Reality bites for the big-spenders

Leed United had a dream - to compete with the best in Europe and against the likes of Real Madrid and Manchester United. They borrowed heavily and went on a spending spree. Fro a while it worked. But it's a fickle world. Now, Leeds are forced to sell their players cheaply just to stay in the game. Gambling on success can be costly

LONDON: In a world where financial institutions gamble with the common man's pension money, fooball clubs pursuing a richer future can turn their Holy Grail into fool's gold. 

On the face of things, the UEFA Champions League is a tremendous business success. Formed 10 years ago with a pot of 56 million Swiss francs to be shared among the clubs that took part, the competition now generates close to US$700 million for the clubs. 

Every one, it seems, is a winner. 

LOOKING FOR GREENER PASTURES?:As far as Terry Venables (right) was concerned, among the departures that ripped the heart out of the Leeds squad ws that of Robbie Fowler (left).

Real Madrid, who operate in one of the big Western European television markets that generate the wealth, banked US$40 million from the Champions League during the 2001-2 season, proof that the more sweetly you make the ball roll, the greater your profits. 

But Madrid had to speculate to accumulate, and US$40 million would not even pay the transfer fee it took to acquire Zinedine Zidane, never mind pay his wages. The biggest clubs, such as Real Madrid and Manchester United, use the Champions League as a platform to tap into other and growing revenues from Europe, Asia and the Americas through image rights and merchandising. 

It is not a game anybody can play. Some get terribly burned trying to keep up. 

Last year, the losses suffered by Lazio of Rome forced president, Sergio Cragnotti, a billionaire in old money, out of the sport. This year, Leeds United, an English club that borrowed to buy their way into the European wealth league, are having to sell cheaply players that they bought expensively. 

Leeds are one of those clubs that opted to float on the stock exchange, thus subjecting themselves to different rules on accountability. Three of Leeds' big investors are banks - Schroders, UBS Warburg and Jupiter Asset Management. Even so, the club mortgaged their future by taking out a 25-year bond worth almost US$100 million to buy the glory team. 

Those banks, owning a quarter of the Leeds shares, appear to have blessed the spending spree overseen by Peter Ridsdale, the club's chairman and chief executive. Ridsdale came from clothing manufacturing and sales into the whimsical world of football. 

He identified, and backed to the hilt, a young manager, David O'Leary. Ridsdale had supported the team for 40 years. O'Leary had been a magnificent player, a defender for 20 years at Arsenal. They shared a dream. 

Their formula was simple. Ridsdale would raise the millions. O'Leary would spend the money on players he was sure would sustain this club in the Champions League year after year. 

In the beginning, it worked. The young Leeds warriors disturbed the European elite, rushing, charging, kicking and scoring their way to the Champions League semi-final three years ago. Maybe O'Leary was, as Ridsdale regularly broadcast, the brightest young manager in the game. 

We shall probably never know. Indiscipline cost Leeds dear. Four players became embroiled in a night of drunkenness that ended with an Asian student kicked almost to death and led to court appearances by two of the team's pivotal players: Lee Bowyer, who was acquitted, and Jonathan Woodgate, who was sentenced to community work. 

Perhaps not even the most experienced of coaches could have managed that situation. To compound it, O'Leary wrote a book for his personal profit on the “trial” of Leeds United.  

Ultimately, the garrulous Irish manager lost the respect and trust of the team. He was dismissed by Ridsdale. On Monday, the club and the former manager finally settled after an unholy legal wrangle over the US$4 million outstanding on O'Leary's contract. 

By the start of this season, the shareholders demanded returns on their investment. The marriage between sport and hard-nosed investors is at best an unstable relationship. 

Soon, Ridsdale was obliged to retract on the glowing promises he made to lure Terry Venables, a former England coach, out of football retirement and away from his lucrative role as a TV pundit. Together, went the song of the terraces, “Publicity Pete” (Ridsdale) and Terry the Messiah, would take Leeds back to where they think they belong – the Champions League. 

Venables felt he had inherited a squad to win the Premiership. He accepted that he had to sell Rio Ferdinand to Manchester United after a US$47 million offer, but believed this would be the final sale of the season. Venables professes to be a businessman as well as a football man, yet he somehow imagined that the club he was joining could manage debts that had reached US$120 million. 

He started off on the wrong foot. Venables' charm did not immediately excite the team. They played so poorly from August to December that the fans sang: “Terry, Terry, time to go.” 

They have now changed their tune. Now the butt is “Pathetic Pete,” renamed for his withdrawal from the limelight and his sale of five more players this season. 

Now the banners read: “LUFC not PLC” - Leeds United Football Club, not public limited company. 

The fans feel betrayed. Venables feels deceived. The departures that rip the heart out of the squad are Bowyer, Woodgate, Robbie Fowler, Robbie Keane and Olivier Dacourt. The money helps Leeds to service their interest payments and reduces the debt by perhaps half, given that it is often difficult to discover actual transfer fees. 

One player, Alan Smith, a Leeds-born striker, seeks to pledge himself to the remnants of the team, provided the club redistribute some of their recent income to him at the rate of US$64,000 a week for the next three and a half years. 

His demands are roughly equivalent to the salary Venables draws, and Venables has just announced he will not carry through his threat to quit. 

The club swirl in deep and dangerous passions. 

Ridsdale may not hold onto his role as chief executive for long. His eyes are ringed by dark shadows, his life has apparently been threatened, and he requires three bodyguards to go about his daily business. 

Leeds are no longer on the European map. Their stock is down, and their attempt at running with the Reals was not helped by subjecting itself to the principles - or lack of them - of the stock exchange. – IHT 

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