Be Careful What You Wish For (8 page)

Time was against me doing this deal because the agreement with Andrew expired on 30 June 2000. Andersen’s wanted to take the offer but I said let’s go again. We unbelievably had 121 bidding against themselves.

When they upped the offer to £70 million and I still refused to sell, Andersen’s almost went into meltdown. But the way I wanted to sell PPS was indicative of how I ran the business, pushing the envelope on every deal.

My apparent disregard for what 121 were offering made them want it even more. Eventually they got to £88 million and refused to go a penny higher. It was somewhat remarkable, given that they had been bidding against themselves from £45 million onwards.

I eventually phoned Vodafone and told them we wanted £90 million for the business or we would sell it in twenty-four hours. They required less than an hour to say no.

So, on 27 April 2000, I instructed Andersen’s to accept 121’s bid of £88 million. We entered into a period of exclusivity with a timetable of completing in May. This is where the dynamics changed and the fun began.

When Andrew was finally informed what price I had accepted, the silence was palpable. His lawyers demanded to know how we got to this figure. I metaphorically shrugged my shoulders.

121 came in and brought a massive team of accountants and experts to go through all aspects of our business. This was a painful and arduous process. And the balance of power had shifted in the negotiations: since I had accepted their offer, my façade of being reluctant to sell had been destroyed.

I soon discovered that due diligence was Gaelic for get the price
down
. They wanted to go through the computer system and the stock, two prospects that concerned me, to analyse every financial agreement and document, and interview key staff in the business without my presence. They wanted to understand every commercial deal we had ever done. I didn’t want 121’s people sniffing around behind my back; I wanted to be present at every meeting they held. They tried in vain to circumnavigate me.

But 121 and their due diligence were not my only problem. I had two others that almost broke the deal: Andrew Briggs and David Goodman. Andrew was communicating only through his lawyers and trying to make other demands to indemnify himself against this and that.

And then there was David Goodman. The computer system had been sold as the best, which it was – when it was working! 121 wanted the intellectual property rights, and I believed I held them. But it turned out I was using it under licence. Goodman was a prickly little bugger who had got up most people’s noses. I was probably one of the few people that tolerated him. I demanded the IPR but he wanted big money for them. I couldn’t believe it – I had paid him untold amounts of money and swallowed the £400K in BT Costs because of his software balls-up and now this.

There was also the added complication that he had been diagnosed with a very serious illness; thankfully he was to make a full recovery in time. The treatment he was taking made him even more difficult to deal with, and while I tried to be sympathetic to his plight, at times it proved very difficult. After all, this was a computer system designed to my specifications and he was holding a loaded gun to my head. When he demanded £10 million for the IPR I was consumed with rage. And all this was going on without the knowledge of 121.

The cash flow at PPS was creaking again. No, more to the point, it had reached a critical stage. During my absence, my fellow directors had failed to hold things together and had let the business drop. As PPS balanced on a knife edge of cash flow, a couple of months of bad trading put us under extreme pressure.

Back at Head Office it was one meeting after another. 121’s guys went out to stores and the warehouse without my knowledge, precipitating a massive outburst from me. In a fit of pique I threw their guys off site. John Barton called me to complain. I told him they either coordinated through me, or they could piss off. John Barton reminded me of the size and importance of this deal, and told me to calm down and let them get on with their jobs, but he assured me that they would extend all courtesies.

Then I discovered a hole in the stock to the tune of £700,000 and had to call in a favour with a wholesaler to get a million pounds’ worth of stock and to arrange to pay him after the completion of the sale.

121 wanted a demonstration of the computer system and on the day they turned up it only bloody crashed. I made the decision to go ahead with the demo, but I had to create an illusion of it working using a back-up system, a mobile phone and a guy who would know what store I was logging into in advance. After going through this routine of what pre-arranged store I was logging into, my in-house IT guy, Suresh, downstairs, would log into the said store and I would illustrate how transactions were going in Liverpool, Newcastle, Dundee, Croydon. It was smoke and mirrors, but I pulled it off – they loved the real-time system and went back to their headquarters raving about it.

We were reaching the end of May and 121’s due diligence and legal meetings were still ongoing. Their legal people were getting
right
up my nose and Andersen’s were invaluable at keeping things together.

Briggs’ absence caused unnecessary concern with 121, who thought the deal would break down because he was not on board. I showed John Barton the confidential agreement between Andrew and myself so he understood there was no issue in the sale, just Andrew being tetchy about the differences in what we were both getting. John understood immediately and brought some order to the fraying nerves at both ends.

121 now started to chip at the price. They had discovered that the contract for the Time Computers concession was not being renewed and attached a £10 million valuation to it. That was nonsense and they knew it; they had seen the volumes we were shifting weren’t that great. So a £10 million reduction was a try-on. They also had a raft of adjustments, which caused much argument and nearly broke the deal on a daily basis.

More pertinently, I had decided that I was going to buy Crystal Palace Football Club and as much as I had tried to keep it under wraps, John Barton was aware of it. He tried to knock the price down to £65 million, we horse-traded, negotiated and beat each other up until we eventually settled on the final sale price of £77.8 million.

Right in the middle of this I had to fly to America as I was best man at my best friend Walter’s wedding. I was writing a speech for that, whilst juggling calls between lawyers and accountants representing my sale of PPS for £78 million, and another set of lawyers and accountants for my purchase of Crystal Palace Football Club, which I was buying with money I didn’t even have yet.

On returning from America I discovered our cash flow was completely shot to pieces. I pushed to close before the shit really
hit
the fan. David Goodman finally agreed a figure of £1 million for the licence, not the IPR and no software support contract.

Adding insult to injury two of my directors refused to sign standard non-compete agreements. That was it for me. I had held this thing together by duct tape, whilst they had taken the foot off the pedal. These two difficult sods were about to get more money than they had ever seen and they were arguing about the ability to sell accessories or some such crap in the future. I took both of them outside and said they either signed or they would get fuck all. Let’s say it had the desired effect.

121 were cooling and I sensed the deal was falling away. I suggested we complete on Monday 18 June in a hotel in Borehamwood and drove there first thing Monday morning. 121 were sticking on wanting the IPR for the software and a maintenance agreement.

Even so, we couldn’t complete the paperwork, as Andrew’s lawyers were not ready. The following day we tried to sign the completion paperwork again. Andrew had signed a power of attorney overnight with his lawyers who signed for him, completing his end of the agreements and providing the bank account details of where he wanted his share of the sale proceeds sent.

All day I worked on Goodman. Eventually I got his assistant to provide a third-party software maintenance agreement but I couldn’t get the IPR. In the morning I had no choice but to go with what I had: a third-party service agreement and an irrevocable licence to use the software.

I called John Barton into an alcove next to a vending machine outside the room, and after a few words he finally shook my hand on the deal. I went in, signed document after document in triplicate, and also signed my own resignation.

I had wanted to stay and oversee the takeover, but they wanted to put their own footprint on the business straight away so I agreed to go, and that was to prove a very costly decision.

On 20 June 2000, ten days before my agreement expired with Andrew and probably a matter of weeks before the cash flow ground to a halt, I signed away my ownership of the company. It had been five years and ten months since we had opened the doors to that first shop in Slough on 6 August 1994. This brilliant business built out of acumen, alchemy and bloody single-mindedness was now in my past. I had swapped passion, drive and immense achievement for a big bag of cash. Was it an equitable swap? I wasn’t quite sure, but it did give me the opportunity to look after my family.

And who knew what else would come of it?

5

HOW TO BUY A FOOTBALL CLUB

I’M OFTEN ASKED
how I bought a football club.

And more often than not my glib response is: ‘I wrote a cheque for £10 million.’

That’s the simple answer, and of course you have to have the funds to cover that cheque, which fortunately – or unfortunately – I did. Obviously the reality is much more complicated and convoluted than that, so I think the bigger question should be: why would you buy a football club? And, more to the point, why buy an ailing south London club – as cynics would say – like Crystal Palace?

People buy football clubs for many reasons but there is always an element of ego involved. Some simply have the means and want to show it off, for some it’s the kudos that comes with being the owner of an iconic British institution; others, especially those from foreign shores, buy clubs to gain instantaneous legitimacy and credibility. I know one chairman who bought a big club in the north-east that he had no affiliation with whatsoever just because his best mate was vice-chairman of a perceived top London club. And I’ve heard it said that one big west London club was bought as the world’s biggest
life
insurance policy for its owner! None of these motives has much to do with football itself, and none of these motives applied to me – OK, maybe there was a bit of ego in there – but my agenda was more about building something meaningful.

When I was younger, most of my friends abandoned their local clubs. Even my own brother claimed to support Tottenham at one stage, though he didn’t know one end of the Tottenham High Road from the other. I put that down to the trendy Admiral kit that Glenn Hoddle was wearing at the time rather than a treacherous defection. But I wasn’t one of those that subscribed to supporting a fashionable club. Otherwise I would have moved to Hertfordshire and become a Manchester United fan!

Palace was the team I supported as a child, the team my father played for, and a club that was perceived to have vast if unrealised potential. In fact, at the time I was looking to buy Crystal Palace, I could have bought Leicester City – it was a far better deal for me financially – but Crystal Palace was the club I wanted.

In the previous five years I had overcome every adversity and turned it into success, built a business from virtually nothing and sold it for a vast amount of money. At the ripe old age of thirty-two, I had the world at my feet. I didn’t need to work another day in my life but given my personality I needed a challenge. Running a football club was that challenge, one that I believed I was more than capable of rising to. Turning potential into reality was something I was good at.

That covers the why. If you asked me now what owning a football club is like, I’d say I imagine it’s a bit like being a drug addict. You indulge yourself in something you enjoy, knowing it’s bad for you, and after the initial rush of pleasure it gives you a headache and sucks all the money out of your bank account.

* * *

In the summer of 1997, as a token of appreciation to my father, I spent £10,000 on what Crystal Palace laughingly described as a ‘luxury box’ so he could watch his cherished football team out of the cold.

To some extent that is where it all began.

The following year I received a call from the club’s extremely pretty marketing manager.

‘If you’re ringing me up to renew that scabby box at Palace the answer is no,’ I said cheekily. ‘If you’re calling me to go out on a date with you, the answer is yes.’

Whilst the company of a charming and beautiful woman is priceless, after dinner not only had I spent £10,000 on the executive box, I had also coughed up £100,000 for a PocketPhone Shop marketing campaign with Crystal Palace Football Club, an expensive evening out by anyone’s standards! Was the date worth it? I think I’ll keep that to myself.

In truth I was showing off to impress her, but there was also an underlying interest in becoming involved in the club in some way, which appealed to my ego. So not only had I had a charming evening, but I also had the promise of an introduction to her boss, the new club chairman.

In the autumn of 1998 I met Mark Goldberg.

Mark was a personable, energetic character – a small chap, with slicked-back hair and braces – who struck me as being a little guilty of style over substance. He had recently paid £20 million – a vastly overinflated price – to acquire the club from its previous owner, Ron Noades, the same Ron Noades who had been locked in a long-running legal battle with my father.

Mark’s hugely expensive deal hadn’t even included the purchase of the stadium, leaving Noades with some feeling of tenure over the club. Rather like a noisy ex-wife, he felt this gave him the right
to
expel his opinions. In what was his charmless way he’d spewed out one of them at the time: ‘Goldberg was stupid and he wet his knickers when I agreed to sell him the club.’ In my opinion, Noades was a thoroughly dislikeable man, who had used the club to make money for all it was worth and showed no respect for Mark and, more importantly, the club. Rather than disappear into the ether with his huge bounty, he had the audacity to ridicule someone who was prepared to put their hand in their own pocket. This made me gravitate towards Mark.