Football: Tycoon's Palace dreams on brink of shattering ruin

BY MONDAY evening, Mark Goldberg's world could have fallen apart. The man who bought Crystal Palace last year for pounds 22.8m has overseen them accumulate debts of pounds 20m and move into administration. In the past year, Goldberg has racked up personal debts totalling pounds 30m, and on Monday he faces his creditors to see if they will accept partial payment. If they will not, he will face bankruptcy.

On the same day, the future of Palace, the south London club that Goldberg has professed to love ever since he announced that he wanted to buy it from Ron Noades, should become a little clearer. The Football League has given the First Division club until Monday to find a buyer who can secure their future for the coming season.

Simon Paterson, of the club's administrators Moore Stephens, has been considering bids for Palace and the board of the League will decide which one should be carried forward. Had there been no suitable offers, Palace would be on the brink of expulsion from the League. If the current bids turn out to be unacceptable for any reason - and the League will want assurances that monies promised are actually available - Palace could still be expelled.

Life has certainly changed for Goldberg since he saw an advertisement that Noades placed in the Financial Times two years ago seeking a buyer for Palace. He was solvent, for a start, and when he picked up the telephone and told Noades that he was a lifelong Palace fan who had big plans for the club, Noades had no reason to disbelieve him. Noades agreed a plan whereby Goldberg bought 10 per cent of the club for pounds 3m with an option to buy the rest when he had raised the money.

Even before that point, Goldberg had not had an exactly glittering business career. In 1991 he had severe financial problems when his Brighton-based hotel business and another company, MSB Appointments, were put into voluntary liquidation. "I was too busy winning business and didn't pay attention to the money side," he was later quoted as saying of those failures. To say, by the time he contacted Noades, that Goldberg had failed to learn from his mistakes would be an understatement.

Goldberg had to sell a large block of shares in his computer recruitment company, MSB International (his most significant business venture to date), to raise pounds 4m, of which he gave Noades pounds 3m in November 1997.

During the first months of 1998, he then tried to raise funds to complete the purchase. He failed, and with no other financing options left open to him, he disposed of pounds 22.6m of his MSB shares to raise the money and completed the deal with a loan of pounds 4.6m from Noades.

By the time he signed the papers, the club was already in trouble. A boardroom source told The Independent that on the day Goldberg took over, the club's bank account was frozen. The new chairman may have bought the club, but he had little or no working capital. He then made matters worse by embarking on a series investments (the recruitment of staff, including Terry Venables, the former England coach, foremost among them) that he could not afford. That led directly to the club's financial deterioration.

Perhaps the most damning indictment of Goldberg's desire to own Palace at all costs was that he went ahead with buying the club even when told that it was not a sound business move. It is understood that Goldberg was given legal advice before the purchase that Palace's lease at the 26,400-capacity Selhurst Park (which is still owned by Noades) was far from watertight and that the club could theoretically be made homeless at some stage in the future. He went ahead anyway.

No one has ever accused Goldberg of lack of ambition, and listening to his plans for Palace - a club whose history of yo-yoing between the top two divisions was enlivened in the last decade by defeat in the 1990 FA Cup final against Manchester United - it was easy to see why. They would be Premiership giants within a couple of years, he said. Venables would be at the helm for the transformation, he said. The club would become the most famous in China and be hugely profitable, he said. None of these dreams, however, have come to fruition.

What made Goldberg embark so recklessly on such a venture? His fervent passion for Palace, a club he says he has been devoted to since he was a boy, is one clear factor. Palace staff, however, have said they had never heard of him before he contacted Noades.

Whether or not he was a die-hard fan, it seems that Goldberg genuinely saw Palace as a business opportunity to seize. It was not long before he was struggling, however.

By January of this year, Venables had realised that there was little or none of the promised finance to build a team of contenders. He was unhappy that players such as Paul Warhurst had been sold without his agreement and that Matt Jansen, a promising young player, was also about to leave to help alleviate the debt.

The murmurs of trouble at Selhurst Park quickly turned to rumbles. Creditors started to ask questions about their money. Jim McAvoy, the club's chief executive, departed and was critical of Goldberg's behaviour. Even Goldberg's public relations executive, Sara Pearson, resigned, saying she was owed pounds 60,000.

On 3 March, the crumbling edifice of Goldberg's dreams began to collapse. He called a board meeting to announce that he was bringing in administrators Buchler Philips, who said that the club's total debts stood at pounds 20m. Buchler Philips were quickly followed by another firm, Moore Stephens, which has been attempting to sort out the mess ever since.

Goldberg's personal finances, closely intertwined with the fate of the club and myriad other business ventures, have progressively worsened. Yet the man who lost it all has vowed to fight on.

In a move that one of Goldberg's personal creditors last night described as "unbelievable", Goldberg has emerged as the man behind a City consortium that is bidding for Palace. In a letter to creditors in the past few days, Goldberg confirmed that he has put together a bid for the club, the same club he took into administration with debts of pounds 20m. Whether he will be allowed to play any role in Palace's future remains to be seen.

The Palace Debts

An estimated statement of affairs at the end of March, when the club was already in administration, showed Palace's main debts to be:

pounds 1.87m to Tramp Group Limited

pounds 3.09m to Midland Bank

pounds 2m to Singer & Friedlander, a fund management company

pounds 949,000 to Inland Revenue

pounds 413,000 to Contributions Agency

pounds 828,000 to Customs & Excise

pounds 3.5m to trade creditors

pounds 1.6m to UK football clubs

pounds 5.4m to foreign football clubs

pounds 14m in contractual liabilities