GFH in it for the Long Haul

This morning The Guardian published an intriguing article by David Conn which is so far the most insightful look we have had into thoughts and plans of GFH Capital since the completion of the takeover. Following the cancellation of the ‘meet the new owners’ event scheduled to take place next week this is perhaps the most information we will get on their plans for some time. Recent articles in the national media and within the blogging community have suggested that GFH are having financing problems stating that they are close to missing payments to Ken Bates and are looking for investment or even to sell their entire stake in the club. This was exacerbated by news that a bid for a 51% majority share in the club had been made by a Yorkshire based consortium rumoured to be led by former Leeds United board member Adam Pearson.

GFH have however moved to quell these rumours in their interview with David Conn. David Haigh advised "It is absolutely, categorically incorrect that we owe Ken Bates money. He is staying on as the chairman until June because that was the agreement we made." This may go some way to put the minds of supporters at ease after recent articles had suggested that any missed payments could mean that the club would fall back into the control of Ken Bates. Speaking about any potential investments Salem Patel said "The money we paid to buy the club and to provide it with working capital since has come from us, our institutional investors and some smaller strategic investors.”

It is however made clear that GFH are still seeking investment. They would ideally look to sell a 30% stake in the club to reduce their exposure but would consider selling a controlling share provided the investors had the potential and funds to move the club forward significantly. They do appear to be in this investment for the long term, eyeing up the potential windfalls of achieving Premiership football and its associated revenues. They are, it seems, after the hundreds of millions of pounds in TV rights money and sponsorship available in the top flight rather than as some people have suggested the small short term gains in ‘flipping’ the club and immediately selling it on.

In what is their first public criticism of Ken Bates Patel said "There is a cashflow shortfall. This is largely because more than £13m has been spent on building projects, financed by selling things forward.” As we already know season ticket income for this season and next had been sold to Ticketus for £5 million, with all of that money going to finance the East stand redevelopment work. Catering rights have also been sold to Compass Group for £2 million up front and a share of any profits and the club has also borrowed £1.5 million from shirt sponsor Enterprise Insurance. GFH’s priority therefor seems to be to stabilise the clubs cash flow.

Although no significant investment was made in the January transfer window GFH still see this window as having been successful. Their plan moving forward appears to be securing our young players on long term contracts. Salem Patel said "A lot of people have criticised us for not spending money in January but we are supporting the club. We wanted to reward and retain our best players and our goal is to build the club slowly but surely." Haigh and Patel also did little to clarify the future of manager Neil Warnock come the end of his contract at the end of this season, "Whether Neil goes immediately then or not, when Neil goes we will look to appoint a young manager who will particularly work to build the young players into great players for the club."

So it would seem, from what they have said GFH are in this for the long haul. Their priority being to stabilize the clubs cash flow, secure our young, best players on long term contracts and hire a young manager. The expectancy level should therefore not be for massive investment but a steady building of the club towards the Premiership. These are of course only words and the proof will be in their actions, both on and off the pitch.