Will Leeds takeover go ahead?

Running Leeds has given  Andrea Radrizzani status beyond anything he had known before. Prior to investing in 2017, he was an entrepreneur with little or no profile outside niche media circles. He liked the exposure and he liked the attention but, as predicted in certain quarters, he was missing from the stands for the game against Tottenham, conspicuously absent as Leeds gave up the ghost and went down.

Previously, his £45million investment in Leeds had risen tenfold to a level where the club were valued at half a billion pounds but at full time this afternoon, Premier League status was gone and so was that price tag. To all intents and purposes, the Radrizzani project has run its course. Leeds are back where they started.

From here, though, everything that happens will be shaped by Radrizzani’s next move. The offer of a takeover by minority partner 49ers Enterprises is still on the table, albeit at a significantly lower valuation. 

From the very beginning, though, Leeds needed Radrizzani’s cash. They were a loss-making club and at the height of their run to promotion, they were relying on him to plough in between £1million and £1.5million a month to cover operating costs.   Between 2019 and the summer of 2022, the club were almost wholly reliant on shareholder cash and shareholder loans to cover shortfalls. 

Around 18 months ago, people close to Radrizzani began asking the question of how much further he could feasibly take the club. He was wealthy, undoubtedly, but not at the obscene level needed to drive a Premier League team on year after year. The division required an inordinate amount of cash and, though Radrizzani had talked publicly about future growth — a new city-centre training ground, major redevelopment of Elland Road, staying on as majority shareholder until Leeds qualified for Europe — their struggle through the 2021-22 season cast doubt over the likelihood of any of that happening.

Criticism from the fanbase of him and Leeds’ stagnation grew and Radrizzani, a regular Twitter user, was acutely aware of it, keen for greater popularity or validation. 

In terms of annual revenue, Leeds were consistently in a healthy position. In the 2021-22 financial year, their turnover reached a record £189million. But while that money covered a lot of their day-to-day costs, the view internally was that a minimum of £30m to £40m was needed via additional shareholder injections to allow for sufficient transfer activity. It was that which encouraged the feeling that, if Leeds were to progress, Radrizzani would have to relinquish them to 49ers Enterprises. The US fund, which was pulling together investors in the States, had the capacity to plough in more cash. And overall losses of £34million in the 2021-22 season showed how much a Premier League outfit swallowed.

It is five years since 49ers Enterprises first came on the scene at Leeds, making an initial investment in 2018, but its intentions became more serious in 2021 when it upped its stake to 44 per cent and agreed an option to buy Radrizzani out in full, with a deadline of January 2024. Though the group sought complete control, it was mindful of not disrespecting Radrizzani or being seen to push him out prematurely. Then, in the early part of this season, 49ers Enterprises made it clear that it was ready to do the deal sooner. But it was aware of financial liabilities waiting down the line, some comprising of future payments owed for transfers, and it was not willing to pay quite as much as had been agreed in the 2024 option, one which valued Leeds at just under £500million.

The spectre of relegation, and the realisation that it was probably coming this time, prompted 49ers Enterprises to initiate fresh discussions with Radrizzani about buying the club regardless of league status. Those negotiations have been ongoing for the past few weeks, urgent and tense. As time went on, the relationship between the two sides became more and more delicate and the US group is now clear on two things: that it will only buy at what it considers to be a fair price and that it wants Radrizzani to exit the building, as opposed to him continuing in an active, operational role as a minority stakeholder.

Additional challenges for 49ers Enterprises remain, even at this late stage. Not all of the investors behind its project are enthusiastic about buying an EFL side. The fund was put together on the basis of Leeds being a Premier League entity. A major call with the investment group took place this Thursday gone, with 49ers Enterprises still determined to bring a takeover to fruition in the worst-case scenario of relegation. But Radrizzani holds many of the cards, with the prerogative to stick to the price he wants or to plough on and try to get Leeds promoted again.

A takeover of Sampdoria appears to hinge on Radrizzani selling Leeds, though, and progress on that front might be the tipping point for him and 49ers Enterprises to resolve and close out their own discussions. Yesterday, Sampdoria issued a statement announcing that the bid Radrizzani is part of had secured exclusivity to complete a deal. 

As rising dissent rang around Elland Road for the final time this season, Radrizzani must have been asking himself if the game at Leeds is up. In football club ownership, that question comes to them all.