MAD Friday. Not so long ago, such an infamous date in the calendar would have seemed wholly appropriate for a new owner of Leeds United to take a bow.
Back in the dark days between 2002 and early 2005 when United were, quite frankly, a mess thanks to the fallout from the ‘spend, spend, spend’ era of Peter Ridsdale and subsequent relegation from the Premier League, the club was in such dire straits that it seemed unlikely they could even be given away.
Most would-be investors, no matter the strength of their interest, were soon put off once they had looked at the books and even those bold enough to take a chance, namely the Gerald Krasner-led Yorkshire consortium, soon realised that United’s problems bordered on the insurmountable and eventually withdrew after just eight months at the helm.
To seasoned Elland Road observers, it was as if a sign should be hung on the main gates reading, ‘You don’t have to be mad to try to save us, but it would help’.
Fast forward, however, to 2012 and Mad Friday – traditionally the day when Leeds takes a collective leave of its senses and drinks itself into a stupor to celebrate the final Friday before Christmas – saw United’s new owners reveal for the first time their vision for the future.
And in an indication of how times have changed down LS11 way in recent years thanks to United’s revival in off-field fortunes, no one – least of all the new powers-that-be – believes any longer that such an investment is anything but a sound one.
“Leeds United is a great football club with a fantastic fan-base and great pedigree,” says Salem Patel, executive director of GFH Capital, the Dubai-based investment bank who this week assumed control at Elland Road after seven months of negotiations with Ken Bates.
“We maybe didn’t think it would take as long as it did, but we are there now and looking forward to the future.”
Patel, who joined the Leeds board on Thursday after the takeover had been rubber-stamped, joined the Bahrain office of GFH in 2007 and later became head of investment research. The germ of the idea that led to the Yorkshire club being taken over this week was his, with GFH colleague David Haigh – a boyhood Leeds fan – then adding impetus when talks were in danger of stalling.
“We had a brainstorming session in May,” explains Patel. “We have a new acting CEO and we were looking for new ideas. Being from England and passionate about football, I said we should look at English football.
“It was before the new broadcasting deal (that will earn the Premier League clubs £3bn from domestic rights alone for the three years from 2013) had been announced. We were looking for different type of investments. Everyone is investing in health care at the moment and defensive sectors.
“I thought, ‘Let’s push the boat out a bit’. As pioneers of investment in the Middle East, football seemed a very good sector to go into.
“We looked at several clubs, but then we got the investment memo from the broker saying, ‘Leeds United is for sale’. I was in London at the time and met the broker.
“I liked what I heard and relayed the message back to head office. I went back to Bahrain and within a week I was back meeting Shaun Harvey and being shown round. Within a week, we signed our first agreement with Leeds.”
Those early days may have seen quick progress made but, soon, any hopes fans had of a swift conclusion started to fade. Patel adds: “We didn’t have a timeline as to how long it would take from the outset, but it was never going to be a case, like Roman Abramovich, of coming along and saying, ‘I don’t care what is going on, I have the money to sort this out’.
“We are not individuals, we are a regulated bank and certain processes have to be taken if we are to invest in anything. We also had to ensure we knew everything about the club before we bought it.
“The period of due diligence finished in October, it really did take that long. But now we are here as the owners of Leeds United and couldn’t be any happier.”
None of the bank’s three executives who have joined the United board – Hisham Alrayes, who is in the Middle East on business at the moment, completes the trio – have any previous experience of running a football club, but GFH Capital and parent company, Gulf Finance House, have a proven track record of investing in a range of business fields.
When GFH’s involvement in Leeds first emerged, the suggestion was that they would look to flip – or quickly resell at a profit – the club within months of striking a deal with Bates.
Asked by the Yorkshire Post if that was the bank’s intention, Patel replies: “The way our business model works, it is not about flipping or long-term/short-term.
“The way we typically work would be to identify a project, then we would bring strategic investors with us. If people want to call that flipping, then it is flipping.
“But to us it is not flipping. It is identifying an asset and then bringing the right people on board – whether that is management or shareholders or investors – to help try and build that asset to take it to the next level.
“We will not be selling 100 per cent, we will be maintaining a shareholding in this club.”
Just what the future holds for United is unclear, but there can be little doubt that promotion to the Premier League is very much part of the new owner’s remit.
As is building on an off-field performance that over the past four years has seen United make a collective profit of £10m, an achievement that back in those dark days of less than a decade ago would have seemed nigh on impossible.
Patel adds: “Looking at the business from a profitability aspect, the club is making money. Not many in the Championship can say that. Looking from a cash flow perspective, which is something that I feel a lot of fans don’t do, then that is where you can see there is an area of weakness.”