For the mis-management of football clubs ?
Serious question.
I've just been reading up on the absolute basket case that is Crystal Palace, and i doubt you will ever read such a dire instance of a state a football club can be in. Strip aside any personal feelings towards that particular club, or prejudiced loathing of their chairman, and simply wonder how the so called authorities can allow any club to get itself in such a grave position.
Palace don't own their ground, and have not paid their rent for over a year. Jordan also took out an unsustainable mortgage they can't service with a finance company (15% interest) that basically gives the finance company first dibs on future player sales. They have an overdraft bigger than a season's turnover, they have sold off their catering and merchandise streams for a small fee, and they have already banked a hefty chunk of future ticket income by selling as many long-term ST's as they can. They also have outstanding bank loans, outstanding HMRC demands, and players that are repeatedly paid late.
It is clearly in an untradable state and will be the next club to follow a long list of others that will go into administration and leave huge debts unpaid before starting again.
They are not alone; the Portsmouth saga has turned into a long-running joke, no one knows what really went on at Notts County, a large proportion of the premiership clubs have debts in excess of £100m+, while small clubs such as ourselves carry debts of £20m-£30m.
Its not right. Its one thing saying greed has killed our game, but those who have given in to greed and not taking budgeting seriously are the ones who are the real criminals.
So why are they allowed to mis-manage so badly in football when in any other business they would be likely to face criminal charges ?
0
Comments
All I would say is that I think that the rules surrounding going into Administration need to be far, far tighter to prevent people from taking their clubs to the financial abyss and then going into Administration and screwing everyone over.
I think any club going into Administration should be automatically relegated to League Two, I know some people won't agree.
I think that Jordan is real oily fecker who knows he can take financial liberties with Palace and yet still go into Administration without too many long term problems.
But surely crippling a club by undergoing actions such as selling on the rights to player sale profits, and reducing future income by banking 2,3,4,5-year ST sales in advance and selling off other revenue streams such as catering and merchandise shouldn't be allowed when a club is facing impending administration ?
He also reportedly used money from Crystal Palace to finance his dalliance into film production, which falied miserably.
It should not be allowed, surely ?
And yes, I do find the possibility of Simon Jordan being locked up hilarious, but that's beside the point!
Any lawyers out there?
He might possibly have traded while technically insolvent but I suspect so have a few other clubs.
£9.5m I heard the overdraft is plus other debt but that is rumour and unsubstantiated.
Chairman should be seen as guardians of clubs, but in growing cases 100-odd years of history seem to be going out the window due to 3-10 years of mis-management.
On the face of it the club is hopelessly insolvent and without whatever money he has left to keep things going or a new investor to come in, they will go into Administration.
I read recently of a business (Ltd Co) set up by some work colleagues when the company they worked became insolvent. They fulfilled contracts which had been paid to the old company for nothing (not a good start). Leased vehicles for themselves, borrowed some "friendly" money, took on staff, set up credit accounts with suppliers. In just over a year they were hopelessly insolvent and heading for the Official Receiver. They were advised to go into voluntary liquidation, were able to agreed to indemnify the liquidator personally for his costs. The business was wound up with no assets and debts of over a £100,000 to HMRC, and other trade creditors. None of them were prosecuted/banned etc. I think that in most cases the authorities are not interested in pursuing them. In my view that is because the Government puts great faith in entrepreneurs and accepts that some businesses will fail but businessmen can rise again.
In light of that I doubt if Jordan and others will be taken to task unless the political fall out is so huge that the authorities will be compelled to act. Even then pinning a charge on somebody who has put in millions of pounds of their own money is going to be difficult. As for Pompey, well the foreign owners will just melt away into the sunset in my view.
Something about the state of modern football has to change. The clubs belong to the fans and shouldn't be allowed to get themselves into hundreds of millions of pounds worth of debt in the pursuit of profit. There should be some discussion on debt restrictions, transfer and wage caps.
On the second point - if it is true - then it would be illegal if he's breached the company's corporate governance in order to route money to himself or one of his other ventures: but if that were the case I'd expect you'd be hearing from some other owners. If he's moving cash about between his companies I can't see that there's any kind of a problem with it, happens all the time.
I do think that it would be useful for the FA/League to introduce financial restrictions like those that sent Fiorentina down into the minor leagues a while back, to prevent this kind of thing, but as it's not there right now, then football is being treated exactly like any other business. The only difference is that more people care passionately about Crystal Palace FC being badly run than would care if Crystal Palace Car Repairs.
Football clubs are unique in that way. The FSA regulate finance co's - the FA regulate football clubs and they have their own mess to deal with! Reactive not proactive that's the prob.
The thing about most chairmen is that they are fans, while decisions might be wrong they are hopefully always made with the best interests of the club.
..........
Sounds like he should get a job running a bank with Fred Goodwin. Directors can be struck off and barred from running companies and that ultimately may be Jordan's fate. The other likely fate is that CP will go into receivership and that is looking likely if he can't either find an investor/buyer or sell a few players in the window.
Jordan's mistake was two fold - I suspect his ego/emotion ran ahead of his abilities and second a poor management style meant that he didn't get in either an experienced CEO/MD type to run his toy for him and/or get in a few experienced businessmen/investors to share the risk and get some wiser heads to help him. In essence he did exactly the opposite of what Richard Murray did at Charlton.
..............
A lack of regulation is also to blame - the FA has fallen over backwards to attract new investment regardless of the consequences and the supposed fit and proper rules have never been once invoked. Two of the EPL's most successful clubs in Liverpool and Man U are heavily in debt thanks to loans that were taken out by the new owners which allowed them to use leverage and debt to buy the clubs and both are a financial hiccup away from being in serious trouble. Liverpool need to play CL football in order to survive and if they screw up in the UEFA cup and finish in mid-table/out of the CL places then an urgent refinancing could happen.
The answer would be better regulation but for the last 10-20 years in business generally the movement has been towardsreducing regulation on the basis that business knows best how to look after itself. We've seen the wisdom of gutting regulation in the banking/finance industry and football is half a step behind.
Back to your point though. I kind of get the feeling that in this case, their Chairman has believed his own hype and took on all these plainly stupid loans and selling of long-term STs because he believed that saving face was more important than being honest about the inherent problems. If he has gone out and crippled them by knowingly taken on a path that would lead to financial meltdown, then yes, he should get a medal face charges. It comes across rather like someone with no mortgage who took out every loan and credit card that was thrown at them, only to lose their job during the downturn.
What the real crime is though is all of the small businesses who will lose out when / should CPFC go into admin.
Agree with you there Dan. Couldn't give a toss about Palace or Jordan but many others will suffer.
Incompetence is not a criminal offence but the other two probably are.
It is a question of perspective I am informed, funny I thought it was either legal or illegal.........
In the case of football I would imagine that it is very hard to prove this, as the posters above have cited, as directors would claim that they were trying to maximise the profitability of the club, and generate income/turnover.
I would imagine that unless fraud was committed, to a bank or the Inland Revenue, VAT etc who get first grab anyway, mere creditors get what is left after the insolvency people take there fees off.......
Happened to me three times, on each occassion directors swanning around in cars, taking loans, paying themselves a 'bonus' days before they went broke etc, and were advised to go 'bankrupt' often what takes other innocent companies down.
Never gave a company/individual that much credit in the first place.......