Leeds hand McKenzie an £80m mission

As chairman of Leeds United, Peter Ridsdale boasted that he "lived the dream". Yesterday, his chairmanship was finished by the reality of a debt nearly seven times the value of the company, the worst set of interim figures ever released by a football club, a squad largely broken up, a temporary manager, and the near-certainty that if relegated Leeds United will slide into administration.

As supporters campaigning for his dismissal since the sale of Jonathan Woodgate in January digested their victory, his successor, Professor John McKenzie, was beginning the slow, painful process of steering Leeds away from bankruptcy.

Yesterday's interim results declared a half-year loss of £17.2m and a total debt of £78.9m. Leeds United plc is valued at something less than £12m and, should Peter Reid fail to reverse a sequence of results which has seen the team pick up one victory in their last nine matches, the consequences will be more catastrophic still.

McKenzie, the club's second-largest shareholder, is seen as a credible figure by both the City of London and by the game itself. His father was a member of the Football Association's international committee and head of the Isthmian League and, when he moved to Yorkshire in the 1970s, he became a season-ticket holder, eventually owning some four million shares. It is, however, as a professor of economics that his talents will be most urgently required at Elland Road.

Yesterday, McKenzie managed to be both grimly realistic and upbeat. "You don't have to be a great financial expert to say you can't go on haemorrhaging money at the rate we have been and survive," he said. "But we won't go on haemorrhaging money at that rate. Everyone can see the situation needs to be balanced but I'm not contemplating administration. The situation is going to be serious, but not impossible."

McKenzie will adopt a lower profile than Ridsdale, who two years ago released a video which stated: "Even fans of rival clubs applaud his achievements, having developed a top squad, a manager and a guaranteed future on football's European stage." Some £55m of that "top squad" has been sold since the summer, two managers have been fired, while the third, Reid, knows his contract will expire in May. Their European future for the moment is non-existent.

It was this kind of hubris which undermined Ridsdale's achievements and ensured that the backlash when it came was vicious. Terry Yorath, who as a former manager of Sheffield Wednesday (another Yorkshire club perilously close to the financial brink) knows what relegation would do to Leeds, stated: "Ridsdale was absolutely gloating when they were buying players and playing in the Champions' League, so, when that goes wrong, he has to pay for it."

McKenzie's strategy of increasing income to avoid further player sales this summer will in his words "be a difficult trick to pull off". This season they are likely to see a reduction in revenue of £8m because, as a less attractive side, they have been screened fewer times by Sky Sports and will pick up a fraction of the prize money they received for finishing fifth. If the failure to requalify for the Champions' League in 2001 began the meltdown, relegation to the Nationwide League would probably be terminal.

Bill Gerrard, a long-standing critic of Ridsdale, and a reader in economics at Leeds University Business School, was apocalyptic in his assessment. "If Leeds were relegated, I could only imagine they would go straight into administration. I can't see how they could continue to operate if they went down. These are the worst set of interim figures ever released by a football club. They are absolutely appalling. I had a catastrophic projection of an operating loss of £7.5m and it has exceeded that.

"Now we know why they sold Jonathan Woodgate. They needed cash just to keep afloat and to say there was no financial imperative to do so shows they have lost their grip on reality."

It is likely the next six months will show a turnaround, with Lee Bowyer and Olivier Dacourt's removal from the wage bill and the revenue from the sales of Woodgate and Robbie Keane feeding through. There will, however, also be the £4.5m Leeds paid their two sacked managers, David O'Leary and Terry Venables, to contend with. McKenzie said yesterday he did not have time for post-mortems, but outlaying £28m on player transfers and wages immediately after failing to make it back into the Champions' League must be seen as an act of complete folly.

The mood in Leeds was summed up by John Boocock, of the Leeds Independent Fans Association. "A new chairman, no chief executive and a manager who is there for eight matches. It does not look good."