Crystal Palace Avoid The Axe… Just
It has been a long Bank Holiday weekend for Crystal Palace supporters, and the new working week started with the longest day of all. With no take-over of the stricken club having been confirmed, the club’s administrator Brendan Guilfoyle had announced that the consortium looking to purchase the club from the administrators had until three o’clock this afternoon to reach agreement over the purchase after talks with the administrators for the company that owned Selhurst Park, Price Waterhouse Cooper, had hit a dead end. They got there in the end, stumbling over the line an hour or so over the deadline, but their story should be a salutory tale for all football supporters and club owners.
The tale of financial mismanagement at Crystal Palace was a familiar one but how the club came so close to extinction was less so, and key to the close shave that the club had was the separation of Palace from Selhurst Park. Previous owner Simon Jordan had claimed to have purchased the freehold to the club’s home for £12m in November 2006, but this was a half-truth that almost proved to be highly expensive. What actually seems to have happened is that Jordan did purchase the freehold from its previous owner, Ron Noades, but that that he had financed the deal through a former director of Tottenham Hotspur, Paul Kemsley, and the ownership of said freehold effectively passed into the hands of Kemsley’s Rock group of companies.
What happened next was a damning indictment of more or less every aspect of how this transaction was completed. Jordan was unable to pay a “parking” fee to get the lease for Selhurst Park back from Kemsley, but the Rock group had already entered into administration themselves. The Rock Group became the legal owners of Selhurst Park in 2008, and Jordan, according to records held by the club’s administrators, seems to have negotiated a new lease for the club to stay there which increased their rent from around £600,000 per year to £1,250,000 per year. The administrators themselves admit that they do not know why this happened with two years left on Palace’s existing lease on the ground.
The club’s administration, with the benefit of hindsight, was little short of being a foregone conclusion from the moment that the new lease on Selhurst Park was signed. The club’s debts were now owed to a variety of different creditors, and it was the Cayman Islands based Agilo, to whom Palace owed £5.5m, that pushed the club into administration at the start of this year. Administration was, in some respects, a good thing for the club. At a time during which HMRC were throwing around winding up orders with understandable abandon, it secured the club a bit of time to get its house in order. That it took so long, however, was due to the byzantine structure of the ownership of Selhurst Park itself.
A consortium, named CPFC2010, quickly appeared that was interested in buying the club, but the sticking point seems to have been that they were insisting on taking ownership of Selhurst Park. This meant, effectively, that two sets of negotiations had to take place – one for the club, through Brendan Guilfoyle, and one through Price Waterhouse Cooper. Meanwhile, on the pitch, manager Neil Warnock departed at more or less the precise moment that the ten point deduction was sanctioned against the club (which may be worth bearing in mind should he ever utter another sentence containing the word “loyalty” ever again), and the points deduction and a partial collapse in form left them scrabbling to avoid the drop from the top two divisions for the first time since the late 1970s. They managed it in dramatic circumstances, at Hillsborough on the last day of the season.
Since then, however, the club’s income streams have dried up and, with negotiations apparently still stalling (over creditor concerns that if the ground is sold to CPFC2010, they would miss out on a far greater sum than may have been achieved if Selhurst Park were to be bulldozed and sold for property development), the deadline was set for today for the matter to be resolved one way or the other. Last Friday, with ominous echoes of what happened at Portsmouth a couple of months ago, the club announced that they were to make twenty-nine staff redundant, and then Guilfoyle then confirmed that he would have to set a final deadline – this afternoon, at three o’clock. The money, even to pay players’ wages, had run out, and it was the final deadline that could be set without having to either sell players (which CPFC2010 had been against to the point of suggesting that they may have to pull out if this went ahead) or even, in the worst case scenario, the withdrawal of the administrators and the near-inevitable subsequent winding up of the club.
And so began Crystal Palace’s longest day. There were protests outside Lloyds Bank offices in London after a demonstration march by supporters earlier this afternoon. Over the weekend, the gravity of the situation had started to become clear, and external pressure was starting to build on all concerned to knock their heads together and reach agreement. The three o’clock deadline came and passed with no official statement, but the news wires were starting to hum. The official announcement finally came an hour and a half after the deadline, from Lloyds Bank:
Stadium administrator Pricewaterhousecoopers has reached an agreement in principle with CPFC 2010 in relation to the sale of Selhurst Park. This enables the consortium to go ahead with the purchase of both the Crystal Palace Football Club and Selhurst Park.
The dotted line hasn’t been signed yet, but at last there is some definite, positive news after four long months for Crystal Palace supporters. They have worked tirelessly to keep their club’s plight in the news, something which they achieved with stunning results last weekend as the news worsened. There may well have been points over the last few weeks when the men behind CPFC 2010, Steve Parish and Martin Long, looked at the figures, the hassle and the pressure that they were under and wondered whether it was all worth it or not. We can be certain, however, that if they did, the continued support of the supporters of the club itself must surely have encouraged them to keep pushing and keep negotiating in order to save their club. For the rest of us, this close shave acts as a timely reminder that we may yet not have seen the worst of the chill wind that is blowing over football’s finances.