Doing an Arsenal, Doing a Leeds. Different clubs, different paths

By Tony Attwood

In Walter’s last article, published this morning, the phrase is used “Doing an Arsenal”.   It reminded me of the phrase “Doing a Leeds” which is the absolute contrast, and I thought I would write about the two.

But in doing so I found myself diverted into thinking about where Leeds is now.  I’ll come back to Doing a Leeds in a moment, but first I do think we need to consider what we used to call Division 2.  Now we call it the Championship.  Different name.  More problems. More debt.

The Guardian’s analysis of the Championship’s 24 clubs’ accounts, which of course includes Leeds recently revealed that between them they owe almost £1bn.

And the reason?  It was the same reason that Phil Gregory of Untold highlighted when he submitted our proposals to the UK government’s enquiry into football.

OK no one took much notice of Phil’s excellent report – except his subsequent employers who I’m told cited it as one of the reasons Phil got his new job – but what we highlighted years back is still there, and getting worse.

We know the problem.  Promotion is said to be worth £120m.   The hope of promotion also, under the new approach of the oil men and mega rich, means buy the club, improve the stadium if needs be, get promotion to the Premier League, sell it off.

And it works because a year in the Premier League in turnover terms is equal to about 30 years in the Championship.

The huge debt, coupled with around 20 of the 24 clubs regularly making losses totalling around £350m a year, shows that the whole operation is not viable and is quite unsustainable.

The trouble is, if you support a smaller club, what you pray for is a spot of wealth and a decent manager.  I know this because of my long term affection for Torquay United, now sadly in the Conference after a disastrous season.   What we would give for some real investment…. but not if it meant ultimately total collapse and no club at all.

In 2012/13 the 24 Championship clubs spent £30m more on wages than their entire income.  The debt of nearly £1bn is mostly owned to the owners who just want that promotion and one year of survival in the Premier League to be able to sell the club on and get everything back.

So why is the gap so big I hear you ask (although, of course, not literally).  It is because the Premier League clubs get the TV cash, and they keep it.  The current TV deal which ends in 2016 gives the Premier League about £1.83 billion a year, and even a club down the foot of the table and not attracting the cameras much gets over £60m a year.

The entire Football League of three divisions gets an income from TV which is about 3% of the amount received by the Premier League.

To put it bluntly, even leaving aside the parachute money, a badly performing Premier League club gets £60m a year from TV.  A Championship club gets £1,7m a year.   True they get a bit more because the PL now pays another £2.3m solidarity payment to each Championship club, but it is still just £4m compared to £60m.

However that solidarity payment is worth its weight, because it gives the Premier League a chance to interfere in the workings of the Championship, as it has done with the Championship’s FFP model.  QPR and Leicester both potentially face fines for breaking FFP rules in getting promotion.   But by the time the hearings come around they will be in the Premier League, so the Premier League is interfering in what the Championship can do and suggesting it won’t collect the fines.  It has already said that the fines collected must go to charity, not to the other clubs, which is a major disincentive for the Championship to take legal action against either club for breaking its rules.

And so on to a member of the Championship: Leeds.

Leeds United’s bank account is frozen.  It has been ordered to repay a £1m of a loan, and there is a winding up order against the club to be heard on 23 June if it doesn’t pay up.

Now if you were around in the 1970s – a long time ago I know, but some supporters of now were there then – you will remember that Leeds were Arsenal’s big rivals during our triumphs under Bertie Mee.   They were the big team in the north, challenging for the title and cup year after year.   And this is where they have fallen to – financially in supreme difficulty in the second division.

And this is where Arsenal comes in, and the “Arsenal way” of doing things, for it is not just that we have the Emirates stadium now, and all the finances to go and buy anyone we want if he wants to come to us – we have had this stability since 1910 when one owner (Henry Norris) used his money to start us on the road to stability.

The man who was MD of Leeds Utd until April has been arrested in Dubai and is still in prison.  The allegation is serious fraud.  He denies doing anything wrong.   Legal people representing Leeds told the court that “this is not a ‘can’t pay won’t pay situation’. This is a ‘can pay won’t pay situation’.”

Meanwhile Mr Cellino, an Italian businessman who is the latest person to buy Leeds has sacked Brian McDermott for a second time.  There is talk of forged documents and false invoicing.  Leeds previous owners are getting uppity.  If you don’t know who might be in our team next season, so what?  Leeds don’t know if they will have a team next season.

Thus Arsenal took the route of stability and probity, Leeds took the route of living the dream.  Indeed so notorious is the Leeds approach under the likes of Peter Ridsdale and others that the phrase “Doing a Leeds” now has its own page on Wikipedia.  It says there…

“The term “doing a Leeds” or to “do a Leeds” has since become synonymous with financial mismanagement of a football club with potential dire consequences. It can refer specifically to any club that fails to plan adequately for the financial impact of either failure to qualify for the Champions League, or of not adequately restructuring following relegation from the Premier League to avoid a further drop, or more generally, to the rapid demise in the relative standing of any club.”

I refer you back to the previous article – Doing An Arsenal

Or put another way, be careful what you wish for.

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