There seems to be a host of different views about Palace's financial plight. I thought I'd share my thoughts on the subject, but while I'm at it I'm going to explore how the rules should be changed.
Firstly I should explain that I am not completely sure what the rules are about who gets paid what and what options a creditor has if he doesn't agree with the 10p (or what ever it is) in the pound that they are owed.
What I do know is that in 2008 a company went into Administration and was subsequently declared bankrupt and it owed my wife over £10,000. The owners and staff had been paying themselves hundreds of thousands of pounds in salaries while the business failed to make money, and even (obviously) spent what turned out to be millions of pounds that it didn't have. I am fully aware of the implications of the 'little man' as the founder of the company that owed us £10k plus went home to his £2m house that was safe as he had a limited company.
Thus I do have sympathy for anyone that is trying to earn a living, look after their family and pay the taxes that provide public services and then get stuffed when mismanagement causes businesses to fold. In the case of Crystal Palace (just like any other company, football or otherwise) I would love to see their Chairman lose his house and the shirt off his back. I read an article recently where Mr Jordan was boasting that he has fifteen cars - he listed them as he was so proud of them. I mean, how can you need 15 cars? He will be allowed to keep them all, of course, and his yacht, which he brags he paid £3m for (it might have been £2m I'm not that sure).
The other thing that I feel needs addressing is this condition to repay any football debts. I'm very pleased that we will benefit from the reported £100k they owe us, but if they are forced to repay all football debts, yet get away with 10p in the £ to the Inland Revenue this needs to be addressed. The Inland Revenue is, after all, the public purse. This is the money used to pay for hospitals, schools etc.
When I mentioned that my knowledge of the rules was limited I did so with the intention of floating the idea that HMRC should force a football club to repay 100% of the Tax due or go out of business. This would be rather unfair on the club in question, but it would make others think twice about 'cheating' the public out of their money by putting a limited company into administration.
I remember the fuss when Leeds were in administration. According to Wikipedia, Ken Bates only offered 1p in the pound initially. He eventually paid 8p in the pound. Thus the reported £35m debt was reduced to £2.8m. They owed the Inland Revenue (you and I) £6m. Thus the public purse was shortchanged of £4.92m. Even now the presenters on TalkSport happily tell us that Ken Bates saved Leeds and he's done a great job. He did so by managing to wipe off £32.2m.
The former footballers (who's intelligence I question) don't seem to have a problem with the fact that we have nearly £5m less to spend on hospitals where sick children are dying due to a lack of resources. No, not at all, Ken Bates is a real Hero.
Portsmouth are in a bit of a jam at the moment. There seems to be some confusion about a penalty points deduction in the Premier League. I'm not sure what the actual situation is as there has never been an administration in the Premier League, but I suspect that with debts of £60m (or what ever they are) they would be advised to go into administration before the March deadline, reduce their debts to a few million, knock the Inland Revenue and start in the Championship with little (or no) debt with two seasons of parachute money to get them back up again.
In fact, this should be the new model for all promoted teams. If you go up you should borrow c.£60m to spend on players, go into administration, get relegated (there was a fairly good chance of this happening anyway), sell a couple of players and end up with £50m of players and cash in the bank.
Thus I think it is time for a football club to be forced to close it's doors and cease to exist. This is just needed as a lesson to the rest of the footballing world that it is no longer acceptable to spend someone else's money and then pay something like 10% of it and start again.
For the record Leeds and Palace are not the only clubs that have benefited from this. Southampton have, from the little information available, managed to build a super stadium for nothing - or a massively reduced price at the very least. Sure they have been deducted 10 points in the third division, but from what I've seen they have the biggest transfer budget outside of the Premier League. How must those that have suffered financial hardship as a consequence of their administration feel when they seem them buying million pound players? Leicester City did the same thing. They built the Walkers Stadium then went into Administration and never paid the full price for it. What made their actions even worse was that they didn't even suffer a 10 point deduction as the rule hadn't been introduced by then.
Now it is no secret that I don't like Palace, and for me they are the perfect club to make an example of, despite the fact that I suspect they will end up defaulting on less than those others I've mentioned. At the very least HMRC should demand that their debt is treated with the same priority as football debts. Maybe it's time for a change in the law to enforce that across the board.
I know people are suggesting that we could well be in a similar situation at some point (this summer being mentioned) but even though I don't want Charlton to cease to exist, I believe that these administrations are currently just too beneficial to the football clubs, and are often used as a business practice. The punishment should be so severe that no one relies on it.
On a side issue, having looked at our accounts most of the debt is owed to those that run the club. Sure we have a 'mortgage' on The Valley, but as that is secured it is likely to be paid in any event. Thus administration would cost the Board millions. From sporadic reports it looks like the board members wanted some money for the Club and/or (depending on which reports you believe) they wanted their loan bonds to be repaid. If they don't sell the club and it goes into administration they are likely to get a very small percentage of that money. That could well have been a major motivating factor in the £7m injection in the summer. I'm not suggesting that our directors only care for their own money, but I'm guessing that if Simon Jordan was owed £15m by Palace and they owned the ground that was worth many millions, he would have bank rolled the club from his own finances, rather than the money he has 'borrowed' from local businesses and us taxpayers.
As it is I suspect that Palace will sell a couple of their players (I'd be amazed if anyone would pay much of a fee for Ambrose - I don't think there are many secrets in football and he underperformed for Newcastle, us and on loan an Ipswich) then survive in the Championship and be no worse off next season.
Something has got to change. Imagine if every football club went into administration. We would all have 10 points deducted, and we could write off literally billions of pounds of debt with no real consequences at all for the footballing world. This system actually punishes the sensible, the prudent, and the decent.
So, for the record, I hope that Crystal Palace are forced into liquidation and cease to exist. Sure that's personal, why shouldn't I hate them, their fans hate us. However, the main reason for this is that I am sick and tired of seeing millionaires (Chairmen, Players and their Agents) being unaffected by these actions while the tax payer and small businesses lose millions of pounds that they can't spare.
Up the Addicks!