The majority stake in Leeds United purchased by Ken Bates is likely to have been worth “tens of millions of pounds,” a leading sports lawyer claimed today.
Richard Cramer, a partner with Leeds-based solicitors Cohen Cramer, said the value of the controlling interest acquired by Bates could stand at eight figures with United closer to the Premier League than they have been for almost five years.
Bates, United’s chairman since January 2005, became the club’s majority shareholder last week in an attempt to tackle scrutiny of Leeds’ previous owners, all of whom were anonymous.
The 79-year-old purchased a 72.85 per cent stake in Leeds City Holdings Limited – the firm which owns Leeds United Football Club Limited – on April 26, installing himself as United’s new owner and moving to comply with Premier League rules demanding full disclosure of the identity of shareholders with an interest of 10 per cent or more.
Bates bought his stake from Forward Sports Fund, the offshore company which took up a controlling interest after United’s insolvency in 2007.
The purchase was made by another offshore company, Outro Limited, owned by the former Chelsea chairman.
Leeds said that Bates paid an “undisclosed sum” for the shares but Cramer, a specialist in sports law, told the YEP: “I’d estimate the value that sort of stake to be in the region of tens of millions of pounds. The club are very close to a big pay-day in the Premier League and they got rid of a lot of toxic debt when they came out of administration.
“They’ve got a hard core of 20,000 supporters and they can rely on crowds of 30,000 for the bigger games.
“In the Premier League, I’d expect them to sell out every week.
“It’s also true that the squad is worth considerably more than it was two or three years ago. At the moment you’re buying a franchise in the Football League but you could end up with a franchise in the Premier League.
“The investment is about potential but there’s an awful lot of it.”
Cramer believes that Bates’ decision to purchase a controlling interest – a move which came on the back of pointed questions about United’s ownership structure during a government inquiry into football governance – had ended any threat of future sanctions from England’s governing bodies.
Leeds are understood to have met both Football League and Premier League rule on disclosure of shareholders, and approval from the Football Association is expected to follow in the near future.
Cramer said: “My assessment of this is that there must have been a certain degree of pressure brought to bear on the club.
“This deal can’t have happened overnight and I’d guess that Leeds have been working on it ever since the parliamentary hearing began asking questions and raising doubts (about whether United might be denied entry to the Premier League in future).
“But this has clarified matters and what it seems to have done is shut the door on any future inquiries or penalties.”