Banking on The Future
If you’re reading this and you’re aged 24 or under, it’s likely you won’t remember Leeds United as a powerhouse of English Football, or at very least you might have a vague memory of their often-bitter contests with Manchester United, Ian Harte hitting top bins from 30 yards and a blond teenager scoring with his first touch as a professional footballer against Liverpool at Anfield.
Leeds United’s battles at the top of The Premier League in the late 90’s early 2000’s was the precipice of a 35-year Rollercoaster ride that delivered League Titles, FA Cups and even European Finals.
Yes, that’s right Leeds were in a European Cup Final, okay it was back in 1975, but they have since made the UEFA Cup Semi-Finals (now known as Europa League) and Champions League Semi-Finals as recently as 2000 and 2001 respectively.
Under manager David O’Leary and assistant Eddie Gray, Leeds never finished lower than 5th in The Premier League between 1997 and 2002 and it was this success that ultimately made them a victim of their own demise.
Peter Ridsdale, the Chairman of Leeds United throughout this run of top of the table finishes, envisioned many years of continued success at Elland Road and borrowed heavily against the equity of this highly desirable future for the club. Floating the potential for back-to-back Champions League campaigns, Ridsdale secured a loan of £60m, hoping that this would finance top-tier talent, on the highest wage of the time. Despite the Leeds United academy producing several exciting players, Alan Smith, James Milner, Aaron Lennon, Johnathan Woodgate and Paul Robinson to name a few, all future England Internationals, Leeds still spent the money they had borrowed like it was going out of fashion. Supplementing their young and talented side with marquee signings of Mark Viduka, Jimmy Floyd Hasselbaink, Robbie Fowler, Robbie Keane and Rio Ferdinand.
Ironically spending £41m in the transfer market at a net loss of £32m in the 2000/01 season did nothing to improve on the previous campaign, in fact, they finished exactly 1pt worse off and one position further back than their 3rd place finish in the 99/00 Premier League Season.
Although it did allow Leeds to compete with the best Europe had to offer, reaching a Champions League semi-final vs Valencia, 4th place back then wasn’t enough to qualify for the following seasons renewal of European Club Footballs richest competition, and here lay the problem.
Ridsdale had borrowed a significant sum of money with a sound financial plan in place to repay the loan and then some with Gate Receipts and TV Money gained from Champions League Football.
Any other Chairmen, Club or Board of Directors would have looked at this situation and sort a different solution, but not Leeds. They’re an if it doesn’t work first time, try it again and see what happens, sort of club. That’s exactly what they did the following season, spending a further £18m at a net loss of almost £18m and wouldn’t you know it, it didn’t work. Leeds United limped to a 5th place finish on 66pts, they’d spent a net £50m on transfers by this point and they’ve finished two places lower and one-win worth of points worse off than when the loan was first issued.
Fair to say Leeds United’s financiers were far from pleased when the loan repayments ceased, Ridsdale had sold them the dream of near doubling their investment and being involved with a club that were going to dominate England and Europe for years to come, but they had ultimately failed in doing either and thus the gate receipts and TV Money they were expecting from European Competition did not come.
The Very Top to Not Quite Rock Bottom
Leeds United were in financial ruin, staring administration and bankruptcy in the face. Liquidation of the club was becoming a very real prospect, so real I remember having a conversation with a Leeds fan at school, deliberating which team it would be okay for him to support if Leeds United no longer existed, Bradford City was ruled out immediately.
A fire sale of players was inevitable, some they sold for a tidy profit and others they made significant losses. Rio Ferdinand going to bitter rivals Manchester United for £30m represented the biggest gain, as well as the sale of youth academy product Woodgate for £9m to Newcastle United, the transfers of the two Robbie’s, Keane and Fowler, for a combined £13m was a significant loss on their original investment, more so when you consider Leeds continued to pay Fowler £12,000 per week nearly two years after he left the club.
Fowler’s situation wasn’t unique, Leeds unbelievably had agreed to partial payment of Players, opting to receive the fee over a period of two or three seasons as some form of guaranteed income, but also agreed that for those that accepted pay cuts to move, Leeds United would pay the difference.
More believable of course, after selling off their best players, was Leeds United league form nosediving, finishing 15th in 2002/03. The following year and another clear-out, this time it was the talented youth the Leeds faithful were so proud of, that were being farmed out in a desperate cash grab. They raised a respectful £20m, a large chunk of which was made of up in the sale of Alan Smith to Manchester United, it left a sour taste in the mouth for many Leeds fans who saw Smith as a saviour figure and who’d gone on record as saying “He’d never play for Manchester United”. It’s recently been revealed that the move to Manchester was engineered, not by Smith but by Ridsdale. Contrary to what has previously been reported, United were not the only club to offer a fee for Alan Smith, they were just the only ones to offer £7m up front in cash. Everton and West Ham had also made an offer of two instalments of £3.5m, but such was the desperation for Leeds United to satisfy its debts, the Everton and West Ham bids were rejected and Smith wasn’t even made aware of them until much later in his career.
With few high-quality players left at the club at the start of the 2003/04 season, they all but signed their own death certificate, okay so no-one died, but Leeds were relegated finishing 19th.
A Risk Worth Taking?
Ridsdale had left the club in the March of 2003, with the club £103m in debt, his high stakes gamble a complete failure. Leeds finished 15th in their first season in The Championship and despite a playoff appearance the following year have never recovered, suffering the ignominy of relegation again down to League One, the first time in the club’s history that Leeds United had played in the third tier of English Football.
Whilst the trials and tribulations of Leeds United in the years that have followed could make a whole other series of articles, Ridsdale’s further involvement in Football would make a less believable piece of fiction, had it not actually happened. Peter moved onto Barnsley after the disaster at Leeds, owning the club outright and rescuing them from the brink of collapse after ITV Digital money came and went, he was forced to sell up or go bankrupt just a year later. He was then hired by Cardiff City as Chairman to oversee the new Stadium project, he misled fans over the use of funds from season ticket sales and failed to get a seat on the panel of the Welsh Football Association, receiving just 14 votes. During his four years as Chairman, the Bluebirds were on the receiving end of five winding-up orders from HMRC and Ridsdale left the club in 2010, reportedly £66m in debt. Ridsdale miraculously found himself another position as acting Chairman of Plymouth Argyle in the same year his consultancy business was liquidated with debts of £475,000, Peter was disqualified from taking any form of Directorship until April 2020 by the Insolvency Service in 2012 and remains in an advisory role to Argyle Chairman, Mr T Hemmings.
Ridsdale’s exploits are a perfect example to anyone on How Not to Run a Football Club and rather fortunately for me, the example he has set is not uncommon.