Highs and lows of the beautiful game

Jan 4 2010 by Andrew Mernin, The Journal

WORKING as a football chairman brings mass criticism, impossible financial targets and the fire of media snipers from every angle, so why do it? Andrew Mernin talks to Gerald Krasner, an insolvency expert who has done it twice and would do it again given half the chance.

FOR most fans, football is still a beautiful game, it still evokes memories of childhood heroes bursting the net and it is still a religion with gods that must be worshipped.

But for those who have delved into its financial underbelly and witnessed the money machine that drives it, it is a harsh habitat where cash – above all else – is king.

“Football is unlike any other business. It does not obey the law of the land and it does not obey the laws of physics,” says Gerald Krasner, a man who has twice risked wealth and reputation by buying into the working man’s game.

Today he is one of the most prominent figures in the North East’s financial world, but not so long ago he was thrust into the media glare as he battled to stop one of the most dramatic falls from grace football has seen in recent decades.

Krasner leads Begbies Traynor’s team of insolvency practitioners in the North East and two years ago he merged the insolvency practice of Bartfields (UK) Ltd with Begbies Traynor.

But he is perhaps most famous for his brief but eventful spell as chairman of Leeds United at a time when the club owed in excess of £100m.

Krasner had been a Leeds fan for more than 40 years and refused to stand back and watch as the club’s overspending pushed it closer to the brink of disaster.

As part of a consortium, he took over the club for a nominal fee in 2004, saving it from almost certain administration.

“Mr Ridsdale (the Leeds chairman at the time) had spent a bit too much money and they were in £103m in debt.

“Someone told me that Leeds were going to go bust and there was nothing that could be done, but I’m a bit stubborn that way, so together with some clients, I bought the club and we reduced the debt to £22m.

“Then we started doing deals with people and paying them off. I remember my first match as chairman was Manchester City at home and we won one-nil. I thought about whether I should resign and become the first chairman of a Premier League team never to lose a match but I decided to follow it through.”

And follow it through he did, through an incredibly steep learning curve and into a world which, according to Krasner, is rarely so much as glimpsed by the majority of football fans.

“We started doing deals with people. We sold quite a few players to Newcastle in Jonathan Woodgate, James Milner and Lee Bowyer and we also sold Mark Viduka to Middlesbrough.

“I think 85% of the fans gave us a chance but with the other 15%, it didn’t matter what we did. If I’d listened to the fans we’d have had 22 managers and 105 players.

“To me, football is like an iceberg. The fans and the public only see one-tenth of what’s going on.”

Despite his best efforts, Krasner was unable to prevent Leeds United hitting the almighty iceberg of relegation as the one-time Champions League club was sunk out of the top flight. And, after Krasner’s reign ended with the sale of the club to Ken Bates in 2005, Leeds eventually did go into administration, with a 10-point penalty and another relegation to football’s third tier.

However, the adopted North Easterner has no regrets about his tenure in the Yorkshire hotseat.

“How can I have any regrets? How many people can say they’ve been the chairman of the team they’ve supported all their life? I couldn’t be a fan as a chairman. I had to take that hat off and be serious about what was going on.

“But I’ve done that all my life – you have to detach yourself from problems when you are dealing with insolvency.”

Fortunately, Krasner’s experience in the cut-throat world of football finance has not dampened his love of the game, or his favourite team, although he is now unable to visit his spiritual home.

A lengthy dispute with the current Leeds chairman Ken Bates – which involves claim, counter-claim and ongoing court cases – means he is not allowed on Elland Road territory.

In fact, his only recent visit to the stadium came in his second and last football role at Bournemouth FC.