Post by QPR Report on Feb 28, 2010 8:01:10 GMT
Observer/Owen Gibson
Crystal Palace face unexpected £1m property billCrystal Palace have been hit with an unforeseen one-off charge of £1m on their ground
Crystal Palace will have to pay an unforeseen one-off charge of £1m on their ground next month. It is understood that the administrator in charge of the freehold of the ground, PricewaterhouseCoopers (PWC), has rejected calls from its counterpart overseeing the club for the charge – effectively a deferred payment from when the previous owner, Simon Jordan, signed up to the lease – to be waived.
Because the administrator, Brendan Guilfoyle, of P&A Partners, is working on a tight budget to see the club through to the end of the season, the payment on top of the £1.2m a year rent could prove pivotal.
Although the windfall from the club's FA Cup run and potential compensation for Neil Warnock, who is widely expected to leave the manager's job to take over at QPR, will help, it is understood that Guilfoyle did not include the charge in his financial projections designed to take the club through to the end of the season.
Following Wednesday's FA Cup fifth-round replay defeat at Aston Villa the club face a relegation battle following the deduction of 10 points when they were placed into administration at the request of the hedge fund Agilo in January.
However, PWC is believed to have come to an agreement with Guilfoyle to reduce the rent on the ground to a more market-friendly rate. It was feared that the punitive rent on the stadium would put off potential purchasers. On Friday Guilfoyle announced that he planned to extend the closing date for bidders to 12 March, claiming that he had received 36 expressions of interest.
There is believed to be no more than a handful of realistic bids, including one from the United States. How serious they are will become clearer when the bidders are asked to place £10m in a nominated bank account to demonstrate their commitment. Here Observer Sport outlines five more hurdles that any potential purchaser will have to overcome:
1. Establish ownership of the ground: Simon Jordan claimed to have secured the future of the ground (when he bought the club, the freehold had not been part of the deal) in 2006 but it later emerged that it had in fact been bought by a company owned by the Spurs director Paul Kemsley. That holding company, Rock Investments, is now in administration. On Friday PWC formally appointed agents to sell the ground. The most likely purchaser is a prospective buyer of the club, but the administrator Laurie Manson has also been clear that PWC ultimately want to achieve the best price.
2. Resolve issues with Agilo: The hedge fund that pushed Crystal Palace into administration after falling out with Jordan is owed £4.5m and have loaned the club a further £1m to fund the administration. They acted after becoming frustrated with Jordan's refusal to engage with potential buyers and fearing that Her Majesty's Revenue and Customs and other creditors were seeking to recover their money before they did. In administration, their secured creditor status means they must be paid first and in full once football debts have been paid.
3. Come to an agreement with the former owner: Jordan effectively ran out of money and was no longer able to satisfy all of the club's creditors. He had hoped that the sale of a handful of players in the transfer window, including Victor Moses, would raise enough money to buy some breathing space. But Agilo's action took him by surprise and left him furious. Any attempt to exit administration via a Company Voluntary Agreement (CVA) will require the new owner to reach an agreement with Jordan over the £20m he is owed, making him the club's largest creditor.
4. Hope the club stay in the Championship: Despite the rally produced by Warnock and his players in the wake of the administration, the club is still hovering dangerously above the relegation zone and the departure of the manager could send results into freefall. Retaining Championship status is vital in terms of sponsorship and TV income.
5. Win the support of the fans: The explosion of defiant backing that accompanied Palace's FA Cup victory over Wolves at Selhurst Park and almost propelled them to victory in the next round will have to be harnessed by the new owners. The biggest worry for the Crystal Palace Supporters Trust and the wider fanbase will be the prospect of another owner coming in without deep enough pockets to invest in the playing squad and the stadium. They are also concerned that the well-regarded academy, which has produced John Bostock and Moses among others in recent years, does not suffer.
www.guardian.co.uk/football/2010/feb/28/crystal-palace-financial-bill
Crystal Palace face unexpected £1m property billCrystal Palace have been hit with an unforeseen one-off charge of £1m on their ground
Crystal Palace will have to pay an unforeseen one-off charge of £1m on their ground next month. It is understood that the administrator in charge of the freehold of the ground, PricewaterhouseCoopers (PWC), has rejected calls from its counterpart overseeing the club for the charge – effectively a deferred payment from when the previous owner, Simon Jordan, signed up to the lease – to be waived.
Because the administrator, Brendan Guilfoyle, of P&A Partners, is working on a tight budget to see the club through to the end of the season, the payment on top of the £1.2m a year rent could prove pivotal.
Although the windfall from the club's FA Cup run and potential compensation for Neil Warnock, who is widely expected to leave the manager's job to take over at QPR, will help, it is understood that Guilfoyle did not include the charge in his financial projections designed to take the club through to the end of the season.
Following Wednesday's FA Cup fifth-round replay defeat at Aston Villa the club face a relegation battle following the deduction of 10 points when they were placed into administration at the request of the hedge fund Agilo in January.
However, PWC is believed to have come to an agreement with Guilfoyle to reduce the rent on the ground to a more market-friendly rate. It was feared that the punitive rent on the stadium would put off potential purchasers. On Friday Guilfoyle announced that he planned to extend the closing date for bidders to 12 March, claiming that he had received 36 expressions of interest.
There is believed to be no more than a handful of realistic bids, including one from the United States. How serious they are will become clearer when the bidders are asked to place £10m in a nominated bank account to demonstrate their commitment. Here Observer Sport outlines five more hurdles that any potential purchaser will have to overcome:
1. Establish ownership of the ground: Simon Jordan claimed to have secured the future of the ground (when he bought the club, the freehold had not been part of the deal) in 2006 but it later emerged that it had in fact been bought by a company owned by the Spurs director Paul Kemsley. That holding company, Rock Investments, is now in administration. On Friday PWC formally appointed agents to sell the ground. The most likely purchaser is a prospective buyer of the club, but the administrator Laurie Manson has also been clear that PWC ultimately want to achieve the best price.
2. Resolve issues with Agilo: The hedge fund that pushed Crystal Palace into administration after falling out with Jordan is owed £4.5m and have loaned the club a further £1m to fund the administration. They acted after becoming frustrated with Jordan's refusal to engage with potential buyers and fearing that Her Majesty's Revenue and Customs and other creditors were seeking to recover their money before they did. In administration, their secured creditor status means they must be paid first and in full once football debts have been paid.
3. Come to an agreement with the former owner: Jordan effectively ran out of money and was no longer able to satisfy all of the club's creditors. He had hoped that the sale of a handful of players in the transfer window, including Victor Moses, would raise enough money to buy some breathing space. But Agilo's action took him by surprise and left him furious. Any attempt to exit administration via a Company Voluntary Agreement (CVA) will require the new owner to reach an agreement with Jordan over the £20m he is owed, making him the club's largest creditor.
4. Hope the club stay in the Championship: Despite the rally produced by Warnock and his players in the wake of the administration, the club is still hovering dangerously above the relegation zone and the departure of the manager could send results into freefall. Retaining Championship status is vital in terms of sponsorship and TV income.
5. Win the support of the fans: The explosion of defiant backing that accompanied Palace's FA Cup victory over Wolves at Selhurst Park and almost propelled them to victory in the next round will have to be harnessed by the new owners. The biggest worry for the Crystal Palace Supporters Trust and the wider fanbase will be the prospect of another owner coming in without deep enough pockets to invest in the playing squad and the stadium. They are also concerned that the well-regarded academy, which has produced John Bostock and Moses among others in recent years, does not suffer.
www.guardian.co.uk/football/2010/feb/28/crystal-palace-financial-bill