By Michael Lynch
June 3 2010

(Part 2)

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Leeds' rise & fall... (and subsequent rising?)

Every club can look at United with a sense of envy. Indeed, many have tried to emulate their achievements. In 1998 Leeds United announced that David O’Leary was to replace outgoing George Graham as their manager. This man would assemble a squad that would finish in 3rd place in the Premiership and secure them a shot at lifting the UEFA Champions League trophy. But how did Leeds United manage to achieve such a feat?

Financial irresponsibility marred the clubs progress. They were running at a loss. Desperate that the clubs on the pitch fortunes would in turn provide the club with increased sources of revenue and that they could turn this into profit. It didn’t. Following their defeat in the 2001 Champions League semi-final vs Valencia, fortunes changed for the Yorkshire club.

Leeds had taken out catastrophic loans against the revenue that they had hoped would be generated from Champions League television rights. However they failed to qualify for Europe the following season, missing out to Newcastle United. As a consequence Leeds were in big trouble and not even the sale of Rio Ferdinand to Manchester United for £30 million could ease the clubs debts.

Following the club's going into administration and the deduction of ten points from their tally, Leeds United were eventually relegated to the third tier of English football. It had taken them until 2010 to finally gain promotion back to the Championship.

Since Leeds set the precedent many other clubs have emulated their bad practice. Since Clubs such as Leicester City, Crystal Palace and Wimbledon (MK Dons) have all entered administration due to their woes. After being served winding up orders, these clubs are somehow able to avoid liquidation and are seemingly given special treatment by HMRC which no other company would. Crystal Palace have even refused to sell their assets.

Many have suggested that ten point penalty which is imposed by the Football League when a team enters administration is simply not enough, that this does nothing to encourage clubs taking a gamble and spending beyond their means and thus preventing clubs which are run in a legitimate and fair way the chance to compete. Spend a couple of years in the division below if it all implodes and it’s forgotten about it seems.

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