Wednesday, 2 June 2010

Palace Survive

Well, what d'you know all the posturing and in the end a 'deal' is agreed. I have made no secret of being happy for Palace to disappear, because I don't like them, but you have to be concerned that a government (tax payer) owned asset has been sold off cheap to a specific group for PR reasons.

No doubt two things will happen in the future:

1> Palace with funds from CPFC2010 will go on a spending spree rather like that of Southampton last summer and this last season.

2> Selhurst Park will be patched up and used until the value of development land increases and then they will sell it and use it to fund a new football stadium.

I have made no secret of my feelings about clubs (and other businesses) that over spend and then go into Administration to protect their assets, before being 'relaunched' and wiping off most of their debt, while those that dealt with them in good faith lose their money.

My biggest gripe is the football related debts having to be honoured so that a small business can be forced into drastic measures and families lose money while footballers keep earning their thousands of pounds a week.

I know the rules are in place and have been for a while, but the ten point penalty Palace suffered has proved to be no punishment at all. The message that is being sent out is that you might as well take huge risks to see if you can better yourself because if it works then great, and if it doesn't then you can always just wipe off the debt by blackmailing those that did business with you in good faith by telling them them get a fraction (in Palace's case 1%) of what you owe them or nothing at all.

I wouldn't like to be where Portsmouth are right now, but having said that they have been in the Premier League for a few seasons and they have been to two FA Cup Finals, and they even won one of them. All this has been achieved with investment that has, it would appear, been on the never never. If you look at Portsmouth's financial and league position and attendance record for the five seasons before Redknapp went there to manage them I suspect that you would see something that would not be more impressive than any of the clubs in the current second division. Thus you could argue that Portsmouth's tenure in the Premier League and those two FA Cup finals have been funded by the debts that will not be paid back.

Ask any fan of a second division team that are looking like going nowhere if they would like to borrow a couple of hundred million pounds, have a decade in the Premier League and win the FA Cup then be in debt for a couple of seasons and they'd probably rip your hand off. Why should Portsmouth be allowed to get away with it.

I read that Portsmouth have now offered 20p in the £ but want to pay it over five years. That means that the c. £130m that they owe will be paid back at a rate of £5.2m a season for five years. Ultimately they can, therefore, use their parachute payments to cover the small percentage of what they've overspent. In fact with parachute payments of c. £48m they will even come out of the Premier League with more income (net of loan repayments) than they had before they went up in he first place.

If that's a punishment then let's all have some. We (Charlton) were looked upon as a well run club. That moniker seems to have been misplaced with our recent run, but compared to Portsmouth, and Hull for that matter, we look in great shape. There are also about another half dozen that would be in real trouble if they were relegated from the Premier League now - even with the new parachute payment plan that we didn't benefit from.

I really thought that as Palace had a dispute with a party that were not owed money by them (Bank of Scotland) they would actually have to pay the right (and a fair) price for Selhurst Park. It would seem that it only takes a few hundred school children outside their offices to make a huge financial institution back down and add to the gravy train that is English football.

For the fans of Palace I'm, reluctantly, pleased. It could be us, and for the record I would be a complete hypocrite and demand that our creditors agreed to a CVA with us. So, I guess I can rejoice on their behalf that something that is as important to them as Charlton is to me has been saved, but at some point the rules have got be changed to stop clubs from doing this. If a club had to go out of business to be used as an example them I was happy for it to be Palace. Having said that I would have been happy for it to be Southampton last summer, and for the sheer size of their unmanageable debt I'm happy for it to be Portsmouth.

Just as long as it's not us eh?

Up the Addicks!


Phil said...

You're spot on KHA. None of this is right in respect of all the clubs you mention and as a Charlton fan you can't help but think we would be treatly differently !
At least all those Nigels were in London yesterday as I'm off to the Metropolis today and I want to enjoy it, not spend the day feeling nauseous !

Dave said...

Not sure of the details KHA but I do believe the Bank of Scotland have some protection against Palace profiteering from a future sale of Selhurst. If they go on a spending spree it will be very hard to justify the penny in the pound settlement of debts.

Kings Hill Addick said...


Hard to justify? Yes. Too embarrassed to do it? Probably not.

Look at Southampton last summer, wiped off millions of pounds of debt then spent millions on new players?

Hopefully the deal that Bank of Scotland have now agreed to does, indeed, protect them but they have obviously reduced their entitlement from what they thought fair at the start of the week.

Having 'Kid' Jensen on the tv telling the world that they have lots of money available to invest in the club doesn't exactly bode well for the moral stand point. We sold Darren Bent and Luke Young to balance the books, if Ambrose stays as is being suggested they will have sold none of their assets yet paid 1% of their debts and bought their ground for about half what the bank was offered for it.

That sounds like a good deal for Palace and a bad deal for everyone else.

Sciurus Carolinensis Nemesis said...

KHA you're dead right
The rules in football that "football creditors" have to be settled first can't possibly stand up to legal scrutiny hopefully soon an unsatisfied creditor will have the financial wherewithall to challenge them through the courts. For any other company only the banks who have mortgages and the staff are placed at the head of the queue. In the case of the staff they are only guaranteed around £800. The football authorities position on who gets paid and how much is shaming at best. It is illegal for a company to continue to trade beyond the point it might not be able to pay its bills. Football thinks it is different but it can't be. Worst of all it is you & me who are effectively footing the bill for this crookedness because the Taxman (us) is always the first creditor to get shafted and then maybe receives a penny in the pound of what's owed.
I'm with you; I think the sooner a high(ish) profile club goes properly bust and its directors properly punished the better for the game as a whole. Fingers crossed it ain't Charlton.