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NOTE: PROJECT OFFSIDE
19 FEBRUARY 2013

INTRODUCTION
We reviewed GFH Capitals Leeds United Football Club (LUFC) acquisition contract and extracted relevant
warranties which we used as a basis for our enquiries. These included issues relating to:

Players & staff;

Disputes and investigations, intellectual property and data protection;
Financial health of the club;
Infrastructure condition/health and safety; and
Suppliers

In addition, our enquiries also highlighted four separate issues, which we have detailed in this filenote. These
include views on the Chairman Ken Bates, the Yorkshire consortium bid, the leaks of information and vteh
clubs relationship with the Leeds City Council.
Our findings are detailed in the following sections.
WARRANTIES

PLAYERS & STAFF

Our enquiries did not highlight any indication of problems between players and the club or any litigation
involving current or former football staff.

Players contracts
The head of payroll and HR for the club believed that several players contracts were not negotiated well, which
resulted in the players still being paid by the club following the termination of their contracts. For instance,
Honduran midfielder Ramn Nez (whose contract was terminated on 29 January 2013) is owed payments
totalling 471,000 until October 2015. Payroll documents we saw confirmed this.
We understand that the majority of these payments are due to cease within the next six months.

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DISPUTES AND INVESTIGATIONS, INTELLECTUAL PROPERTY AND DATA PROTECTION

Our enquiries did not reveal the existence of on-going litigation against the club or Ken Bates (KB). However,
a senior member of the clubs administrative staff stated that she believed that there were still a number of
unspecified on-going cases against the club, brought by members of the Jewish community: KB has totally

alienated the whole of the Jewish community in Leeds. They used to be quite big spenders at the club, but I
have met some Jewish people in Leeds recently who have all told me they are not willing to spend another
penny on the club while KB is still there. I think there are still some current court cases outstanding against
him and the club, but nobody is told anything about this.
The same source further stated that KB told me that it was in the contract that GFH had agreed to take on any
outstanding litigation or claims against the club.

IP infringements
A numbers of employees at the club stated that combating infringement of the clubs intellectual property
remained a constant battle. This mostly involved tackling the sale of counterfeit Leeds United-branded goods
and the illegal streaming of content from Yorkshire Radio and LUTV.
The director of the clubs retail department stated that: there is not any litigation regarding counterfeit goods

at present and Ive not been aware of any nor have I heard of any pending court cases. We employ a private
detective to find instances of fake goods and normally a cease and desist letter is more than enough to stop
production of the goods, he said.
The director of LUFCs in-house radio station, Yorkshire Radio, stated that illegal streaming of content from
the station and LUTV was hard to detect sometimes but that more time could be spent on this. We monitor

Twitter feeds and other social networking sites for notice of illegal streams, but this takes a long time and we
probably miss some.
A manager in the clubs marketing department did say that IP guidelines were out-of-date and required a
complete refresh. The guidelines havent been updated for around twelve years and are not fit for purpose.

This doesnt help us with trying to combat brand infringement, of which there is a lot. We need more money to
be able to spend time on refreshing the guidelines or to hire extra staff to do this. When the guidelines are
improved we can then get on with improving our marketing to fans, as I think fans are quite disengaged with
the club at the moment.
FINANCIAL HEALTH OF THE CLUB
A recurring theme in conversations regarding LUFCs financial health is that, although the club is currently
successful as a revenue-generating entity, more investment in players is needed to achieve promotion to the
Premiership. This feeling is evident amongst staff, as well as across online fan forums and local media, as
promotion would result in higher attendance figures on match days and higher revenues from television rights.

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We were also told that four supplier companies to the club had refused to deal with LUFC as they were owed
payment for work completed. This is detailed further in section 1.5.

Facilities budget
The facilities manager at the club expressed concern that an adequate budget for repairs and maintenance of
club facilities had not been allocated or managed: Im not sure where the facilities and repair budget comes

from its a very strange setup. There are many things that need to be fixed at both Elland Road and Thorp
Arch but the money just isnt there. No other source commented on this issue.
Museum
Plans for a LUFC museum to be built on the stadium grounds were first explored in the first half of 2011. A
dedicated member of staff was hired to manage and develop the project. Since then, the museum project has
not progressed. Whilst space in the stadium has been allocated to it, a tour of the site with the clubs health and
safety manager revealed that little work had been carried out so far and the area allocated for the museum is
effectively a building site. Several members of staff stated that the project was a white elephant and that it was
a real shame for the museum manager, Helen Castle, as she receives very little support in her initiative. It
seems like shes banging her head against a brick wall, sources said.
The museum manager confirmed to us directly that funding for the project was being actively sought through
various lottery and charitable schemes, and that funding had not been forthcoming from the club. She
appeared reluctant to say anything overtly negative about the club, but gave no positive feedback on her
experiences since joining the organisation.

INFRASTRUCTURE CONDITION/HEALTH
CONDITION/HEALTH AND SAFETY
The physical condition of the clubs premises and training facility at Thorp Arch were described by numerous
sources as being very good. Indeed, the Director of Commercial Affairs and an employee in the merchandise
department both described the facilities as Premier League facilities owned by a Championship club.
However, enquiries indicated a number of on-going incidents which are/could be damming for the club in the
future.

West Stand roof and other improvements

The facilities manager stated that approximately five years ago a tile in the West Stand roof fell out, narrowly
missing a spectator. He stated: had this hit the guy, it would have caused serious damage as it was asbestos
cement. The employee stated that the club had not provided budget for fixing this properly: instead of fixing

the problem, they only agreed to install a net under the roof of the stand to catch any other pieces that might
fall in the future. Nothing else has been done on this since.
The facilities manager also stated that it had been difficult to push forward necessary repairs and
improvements due to a lack of action from the clubs management. In his view, Shaun Harvey and Ken Bates

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tend to just sweep things under the carpet. Nothing ever seems to get done, even with problems that have been
in existence for a long time. We just seem to keep plodding along as always. We have also wasted a lot of
money on things we just dont need the prime example being the heating for the indoor astroturf pitch at
Thorp Arch they decided to install gas heaters, which arent used but still need a lot of money to maintain.
Ventilation systems
The facilities manager also stated that the ventilation and cooling systems in the club shop were run on R22
gas, which he stated shouldnt technically be used any more, as its become illegal. It is still technically legal
to use recycled R22 gas in air conditioning systems, and will be until December 2014, but using virgin R22 gas
has been illegal since 1 January 2010.1 The employee did not specify whether virgin or recycled gas was being
used, but he did indicate that he had tried to change the ventilation system with no success so far.

Security screening
An employee in the sales department expressed doubts about the security screening procedure for away fans
entering the stadium. She stated that at the Leeds United v Chelsea match on 19 December 2012 there were

flares being thrown onto the pitch and I think at the home fans. I saw three separate ones being thrown.
Children were being dragged out of the stands by their parents due to it being dangerous. I dont think the
security staff had patted people down properly.
This was further probed with the manager for ticketing and match-day operations, who confirmed that away

fans are only randomly patted down and searched before entry to the stadium, not everyone is searched and
there are no security scanners in place.
Electricity testing
According to the facilities manager, mandatory testing of electrical systems (which should occur every five
years) had been late at Elland Road stadium but had now been completed. However, he stated that testing at
Thorp Arch was now overdue.

Food safety
The head of catering (employed directly by the club but who oversees Compasss operations) stated to us that
LUFC had never been involved in any incidents concerning food safety. He stated: we are spot checked by the

Food Standards Agency around twice a year and sometimes we only get four out of five stars due to various
minor infringements of rules, although none connected with actual food safety or hygiene issues. We have
never had any major problems and certainly no litigation or complaints. We do receive complaints from time to
time, but these are mostly trivial in nature and are easily resolved.
We asked to see some examples of complaints received by the club, and these were all minor issues and had
been resolved by either a letter in reply or a personal meeting with the individual complainant.
1

See EC Regulation no. 2037/2000.

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Health and safety regime at LUFC

The health and safety (H&S) manager at LUFC is extremely enthusiastic about his position and about
promoting a good H&S regime at the club, something which is frequently made fun of by other staff at LUFC.
He clearly felt proud of the systems he implemented at the club since he joined three years ago. Of all the

people who come onto the site, less than 1% have any sort of accident or mishap. Auditors have commented on
the good H&S procedures at Elland Road and I have never had to discipline anyone here for not wearing
correct protective equipment. I keep an accident log which is publicly displayed for everyone to see, he said.
One negative point put forward by this source was that the East Stand was the only part of the stadium to have
a backup generator. The only generator to cover for a power shortage is in the East Stand, no other parts of the

stadium have a source of backup power and this could potentially affect the H&S environment here.
SUPPLIERS
Non-payment of contractors and suppliers
The facilities manager stated on three separate occasions that four companies that had been carrying out
contractual work since pre-administration days were now refusing to work for the club due to non-payment of
work carried out during 2012.
Although he would not name specific companies, he stated that one is owed over 10,000 and has been

waiting for the money for months. Another company is the main provider of fire safety equipment and services
at Elland Road, so not having them on board is potentially dangerous.
Compass catering contract
Staff at the club was generally unaware of the reasons behind Compass taking on the conference and
banqueting contract at LUFC. Compass staff stated that they had all been previously employed by the club but
now had contracts under Compass. They seemed generally happy with this arrangement and offered no
negative criticism.
The head of catering stated that he had been on holiday when the new contract was announced, and said that
he was unaware of the reason that Compass had been chosen over other contractors. He stated that he had
been told by the chairman that Compass took over the catering due to the fact that 35% of our sales are alcohol

and the fact that an Islamic organisation is going to own the club means that we cant directly sell alcohol.
Therefore, we have to do everything through an external provider. He did not criticise the decision or KBs
involvement in any way.
He continued by stating that Compass often put profits before quality, something which he frequently
monitored. On numerous occasions I have caught them trying to use inferior quality meat which they can buy

at a cheaper price. We have used local butchers from around Yorkshire for years who supply excellent produce,

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but Compass constantly try to get the cheapest deal with the lowest quality meat. However, I suppose this is a
normal thing in business.
OTHER ISSUES OF NOTE

KEN BATES
Ken Bates (KB) is spoken of by many staff at the club as still being very much in charge. The vast majority of
information on him was provided to us by a senior member of the clubs administrative staff. Other staff
members were slightly more guarded in their description of the chairman, with the exception of a senior
marketing manager who described him as still a dictator-like figure.
A senior member of the clubs administrative staff told us that KB still considers himself to be running the club
and that there is a lot of negative feeling towards him amongst club staff: He is a narcissistic control freak. I

hope that when he finally finishes as Chairman he will disappear into the background and not be seen again!
This will be good for GFH, who he commonly refers to as GBH. When he arrived at the club he took away all
staff perks (such as season tickets, pensions and free health care), which has resulted in a huge disparity
between staff contracts. This was confirmed to us by the head of payroll at the club.
The source continued: KB never listens to staff or takes on their views. He and Shaun have pushed back

against the idea of any staff speaking directly to Salem or David about their ideas for the club, insisting that
everything has to go through them. He once told me directly that I should never ask Salem anything and that
he [KB] was still my boss and had power of authority over me.
On staff remuneration, the source commented: There is a lot of resentment between the staff, especially when

they see people like KB clocking up huge expenses bills. When you have grown men on 12,000 per year,
people wonder where all the money is going, especially as staff havent had any kind of pay rise for three years
now and no rise is on the horizon. KB always says he doesnt take a salary, but the money goes somewhere,
whereto, I dont know. [NAME REMOVED] works at the club but also with his personal accounts, which
[NAME REMOVED] administers from home. They have been friends for years, [NAME REMOVED] is besotted
with him and they often drink at lunchtime (and throughout the afternoon) together.
We also received allegations of racism against KB from the source, and understand you are aware of this side to
his character.
The senior member of the clubs administrative staff described KB as a huge racist with extremely bigoted
views. This goes back a long way he was invited to speak at an anti-racism event at Chelsea Football Club in
the mid-1990s. After turning up drunk and over an hour late, he proceeded to make a racist comment aimed at
the only black member of the audience, to which there was stunned silence and a number of people walked
out. This was never reported in the media.

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KBs wife, Suzanna, was also described by the source as holding the same views as him: she will be very nice

to peoples faces, but she is very much a controlling force in the background and you can often hear her telling
him to say things during telephone conversations.
The relationship between KB and Salem were not described as being good, and when KB was told a
representative would be spending time at the club he instructed the source to tell everyone that when they

speak to him they have to tell him they hate Salem and that they are really unhappy with him being involved
with the club.
Despite the majority of references to the chairman being negative or distinctly neutral in tone, some members
of staff did express their support for KB. A senior member of the clubs administrative staff stated that the
chairman has been fantastic for the club since he came on board and a senior conference and banqueting
employee (who also worked with KB at Chelsea) spoke of him in a positive light. The health and safety manager
at LUFC stated that Ken and his wife are both extremely nice people.

LEAKS OF INFORMATION
You indicated to us that you believe Gwyn Williams (GW), Technical Director at LUFC, has been leaking
information to Duncan Castles, a freelance sports journalist who has written numerous derogatory articles and
tweets about LUFC and GFH.
Suspicion of GW is shared by the head of media at LUFC, who stated: Gwyn Williams is the source of the

leak, Im certain of it. He is really the only one left who is close to Bates from the decision making team they
have been friends for years and I think Bates tells him everything.
When asked about the reasons behind his suspicion of GW, he replied: the only concrete thing I have to go off

is that a few years ago I was in a car with him and he was speaking to someone called Duncan about the club.
After this, information about the club started appearing on blogs and in press. This is all I have, but Im sure
he is the leak. I raised this with Shaun Harvey but was told to prove it and nothing more was done.
He described GW as an extremely divisive character, but I dont really want to say much more about him

youll have to make up your own mind when you meet him.
GW, in turn, was happy to talk in detail about his career history and achievements: I have made a heck of a lot
of money for this club and others in finding players and then selling them on for big profits I am definitely
worth my salary. I have to be here as sometimes the manager needs another pair of eyes to see which players
are actually going to benefit the club long-term.
When it came to his future prospects at the club, GW was more ambivalent: I work for management, not for

the owners of the club. Im not sure if this current manager is going to be here after the end of the season,
though. Likewise, if GFH dont want to keep me on, then so be it. Ive had more to do with Salem than I have
with David, and have advised Salem on what he should do for a player strategy in the future.

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No other staff at the club raised any suspicions about GW leaking information on the club to the press, and
several hold him in high regard.

YORKSHIREYORKSHIRE-BASED CONSORTIUM
As discussed, on 11 February 2013 a contact overheard a train passenger in standard class from London Kings
Cross to Leeds stating in numerous telephone conversations that he was buying Leeds United. In one
conversation he stated that he was being interviewed by Sky Sports at 1.30.. yeah, its for 51% with the option
to buy the other 49% later. No further details were given to any of the people he spoke to on the telephone and
no names were exchanged.
When speaking to one individual, the man repeatedly mentioned someone who was going to do him a
favour. He stated several times that the person providing the favour was important, and that we have to lay it
on thick for him, hes doing this for nothing so we need to lay on the birds and booze for him. The fact that
the favour was being done for no money was constantly repeated throughout the conversation.
At the end of journey, a fellow passenger who had been sitting opposite the man approached him, wished him
good luck and asked if he was a fan of LUFC or if he just saw it as an investment opportunity, to which he
received the curt reply both.
The mans destination was unclear, but he did state in one conversation that my uncle might pick me up from
Leeds station. He was aged around 35, 6 tall with short, black hair and spoke with a strong Yorkshire accent.
Aside from Adam Pearson (covered under separate work for you by us) you indicated that you had heard that a
company named Clipper Logistics was also interested in making an offer for a share in the club, and that it
could be part of the consortium. We note several mentions of Clippers possible involvement on fan forums
and in media.2 However, we have found no possible candidates who are either directors or employees of
Clipper Logistics at this stage that match the individual overheard on the train.
We have noted a specific reference to a further company rumoured to be in the position to invest in LUFC,
referred to as Premier Taxis in a forum,3 which we understand to be Premier Licensed Private Hire.4 The
company lists Andrew Philip Newdall5 and Christopher Robert Morrey6 as directors and joint shareholders.
The reference to this company could be linked to the fact that in 2006 Andrew Newdall was involved in a
previous bid to invest in the club.7

2
Examples may be seen at: http://silverfox.infopop.cc/eve/forums/a/tpc/f/2126055102/m/79820499073;
http://www.yorkshireeveningpost.co.uk/news/latest-news/top-stories/takeover-talk-back-on-agenda-at-leeds-united-1-5409935;
http://www.leedsrumours.co.uk/leeds-rumours.php.
3 http://www.leedsrumours.co.uk/leeds-rumours/leedsrumours11381.php;
4 Registered as New Fairdeal Licensed Private Hire Limited, Companies House number 05663855, incorporated 29 December
2005.
5 DOB 20 May 1968.
6 DOB 20 December 1962.
7 http://www.leedsunited-mad.co.uk/news/tmnw/bates_sceptical_of_new_investment_298441/index.shtml.

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RELATIONSHIP WITH LEEDS CITY COUNCIL

The employee in the sales department told us that the relationship between LUFC and Leeds City Council (the
Council) had historically been very bad, and was still strained. She stated that she had a friend who held a
senior position in the Sports and Leisure department of the Council, who told her that relations between the

club and the Council are dreadful and the majority of council members have no interest in being associated
with the club at all. This isnt helped by the fact that the majority of senior council figures are not from Leeds.
The general feeling is that the club has never done anything for the council, so the council is disinclined to help
the club in any way.
The same employee provided an example of alleged bad practice by LUFC towards the Council: a few years

ago the Council wanted to start a football training scheme for children and adults. They asked LUFC if its logo
could be used on promotional material for the scheme to try and bring relationships closer through the
scheme. Shaun [Harvey] and Ken Bates went back to them and said that the council could use the logo for a fee
of 30,000. This obviously annoyed a lot of people at the council and did nothing to improve relations.
We should note that no other employees of the club were able to provide any further information on this issue.

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Information contained in this report provides solely intelligence on the underlying issues and it is for the
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