Big freeze at Leeds as Venables hangs on

Frosty relationship between Elland Road manager and chairman all too evident as Woodgate signing lights up St James' Park

Reading David O'Leary's book, which did for its author and which, strangely, is no longer available in Leeds United's club shop, is like flicking through a footballing Great Gatsby. The plot flits from Rome to Barcelona and Valencia, there are receptions at Harewood House and the young manager is intoxicated with the idea of spending someone else's money.

That was before the crash. Dedicated to the club's chairman, Peter Ridsdale, to whom O'Leary no longer speaks, it seems another world. A time of Rio, Woody, San Siro and what Ridsdale yesterday called, with the kind of language used to sell timeshare apartments, "living the dream". It was less than two years ago.

Scott Fitzgerald wrote another story, called The Crack-Up. Watching Ridsdale and his manager, Terry Venables, staring into the arc lights and television cameras at Elland Road, not even attempting to pretend there was a basic friendship between them, was the most visible sign of Leeds breaking apart under the financial realities of modern football.

Venables, normally a loquacious man, was unusually terse. Ridsdale, another fine communicator, was either persuasive, pointing out that where once Leeds received £1m for the television rights to a Uefa Cup match, this year it was £100,000, or babbled forth a kind of advertising drivel Venables did not begin to agree with.

After the sale of Jonathan Woodgate, which he admitted, as a Leeds fan, had given him sleepless nights, Ridsdale attempted to argue that what was left was good enough to challenge for a Champions' League place. "We have got a squad which, in my view, is one of the best in the Premiership," he said. "Reel off the squad we already have; you can't say we have abandoned European ambition."

Venables, a football man, who at both Tottenham and Barcelona faced chairmen who give him as many problems as the one seated alongside him, begged to differ. "To get to fourth in the Premier League you have to have an excellent squad, not just a team. You have got to cover all eventualities and we haven't got that. Money is more important than players here. We have lost players I don't think any club could have lost without suffering in the league."

Venables, greeting the end of a transfer window through which have disappeared Woodgate, Robbie Fowler and Lee Bowyer, said that he had not decided whether to resign. The most important thing was today's match at Everton and, beyond that, who knows.

"It would be irresponsible to do anything other than stay," he said. "There is obviously a situation here that is a very difficult one. I am concerned about leaving it in this position. There are a lot of frustrations involved. The bond of trust has been put to the test."

Neither man tried to pretend there was much friendship between them. Ridsdale confessed he had misled Venables over his assurance that, if Fowler were sold, Woodgate, one of the jewels of O'Leary's fallen, tarnished crown, would remain. "If Terry feels I let him down, I understand that," he said. "I probably misled him but not deliberately so."

Venables, who complained to friends he was discovering Leeds' transfer policy through the media, was hardly warm in his endorsement of his chairman. "We are both professional people. We are both grown-ups and must get on with it. Whatever the differences, they must remain private.

"Whether I'd have taken the job had I known the full facts is another matter. I certainly didn't know what was going to happen and the chairman would agree with that."

For a chairman of a plc, Ridsdale was either not fully aware of the depth of Leeds' financial crisis or not straight with his manager. In August, once the sales of Rio Ferdinand and Robbie Keane were completed for a combined fee of some £37m, he said: "There is no further requirement to reduce those players Terry Venables sees as part of his ongoing first-team plans. There is no pressure on the manager to off-load players. We have a strong squad and it's up to Terry whether he wants to let anybody go."

This month Venables discovered it was not "up to Terry" and, with the bankers demanding the club's debts of £78m be serviced, it was probably not up to Ridsdale either. When he said that any other chairman, faced with these decisions, would have acted in the same way, Ridsdale was probably correct. However, when asked whether any other chairman would have run up such a bill before losing £30m of income when failing to requalify for the Champions' League, he was less convincing.

Living the dream costs. Between 1999 and 2002, the wage bill leapt from £18.5m to £53.6m, taking two-thirds of every pound the club earned. Even the sale of Ferdinand and Keane did not substantially reduce the size of Leeds' salaries. O'Leary spent £60m on players, although in mitigation it was argued that since these were usually young and English they had a high resale value. Ferdinand proved the point with a £30m transfer to Manchester United but thereafter the market collapsed. Leeds lost £4m on Keane, £5m on Fowler, nearly £3m on Bowyer.

Woodgate cost Leeds nothing – he had joined the club as 13-year-old – but the cost of his departure to Leeds' reputation is incalculable. Putting it as baldly as he could, Ridsdale maintained that Leeds United plc was worth a mere £15m – and the company's value has fallen £900,000 in this week's trading – and he could not turn down Newcastle's bid of £9m for one of its assets.

Like Jay Gatsby, Ridsdale believed in "the orgiastic future that year by year recedes before us". He admitted as much yesterday. "The mistake was believing that by investing more we could sustain it. I will take my share of the blame but to say it was uniquely down to me is a little fanciful. Should we have spent so heavily in the past? Probably not, but we lived the dream and only by making this decision can we rekindle the dream. With the benefit of hindsight, we said yes too often."

According to Tom Cannon, of the Kingston Business School, Ridsdale "bet the company" they would become regular members of the Champions' League. "The buck stops with the board," he said. "There is a real risk Leeds United would have been forced into administration and in my opinion all of the Rio money has been burnt off by the losses." Ridsdale firmly rejects this analysis.

Ridsdale was once a hero at Elland Road, especially after the way he comforted the families of two fans murdered in Istanbul before their Uefa Cup semi-final with Galatasaray three years ago. When Leeds last went to Goodison, he marched over to confront supporters demanding the sacking of the first-team coach, Brian Kidd. Should he attempt to enter the Bullens Road Stand this afternoon, his reception would be very different.

Howard Symonds, chairman of the Leeds-based Sundial Group, resigned from his £3,000-a-season seat in the directors' box at Elland Road, tired of Ridsdale. He told the Yorkshire Post: "He used to sign autographs like the manager and players did. I got sick of him jumping up and down in the directors' box, shouting instructions. He has been like a kid in a sweetie shop and he's made himself sick."

Venables, baited throughout his fretful six months in charge, has been absolved of blame by some of the most unforgiving supporters in the country, who can now see under what conditions he has had to work. When criticised for his performance as coach of Australia, Venables commented: "At least I am being stabbed in the front for a change." Now, the other side of his body is hurting.