The latest shambles at Elland Road begs the questions: What happened at Elland Road last week, and what happens next?
Prior to Leeds United’s defeat to Blackburn Rovers, where Massimo Cellino was roundly abused by the crowd at Elland Road, he arranged a meeting of supporters’ groups to discuss the fixture disruption caused by Sky Sports’ scheduling this season.
That meeting took place on Friday morning, immediately after the Blackburn game. An emotional Cellino told the gathering that he was ready to quit as owner immediately – and his offer to sell his majority stake to Leeds Fans United was made during a meeting with LFU’s Sharon Reid later that day.
LFU chief executive Dylan Thwaites was on holiday at the time but the group believed the offer to be genuine and Cellino confirmed his proposal in an interview with the BBC.
“One hundred per cent I will sell to the fans,” he said. “The fans are the only asset the club has.”
Was Leeds Fans United in any position to do the deal?
Yes and no. It was prepared to begin due diligence and it had the money in place to cover the cost of that process, but LFU was still to formally secure the funding for a takeover which it said would require a minimum of £30m. Thwaites, however, insisted on Tuesday that he was confident of amassing the necessary cash, some through loans but most of it via pledges from “high net worth” Leeds fans. The group wanted a period of exclusivity to ensure that Cellino did not attempt sell to another buyer while it was in the middle of paying for due diligence.
Cellino refused that request and, for his part, was never likely to agree to it without proof of funds. LFU is wondering now if he ever intended to sell to the group at all or if he was actually using this opportunity to smoke out alternative, lucrative bids.
Why has the agreement in principle collapsed so quickly?
LFU wanted a swift guarantee of exclusivity and began seeking it on Monday. Cellino’s lawyers informed Thwaites yesterday that Cellino was not willing to provide it and, according to LFU, had backtracked on his offer to “sell to the fans.”
Cellino’s response to a pointed LFU statement – one which accused him of “insincerity” – was to blame LFU for courting too much publicity and of telling “fairytales” about its plans and capabilities.
LFU was aggressive in warning off rival bidders on Monday and carried out a large round of media work on Tuesday, ahead of Leeds’ 1-0 win over Cardiff City. Cellino seemed to feel that the group was getting ahead of itself. LFU, however, was suspicious from the outset about whether the Italian’s offer to sell was genuine.
Yesterday it said it had “forced transparency on his motives.”
Is there any remaining hope for this deal?
Probably not, or not in its original form. LFU was established with the intention of buying a minority stake in Leeds United so it might revert to that position and attempt to align itself with another buyer – effectively as a small facet of a takeover of the club. But it is inconceivable that LFU and Cellino will be able to repair their relationship. They’d been in touch for a while before last Friday and LFU had helped to persuade Cellino to abandon his ill-conceived plan to cut United’s allocation of away tickets to 2,000 a game but trust is broken on both sides now. And in any case, Cellino has been dealing with other prospective buyers.
Will Cellino actually sell the club?
He says so and there is ample reason for him to do so. The Football League is trying to ban him and could insist on him resigning from the board at Elland Road as early as Wednesday of next week. If Cellino loses his appeal against disqualification, he’ll be banished from the club until June 2016 – with other court cases awaiting him in Italy.
He has banned himself from going to United’s matches after the crowd turned on him during the defeat to Blackburn and he stayed away from Tuesday’s victory over Cardiff. His family moved away from Leeds a while ago and the 59-year-old is more isolated than he has ever been.
There is very little left for him here, apart from the cash invested in United. Asked directly yesterday, Cellino said he was ready to relinquish his 77 per cent stake. “I’m very hurt and sad,” he said. “I can’t take anymore.”
What is he looking for?
Cellino initially offered to sell his shares to LFU “without profit” but it seemed implausible that he would do so if rival buyers were willing to pay more money.
Estimates of how much he has ploughed into Leeds vary but it will probably take an asking price of around £40m for him to exit without making a loss.
A year ago, he was believed to be quoting £50m-£60m to anyone who enquired about the possibility of a takeover.
Despite his “agreement in principle” with LFU he has been in contact with separate interested parties this week.
He is strongly rumoured to have met one at Elland Road yesterday afternoon.
How long would a takeover take to complete?
There is no firm answer to that question. Gulf Finance House spent months negotiating with Ken Bates. Cellino, by comparison, agreed to buy-out GFH in a matter of days.
But he paid a heavy price for that, taking on a Share Purchase Agreement which was weighted heavily in GFH’s favour and inheriting all sort of financial problems which due diligence would have uncovered.
It is no secret that Leeds have skeletons in their closet – employment claims against them, potentially costly legal disputes with former shirt manufacturers and sponsors – so you would question the sanity of anyone who finalised a takeover without performing due diligence.
LFU estimated that the process from the start of due diligence to the point of buying out Cellino would have taken around three months – which at this stage would be February of next year.
How will this affect Steve Evans and the playing squad?
It depends on how committed Cellino still is. Watch with interest to see if Liam Bridcutt’s move from Sunderland goes ahead as planned.
That looked virtually done on Monday but Evans has been waiting for a straightforward deal to be signed off at both ends. If loan signings come in, it will be clear enough that Cellino still has an eye on the pitch. If Evans starts hitting repeated brick walls, questions will be asked.
All you can say is that United’s head coach seems as uninformed about the off-field issues as anyone else at Elland Road. And largely unconcerned by them.