September 26 – Leeds Get Credit Crunched
WITH the credit crunch being talked about almost as much as the comedy going-ons at St James’ Park (and not the one in Exeter) we thought it was time to bring you the story of English football’s biggest financial meltdown of recent years.
Today in 2001 Leeds United took out a loan of £60m as the board, led by chairman Peter Ridsdale, ‘lived the dream’ in search of regular Champions League football.
When David O’Leary took over the Elland Road club in 1998 he set about building one of the most exciting young teams in the country, as his ‘babies’ reached the Uefa Cup semi-final in 2000 and qualified for the next seasons’ Champions League.
After a blockbusting run to the semi-finals of Europe’s premier competition everyone got a tad over-excited and Ridsdale decided that the way to cement their place was to mortgage the club’s future.
The £60m loan was secured against future gate receipts, so in theory when Ridsdale’s big-name players came in and won the Champions League for Leeds, the revenue would cover the payments that generated £4.62m in interest alone each year.
The early 2000s spending spree at Elland Road has gone down in legend. Given what seemed like a blank chequebook from his chairman, manager David O’Leary was like a kid in a sweet shop in those pre-Abramovich days. The English transfer record was broken to bring in Rio Ferdinand from West Ham (£18m), Robbie Keane (£12m) was bought from Internazionale to add to the growing number of strikers at the club as was a past-his-prime Robbie Fowler (£11m) and Seth Johnson (£7m) managed to con his way into receiving £38,000 a week.
Whilst fans were expecting the biggest title challenge since Danny Shittu tried to write his autobiography, things didn’t go to plan in West Yorkshire.
With a wage bill rising faster than sales of Prozac in the north east, the problems began to mount for O’Leary’s men. Two of the leading lights of his team, Lee Bowyer and Jonathan Woodgate, were involved in a lengthy court case that saw Woodgate convicted of affray, as results on the pitch suffered. O’Leary then saw fit to release a (terrible) book entitled ‘Leeds United on Trial’ which saw him lose the dressing room.
When a fourth-place finish saw the club miss out on the Champions League at the end of the 2000/01 season O’Leary was sacked and Ridsdale’s cunning plan became found out.
Rio Ferdinand was soon sold to meet the latest loan payment and Terry Venables was brought in for a torrid eight-month spell at the club before he was given the boot. It obviously did him some good though, because he’s just been sensible enough to turn down the Newcastle job.
Leeds were eventually relegated from the Premiership in 2004 and their financial problems rolled on, culminating in administration and a then-record 15-point penalty in 2007. But that, as they say, is another story for another day.
Again proving that football operates in a world as far removed from common sense as it’s possible to be, Ridsdale took over as chairman at Barnsley, almost leading them to liquidation before Gordon Shepherd and Patrick Cryne took over. He’s now chairman of Cardiff City, who, as coincidence would have it, almost went out of existence last year after a court case with Langston, one of their major creditors. Why do people let this man run football clubs? As Tears for Fears said, it’s a mad world.
In case all you Leeds fans out there are on too much of a downer, check out this highlights reel from a simpler time when Leeds played the best football around. Click here if you want to know who wasn’t respecting the ref today in 1998 and come back tomorrow for a timely look at the Merseyside derby.
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- September 26 – Pushy Paolo and Leeds Get Credit Crunched Today's targets in the OTFD crosshairs: referees and Leeds United....
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March 21 – By George! | On This Football Day on March 21st, 2009
[...] would lead the Yorkshire side to fifth in the table and pave the way for Ridsdale and O’Leary to ‘live the dream’ and go wild buying over-priced goldfish and over-paying Seth [...]
May 4 – The Dream is Well and Truly Over | On This Football Day on May 5th, 2009
[...] heard the stories of Leeds United’s extravagant early 2000s pursuit of ‘the dream’ far too many times, whether it’s Seth Johnson’s wage negations or Peter [...]
November 23 - His name is Rio and he dances on the sand | On This Football Day on November 23rd, 2008
[...] On this day things looked even rosier for the Leeds faithful when the club signed West Ham defender Rio Ferdinand for a whopping £18m. It seemed like a massive amount of money for an undoubtedly good player, but at the time it was a British transfer fee record, and a world record for a defender. Many questioned whether he was worth the money, but no one bothered to ask where the money was coming from, and if Leeds could actually afford it. [...]