Fan ownership. It’s nothing new.
A lesson from Leeds United's history
The fan led review about club ownership is heralded as a new pathway for English football. It may surprise many supporters that the great Leeds club that dominated English football for over a decade had no major shareholders. In fact, it was controlled by 970 shareholders stemming from the collapse of Leeds City, when shares were sold door to door, in the inner-city areas of Holbeck and Beeston which surround the Elland Road ground, to finance the launch of Leeds United.
Don Revie is inextricably linked with the parsimonious multi-millionaire Chairman, Manny Cussins. The joint heads of a seemingly well-oiled machine. The reality was that this was a far from harmonious relationship. Manny, however, only held 414 shares in the club, some 2% of the share capital. Don himself was, unusually, also a shareholder.
In 1980, Richard Hainsworth of The Yorkshire Evening Post investigated the shareholdings of Leeds United in the Revie Era, dispelling the widely held myth that the directors owned the club and milked its profits for their benefit. The reality was a shock. The directors and their spouses only held 2966 shares, less than 15% of the issued share capital. The Club Secretary at the time, Keith Archer, valued each share at 12.5p;
- Manny Cussins of Sandmoor Court LS17 owned 414 Shares valued at £51.75
- Mr Crowther of Blackpool owned 800 shares valued at £128.13
- Bob Roberts of the Drive Adel owned 445 shares valued at £55.63
- Harry Reynolds of Hough Top owned 373 shares valued at £46.62
- Percy Woodward of Collingham owned 709 shares valued at £88.63
Not one of the directors could claim to be even a major shareholder;
- Sam Bolton’s family held 1640 shares with a club valuation of £205
- Tetley’s held 1450 shares valued at £175.63
- Yorkshire Post Newspapers and John Smiths brewery both held 1000 shares with a value of £125
No shareholder owned more than 10% of the club; this dilution of the shares made the directors holdings virtually worthless. Financially they were incentivised by the value and profits of their own business interests not that of Leeds United.
Manny Cussins owned Waring and Gillows and John Peters, the 4th largest furniture retailers in the UK, Arncliffe Holdings (Builders) 38 Tailoring shops in Scotland, and 11 Clothing factories. Cussins had an ambiguous relationship with football. Jimmy Armfield describes a trip to Glasgow to watch four Leeds players in the Scotland v England match. Cussins woke a surprised Armfield at 7 am to visit and buy two factories but didn’t want to watch the game. His passion was business, football opened doors for him, it gave him real prestige, but it wasn’t a priority.
Surprisingly as history has linked the two together, Cussins hated Don Revie. He never came to terms with an employee telling him how Leeds United should be run. Indeed, he said to Tony Francis in Clough's biography (p138)’I liked (Clough) him a lot. In fact, I preferred him to Don Revie’.
The Leeds Other Paper tapped into the views of many Leeds supporters about Cussins. Their ‘wheeler dealer column’ featured many stories about his business practices always introduced by Cussins introductory stock phrase of ‘I’m the Chairman of Leeds United’.
One of the stories they ran was of an ambitious junior employee of Cussins using his initiative to wash Cussins’ car on a visit to one of his stores. Cussins, impressed, tipped a fiver, but immediately accused the Store Manager of overstaffing and the young man was sacked.
Although Cussins used the club to boost his reputation, some director’s businesses benefited directly from their involvement in the club. Joe Jordan in his autobiography (p127) claimed that Bob Roberts firm had rebuilt the ground, including the 500k South Stand, whilst opposing testimonials for players.
The counter narrative to this was that the Directors had lent the Club vast sums of money. Richard Sutcliffe in Revies biography (p69) claimed that Manny Cussins and Albert Morris had granted interest free loans of £10k and Harry Reynolds £50k. If correct these were more than adequately supported by huge profits the Club was making, for example £138k in 1967 and £172k in 1971. The accounts in 1967 showed, however, that there were no directors’ loans outstanding, and it is likely that the loans were actually guarantor amounts with the club’s bankers. Peter Lorimer, who at the time was himself a Director, claimed that in 1974 the club had the incredible sum of £2m in the bank (the English Transfer Record at the time was £350k) and that the club was so structured that two home games covered the players wages for a season.
The commonly held belief amongst supporters was that directors were personally benefiting from the clubs success. However, the lack of shareholding meant that there were no large dividend pay-outs, the last dividend was in 1931, but perhaps the benefits came in less tangible ways. Certainly, rumours were widespread that many of the tickets for the 1975 European Cup Final ended up in the hands of the Directors friends and business associates. Carol Parkinson letter to The YEP reflected this view. She provided evidence that she had spent, in today’s money, the equivalent of £3200 following the club over the season and still could not get a ticket. She bemoaned,
‘I hate United now, the directors anyway’.
Undoubtedly, there was a ‘special allocation’ distributed at the Directors discretion.
Despite the lack of a meaningful shareholding this was one of the many benefits in being a director and being closely connected to the club. Prestige in the local community, association with success, personal ego and doors being opened for business accrued to the Board and their associates were others. Despite the broad base of the shareholding, it did not encourage ordinary shareholders involvement in running the club, perhaps a practical lesson for those that believe an extension of share ownership is the panacea to cure the ills of modern football.
The lack of dividends meant that the shareholding was very stable. Hainsworth reports ‘There is no open market in the shares and the directors try to veto any sales’. They were able to do this by virtue of Article 33 of the Articles of Association, but they had to ‘act in the interests of the club’. A grab of shares was contested by the directors when they vetoed the sale of shares from a Probate Estate at 9 times the market value to an interested buyer. They were forced to back down when challenged by the Solicitors acting for the Estate.
Mark Twain said that ‘there is no such thing as an original idea’ and the Crouch Review demonstrates this. Leeds United had fan ownership and there was success on pitch, but manifest problems off it. The historic lessons of certain shareholders drawing benefit, prestige, ego, status and indeed tickets from an association with the club are perhaps considerations that modern supporters should be wary of. No shareholder owned more than 10% of the club; this dilution of the shares made the directors holdings virtually worthless. Financially they were incentivised by the value and profits of their own business interests not that of Leeds United.
Clive Miers
Leeds United Supporters Network
