On Wednesday, GFH Capital channelled a sum in excess of £1m into Leeds United. This, the company said, was to “stabilise the club’s financial position.” Or to put it another way, plug a hole in the accounts.
When the Football League introduces the full remit of Financial Fair Play, that solution to cash shortages will have its limits. Next season, owners of Championship clubs can invest a maximum of £6m, falling to £5m in 2013-14 and £3m the following year. The Football League will wave a transfer embargo at anyone who breaches those boundaries.
So Leeds United need to raise their income and stem the haemorrhage of money outlined by their last set of financial results. The club have a high turnover by Championship standards – over £30m – and a modest wage bill in percentage terms but player sales subsidised an operating loss of £3.3m in 2011-12. Judging by Wednesday’s cash injection, GFH Capital is now meeting the shortfall. Only the firm can say how long it can afford to keep doing so.
Certain millstones are too heavy to shift: the annual rent paid for Elland Road and Thorp Arch – unless GFH Capital follows through with pre-takeover hints that it would buy one or both properties – and the commitment to using income from next season’s season tickets to pay for the contentious redevelopment of Elland Road’s East Stand.
Savings elsewhere should be possible, not least among £5.2m of “unknown” administrative expenses. But Leeds in their present state cannot thrive. If cash from GFH Capital is needed to stabilise United, rather than take them forward, the club must either stand still or find another way.
The immediate answer? Ask the empty seats at Elland Road; the same seats that Leeds were too often willing to leave flapping in the wind so long as their break-even attendance was met. In the mind’s eye, the path to pots of gold ends at the door of the Premier League and high-end sponsors – take a look at Manchester City’s sponsors for the definition of high-end – but neither will help GFH Capital in the interim. Additional investment aside, the company can only look to a woefully under-nurtured support to raise United’s revenue. As Wednesday night showed, it already has.
The promotion of cut-price tickets at Elland Road was so long overdue as to be laughable. Like the introduction of half-season tickets in a ground which sits half-empty, you can only guess why no-one bothered before.
Clubs can name their price for a premium product when supply outstrips demand. Any fool knows that a Championship team who are struggling to suck 20,000 into a 38,000-capacity stadium would benefit from self-promotion.
The figures on Wednesday were thus: a crowd increased by 4,000 on this season’s average for league games and 6,000 higher than the attendance seen at United’s defeat to Cardiff City.
There were ample reasons not to bother with their meeting with Blackpool and many would have used them had usual category prices demanded that adults pay £30-plus. Instead, the atmosphere was enhanced.
Ken Bates always argued against these promotions on the basis that money lost through reductions was rarely recouped by increased sales and other income and the financial workings of all this is not irrelevant. But the absence of these schemes in each and every season since United’s relegation from the Premier League has been criminal. Breaking even is fine until the day you wake up to find that the accounts are in the red and supporters who said they would walk away were not making idle threats.
It is sobering to imagine how many would-be fans have been lost to the past 10 years; kids who were never hooked and never will be. This has been the worst time to shun pro-activity, a period in which there has been saturation coverage of professional football. How many impressionable youngsters will have watched televised coverage of Leeds United’s FA Cup tie at Manchester City and decided that the team in white were worth following? How many would rather sample the Etihad?
I live near a young City fan, Yorkshire-born and bred. When he saw me last Sunday, he asked: “Do you have to watch that every week?” Touché. But the experience of attending Elland Road, which many had on Wednesday, should engender a different attitude and a firmer sense of loyalty. Leeds are a club who, for many years, have reaped what they’ve sown.
In one respect, Bates is right. Selling tickets at £15 for adults and £5 for juniors 23 times a season is unfeasible. Nor is it fair on season-ticket holders.
When GFH Capital comes to sell season tickets, it might find that prices are only part of the battle. No less influential will be clarity over Neil Warnock’s position, the company’s plan for replacing him as manager and the credibility of its promises for a first summer in charge. Much as it sought to deal with media inquiries this week, including questions from this newspaper, the answers were nowhere near candid enough.
To its credit, the company seems to have grasped the severity of one of United’s many shortcomings and shown some understanding of the fact that properly exploiting a fan base is not the same as fleecing it. This is a long fight but it had to start somewhere.