Leeds cash crisis worsens: Now suppliers go unpaid

Leeds United in crisis

Leeds United in crisis

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FRESH details were revealed today of the financial crisis at Leeds United which has halted payment to some suppliers – and delayed the installation of a new Astroturf pitch at the club’s training ground.

Emails passed to the Yorkshire Evening Post show that suppliers of the Championship club, some of whom have not been paid for services since October, are being told that they will receive no further money until the shambolic ownership saga at Elland Road is over.

The details emerged at the end of a week in which Leeds were forced to accept a £1.5million loan from Massimo Cellino, the Italian businessman poised to buy 75 per cent of the club, to fund their wage bill for January.

Mounting financial pressure has been increasingly apparent at Elland Road since the turn of the year, and beleaguered club owner Gulf Finance House has been working for months to sell its majority stake in Leeds.

Cellino has struck a deal to take charge of United last week, an agreement which is subject to Football League approval, but the club have given no timescale for completion nor clarified whether Cellino’s prior convictions for fraud are likely to see him pass the Football League’s Owners and Directors Test.

Local businesses and sections of the club itself are feeling the effect of chronic uncertainty and the YEP can reveal how work to lay a state-of-the-art 3G Astroturf surface at Leeds’ Thorp Arch training complex has ceased due to a disagreement about payment.

The outdoor pitch – a fundamental part of United’s attempt to secure category two status for their academy under the Elite Player Performance Plan (EPPP) – is close to completion but appears unlikely to be finished until United meet their financial obligation. The situation was described as a “nightmare” by one source.

One of United’s suppliers, meanwhile, who spoke on the condition of anonymity, said: “If I ran my business the way Leeds United run theirs I wouldn’t be able to get suppliers to even talk to me let alone provide products or services. But then football’s a funny business.”

GFH was approached for comment but did not respond. United were last week served with a winding-up petition by Andrew Flowers, the managing director of Enterprise Insurance which loaned £1.5m to Leeds in 2012 and is now seeking to recover the money.

In response, an angry GFH statement read: “The winding up petition issued by Enterprise Insurance, a sponsor whose managing director, Andrew Flowers, claims to support the club, is misconceived and an abuse of legal process.

“It is being vigorously contested by the club’s lawyers and there are no valid grounds to issue the petition. Under the ownership of GFH Capital, Leeds United has always met its financial obligations, and it will continue to do so.”

GFH has considered no fewer than three takeover offers in the past three months, and Cellino remains the most likely buyer of Leeds after a number of other proposals collapsed.

Sport Capital – a consortium including Flowers and club managing director David Haigh – abandoned one bid last week and Flowers then failed with a separate attempt to match Cellino’s £25m offer.

Together Leeds, a group lead by former Manchester United international Mike Farnan, appear to be the only rival party to Cellino but they admitted in a statement on Wednesday night that they were struggling to draw GFH into productive negotiations.

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