the square ball week: the greater goodBack
Football is a game where your predictions are always wrong and what you want to happen does not. It’s rooted in failure: twenty-four teams entered The Championship this season, but only one can win it, and only two more will get promotion. Three will even get relegated. That means a lot of failing, but then, that’s football. To follow a football team is to get quickly used to the feeling of being wrong, because no football fan learns from their mistakes. You were wrong, this time, about Leeds winning the league. But next time…
There are some mistakes, though, that even the most error-worn fan can understand once as a bite towards shyness twice. For example, some time ago, I was very wrong about a takeover of Leeds United and the effect it would ultimately have on our club. I still kick myself for my idiocy, and wonder why I didn’t give my head a shake and wise up sooner. You can’t change the past, though, and you can’t change the blind hope that this time, this time, Leeds will win everything; but you can swear not to be fooled twice, and you can learn from believing in Ken Bates.
‘Believing’ might be putting it a bit strongly. It wasn’t so much that I believed in Bates, as that I bought the idea that his coming would not signal a time of great darkness at Elland Road. Despite everything, despite the Chelsea history, despite the Irish Trust Bank, despite the reputation, the demeanour and the rotting fur coat, I convinced myself things would turn out alright. I figured that even if he was only at Leeds to get the best return possible for himself, that return would be dependent on Leeds doing well and, most likely, returning to the Premier League. What would be good for Ken Bates would be good for Leeds United, so I just had to grit my teeth and bear the beard.
It didn’t quite work out that way, of course, and we don’t need to rehash the whole sorry story here. But one thing worked out as predicted: the permanent discord that was Ken Bates’s time at Leeds worked out very well for Ken Bates. He won’t ever tell us what he paid to buy the club, and he won’t ever reveal how much he sold it for, but you can guarantee Ken walked away with a great many new millions in his pocket thanks to the sale of the ailing and failing club to GFH Capital. Our club, meanwhile, was just that: ailing and failing, and showing absolutely no benefit for Ken’s ever being here.
And it’s a lesson that seems like it might come in handy when analysing GFHC’s intentions/strategies/blundering about with the future of our club. Takeover talk was on the block again this week as the detail of parent company Gulf Finance House’s accounts made its way to the wider web. That was followed by a research document from Exotix Credit Research (that’s a pdf link), summarised by Amitai Winehouse at Spoughts here, that describes GFH as a "mirage in the desert." Leeds United’s status as “held-for-sale” was first touched upon by blogger Ole1985 back in February, but the repetition in GFH’s annual report has received wider coverage: Bloomberg, Reuters and The Guardian, among others, all picked up the news that our ‘new’ owners seem set to sell before they ever get old.
The representatives of those owners then contradicted their own parent company’s accounts and report in a statement of their own on Wednesday, saying that, “GFH Capital has been transparent since acquiring Leeds United and is continuing to look for strategic investors in part of the club that can invest in Leeds United, alongside GFH Capital, to ensure a long term, sustainable future.” As Ole1985 points out in his analysis of the annual report, they might want to have a word with the folks back at Basecamp Bahrain, who state, “that there is an ‘active plan by the group to sell its stake’ … all comments refer to a sale of the whole.”
It could be argued that such snooze-inducing examination of minutae and contradiction doesn’t matter: GFH/GFHC are either going to sell the lot or sell some bits or get investment, and either way will be great for Leeds United. What’s good for them is good for us, right? That has a familiar ring to it, that.
Ole1985 reckons a full sale now would mean a 33% profit for GFHC; not bad work, given GFH lost over a billion dollars not long ago. But as Salem Patel told David Conn of The Guardian back in February, "We do not wish to make a short-term profit to miss out on the £150m-£200m which could be made if the club wins promotion to the Premier League."
The fate of a football club and the fate of an investment bank are not going to intertwine. They may run parallel for a while, but that’s the thing with parallel lines: they never touch. In fact, in his answers to these soft-lobbed questions on Wednesday, David Haigh couldn’t distance himself from the club enough – Salem Patel and he aren’t owners, just representatives, and the club has a great staff and runs itself. Which rather begs the question of what David and Salem actually do for Leeds United.
Elsewhere in the Guardian interview Patel says, “our goal is to build the club slowly but surely,” and that’s the message they want you to hear: Salem and Dave are here long term, to build the club, get investment and get into the Premier League. But investment needs return, and GFH – an investment bank – will need return on their investment for themselves and their investors, investors drawn to the club perhaps by quantifiable numbers of Twitter and Facebook followers, and a graph showing attendances on an upward curve in a glossy prospectus.
That £150m-£200m is the return they want. Promotion to the Premier League would obviously be great for Leeds United – fans want success, and that is success. But would that £150m-£200m be used to take our club to the next level, or to pay off promises made to profit-hungry investors?
What’s good for us, is good for them; but as Ken Bates taught me, what’s good for them might not be good for us.
about 3 weeks ago
Issue 23 of The City Talking is out in Leeds now, and available free inside Friday’s edition of the Yorkshire Evening Post.