From Bad to Worse

The news just keeps get­ting worse for Leeds United Foot­ball Club (LUFC). The club has called in admin­is­tra­tors and is fac­ing a major finan­cial cri­sis. LUFC had made a pub­lic appeal for would-be investors to con­tact the club as a last-gasp chance to stave off admin­is­tra­tion. With a Sup­port­ers Trust in place it looked as if the club was going to be spared but that deal has fallen apart for rea­sons that are cur­rently unknown.

By Foot­ball League rules, enter­ing admin­is­tra­tion means that LUFC are auto­mat­i­cally docked 10 league points. The deci­sion to go into admin­is­tra­tion dur­ing the cur­rent sea­son will mean that LUFC will be docked 10 points now while the team is still in the Cham­pi­onship, rather than when it started next sea­son in League One.

LUFC has been strug­gling with its finances in recent years and rel­e­ga­tion from the Cham­pi­onship will cer­tainly eat into earn­ings for the com­ing year. The club had already sold its Elland Road home ground and its Thorp Arch train­ing ground to cover pre­vi­ous cash short­falls. The fact that con­tracts for a num­ber of high-price play­ers run out this sum­mer also means that the club will run short of valu­able assets later this year. Enter­ing admin­is­tra­tion gives the club a chance to restruc­ture and clear off debts. LUFC would then be a more attrac­tive invest­ment and takeover tar­get because any new owner would not have to take on its entire debt burden.

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