Phil Hay: Leeds United owner GFH has put all its eggs in one basket with Cellino

Massimo Cellino
Massimo Cellino
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High Stakes: United’s owners playing a game of high risk with club’s future by borrowing money from Italian.

On Thursday evening, Massimo Cellino – businessman, musician, man of the moment – invited representatives of Leeds United’s largest supporters groups to spend a few hours in the chairman’s suite at Elland Road.

Gary Cooper, the head of the Leeds United Supporters Trust, and Leeds United Supporters Club chairman Ray Fell were hosted by Cellino and David Haigh, United’s managing director. The Italian was warm, passionate and charismatic; receptive to two organisations who went years without any chance of entering the chairman’s inner sanctum.

The presiding Leeds chairman, Salah Nooruddin, did not attend the meeting but the organ grinder was there. You don’t need eyes or ears to know that the club are running on Cellino’s vigour and, to a large degree, living on his wealth. He felt comfortable enough about the pending state of his takeover to speak to Cooper and Fell as if his takeover of Leeds was not pending at all.

He has also been happy to play a hand of high-stakes poker as the Football League decides whether formally welcoming him into the English game is a good idea or a violation of its rules. Gulf Finance House, United’s current owner, is not the only company to have taken several million pounds from Cellino since he bid to acquire a 75 per cent stake. Leeds United have too – some £5m or thereabouts if informed estimates are to be believed.

Back on January 31, when Cellino put a pigeon among the cats, the 57-year-old was acting outside his authority. Blame fell on Nooruddin for sending Cellino a premature text message congratulating him on his buy-out but Cellino jumped the gun. By comparison, the influence he now exerts is more valid and defensible, regardless of his status in the eyes of the Football League. He has paid for control and paid well.

There was the £1.5m loan paid by him in January to cover that month’s wages and another this week for the same purpose. On Thursday, Leeds saw off the threat of a winding-up petition from shirt sponsor Enterprise Insurance by repaying a £1.5m debt plus interest, with costs to come. United were not required to say how the money for that debt was found – at a time when countless local suppliers have outstanding invoices at Elland Road – but a source involved in the case told the YEP that it was not put up by GFH. The other possibilities are not exactly endless.

Away from the firefighting, the club have signed Jack Butland and Connor Wickham – exactly the sort of loan signings they should be making; the sort of loan signings Brian McDermott might have liked to make in January. If Cellino’s cash was not behind those transfers then a loss-making club who need loans to pay wages have played a blinder. The Italian is right in the thick of it, and in the thick of it is where he likes to be.

In theory, there is no risk to Leeds in all this dealing since Cellino is buying the club. But Sport Capital were buying the club before Christmas and gave loans to United with the intention of converting them into equity. That balloon burst and the debts will fall to whoever takes GFH’s shares.

Cellino’s investment is protected, as loans of that type are. The YEP understands that he will earn close to 10 per cent in interest if he is forced to pull his loans out but he is not circling Elland Road for the purpose of earning a bit of interest. He opened his wallet because he wants the club.

By relying on his money, GFH has tightened his grip on Leeds. Each passing loan makes Cellino’s takeover more essential. The Bahraini bank was accused this week of inviting Enterprise to try and liquidate United as it fought with the insurance firm over the debt owed and the winding-up petition Leeds faced. Ugly as that sounds, it amounts to brinkmanship. GFH is no more intent on liquidating Leeds than Enterprise or Andrew Flowers were on winding the club up. The loan has been serviced and a total of £1.6m repaid.

It is more relevant in this case to ignore the sniping and follow the money. How £1.6m was paid to Enterprise – and by whom – the club have not said. But who else could have fronted the funds except Cellino? And how confident must GFH be about the Football League approving his takeover to allow him to take care of such tangible debt?

Economic analysts might describe GFH’s attitude to loans as a ‘scorched-earth policy’ – in other words, they are borrowing so much money from Cellino that the prospect of the Football League refusing his buy-out is more worrying than the governing body sanctioning it. Leeds are into Cellino for a seven-figure sum without anything like the means to repay him. Alternative buyers would be burdened with those liabilities.

Cellino is blameless in that respect. If the club weren’t taking loans from him they’d be scrambling about to take loans from someone else. It would also be remiss to ignore the fact that in the past week Leeds have made two credible signings and disposed of a troublesome court case. Cellino took a kicking after the events of transfer deadline day; better management deserves recognition too.

And yet this is not his club to manage. Not officially. And so we return to the elephant in the room – the consequences of the Football League blackballing Cellino and sending him home. Borrowing at will, GFH has pre-empted that judgement and hung United on a favourable decision.

You only hope the bank knows what it’s doing.

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