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If you read the Daily Telegraph two years ago today...
Mihir Bose Telegraph 15/07/2004
Foreign investors step in to keep QPR in business
Queens Park Rangers are being rescued by a Monaco-based company of unnamed Italian and French investors who are putting in money to make sure the west London club survive. In a series of dramatic recent developments at the club, who came out of administration only two years ago, the chairman, chief executive, and one other director have resigned and a new board have taken over.
The accounts for the season just concluded, in which QPR won promotion to the newly named Coca-Cola Championship, are not yet available. The club have only just finished preparing audited accounts for the year to May 2003, which covers the 2002-2003 season. However, these accounts have some information on the latest cash crisis.
The Daily Telegraph has seen a copy and in it the directors confess that if new money is not made available the club would have to be wound up.The directors' report says: "The directors have reviewed the group's budget for the current year and outline projections for the subsequent year including cash flows and forecasts of headroom available against current borrowing facilities, together with other likely sources of cash generation."
Following this review, the directors have formed a judgment that, at the time of approval of the financial statements, the group does not have sufficient resources to continue operating in the foreseeable future without raising additional working capital. For this reason, the directors are actively seeking to raise further capital to meet the shortfall."
QPR were a casualty of the football recession even before the collapse of ITV Digital but their main problem is that they were never properly rescued. They went into administration with debts of £10 million and instead of coming out with no debts, as clubs that go into administration seek to do, came out with a long-term loan of £10 million. This is to a Panama-based company on which the club pay a crippling 10 per cent interest.
Since QPR came out of administration, the board have been seeking new money and all sorts of schemes have been floated, but none has worked. QPR's ground-sharing with Fulham for two years was largely unsuccessful. Fulham paid £1 million a year as rent but QPR had to pick up the bill for all the extra match-day costs and made very little money. One source said: "It would have been much better if we had got [Mohamed] Fayed to pay us £15,000 a match to hire the ground and they met all the other bills."
Several people have been offering to find money. One of them, Tim Krause, an American who owns the United States team Milwaukee Wave, had various discussions with the club in the last few years. Bill Power, who is the new QPR chairman and provided £200,000 as a loan for the club, said: "In the end we found he was acting as an agent and it was not his own money he was investing. Why use an agent to find money when we can do it ourselves?"
It was a failure to find investors and disagreements about the way the club was run, leading to the horrendous cash situation, that forced the three directors to go: David Davies, the chief executive who was paid a salary of £135,000, Ross Jones, the chairman of the plc, and Nick Blackburn, the chairman of the football club.
The Monaco-based investors were introduced to the club by Gianni Paladini, the husband of Olga Paladini, who, through Moorbound Ltd, is a major shareholder with 22 per cent.The new investors will buy new shares that QPR are issuing. This will give them 29.9 per cent of the club. Since they are buying new shares and not shares from another director, it will mean the £1.8 million they are investing will go directly into the club. Chris Wright, the former owner with 14 million shares, and Moorbound with 18 million shares, will remain the other main shareholders.
Although the latest available accounts are a year out of date, they give an indication of QPR's predicament. The accounts show that in the 2002-03 season, while income rose from £5.6 million to £7.3 million, the loss increased 10 times from £413,000 to £4.3 million.
The accounts for the season just gone are expected to be much worse. But by the time they are revealed to the world the Monaco-based Italian-French alliance will be on board. The deal is expected to be done in the next few days.Power would not disclose who they are but said: "They are football fans."
[Originally Posted on http://www.queensparkrangersfc.com/papersjuly15.htm Also: http://www.boardroomblues.co.uk/telegraph150704.htm Hmm!
