Palace hopeful of "many interested buyers" after entering administration
26 January 2010
Crystal Palace entered administration this afternoon after the pressure from creditors and the size of the wage bill finally became too much for owner Simon Jordan to bear. But in a statement issued by the club, Brendan Guilfoyle of administrators P&A Partnership said: "We are hoping our appointment will be short-lived as we understand there are many interested buyers."
Palace will have 10 points deducted by the Football League for entering administration. As things stand today they have 37 points and are just two points outside the play-off zone in the Championship. With 27 points, they would be just four points clear of the relegation zone. Under Neil Warnock, they have been punching above their weight in the division with dwindling resources. Warnock's future will now come under scrutiny: the administrators will be looking to slash costs, and as the manager he will be among the higher earners and therefore vulnerable.
Palace have been in administration before, when Mark Golberg's ill-fated ownership of the club at the end of the 1990s came to a sticky end. Jordan bought the club in 2000 and made himself chairman. He has since invested time and money trying to get Palace back into the Premier League and keep them there. Under his control they have spent one season in the top division, in 2004-05.
Palace's debts are now around £30m according to reports and they were due to face a winding-up order from HM Revenue and Customs tomorrow. Palace's financial woes have been apparent since late last year. The club had hoped to stay afloat for a while longer by selling the highly rated teenage striker Victor Moses for up to £10m but that did not prove possible in time. Moses is now an asset the administrators will sell unless a new owner with deep pockets takes over quickly.
Stefan Szymanski, Professor of sports business at Cass Business School in London, said he was not shocked to hear of another British football club going into administration. "No-one should be surprised that football clubs regularly become insolvent," he said. "This is not a credit crunch phenomenon, it is not a British phenomenon, it is not even a football phenomenon – most professional sports clubs around the world live on the edge insolvency because of the nature of sporting competition.
"In English football there have been around 50 cases of administration in the last 20 years, including a two-year spell for Crystal Palace at the end of the last century. The reason is almost always the same - ambitious owners, egged on by fans, overspend and fail to achieve the glory that was in their reach, fans become disillusioned and attendance falls, costs exceed revenues and so the bills can’t be paid.
"Dismayed as hardcore Palace fans may be, their story also demonstrates that there is no reason to despair. The current owner, Simon Jordan, bought the club 10 years ago and made good his promise to take the club to the Premier League within five years. A new buyer for Palace will almost certainly be found and the club will rise again- there are enough football supporters in South East London to run a viable club. Indeed, of the 88 Football League clubs that existed in 1923 only three do not exist today, and all of those disappeared before World War Two. Palace will probably go through a lean period on the pitch, but long-term survival is not in doubt."