Leeds United Financial Results: L.U.S.T Questions Posted: 05 Apr 2012 05:00 AM PDT Leeds United's various financial results were made available at Companies House yesterday, and as ever they have caused consternation among Leeds supporters and begged more questions than they answer. The headline points from the accounts are: - At the very end of the accounts, under 'Post Balance Sheet Events', it is stated that: "Leeds United Football Club Limited entered into an agreement whereby it sold season tickets for both the 2012/13 and 2013/14 season for a sum of £5,000,000 after the year end." This has since been clarified by Phil Hay of the YEP, and we understand that a portion of the season ticket income for the next two season has been sold to raise £5m, to pay off a loan for the East Stand development works. - Since administration in 2007, the running total of money of that Leeds United has loaned to its loss-making sister companies has reached £4.3m, set against an initial investment from FSF of £500k in 2007, and a loan - since paid back - of £975k from Outro. This means £2.84m of cash raised by Leeds United Football Club Ltd's has been loaned to subsidiary companies. As well as the accounts, a 'Special Resolution' document was found at Companies House. The document is explained more fully on The Square Ball blog and their new magazine, but briefly it shows that: - 32 'Preference Shares' were issued in Leeds United Football Club Ltd. Each of these shares was purchased for £100k, but each has a guaranteed worth of £125k, giving a total of £4m return for a £3.2m investment. The shares can be redeemed if the club or its holding company changes ownership or is liquidated, or if the major shareholder - Ken Bates - elects to buy them. The beneficiary of these shares is not disclosed. In response to these new pieces of information, the Leeds United Supporters' Trust is asking the following questions of the Leeds United board, and would welcome full answers to reassure Leeds United's fans about the implications of these accounts: - What proportion of the season ticket money has been sold to raise the £5m loan for the East Stand work? How will Neil Warnock's transfer and wages budget be impacted by this loan? Where does the club expect to make cost savings to make up for the season ticket income sold, so that Neil Warnock can be given the playing budget he is asking for to make promotion a possibility? - When do you expect Leeds United Football Club Ltd to be repaid the £4.3m owed by its three sister companies, and, given this amount is freely available loan to other group companies, will this cash be added to Neil Warnock's playing budget? - Who is the beneficiary of the 32 preference shares? Why were these shares issued? What is the £3.2m needed for, to justify the 25% return to the beneficiary? - What was the budgeted figure (by year) provided to the auditors for profit on sale of players which was used to justify the Deferred Tax debtor? - When do you expect the investment in the East Stand development to pay back and start contributing to the income of the football club? - Why have Leeds United Media and Leeds United Centenary Pavilion been spun out into independent entities? - Why do Leeds United Media, the Pavilion and Yorkshire Radio show no employees in the accounts? Would these companies be even less profitable if employees were introduced to their balance sheets? As the staff of these companies appears to be included on Leeds United Football Club's accounts, what impact do these wages have on the turnover-to-wages ratio? - When do you expect other group companies - such as Leeds United Media and Leeds United Centenary Pavilion - to start contributing to the core Football Club business? - Do you think that the £5m loan against season ticket monies, and the £4m Preference Share issue, will have a negative impact on potential third party investment? - Was it a good business decision to put the club into significant debt in order to develop a stand that is currently likely to be half empty for at least another season? We look forward to receiving a positive response. Supporters can join more than 5,000 other Leeds fans and have their voice heard as members of the Leeds United Supportersâ Trust by filling in this form. Membership is free. Keep checking for updates on www.lufctrust.org, and our Facebook and Twitter pages.
