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Volume 10 No. 25
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Leeds United Investor GFH Has 'Little Financial Fire Power'

Accounts of its Bahrain parent company Gulf Finance House show that the Dubai-based investment firm negotiating to takeover Championship club Leeds United, one of English football's most-famous clubs, "appears to have little financial fire power to complete the deal," according to Sa'Pinto, French & Weir of REUTERS. According to an internal document from '10 reviewed by Reuters and verified by four former insiders, the Bahrain company had "previously taken big fees from projects that rarely see completion." Dubai-based GFH Capital "is in exclusive talks to buy Leeds, which it estimates has a market value of around £52M ($83M)." However, the GFH group "had more than a quarter of a billion dollars of accumulated losses and less than $6M in cash at the end of June." Leeds Supporters' Trust Chair Gary Cooper said, "Words don't buy football clubs; Money buys football clubs. We would expect to see evidence of GFH's ability to fulfill their claims and promises in the very near future after the takeover." GFH Capital CEO David Haigh said that "his company had the resources to complete the transaction and buy new players, but gave no further details on the deal, citing a non-disclosure agreement during negotiations." GFH Capital said that "it can afford the investments to get the club back into the Premier League and buy back the stadium." The group's accounts "present a more more equivocal picture." After losing more than a billion dollars in '09 and '10, the group reported a profit of just $381,000 in '11 -- less than a month's pay for a top EPL player -- after "slashing staff costs and canceling staff bonuses already accounted for in previous financial statements" (REUTERS, 10/16).