Bottom of the Premiership and £82 million in debt, will Leeds United be UK football's biggest financial casualty yet, asks Mary Hannigan
'There's only one United," the fans often chant at each other during the rather heated meetings between old rivals Leeds United and Manchester United. At the rate Leeds are going, on and off the pitch, their supporters must be beginning to think there may well soon be "only one United", and it'll be the one across the Pennines in Lancashire. Leeds United, as the headlines put it, are facing meltdown.
With debts of £82 million the Yorkshire club has until midnight on Monday to find the £5 million it needs to cover its operating costs until the end of the season. If it fails to do so it faces going into administration, either voluntarily or by order of a court at the request of the club's creditors.
Over in Lancashire, Manchester United have just paid Fulham £10.5 million for Louis Saha, but having seen their profits rise by 22 per cent to £39.3 million last year, with turnover up 18 per cent to £173 million, Saha's purchase will barely make a dent in the club's finances.
Leeds's finances, meanwhile, make bewildering reading. The club has total liabilities of £139.4 million, which includes borrowings of £93.2 million and £17.5 million owed to other clubs for transfers. The £82 million figure is the club's net debt.
On-the-field performances this season have been just as calamitous, with the club currently bottom of the Premiership, having won just four of its 22 games.
In May, 2001, Leeds United were a game away from reaching the Champions League final; in January, 2002, they beat West Ham to go top of the league; in May 2004 they could well be relegated from the Premiership - and relegation would, it is estimated, result in a further £20 million to £25 million loss.
The club desperately needs to find a buyer, preferably in the form of a white knight like Chelsea's Roman Abramovich, but potential buyers (Bahrainian Sheikh Mubarak al-Khalifa was rumoured to be interested in bailing out the club, but so far has kept his hands in his pockets) are getting the sinking feeling that they'll be buying a Nationwide League side rather than a Premiership one. And a Nationwide League club with mammoth debts and a Premiership wage bill cannot quite be described as an attractive investment.
"Leeds United lived the dream and I inherited the nightmare," said Prof John McKenzie, who recently stepped down as plc chairman. McKenzie was referring to the reign of Peter Ridsdale, McKenzie's predecessor, who attempted to return Leeds to its former glory. By the time he resigned last April, the club was close to ruin.
Ridsdale wanted to "chase the dream", as he put it, always citing Manchester United as the club Leeds would emulate, in footballing and commercial terms. What followed was mismanagement to a quite extraordinary degree, with the club borrowing heavily to fund its ambition.
Manager David O'Leary was given £97 million to spend on new players, an investment Ridsdale believed would pay rich dividends. The club speculated, the debts accumulated. After showing so much early promise the team faltered: it never won a trophy, failed to continue qualifying for the Champions League, where the money is, and eventually was dismantled. Lee Bowyer and Jonathan Woodgate were embroiled in a court case, accused of beating an Asian student, and it was the beginning of the end. The trouble has been endless since then.
O'Leary was sacked, as were his two successors, Terry Venables and Peter Reid, in the space of eight months, all three dismissals costing the club yet more money in compensation.
Now? Leeds are 33 points behind Manchester United, the club, less than three years ago, they believed they could match. The disparity between their financial positions is even wider than that between their footballing fortunes.
Even the sale of most of Leeds's top players - Rio Ferdinand, Harry Kewell, Jonathan Woodgate, Robbie Keane, Oliver Dacourt and Lee Bowyer, among them - has done little to ease the debt. Now, realistically, only four players in the current squad - Alan Smith, Paul Robinson, Mark Viduka and James Milner - are worth fees of any substance.
However, other than removing him from the wage bill, Viduka's sale (he is said to earn £60,000 a week) wouldn't even yield the club any money. He is "owned" by a Guernsey-based agency, Registered European Football Finance Ltd, to which Leeds owes £21 million for the "hire purchase" of several of its players, including Viduka.
If the club's finances were in order and it chose to sell Smith, for example, Leeds could expect to receive a fee of at least £10 million, probably more. He is a 23-year-old English international, hugely talented, if a little hot-headed. The vultures, though, are circling. Rival Premiership clubs know Leeds are in no position to turn down even offers that border on the insulting - hence the talk of Smith leaving for as little as £3 million.
Meanwhile, as an epitaph to the madness of the Ridsdale years, Leeds are still paying Robbie Fowler £500,000 a year and Robbie Keane £200,000, even though neither Robbie plays for the club any more. Fowler spent 14 months at Leeds but had to be sold, at a loss of £5 million, because of the club's debts. Manchester City bought him, but only on condition that Leeds paid him a year's wages - and they agreed. Similarly, Leeds made a £5 million loss when they sold Keane to Spurs. When he scored the winner for Spurs at Elland Road this month he was still being paid by his former employers.
More madness: the only headlines mediocre midfielder Seth Johnson has made since being bought by O'Leary for £7 million two years ago was when he admitted speeding at 135 m.p.h. while over the drink-drive limit. He remains at the club, on £35,000 a week. Leeds would like him to leave, but nobody would pay him even close to a salary of that nature, never mind a transfer fee of £7 million.
Before Roman Abramovich bought Chelsea for £140 million, and cleared substantial debts in one fell swoop, the London club was the one many in English football predicted would be the first major casualty of the game's inability to live within its means. Abramovich saved it; now Leeds need to find as generous a benefactor if the club is to survive.
For now, Leeds are dependent on their players accepting a wage-cut, of between 30 and 35 per cent, if they are to find the £5 million that will keep them afloat until the end of the season. So far the players have been reluctant to comply, demanding that all other options be exhausted before they are asked to do their bit. If they were "doing their bit" on the field of play, and making Leeds's Premiership status safe, fans might understand and buyers might step forward.
"Getting into debt is easy," says the www.a1-credit-cards.co.uk website. "Getting out of it less so, but it can be done. And remember, if you feel scared to open those bills that keep coming through the letter box and are worried about sorting them out, you are not alone and there is help available."
Ironically, the same website offers Leeds United supporters the chance to sign up for club credit cards.
"Click below to be taken to the official Leeds United credit card website to apply," it says. When you do so the following message appears: "The link you clicked on has expired." An omen?