KEN BATES HA HA HA

It was no surprise that Ken Bates was scathing of the Independent Arbitration Tribunal that last week systematically dismantled his arguments against the Football League’s fifteen-point “condition” on Leeds’ League One membership. The tribunal were scathing too. “No authority to act”; “Misconceived proceedings”; “No credible explanation nor convincing excuse for their unreasonable delay” said the report. Unfortunately for Bates, these comments referred to Leeds, not the League.

Little wonder he’s been so bullish, if misguided. His status as the biggest w***** in English football is coming under domestic (John Batchelor, Keith Haslam, Rupert Lowe, Richard Scudamore) and overseas (Tom Hicks, Thaksin Shinawatra) threat. Calls for the resignations of League chairman Lord Mawhinney and his board for “totally disgraceful” behaviour are contemptible, even by Bates’ gutter standards. But these guys have set new standards.

Bates continually railed against Leeds ‘double’ punishment for entering administration last season, as soon as relegation to League One was otherwise assured, publishing his ludicrous ‘real’ League One table in the programme, with Leeds’ points deduction airbrushed in true Stalinist-manner. Even in response to the tribunal’s “unequivocal support” of the League, Bates was claiming “moral victory” – a first, surely, and a last, surely.

Bates claimed: “We have been penalised…for adhering to the League’s policy of paying all football creditors”; “the FA dragged their feet, we asked for arbitration for six months”; “the League admitted (we) did nothing wrong”; “we lost on a technicality”; “all the financial failures were down to previous administrations” and “my wife said: ‘we lost the battle but won the war.’”

In order, those statements are: untrue, untrue, laughably untrue, preposterously untrue, untrue (if Leeds accounts to June 2006, the only ones before administration, are to be believed) and…well, his wife’s probably biased (and her career as a military strategist should be put on hold). But even she must sometimes think: “Ooooh, Ken, not sure about that.” She’d certainly not read the tribunal’s report.

The story ran in the media as follows: Leeds entered administration last May and sought to pay off creditors via a ‘Company Voluntary Arrangement’ (CVA). They obtained the 75% support for their proposals required to allow them to start the new season, even though HM Revenue and Customs (HMRC) voted against them in protest at not receiving their money while ‘football’ creditors were paid, as required by law, in full. These included astronomically-paid players, most (in)famously Danny Mills, paid £216,666.68, even though he hadn’t donned a Leeds shirt since May 2003.

However, HMRC, owed £7.7m, mounted a legal challenge to the CVA and with their case not due in High Court until three weeks into the season, Leeds were unable to meet the League’s CVA requirements, ‘through no fault of their own’, and were deducted 15 points as a ‘penalty.’ Leeds sought to appeal but encountered obfuscation from the League and FA, only getting the ‘fair’ hearing they’d demanded by threatening High Court action.

Presented with documentary evidence from both sides, the Tribunal told a different story.

The least publicised aspect was the most fundamental. The Tribunal were concerned that “the (15-point deduction was described by the League Board as a ‘penalty’ and was understandably perceived to be so.” And for all Bates’ ‘proper’ league tables, Leeds agreed the deduction. League regulations require “that a new member should start the season in a lower league (here League Two).” Administrators KPMG had sold Leeds to Bates’ “rich and powerful consortium” after the CVA failed and their new company was the ‘new member.’ But “Leeds wanted to avoid this ‘relegation’ and was prepared to pay a price.” That price was 15 points.

Bates expressed “surprise and concern…in blunt and direct terms” to Mawhinney (you can imagine the language). But his own Chief Executive Shaun Harvey and his own solicitor Mark Taylor agreed the deduction at a meeting with the league prior to the season’s start. So he can’t have been that surprised.

The notion that Leeds were ‘punished’ for obeying the League’s ‘football creditors’ rule’ is equally…er…’misleading’ (don’t know the legalese for total b******s, sorry).

HMRC have voted against football-related CVAs as policy since the 2003 Companies Act reduced them to unsecured creditors, scrabbling for scraps after football people took their full share. They tried the High Court route in 2004, when Milton Keynes-based “””Wimbledon””” tried to exit administration. But their challenge to the football creditors rule was dismissed.

Their challenge to Leeds CVA was specific to Leeds’ case. Guardian journalists Matt Scott and David Conn had asked: “Why did (Leeds) owe their own company Yorkshire Radio, of which Bates and Taylor are also directors, £480,000, and why was this…revealed only at the creditors’ meeting?” HMRC were equally puzzled, also wondering why ‘Mark Taylor and Co’ (Bates’ solicitors) upped their claim by £213, 859.32 at the last minute. This, purely co-incidentally, allowed the CVA to pass by the skin of some poorly-enamelled teeth. Bates paid creditors 52.9p in the £. One assumes Taylor received his extra £113,131.53.

HMRC didn’t take Leeds’ case to court ‘just because they lost’ over the football creditors’ rule. So Leeds weren’t punished for obeying it, whatever Bates claimed.

Bates claimed that the League were only forced into arbitration by threat of High Court action. The Tribunal disagreed: “Leeds was in the same position in August as…in March when it finally commenced arbitration proceedings…there was no reason why they could not commence arbitration proceedings (in August).

Bates claimed Leeds did nothing wrong. The Tribunal disagreed: “(Court) proceedings were issued by Leeds and Barnsley…against the League…there was a delay of five weeks” while it was established that Barnsley “did not…lend its name to proceedings…(the delay was) primarily due to the misconceived proceedings commenced by (Leeds) solicitors and their conduct of them.” Nothing wrong there, then.

Bates would have been wise not to blame Leeds ex-directors again for current financial problems. So, naturally, he did. Not connected to the Tribunal, just another clumsy attempt to mask his own failings. Elmet MP Colin Burgon said Bates “assured fans that the corner was turned financially.” And the club’s 2006 accounts showed only £12m ‘due within one year” – the debt hung-over from previous administrations - not the £35.5m debt which forced them into administration. Bates would have been wise not to write in Leeds’ programme: “Any financial mismanagement is the responsibility of…Ridsdale and Krasner.” So, naturally, he did.

Bates claimed Leeds lost on a technicality, i.e.: “agreeing to the…deduction” and promising “not to bring the claims it has now sought to assert.” A club statement claimed: “We had no option…(otherwise) the club would have been lost forever.” The Tribunal…yep… disagreed: “Normally (Leeds would have been) required to start the season in League Two.” Hardly ‘lost forever’, even if you concur with Boston United fans in the 1980s: “When I die I’ll go to heaven because I’ve already been to Macclesfield.”

The club statement equated criticisms of Leeds, which peppered the report (highlighting them in red makes the report resemble Doncaster’s home-kit), with criticisms of the league, which amounted to less than half the postscript: “The Board should be astute NOT to think in terms of a ‘penalty’ “ (like Mike Riley, then), the Tribunal preferring “condition” and, wait for it,…”indulgence.” (Bates wrote to League clubs, calling the deduction a “sanction” - a ‘penalty for breaking the rules’ – arguing that Leeds hadn’t broken any. We now know that he knew different even then. Which needs no further comment).

Bates claimed the appeal to League clubs was fatally flawed by self-interest. The Tribunal…agreed! : “We consider (such) an Appeal…unsatisfactory (due to) understandable self-interest.” So, there IS always one. Nonetheless, two-thirds of League clubs – from Championship and League Two – had no self-interest in Leeds’ fortunes. Indeed, League Two clubs could have benefited from increased gate receipts from Leeds matches. But the issue wasn’t tested as, whatever the appeals process, the original decision was right.

Burgon asked Mawhinney: “Why should fans suffer for the actions of Ken Bates?” It remains the underpinning question. Some fans’ comments on the report have verged on the ridiculous, proclaiming either ‘victory!’ or ‘vendetta!’ The Yorkshire Evening Post’s account rendered the report itself a huge surprise.

Yet fans may not suffer, if Leeds win promotion via play-offs rather than the second-place the deduction cost them, something which, collectively, the fans deserve. The Independent wrote: “The deduction effectively condemns Leeds to at least two seasons in League One.” Maybe not, thanks to Gus Poyet and, late on, Gary McAllister – an achievement to dwarf those of many a ‘manager of the year.’

Bates was ultimately right, however. Not the offensive rubbish about serving “poetic justice” on Gillingham, for publicly supporting the deduction, by relegating them (eliciting sympathy for Gills chairman Paul Scally surely ranks high among Bates’ achievements). Nor the Bates version of ‘we know where you live’: “Leeds have long memories…we’ll remember those clubs who may want help in the future.”

But the chairman and his board resigning over their “disgraceful behaviour”? That rings true - referring to Leeds, not the League.

‘MotorMurph’ is written by Mark Murphy

Entry Filed under: MotorMurph Column

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