Cellino era beigns, with a loss

09 Apr 2014 10:27am, by YorkshireSquare

And so yesterday Massimo Cellino officially completed his takeover of Leeds United. His lawyers said “Massimo Cellino has now been appointed a director of LUFC Holdings & ESL has completed its purchase of 75 per cent of the shares of LUFC Holdings.” The Football League still has to ratify the takeover at their board meeting tomorrow but this should be a formality given the outcome of his appeal last week. The chances of Together Leeds joining Cellino at the board table seem to have faded with Cellino saying “I have no plans for any other investors, I will tell them no now. I want the fans close to the club, we don’t need anyone else.”

In an interview earlier in the week with Sky Sports Cellino had given manager Brian McDermott tentative backing. Cellino, it seemed, would give McDermott time to impress and as such last night’s game against Watford at Vicarage Road was as good as a job interview. As far as Brian was concerned it didn’t go so well. Free from the shackles of GFH, free from submitting team sheets to Bahrain 24 hours in advance, free from writing detailed reports it was chance for the manager and players to shine. They didn’t.

A hotchpotch team selection and another lacklustre performance saw Leeds one nil down within ten minutes and go on to an embarrassing three nil defeat. Cellino spoke with McDermott before the game and looked on from the stands but he will not be impressed with what he saw. McDermott conceded after the game “Everyone’s playing for their future in my opinion and of course I’m under pressure. I’m not in a strong position because of the results we’ve had." Cellino was quoted as saying “I’m driving the bus” on completing his takeover, it’s not looking like there will be a seat for McDermott at this rate.

As well as the continuing woes on the field more issues came to light off the field this week. Cellino has already inherited a £22m debt and the club accounts filed this week don’t make for pretty reading. Attendances have dropped 8% with ticket revenues down £2m for the 2012-13 financial year with turnover dropping from £31.8m to £28.5m. The loss for the period stands at a staggering £9.5m with loans of £11.3m from Brendale Holdings, a subsidiary of GFH. Sport Capital also loaned the club 1.75m in a week before their takeover collapsed. As we know Cellino put around £6m into the club before his deal was authorised pointing to the very precarious financial position the club was in. It was also revealed that directors pay totalled £750,000, more than double the previous year.

There has been speculation that the losses could cause issues with the Financial Fair Play Rules which allow for a £8m loss in that period. There is an acceptable deviation of £4m for the first two years however and the rules also state “Failure to stay within the defined limits will lead to the imposition of sanctions. However, there will be no sanctions implemented during the first two seasons (2012/13 and 2013/14) in order to give clubs sensible period of transition.” So we should be fine in terms of sanctions, the full rules can be read on the Football League website.

The Football League will also be concerned that for a period of time last year Leeds United had “no controlling party” as GFH had sold more than 50% of their shares. They later bought shares back to the total of 85% of the club before selling to Cellino. The Football League had not been notified of this and could be concerned given the receipt publicity around the “owners and directors test”.

Cellino left the game on the final whistle and headed straight up to Leeds. He was due at Elland Road this morning and has a lot of work to do. As McDetmott said after the game “We’re all in a situation where it depends on who wants to be here next season. Because this guy has a lot of clout. He’ll have watched that tonight and he’ll have been bitterly disappointed with it.” Expect Cellino’s axe to start flying.