Daily Archives: 07/05/2014

Cellino – silent and unimpressed

The fact that Leeds United have missed a 21 day deadline imposed by a Statutory Demand – for payment of just under £1m allegedly owed to David Haigh’s Sport Capital outfit – is capable of interpretation in a number of ways.

One is to take the gloomy view that new United owner Massimo Cellino is not quite as minted as we have been led to believe; that he is starting to struggle under the weight of outstanding bills left behind by previous owners notable mainly for their incompetence and lack of experience, along with sundry other negative attributes.  And yet Cellino has acted swiftly to clear debts up to this point; when HMRC were owed £500,000 in unpaid tax, the bill was settled in the first flush of the Corn King’s reign.  Likewise, former suitor for the club Andrew Flowers was paid off quickly and the players’ deferred wages were restored to them, saving them from inevitable penury and the soup kitchen, I shouldn’t wonder.

Cellino has remained silent on this latest financial demand.  The form-book, though, suggests that if he was both willing and able to pay up, he would have done so promptly, perhaps with a few typically acerbic Latin observations on the craziness of running a Championship club along the lines of one in the latter stages of the Champions League.

But nothing has yet happened – and obviously this has persuaded some that the scenario above – of Cellino being not exactly skint, but cash-strapped enough to prevaricate – is being proved true.

Another possible version of reality, though, is that Cellino, a downy bird if ever there was one, is determined not to be taken for a mug; determined not to pay up meekly when others might be liable for at least some of the burden.  The money that Haigh is demanding was put into the club at a time when GFH – as they loudly and repeatedly trumpeted – were still Leeds United owners, for as long as Cellino’s purchase of a controlling stake was still held up by Football League red tape.  As has since become clear, however, GFH throughout this time were resolved to avoid meeting the club’s running costs and relied instead on what they claimed were contractual provisions supposedly obliging Cellino to meet those costs – even though the success of his purchase was in extreme doubt. Cellino differed on that matter; although he had been funding the club, he cut that off when the League initially ruled against him, a ruling that made his chances of ultimately owning Leeds United seem remote indeed.

At this time, Leeds were therefore grubbing about for money wherever and however it might be obtained, in order to keep the ship afloat.  Can Cellino, who must have seen his prospects of becoming owner receding by the hour, really be held totally responsible for the debts incurred in running the club and paying the bills during this awkward limbo period when nobody really knew what was going to happen?  His verdict on that is likely to have been: Not on your Nélie.

Another relevant consideration is of just how well GFH did for themselves during the time they were in charge of Leeds.  The bald fact of the matter is that Gulf Finance House has reported a net gain of $6.46m (£3.8m) from the investment bank’s time as majority owner.  This will, of course, include those last few weeks of uncertainty when they basically backed away from any financial responsibility, pointing fingers at just about anybody else, but refusing to meet business costs from their own purse.  Elementary arithmetic shows that the money they avoided paying not only had to be provided from elsewhere – but also that the cash thus saved by GFH will appear as a significant part of that £3.8m GFH net gain.

Profiting from an abdication of responsibility?  You can bet that Signor Cellino is not too impressed by that – especially when he is now faced with a bill from one or more of the people who did pay up when Cellino was hamstrung by the Owners and Directors test – and when GFH were pouting and sulking and claiming that, despite being owners, it wasn’t their responsibility.

It is also a fact that, as part of the deal whereby Cellino’s Eleonora Sport bought a 75% stake in Leeds United, GFH have retained a 10% stake “in order to take advantage of future revenues” – in other words, because they wanted to make damned sure that they would get a fat slice of the cake as and when Leeds United return to the Premier League.  This will be seen by some as just good business practice – but it means also that GFH are still a part of the entity which now faces a winding-up petition – and yet they are apparently showing absolutely no sign of wishing to contribute towards the settling of that matter, even though the debt was incurred on their watch, due to their unwillingness to meet owners’ responsibilities at that time – and despite the fact that they were telling anyone who would listen that they were still in charge.

So now we have a situation whereby Cellino, having already stumped up millions during his brief time as owner, to settle legacy debts and repel winding-up orders, is faced with yet another bill – one incurred while he was not yet owner and one arguably attributable to the fact that the nominal owners GFH had put their wallets away and abandoned their financial responsibilities.  The same GFH who recorded a fat profit from a time in which they managed the club in a cack-handed way, the results of which are now at Cellino’s door.  And the same GFH that remains one-tenth owners of Leeds, ready to profit in that proportion from any future success, but seemingly unwilling to take anything like 10% of the responsibility for the currently pending litigation.  Does that seem remotely fair to you?

Football is business – big business.  But it’s not simply that.  It’s also an emotional matter, with complex questions of loyalty and commitment very much to the fore.  GFH remain on board at Leeds United – but it appears that they are here simply as parasites, unwilling to help or assist their host in any way, intent merely on sucking away greedily when the good times come around again.  That’s a deeply unattractive position to adopt, and the better it is recognised and understood by the fans, the worse it will reflect on GFH who, presumably, still have some interest in retaining a good name in the business world if not in the more parochial football sphere.

Cellino’s silence and inactivity in respect of David Haigh’s winding-up petition should really be seen in the light of the GFH stance – and not as any sign of poverty or lack of commitment on the Italian’s part. Massimo is no mug and it could well be the case that he is preparing to fight over this, even if the amount of money involved is small beer to him.  If GFH really are prepared to “lie low and do nuffink” until such time as there are dividends to be reaped on their 10% holding, then it’s laudable on Cellino’s part to stand up to them and make them pay up on their responsibilities, if possible – instead of simply allowing them to sit tight and reap a fat reward at some future date.  Surely fighting such unfairness has to be the right and proper thing to do.

The bill is due; it was incurred under GFH while they were cocking a deaf’un to the club creditors – including the playing and general staff.  Now it’s landed on Cellino’s doormat, and when he looks around, he sees only parasites – not partners.  That’s a tawdry and disgusting state of affairs.

If Massimo Cellino is prepared to contest this current matter on that basis, then this blog is of the opinion that he deserves the support of all Leeds United fans in bringing GFH to account.  Good luck to him in this – and also in the greater battles ahead as he looks to restore Leeds United to the game’s top table.