Football: Goldberg's Palace built on sand

Clubs in crisis: Financially stricken state of First Division side demonstrates how business of football is changing
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The Independent Online
MARK GOLDBERG is the man who played fantasy football and lost. Having paid pounds 23m to buy Crystal Palace from Ron Noades last year, he has overseen the arrival and departure of Terry Venables as coach, the signing of more than a dozen players on contracts as high as pounds 13,000 per week, and the descent of the Eagles to the lowest point in their 94-year existence. The club has debts between pounds 6m and pounds 22m, depending on whose estimates you believe, and is not so much at a crossroads as in a scrapyard.

In the past, small and poorly supported clubs, such as Aldershot and Maidstone United, went out of business. These days, size seems to be less of a protection and Palace head a lengthening list of financial cripples that includes or has included Luton, Oxford, Portsmouth, Bournemouth and Hull.

For Oxford, who have found a buyer in the London hotelier Firoz Kassam, and Hull, where a consortium is putting the club back on track, the problems are fading. At Bournemouth, a supporters' co-operative has worked so well that the club is now seen as a blueprint for how to get out of trouble. At Portsmouth and Chester, supporters' associations are working to steer their clubs out of administration.

The two clubs where the future is most unclear are Luton and Crystal Palace. On the face of it Luton are in the deeper crisis, having gone into receivership with debts of pounds 4.5m. However, while Palace have not had to call in the receivers, their future would appear to be more uncertain. Goldberg has put Palace into voluntary administration and although this - for the moment at least - prevents any of the many creditors from winding the club up, there is still clearly a need for a major injection of money.

The administrators, Moore Stephens, told a meeting of around 1,000 supporters at the Fairfield Halls in Croydon on Monday evening that Palace were insolvent but insisted: "The club will not go bust". Others do not share that optimistic view, however, and one specialist in football rescues yesterday poured scorn on such confidence.

Goldberg himself did not come up with many answers for the supporters. How, asked one fan, could the club's debts be pounds 6m, if Palace owed outstanding transfer fees to other clubs of more than pounds 6m alone? How, asked another, could fans have trust in a man who let Terry Venables spend pounds 300,000 on Gordan Petric when the club already had 10 central defenders? How, asked a third, could Goldberg spend hundreds of thousands of pounds on a villa for himself and his family in Spain when 46 Palace staff have recently lost their jobs? How, everyone asked, will the club get out of this mess?

Even the announcement that Steve Coppell, the manager, had been given a new five-year contract was of little consolation in the context of the club's problems. The evening out cost the fans pounds 5 apiece.

At one stage during the meeting, Goldberg called on to the stage Ed Warner, a supporter who has been planning since January to form a fans' coalition. Warner, a stockbroker with business experience in the City, said he hoped to raise pounds 2m-pounds 3m to help Coppell build a team if and when the club come through administration. He added yesterday, however, that his plan can only ease the club's problems, not eradicate them.

"This is not a Bournemouth. It's much, much worse than that," Warner said. "The current structure of the board is a disincentive for fans to invest in the club. So much money needs to be raised, a whip round will not do. You could ice the new cake with fans' money, but you need substantial new investment first."

If only Palace's debts were not so large, a fans' buyout would be more feasible. At Luton, supporters intend to table a takeover bid within the next few days. The bid - to turn Luton into a community-owned club like Bournemouth - will be made before next Monday, the deadline set by the receivers, Buchler Phillips. The bidders, Fans of Luton Action Group, have already made some headway.

FLAG collected pounds 10,000 at a meeting last week, taking its total fighting fund to pounds 130,000 even before bigger local business investors get involved. One local businessman, Cliff Bassett, is the key to any deal. He is owed pounds 2.8m, but is a fan and wants a solution which will ensure the club survives, hopefully at Kenilworth Road. The local council is likely to agree a new lease, at a peppercorn rent, while plans for a new stadium are made. If the club has not been rescued by mid-June, when the Nationwide League chairmen meet to agree fixtures for next season, Luton could lose their place in the League, but Buchler Phillips are hopeful this week's buyout attempt will be successful.

The League's attitude will be crucial to the futures of both Palace and Luton. While the League does not look favourably on new companies rising from the ashes of failed clubs which had gone down without paying off creditors, it promises a sympathetic hearing both for community-led buyouts and for solutions which provide at least a partial pay-out to creditors.

There can be no doubting the gravity of Palace's situation. Firstly, Selhurst Park is still owned by Noades. Secondly, Noades yesterday issued a writ against Goldberg's holding company, Allowclear, to recover pounds 4.5m he lent Goldberg to buy Palace last year. This clearly threatens Goldberg's ability to continue financing the club. Thirdly, it is estimated Palace need new capital of at least pounds 12m to steady the finances, and new investors may be unwilling to inject funds while Goldberg is still at the helm.

Palace's current administrators were only brought in after another firm, incidentally Buchler Phillips, had taken up the job and then been discarded by Goldberg.

Administrator David Buchler, who has knowledge of both Luton's and Palace's situations, said: "The problems faced by Palace and Luton are entirely different. The magnitude of the problems at Crystal Palace are far greater than at Luton, where the problems were caused by a dispute amongst the directors.

"The success or otherwise of both clubs' future will lie in the same process, in the restructuring of the clubs' finances and a clearing out of the old debt to allow trading having completed the reorganisation."

Goldberg insisted on Monday that Palace would exit the administration period as a debt-free company. Many fans, however, believe he is still playing fantasy football.