Thursday, 6 February 2014

The Way Ahead For Leeds United?

TOMA drags on through another week and most of us are reaching the end of our tether (with the only light relief being the sycophantic comments on Cellino's daughter's Instagram page).

The events of the past 24 hours have narrowed the field somewhat, with Flowers now out of the race and Farnan struggling to get any sort of engagement from GFH. Cellino is therefore striding ahead, and unless something changes markedly, looks set to become owner pending Football League approval (which he is expected to achieve).

As has become more and more apparent, the finances of Leeds United are once again in a parlous state with numerous loans having being made to support the cashflow over the past 9 months. The high interest on these loans will further add to the debt burden that GFH or another party will have to pay off. The need for a sale (given the lack of support from GFH and it's investors) has become ever more pressing and at desperate times come all sorts of characters into the fray.

Step forward Massimo Cellino. We all know about the wider concerns and his history, but instead I want to focus on the challenges ahead should he take over:

Purchase price: the fact that serious business men, with many years working in football investment can't reach his price would suggest that Cellino has paid a high price to gain control. The out-turn of this is either he takes a more "risk-on" (either being more optimistic than the other parties about performance or being prepared to receive a lower return on his capital) approach, or there has been relatively limited DD conducted and Cellino is insufficiently aware of the challenges facing Leeds. If it is the latter, it will be something we will all pay for going forward (most likely through lack of squad investment).

Financial Fair Play: as stated here before, the Financial Fair Play regime which comes into force next season will have a huge impact on the way football clubs are run. Focus will shift from owners prepared to bankroll huge losses for a shot at the big time, to those who are able to maximise revenue streams and ultimately deliver profitability. Profitability = more squad investment = promotion. A relatively simple equation. As has been commented here before, I strongly believed that Mike Farnan and his consortium offered the best skillset to achieve this going forward. Given the high probability of Cellino taking over, the question mark in my mind is whether he has the skill set to deliver this, and also deal with the constraints of the FFP regime. A cap of £5m equity being able to be invested next season and £3m thereafter for a club which is losing £11m per annum suggests that it is the expertise and football business management skills which will be most important to turning around the club and delivering long term success, not the person with the fattest chequebook.

Stability: The fruits of the relative stability of 2013 can be seen by the increased attendances. Not only that, having a manager such as McDermott who has inspired confidence in the squad has helped to maintain and keep happy our key players. A key criterion for success for Leeds United is stability. Something the club as a whole has lacked for the past 13 years. Stability starts at the boardroom and filters down through the management team to the squad and also to the club as a whole. Medium term planning is crucial to stabilise and grow the club and short-term thinking, high squad turnover and managerial changes will not deliver the success we all crave in my opinion. From Cellino's behaviour at Cagliari, and also the shotgun attitude on Friday night, I deeply fear that we are entering another period of instability, which will likely see managerial changes, and with it, the departure in due course of the best members of our squad. This is the anithesis of what is required for promotion.

I still firmly believe the Farnan consortium offers the best probability for success for our football club. If we are however to be bought by Mr Cellino, a few pointers perhaps to be considered:

Stability: The one thing this club needs is stability. Take a moment to consider the work done thus far by Brian McDermott and the sentiment in the wider squad. If you want to be successful in this league you need everyon pulling together and to my mind, that means backing Brian who has had to do a very difficult job with some success in the midst of considerable financial turmoil. You will also win back some of the fans by backing him financially and also offering your long-term support for him. If you want Leeds to be a success, this is the crucial ingredient.

Finances: The club finances are again a mess. In order for Leeds to prosper and grow, someone is going to have to fund the cashflow shortfalls and come up with a credible business plan for stabilising them. Given you have had a successful business career, I would expect you to be able to do this, and articulate it to the fans.

Engagement: You are buying a football club with few assets, aside from players, a Football League Golden Share and a fan base (or the "machine" as Brian McDermott called it). If you want to be a success, you need to nurture and grow the fan base which requires engagement, responsible stewardship and delivering results. Acting as a dictator did not work out for a previous incumbent who managed to alienate a large proportion of the fan base. If you are serious about buying our club, you need to realise where the value truely lies of the asset you're buying and that means recognising the culture and heritage of our great club, being honest and being fair. Events like Friday and Saturday show what happens when you ride roughshod over our interests. The fans were here long before you arrived and we'll be here long after you leave.

Another period of uncertainty in our great club. It is looking like it is up to Mr Cellino as to whether we are able to prosper or return to the dark days of Batesonomics. Only time will tell.

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