Trust Letter to Simon Jordan
posted by Alan Palmer on Saturday 24th of February 2007 12:00:00 AM
The Trust wrote the following letter to Simon Jordan, dated 28/01/07. To date, Mr Jordan has not replied.
Dear Mr Jordan
We are writing with regard to the Football Paper’s story, on 21st January, about your intention to raise £15M of finance to support the acquisition of Selhurst Park.
The Trust welcomed the news of your purchase of the Selhurst Park freehold on the 10th October 2006. Like all Palace fans we were delighted that years of uncertainty had ended and club and ground were reunited under your ownership. However, the Football Paper’s report raises issues that now give the Trust cause for concern.
While we understand the need for financing and the necessary structures to be put in place, we are concerned with the level of rent the club will be required to pay under the terms of the proposed 25-year lease.
From our understanding of the lease in place when Altonwood held the freehold, it appears that the new lease will result in the club paying higher levels of rent, particularly after the first three years, than it did under the lease with Altonwood.
The terms of the borrowing require full repayment within 7-10 years, either by refinancing or through the sale of Selhurst Park. While we accept that the former will be the ideal and preferred option, the idea that Selhurst Park could be sold to repay a loan will concern many supporters, especially as we are unaware of any firm proposals to relocate the club.
The funding document referred to in the Football Paper report, seems to highlight the value of Selhurst Park as a potential property development. Although this emphasis is due to the need to attract finance it still creates a feeling of unease among supporters.
The Football Paper also raises the issue of long-term season tickets. Undoubtedly the deals on offer are financially advantageous to supporters. Our concern is that the club’s generosity could backfire in future years. If a substantial number of long-term season tickets are sold, at today’s prices, it could lead to a shortfall of income in future years coinciding with the club’s rent increases.
With these concerns in mind, we would ask for your response to the following questions.
- Is it correct that the club will be paying higher rent under the terms of the new lease than under the previous lease with Altonwood?
- In the event that repayment of the borrowing can only be achieved by the sale of Selhurst Park, is there a covenant in the lease that protects the club’s tenancy and prevents Selhurst Park being sold for alternative use?
- Is it your intention to redevelop the stadium or have you plans to relocate the club?
- Have potential shortfalls in future income been taken into consideration with regard to the sale of long-term season tickets, and how would such shortfalls be made up?
In finishing, the Trust wishes to reiterate that we share your desire to see Crystal Palace back in the Premiership and established as a top-flight club. It’s fair to say, that in the event that promotion to the Premiership is achieved, the massive financial rewards would remove many of the concerns we have raised in this letter.
For the present, Crystal Palace is a Championship club and while that remains so, we believe our concerns have validity.
We look forward to hearing from you.
Yours sincerely
Alan Palmer
On behalf of the Trust Board
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