority owner Massimo Cellino unfit to take charge of the club
The Football League announced on Monday the Italian has failed its 'owners and directors' test'
Italian can return to his role on March 18 in 2015
By NICK HARRIS FOR MAILONLINE
PUBLISHED: 15:12 GMT, 3 December 2014 | UPDATED: 22:46 GMT, 3 December 2014
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Leeds United fans have seen their fair share of ups and downs in recent years.
From reaching the Champions League semi-final in 2001 to their most recent crisis which has seen majority owner Massimo Cellino ruled unfit to take charge by the Football League.
Here, Sportsmail's Nick Harris details the problems Leeds have faced in recent years, while attempting to answer the club's burning questions.
Massimo Cellino has been deemed unfit to stay in charge of Leeds by the Football League
Leeds are in crisis, again, with majority owner Massimo Cellino now deemed unfit by the Football League to stay in charge. Where did it all go wrong?
For the sake of brevity and everyone’s sanity, we’ll limit the answer to the last 20 years or so, but in brief, the current chaos has its roots in the financial meltdown of the Peter Ridsdale era.
Way back in the mists of time, in 1991-92, Howard Wilkinson led Leeds to England’s top division title. Famously he remains the last English manager to win the English title, and he won it with Cantona, Strachan, McAllister, Speed, Batty, Chapman and Wallace among his players.
Wilkinson got the boot in 1996, replaced by George Graham, who walked out in late 1998, replaced by David O’Leary, who guided ‘my babies’ to fourth place in 1998-99, then third in 1999-2000 - and into the Champions League.
David O'Leary steered Leeds to third place during the 1999-2000 Premier League season
It was all quiet outside Elland Road on Monday as the statements regarding Cellino were released
In December 1999 O’Leary said he wanted to build an empire at Leeds to rival Sir Alex Ferguson’s at Manchester United. ‘I think the foundations of that empire have now been laid,’ he said.
Despite the upheavals brought upon the club by the trials of Jonathan Woodgate and Lee Bowyer for a January 2000 attack on an Asian student, Leeds young team - that pair and Alan Smith, Danny Mills, Harry Kewell, Eirik Bakke, Michael Bridges et al, guided by the wise head of Lucas Radebe - reached the 2000-01 Champions League semi-final.
It felt like a milestone on a journey to bigger things. In fact it was the peak before the fall.
Mark Viduka celebrates scoring against Real Madrid during the Champions League Group D match in 2001
Leeds were beaten by an aggregate score of 3-0 by Valencia in the 2001 Champions League semi-final
So what happened next?
Ridsdale, infamously, decided to ‘live the dream’. He kept spending on players and big wages, with Robbie Fowler (for £11m) and Seth Johnson (£7m) arriving in 2001-02, even though Leeds had missed qualifying for the Champions League that season.
They also missed out on Europe’s top table in 2002-03 after finishing fifth in 2001-02, leading to O’Leary being sacked. It was during that 2001-02 campaign that Ridsdale took out a £60m loan for Leeds to pay for ‘the dream’ but lack of top-table European income fatally undermined the plan.
Player sell-offs started in summer 2002 with Rio Ferdinand going for £30m, then Robbie Keane for £7m, Woodgate for £9m, Bowyer for £300k and Fowler for £6m. By Spring of 2003, Leeds were in freefall, financially and on the pitch. Terry Venables had been and gone as manager, Peter Reid was in charge, Ridsdale quit and Professor John McKenzie took the helm at a debt-ridden club on its way to ruin.
How bad was the financial situation?
As bad as the finances of any English club had EVER been up until that point in history. With player sell-offs continuing, in October 2003 Leeds announced a one-year loss of £49.5m for the 2002-03 season - a world record annual deficit for any club.
Debts were more than £100m and income was falling. With Leeds in a relegation battle, Reid was sacked. Eddie Gray was put in charge but Leeds were relegated, Alan Smith’s tears symbolic of a proud club’s demise.
Before Leeds went down, Prof McKenzie quit and prospective buyers came forward with hollow bids for the club. But Leeds were actually taken over by a consortium of local businessmen headed by Gerald Krasner, best known at the time as an insolvency practitioner.
Rio Ferdinand was sold to Manchester United for £30million in the summer of 2002
Alan Smith is visibly upset after Leeds are relegated to the Championship in 2004
What was the insolvency expert’s solution to Leeds’s problems?
Selling the club to Ken Bates, in January 2005, in the midst of a season where Leeds would finished on 60 points and therefore closer to the Championship relegation zone (50 points) then the top six and the play-off places (73 points).
The price Bates paid was never officially confirmed but believed to be around £10m for 50 per cent of the club; nor was it declared who owned or controlled the other half. During the 2004-05 season, Leeds’s financial woes meant they sold both their Elland Road stadium and Thorp Arch training ground before Bates arrived.
Under manager Kevin Blackwell, Leeds reached the play-off final in 2005-06, losing to Watford, but a poor start to 2006-07 saw Blackwell sacked and replaced, via a couple of caretakers, by Dennis Wise.
Wise could not turn around Leeds’s fortunes and with relegation all but assured and the club’s finances still in bad shape, they went into administration in May 2007 - and then down to League One.
Ken Bates sold Leeds in 2005 during a season in which the club finished on 60 points in the Championship
So League One was the nadir, was it?
That’s debatable, not least by Leeds’s long-suffering fans. Leeds had been hit by a 10-point penalty for entering administration in the Championship but the nature of the CVA which left Leeds still in Bates’s hands post-administration was challenged by HMRC and Leeds were hit with a second points penalty, of 15 points this time.
They spent three seasons in League One, got back into the Championship and then in 2011 Bates announced he had become the full owner of the club. Supporter protests became more intense as the club’s stay outside the top flight dragged on.
Protests against Bates at the start of the 2011-12 season prompted him to write in his programme note he was ‘unimpressed by the demonstrations of a few morons on Saturday and ain’t going anywhere soon ... I saved your club in 2005 and 2007 when nobody else would.
The rebuilding of Leeds United is a bit like sex. In an age of instant gratification, Leeds United is having a long, drawn-out affair with plenty of foreplay and slow arousal.’
Dennis Wise (left) was named as Leeds manager in 2007, but was unable to turn the club's fortunes around
Protests against Bates at the start of the 2011-12 season prompted him to write in his programme notes he was ‘unimpressed by the demonstrations of a few morons on Saturday'
How long did it take Leeds to get aroused under Bates?
It never really happened and by summer 2012 he was in negotiations with GFH Capital, the Dubai-based subsidiary of a Bahrain-based bank, Gulf Finance House, to sell the club.
Did GFH have deep pockets and a sincere wish to turn around the fortunes of Leeds?
A: Errm, not quite. Though GFH Capital’s bid was being publicly pushed by two frontmen, GFHC executives David Haigh and Salem Patel, the reality is GFH were struggling to put together the money to buy Leeds. They had no previous experience in large-scale sports investments and were clueless about running a football club.
The price of the deal was £17m in three installments for the club plus an agreement to pay £14,025,000 more as and when Leeds got promoted back to the Premier League, although this latter amount would fall the longer it took.
GFH insisted in public they had vast resources and wanted to be long-term owners but the reality is that as early as summer 2012, before they even bought Leeds, their most senior official in Bahrain, Hisham Alrayes, was talking of possibly ‘flipping’ the club, or in other words, selling it for a quick profit.
Cellino bought 75 per cent of Leeds from Bahraini bankers Gulf Finance House (GFH)
LEEDS UNITED STATEMENT IN RESPONSE TO FOOTBALL LEAGUE
We have received a notice from the Football League disqualifying Mr Cellino from being a director of Leeds United Football Club until March 18 2015.
The club is in the process of taking legal advice on the reasoning of the decision. In the interim, the club notes that nothing has changed since the decision of the Football League’s Professional Conduct Committee in April 2014.
The steps that the League wishes the club to take – to remove Mr Cellino only to re-appoint him in three months’ time - will be destabilising for the club, its supporters and sponsors and cannot be in the best interests of any party.
In one piece of correspondence, Sportsmail can reveal that Alrayes did not want to make GFH’s interest in Leeds public too early in case they flipped it immediately. ‘I don’t want to announce as we might flip straight away,’ he wrote.
By 13 December 2012, by which time GFH should have completed the purchase of Leeds but were still struggling to put the funds together to buy it, Sportsmail can reveal GFH discussed at a board meeting how they had held meetings with parties they might sell the club to - before they even owned it themselves.
These parties included a Saudi businessman, Khalid Baltan, and Sulaiman Al-Fahim a one-time spokesman at Manchester City who had also been a short-term owner and a figure in the sorry demise at Portsmouth.
Neither set of talks went anywhere and GFH discussed at their December board meeting, still pre-purchase of Leeds, how they would try to sell 90 per cent of Leeds as soon as possible.
How much success did GFH have in reviving the fortunes of Leeds?
Somewhere between little and none. Closer to none. Arguably they took the club backwards. Haigh and Patel had no experience or nous to run a football club.
The financial situation became so perilous that within months of taking over, Sportsmail can reveal, GFH were being warned in late March 2013 by Leeds’s then chief executive Shaun Harvey: ‘While we have not had any form of legal demand for payments that we can’t meet, a forensic review of the position would lead to a determination that we could be trading while technically insolvent. You need to know this because as Directors you are equally responsible.’
Earlier this year, Cellino sacked Brian McDermott (above) and re-instated him under GFH’s orders
GFH’s chief financial officer Chandan Gupta replied to Harvey: ‘Given our exposure issues we will not be able to fund cash flows anymore.’
GFH claim that in fact after that point they spent more than £10m injecting funds into Leeds and paying bills although that figure is disputed by other insiders. Harvey left Leeds in summer 2013 and became the chief executive of the Football League.
So what efforts did GFH make to offload Leeds?
They were trying to sell it even before they bought it and continued to do so throughout 2013, with no luck. This was mainly because of the onerous conditions they set on a sale, mainly a high price for a club with no ground and big debt; and a condition that they wanted to keep a stake but not invest anything else themselves.
With such an unattractive proposition, it is no surprise that so few viable bidders came forward, until convicted fraudster Massimo Cellino met their demands, agreed to a deal worth up to £35m to GFH, and allowed them to keep 25 per cent of the club.
So it was plain sailing from then?
Well, you mention sailing. And no, it wasn’t. Cellino was initially not allowed to complete his 75 per cent purchase because of a tax evasion case related to a yacht. Nonetheless, he took de facto control in early 2014, started funding Leeds, sacked Brian McDermott, re-instated him under GFH’s orders, and waited for the green light.
Cellino (centre) watches Leeds play Brentford at Griffin Park back in September
In February the Football League placed the takeover on formal hold. In March Cellino was found guilty of tax evasion, and Cellino was ruled unfit to buy Leeds. In April he got that decision overturned. In May, McDermott left by ‘mutual consent’ and Cellino hired little-known Dave Hockaday to replace him.
Meanwhile David Haigh, working as MD for Cellino, was invited to Dubai in May to discuss a new job with his now former employers GFH - and was arrested and thrown into a police cell, where he remains, accused but not charged with embezzlement and fraud among other things.
Neil Redfearn is in his second stint as caretaker manager this season - but how much time will he have?
So another normal month in English football, then?
Absolutely. Although it got odder as goalkeeper Paddy Kenny was ousted for having a birthday on 17 May - because 17 is Cellino’s unlucky number. Then Hockaday was sacked in August, Darko Milanic was appointed (and later sacked), and then a detailed ruling from the tax evasion case was made public in September via a media report, saying Cellino was dishonest in his tax dealings.
The Football League started making attempts to get their hands on this verdict. With Milanic sacked and Neil Redfearn in charge, Leeds bobbled around mid-table as rumours persist that Cellino is in talks with Red Bull about selling Leeds. He denies this.
Cellino with manager No 1 of the season, Dave Hockaday (left), who lasted two months
So calm has been restored?
Until 1 December, anyway, when the Football League announced Cellino is no longer fit and proper to own Leeds, as a result of the Italian tax ruling they have now studied. They ordered him to resign as chairman.
Strictly speaking he should sell his holding in the club, although he would be eligible to own it again in March when the tax evasion punishment expires. He has said he has no intention of selling up and will appeal the decision that he is unfit to own Leeds. He has also just been in Bahrain, talking to GFH about the way they can work together.
Darko Milanic (centre) lasted just six matches as Leeds manager before being axed by Cellino
Haigh, meanwhile, has written to the League, alleging all manner of serious malpractice by GFH in their purchase and running of Leeds. The League has asked Haigh for evidence of this and his lawyers are understood to be putting together a file to substantiate his claims.
But apart from all that, Leeds are marching on?
Oh yes. They even won a football match last weekend, beating Derby 2-0. And the brilliant Leeds United fanzine The Square Ball walked off with the best fanzine award at the Football Supporters’ Federation awards this week. Not many people around the club expect any other silverware any time soon.
Cellino privately expects to find some kind of solution to allow him to keep control of Leeds. GFH are hoping to ride out the storm of allegations surrounding them. And the fans have their eyes on Saturday’s away match at Ipswich as their team sit 15th in the Championship, five points above the drop zone, and eight away from the play-offs.
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