How Bates Took Over Leeds

Last updated : 05 February 2005 By Kevin Markey

'I had arrived early for our lunchtime appointment and found Bates tidying up faxes that kept being spewed from his machine. I hoped they might have some great secrets of Leeds but Bates, picking one up, said: "They are about the investment fund I am running. I am doing very well as fund manager."'

'Bates had asked me: "What do you want Italian or French?" The curious thing about Monte Carlo is that while it is in France it is difficult to get French food and most of the restaurants are Italian. I chose Italian, the restaurant just round the corner from his house, but this presented a problem and an opportunity for Bates to pose as the outraged of Monte Carlo.'

'"What do you mean I can't get my favourite table? It is that Roger Moore. He has nicked it again, has he? He is always nicking it?"'

'In fact, the restaurant was deserted and the only thing that interrupted our meal was the passing parade of expatriate Englishmen, not Roger Moore, who all seemed to know Bates and who he seemed to have known for years.'

'In between these visitors Bates started telling me how, in another restaurant in London three weeks ago, his Leeds adventure began. "I was in the Italian bar of the Dorchester having a drink with Ashraf Marwan [a former shareholder in Chelsea] when my old friend, John Owen, walked in. I have known John for 30 years since his nightclub days in Dublin. He said: `Ken, I have got this guy coming who would like to meet you.' So when Marwan had gone I met Sebastian Sainsbury. He said he was trying to get a consortium together. I said I had got £10 million but I wanted control and I wanted to know who the others were. He said, `That is confidential, I can't tell you'. I said I wasn't giving £10 million to an unknown bunch. That was it."'

'The next day Gerald Krasner, the Leeds chairman, called Sainsbury's bluff and the day after that Owen rang Bates and said: "Sainsbury is out of the way if you are satisfied with it have a go." Bates said: "OK let's get together and John made the call to Krasner."'

'On Monday, Jan 17, Krasner and fellow director Melvyn Levy met Bates at the London offices of Bates's lawyer and, two days later, Bates set off for Yorkshire in what he describes as "a cloak and dagger operation".'

'"We get off the train at Wakefield, get into this BMW and are driven into the underground car park at the Leeds lawyer's office. Then through the trade entrance and into the office where we have a meeting for nine hours. Then we are driven to a hotel called 42 The Calls. The Leeds lawyer checks me in, the room being booked in his name and nobody has seen me enter the hotel.'

'"Trevor Birch comes up to my suite to have dinner. I go into the bedroom. Evonne [Todd, his Chelsea financial controller who has assumed the same position at Leeds] has come up, she orders the food and I stay in the bedroom and talk to Trevor.'

'"Next morning this guy picks up my bags, pays and we head for the cars and back to the lawyer's office without anyone noticing I was in the hotel."'

'In the table in front of him Bates had arranged his two mobile phones and, as he spoke, one or the other would ring and Bates would give orders to Leeds. To one caller he said: "Give me a list of all the wines we buy and from whom. I may be able to find a dealer who provides better wine at a cheaper cost."'

'Bates quickly worked out the Leeds debt was not as bad as reported. "They had £17 million of debt, £4.5 million were loans by directors and I said I wasn't paying that back. I said to leave it for 10 years and we did a deal for four years."'

'That brought the debt down to £12.5 milion. Of that, £4.8 million was owed to the Inland Revenue and VAT combined. The Leeds board had got the taxman to accept that £3.5 million of this would be paid back over 2½ years but £1.2 million of this had been due since December and the Inland Revenue could call it in in seven days. If Leeds did not pay they could put the club into receivership.'

'This left around £8 million owed mainly to former players and managers such as David O'Leary and Peter Reid. Bates concluded that this was "very reasonable". Within hours of his takeover he was seeking deals on this debt and told me: "We are negotiating with players and their agents for rebates. They all have the interest of Leeds at heart."'

'Bates offered the existing directors £80,000 for their shares, although for complicated financial reasons they sold only 50 per cent of them for £40,000. Not that they were bought by Bates in his own name. Instead they are now owned by the Geneva-based Forward Sports Foundation.'

'It was when I asked Bates about his connection with the fund that he got more coy. "It is a fund which I advise," he said before adding with a smile, "says he with dilated nostrils."'

'I persisted: "Technically you are not an owner of Leeds, merely an adviser?" Bates replied: " Well let's not get into that. We shall leave it for that is clearly machiavellian." And with that he burst into loud laughter.'

'The Foundation have paid Leeds a total of £4.9 million either for the shares or in loans and although Bates has been in control for barely a week he is already wheeling and dealing.'

'Goalkeeper Scott Carson was sold to Liverpool for £1 million and Kevin Blackwell, the manager, has released, says Bates, "five kids" to save £50,000.'

'Bates added: "He [Blackwell] also sold [Andrew] Keogh to Bury for £50,00 and saved £100,000 in wages. Since this is not money in our budget we can use it to try and pay off other debts. We haven't got any money but things are under control."'

'Bates has no intention of leaving his Monte Carlo home. "I've done a deal with a lovely local jet plane service. Leave here at 8am on Wednesday, get to Bradford-Leeds airport by 9.30. I will be at Leeds at 10, work Wednesday, Thursday, Friday and Saturday and get the plane back at 7 o'clock, 11 o'clock back here in time for last orders at the pub, crash out on Sunday. I will be in Leeds for four days but have spent only two days in the country."'

'As a tax exile he can spend only 90 full days per year in the country and he will only go to home matches.'

'He has also arranged to stay in a little Yorkshire hotel. "It was originally for wealthy mill-owners, on a hill. I can see the new stand from my hotel suite," Bates added.'

'And, with all his arrangements complete, he is basking in the warmth of being back in the football family. He even received a fax last week from his old rival David Dein, vice-chairman of Arsenal. "Dear Ken," it read. "Welcome back to football. We have missed you. Let hostilities commence. Can we have lunch?"'

'As we left the restaurant a car pulled up and a man, lowering his window, shouted: "Ken, can you get me any tickets for Chelsea's Champions League match?"'

'"No tickets," Bates roared and then told me: "When you are in football everyone wants free tickets." Finally, as he bid me goodbye, he said: "There is a bus from here, just 45p, takes you all the way. Byedebye."'