Be Careful What You Wish For (44 page)

‘Chairman, after we have got John back from Narnia, where he is playing in the wardrobe with the lion and witch, and back into the real world, where players have fixed contracts and they can’t be changed and people like the PFA would stamp all over such a decision, I need to talk about football funding.’ I embarked upon a speech that I knew had to be a call to action.

I told them football was facing financial Armageddon outside of the Premier League and funding was desperately needed. I said that a vehicle like the Hero Fund had to be legitimised. Clubs were desperate for money and banks were closed for business. While I accepted the board needed to implement changes to ensure clubs controlled their spending, this was an issue for another time. Without third-party investment there was nowhere for clubs to source funding if they needed it. The Premier League could afford to adopt a pious attitude towards such funders, but their poorer cousins couldn’t. Any reasonable source of funding had to be made available and it was the responsibility of the board and the chairman to legitimise it.

My words had the desired effect as clubs rose to applaud. More importantly Lord Mawhinney understood what I was saying and knew how critical the financial situation surrounding many clubs outside the Premier League was at that time. He jumped on my words and asked the clubs if he was being mandated to achieve my objective. He was almost unanimously given the all clear. I had just taken a giant step to getting the Hero Fund into play and moved a step closer to solving my financial problems.

I had a conversation with Lord Mawhinney afterwards, who was very complimentary about what I had said and observed it was rare
to
see something so unanimously supported by clubs, adding that despite what I might think he was a huge fan of mine, which took me by complete surprise.

I flew back from Portugal in an upbeat mood and informed Keith Harris about the news, who in turn relayed it to the administrators of the Hero Fund. It was agreed that when, rather than if, it happened the first deal they would complete was with Crystal Palace as there was a whole raft of clubs in the queue – Leicester City, Sheffield United, Hull City and Cardiff amongst many others – who were chomping at the bit. And given Lord Mawhinney’s enthusiasm it was my belief that this would happen sooner rather than later.

Back in England I had the release of the film
Telstar
to contend with. So far Fortissimo’s ineptness over pricing left us unable to secure hardly any deals and we didn’t even have a UK distributor. So I decided to self-distribute in order to get a box office release which would give us the platform for a significant DVD release thus making some inroads into returning some of my investment in this film. In order to get this box office release I had to put up £250,000 as a ‘sprat to catch a mackerel’ for marketing and materials. We had chosen an opening date of 19 June and according to the scheduling there were no other films due for release.

Within weeks of us setting the date, the producers of the new
Transformers
film selected the same release date. It was a different film entirely but we were now competing for screens with a huge-budget studio film. To add to our problems,
The Hangover
, released some weeks earlier, was smashing box office records and still going strong.

We opened in thirty-two screens around the country and, despite further critical acclaim, the £250,000 brought limited media space
and
even less time in the cinemas. You opened on a Friday and over the weekend if you hadn’t taken what the cinemas considered decent money you were out of commission a few days later. Given we had to have certain regional cinemas that traditionally had low attendances, five days later we were out of fourteen theatres and shortly afterwards all of them. The only exception was reasonable success in the Warner Cinema in Leicester Square.

The £250,000 I spent was an educated marketing campaign to promote awareness, more reviews and support the DVD launch at the end of September. I had signed a deal with a distributor, G2, which was putting the film out on DVD via Momentum, one of the country’s biggest film companies. Given supposedly expert industry projections I hoped the DVD sales would be significant and enable me to recoup some of my investment, but as ever nothing worked to plan.

As soon as the film was released a man called John Repsch hit me with a lawsuit. He claimed that the film’s screenplay was adapted from a book he had written. This court action would block the DVD distribution deal, which was set for release in September 2009, and the very reason I had paid for a film release was to support the DVD release. The claim was spurious. After a legal review by my lawyers they considered he had no grounds for action.

But what Repsch had managed to do was get a CFA (conditional funding arrangement) with a set of lawyers, which in essence is a no win no fee scenario. The lawyers he used knew they had the leverage, as the release of the DVD would be held up by a pending legal claim. They suspected that it would be more economical for me to settle this grotesque claim than fight it for two years regardless of whether I won, and lose the opportunity to reclaim some of the £2 million-plus I had invested in this film.

After being forced to get my head around the reality of this
situation
, and trying to deal with gutless distributors who refused to market the DVD because of this farcical claim, I reluctantly made a commercial decision to pay a man who I had never met and was advised had no case against me in excess of £100,000 to ensure the DVD release in September went ahead. After all of that, incredibly, it was all pointless: the launch handled by Momentum, who had wanted no input from either me or the director, was a commercial disaster. At that point in time everything with this bloody film seemed to conspire against me.

By now the relationship with Agilo was deteriorating and they were becoming far more aggressive. They were no longer asking when the loan was going to be repaid; they were demanding to know, using a disputed default notice as leverage on a loan that was up to date and yielding a massive 15 per cent return! I was still attempting to reach an ongoing agreement with HMRC surrounding a payment plan for the arrears Palace were accumulating, aware my failure to pay represented another material breach in Agilo’s agreement, this time a legitimate one. And if that wasn’t enough I was now paying in around £500,000 a month just to keep Palace afloat.

I now embarked on the most brutal four months of my life. I descended into a hell of trying to save the football club and pumped fortunes of my ever-depleting financial reserves into it. I had to try and contain the increasing aggression of Agilo, get the Hero Fund into play, attempt to address my personal income streams and monies owed to me as well as becoming increasingly aware that there may be other agendas at play here!

I had managed to negotiate a deal with the Revenue for some payments and the balance of circa £1.8 million to be deferred until at least the end of August when the transfer window had closed, which would allow me to sell some players to raise some funds.

In negotiating with the Revenue their constant threat was to wind up the club. Their leverage was they knew how much money I had invested and how much the club meant to me so they used it to apply an inordinate amount of pressure. But now the cash drains on me were enormous in relative terms. From May to the opening of the new season I had put £4 million in Palace alone and I was in serious financial trouble. I soon realised that even if I got the Hero Fund in place the money would merely come in and go straight out to pay off this bloody hedge fund.

In the summer of 2009 I sat in my house in Spain with my father. I was being confronted with a very bleak future. I had been in tough spots before but nothing like this. I was like King Canute commanding the sea to go back, swamped in a tsunami of battles, which, in hindsight, were frankly unwinnable.

I was fighting on so many fronts that this was the time to take control of my own destiny, save myself and make the decision before it was made for me. At this time I should have put Crystal Palace in administration. I was the biggest creditor and I could have had a degree of control over events. But as I spoke to my father, who as he does today, had an unswerving belief in me, despite knowing the truth that the game, if you can call it that, was up, I once again backed myself to win, or at least come through all this adversity.

After many battles fought on their behalf by Lord Mawhinney and me the Hero Fund was approved at the end of August. We eventually got it past a suspicious FA with some very lateral and technical thinking and adapted the League’s rules to get the fund into play.

Now it was time for them to honour their obligation by putting the funding up for Palace as they had promised. They had completed all their due diligence and all that had to be decided was the
quantum
and commercial terms. To keep Agilo and their increasingly aggressive Brajovic at bay I had told them about the Hero Fund, whose deal with me would pay them and finally get rid of them!

HMRC had been paid some money but there were still seven-figure sums outstanding and I was negotiating with them again as unbelievably, despite our best efforts, we had been unable to sell any players during the August transfer window.

My personal circumstances were becoming ever more dire. I was running on fumes. By September I had put another £1 million into Palace. None of my deals were bearing fruit. I couldn’t get my money out of Spain and the portfolio of money supporting the overdraft was not recovering to give me any working capital. The bank was becoming increasingly concerned and switched me from a bank manager that I had for twelve years to a new recoveries division. Whereas before my relationship with the bank had often been on my terms, given the assets and cash I had, the balance changed and they were now applying enormous pressure on me and wanted to know the ins and outs of everything.

Palace had started the season slowly but the results were coming despite the backdrop of the pressure I was under, as well as the media reporting on a daily basis about cost-stricken Crystal Palace; it was testament to how strong we were as a unit that the team was focused on winning games. Normally, under these circumstances, the first thing to go is the results. But this wasn’t the case.

In the Carling Cup we drew the now Sheikh Mansour-fuelled Manchester City, who were spending money as if they were printing it themselves. Before the match the press billed this as the battle of the ‘haves against the have nots’, which was a little galling for me to read under the circumstances. They compared the cost of the two squads with Palace coming in at about £9 million and City
circa
£173 million. However, we got to showcase some of our young talent, notably Victor Moses, who we believed was worth £5 million of anybody’s money. He was outstanding on the night and regularly showed the England full back Micah Richards a clean pair of heels. Moses immediately caught the attention of Brian Marwood, City’s main recruitment officer. Was this our get-out-of-jail card if all else failed?

As often is the case in football when you are low on luck it completely deserts you. We played Bristol City away and relations between the two clubs were cool. More controversy ensued as Freddie Sears, our recently acquired loanee from West Ham, scored a legitimate goal that wasn’t given. The ball went in the net and bounced off the hoarding at the back of the goal and while everyone else witnessed it the referee decided to award a goal kick! There was uproar for five minutes to no avail and then with virtually the last kick of the game Bristol City scored a winner. Neil and I were outraged and lashed out in the media. I went a little further than Neil and accused the Bristol players of being cheats and promptly got charged by my close personal friends at the FA!

By now my finances had evaporated in liquidity terms. The bank was so concerned they wanted to appoint an external set of accountants to look at Palace’s financial position and Agilo tried to deploy the same tactics. I was not keen for either party to come in but especially not Agilo, given the disingenuity of their conduct and their clear agenda to get this loan repaid early. Also, the arrears with the Revenue would have caused another default notice. They knew I had a case to argue as they were pressing for payment on the back of a spurious default notice, but if they knew I was in arrears with the Revenue, they would no longer be pressing, they would be demanding.

As I was waiting for the promised term sheet from the Hero Fund and an agreed sum of money, I was working on other initiatives. I asked Phil Alexander to approach a selection of wealthy fans, some of whom were already sponsoring Palace in certain areas, and set up meetings with them. I thought that perhaps I could sell some of my equity to raise some cash to help the situation. Alexander in the past had been quite successful getting monies into the club for commercial properties such as shirt sponsorships or big advertising deals; he was an inveterate glad hander and I was to become well acquainted with someone on that list.

After being pushed, Alexander came back with nothing. Apparently none of these so-called big hitters and fervent Palace fans even wanted to sit down and have a chat with me. It struck me as strange as I know football fans, especially wealthy ones, and if nothing else, morbid curiosity would have got the better of them. This was when I began to feel that Phil Alexander and I were perhaps no longer singing from the same hymn sheet. I got the impression he was easing back, waiting to see if I failed and protecting his position. I also began to have an even greater sense that agendas were being drawn up by certain factions, nothing tangible just an insidious feeling.

Finally, as I was driving up to Cardiff for a game on 17 October, Keith Harris phoned to announce that he had agreed a deal with the Hero Fund. Due diligence had been completed and a term sheet had been agreed. Although they failed to offer us the £10 million I was after, they agreed to meet our backstop figure of £7.5 million. The margin they wanted was reasonable and all in all it was a great deal. I could now pay down Agilo, this difficult, aggressive and dangerous creditor, and still have £3 million plus of working capital to move forward on.