by Terry Lovell
McGrath proposed an immediate suspension of the meeting pending clarification of the legal issues, while Power insisted the meeting was closed as he had to visit his father-in-law in hospital. Events turned even more farcical when, in their absence, Trucco proposed another vote of no confidence in Power, which was passed unanimously. Paladini, Trucco and Dunga also approved a motion to make Devlin redundant with immediate effect.
Devlin moved on to become chief executive at Swindon Town, where he was forced to resign in February 2007 due to injuries sustained in a light aircraft crash. Power threatened to take legal action against Paladini and his co-directors, but went no further. In September 2005 Power resigned, followed shortly by McGrath, and sold his 14.5 per cent shareholding to Caliendo for £1.2 million, which took the collective shareholding to 59.3 per cent and put Paladini in total control of QPR. Paladini became chairman of the club, while Caliendo was appointed chairman of QPR Holdings Ltd.
Paladini claims that critical media coverage of Power and McGrath’s departure was inaccurate. ‘It was … a situation of a group … myself, Caliendo and Dunga on one side, and Bill Power, Mark Devlin, the chief executive who was running the whole thing, and McGrath.
‘We decide to take the club forward, OK. We needed to put so much in to pay the bills, otherwise we go bankrupt. At that point, they say, “No, we don’t want to pay any money in.” There is a choice there: “One, we buy your share … not to throw you out, not to put you out … we buy your share and we take the responsibility to take the club forward, or you buy our share and we go out and you move in.” It was very simple, straightforward. That is what happened. The thing is people say we orchestrate a coup to get rid of Bill Power and Devlin. This is not Zimbabwe! Plus the fact that this club, QPR was [registered] at Companies House. This is England, a democratic country, where everything is done properly. You just cannot do things without the directors agree on what is going to happen.
‘My other people [in Monte Carlo], they want to pay them off. They say: “Look, we put (in) £500,000 each.” I have to remortgage my house and I have to remortgage my other house to keep the club going. Nobody ever say that. What did I gain, other than worried to death about losing everything?’
Devlin said the motion to remove Power had ‘come like a bolt out of the blue. They had brought about a situation where Bill could be outgunned, and they seized the opportunity to take control of the club, so it could be run “the Italian way”, which was the phrase Paladini used following the changes there.’
At this time Paladini also had another, more public, dispute to worry about. Eleven days earlier, on 13 August, a group of men allegedlly burst into his office during a match against Sheffield United to force him to sign over his stake in the club. It led to shareholders David Morris and John McFarlane appearing with four other men at Blackfriars Crown Court, London, in September 2006, charged with conspiracy to blackmail, false imprisonment and gun possession. On the direction of the judge, Morris and McFarlane were found not guilty, which led to the other men also being found not guilty.
At the time there were rumours that Paladini wanted to move the club away from Loftus Road and sell the ground to property developers, which, along with the team’s performance on the pitch, left many fans unsympathetic towards him. Paladini opines that consequently he was seen as the villain of the piece: ‘I looked like I am the criminal. I was the person attacked here, and it’s a fact … there is a video of all the people here.’ During the months leading up to the trial, Paladini followed the advice of police to wear a bulletproof vest. He retrieved the jacket from a cupboard in his office. ‘You feel the bloody weight of that! I more likely to die from that than a bullet.’
The abuse aimed at Paladini spilled over on to the club’s message board, mindlessly targeting members of his family. ‘I have had so many bad press of everything … on the message board that my wife was having an affair with a black player, that my daughter was having an affair with one of the players, that my son was a gangster beating people up. Because of that my son don’t come here for a long time. Listen, my friend, I don’t want to tell you a sob story. But my staff, who have been with me, they know what I gone through.
‘I am not denying that I have sleepless nights, that I am crying, waking up in the middle of the night … I don’t know how to tell my wife … she has breast cancer as well … a grandson with cerebral palsy … I lost my mother of a heart attack in the year … so many things happen. But I kept going. My doctor say, “Mr Paladini, you bend so far it’s incredible you don’t break.” Like I say, I wake up in the middle of the night worrying about how to pay the wages, which I always did, until the very end. I don’t know how I managed to get the money.’
Certainly QPR’s future looked grim. Contrary to Paladini’s breezy claims to the media that the club was on its way to breaking even, it ended the 2005–6 season with total debts of £20.7 million, up from £17.29 million, and with the overall loss for the year up from £2.5 million to £3.34 million. More than £2.6 million was owed in tax and social security. Retail income was down – from £1.46 million to £875,000 – as were average attendances and seasonticket holders – from, respectively, 16,060 to 13,501 and 10,669 to 8,056. The club also took out further loans from the directors, principally Caliendo, totalling £2.57 million.
QPR’s financial plight had become so severe that, for the first time, in June 2006, Paladini acknowledged that it had been close to going into administration again, which, with the ground already in hock, would probably have led to its closure. In a statement posted on the QPR website, he blamed media coverage and speculation for ‘obscuring’ the club’s efforts to get back into the Premiership, before adding: ‘Without the financial support of the current Board, the club would have gone into administration last season. With the financial resources being made available, the club will not go into administration with the current Board in control.’
The following month Caliendo also went on the offensive against media speculation about QPR’s future, optimistically claiming that it was in ‘a fantastic position’ to end the season in the top half of the Championship (in fact the club finished in 18th position, four places from the relegation zone). Applauding the board’s efforts to get QPR back on a sound financial footing, he added: ‘Since September, we’ve put in over £4 million to ensure the club’s finances are in a stable position to build for the future.’ In reality the club staggered through 2006. As the bills continued to mount, so did negative publicity, including newspaper reports that players had been refused admission to the club’s training ground at Imperial College, London, because of non-payment of rent.
Events for Paladini took an even more critical turn at the beginning of 2007, when Caliendo, who, through Barnaby Holdings, had loaned the club almost £7 million, decided that he had stumped up enough cash for the black hole that was QPR. He and non-executive director Franco Zanotti, who represented Wanlock, were ready to sell their shares – respectively, 27.6 per cent and 19.9 per cent – for the price they had paid for them. The club’s cashflow crisis became so acute that Paladini, no longer able to approach either Caliendo or the more orthodox channels of financing, was forced in April 2007 to approach wealthy businessman Simon Blitz, the chairman of Oldham Athletic, for a £500,000 personal loan, although he was looking for £1 million. ‘They said they can’t afford a million,’ said Paladini.
Unable to put up QPR’s Loftus Road ground as collateral, as it was already in hock to the ABC Corporation for the £10-million loan, Paladini promised it would be paid out of the future sale of left-winger Lee Cook, one of the team’s best players, who joined QPR from Watford for a tribunal-fixed fee of £125,000 in August 2004. Blitz agreed. But what Paladini describes as ‘a private agreement’ went pear-shaped. By now he had received the money but, having spent it and with Cook unsold, was unable to repay the loan. ‘They told the Football League, who said it [the agreement] was illegal,’ said Paladini. ‘Anyway, we got a slap on the han
d.’ The money was finally paid in mid-July when Cook joined rivals Fulham for £2.5 million.
Paladini was also under pressure from HM Revenue & Customs, which was demanding a long-overdue payment of VAT arrears totalling £800,000. The deadline for payment, 4 July, was just weeks away. This was the final straw for Paladini. On 15 June he announced that he, too, was ready to sell his stake in the club, for the £650,000 it had cost him. But in the meantime, if QPR, which had narrowly escaped relegation the previous season, was to start the 2007–8 season, he had to find some money, and quickly.
Paladini found himself left with one option: he had to return cap in hand to sup with the figures behind the ABC Corporation. The size of the loan was £1.3 million, which he saw as short-term until revenue from season-ticket sales came in. He was also left with £2 million from the timely sale of Cook. This enabled him to repay the loan on time, failure of which would have entitled ABC to claim ownership of the Loftus Road ground. With losses for 2007 predicted at £2.6 million – an actual improvement on the previous year’s figures – the additional ABC loan brought Paladini brief respite.
But, at the same time, the ABC Corporation, as it was entitled to do under the terms of its original agreement with QPR Holdings Ltd, took the opportunity to restructure the terms of the £10-million loan and the rate of interest, which was increased from 10 per cent to a fluctuating LIBOR-fixed rate of about 11.5 per cent. And, instead of the final payment falling due in 2012, it was brought forward to 31 July 2008. This meant that if the loan was not settled by that date, ownership of the Loftus Road ground would pass to the ABC Corporation.
The early months of 2007 saw Paladini in a state of high anxiety. He was desperately close to running out of possible sources who could even be vaguely interested in coming to the rescue of a club heavily in debt – even the St John Ambulance Brigade was at one point threatening a winding-up order over an unpaid bill of £18,000 – and facing relegation to League One. ‘You won’t believe how many people I try. I try everybody,’ he said. With just three matches left before the end of the season – against Cardiff City, Wolverhampton Wanderers and Stoke City, teams higher up the table – Paladini was holding his breath.
To be mathematically safe from the drop, QPR had to win the home match against Cardiff City on 21 April. The omens were good. Cardiff’s previous two visits to Loftus Road had ended in 1-0 defeats via goals from Marc Nygaard and Danny Shittu. And 20-year-old Dexter Blackstock, bought from Southampton for £500,000 the previous August, ensured that QPR continued the run, by scoring the only goal of the match with a header in the 23rd minute.
Blackstock had been signed by former QPR midfielder Gary Waddock, who had been appointed manager in June 2006 but lasted just three months before being replaced by John Gregory. Ironically, although Waddock, who left the club a month later after a brief spell in a coaching role, faced some criticism for the size of the fee paid for Blackstock – his only signing – it could be said to be the most important signing the club had ever made. For Blackstock’s goal led to a fairy-tale reversal of fortunes for QPR, from a lowly, near-bankrupt club barely able to pay its milk bill to one that would come to be billed as the world’s richest, with access to an estimated total of £30 billion.
No one knew better than Paladini how disastrous defeat to Cardiff City would have been. He said: ‘If we had not won that match and we go down, I think that might have been the end of Queens Park Rangers for sure.’ Instead, the win encouraged Paladini to try a long shot and contact a fellow Italian and sports enthusiast by the name of Flavio Briatore. He had met the 54-year-old boss of Renault’s Formula One team a couple of times when they appeared together on Italian television. ‘I knew Flavio was a football man and I knew he live in London. He support Juventus and I’m friendly with people at Juventus.’
Through a mutual friend, a meeting was arranged at the Billionaire Club, a hang-out near to Harrods in London’s Knightsbridge, and owned by Briatore. Paladini said: ‘I went to see him and I told him the truth. Y’know, when you are in the shit, you try to tell people it is not that bad. I decided I’ve got nothing to lose now, so I am going to tell him. I told him we were losing money, we got £10 million debts with the ABC loan, we need another £5 million to pay the creditors. But compared to other clubs, it is not so bad.
‘I told him he would get good fun out of it, the club is in central London, the club is five minutes from his home. The moment that the press and everybody else find out he was involved in QPR, he got so much publicity, he couldn’t believe it. He get more publicity than in Formula One.’ Over the next few months the two men met several times, with Paladini chasing Briatore’s hectic schedule. ‘I went to meet him all over the place. He was doing all these Grands Prix, and I really needed an answer pretty quick.’
By mid-July 2007 Briatore had discussed Paladini’s approach with Bernie Ecclestone, who that month had been linked to a takeover bid for Arsenal following a board upheaval over the departure of vice-chairman David Dein. Ecclestone confirmed his interest in QPR.
However, Paladini had increased his options in case the talks with Briatore went belly up by approaching his old adversary Bill Power two weeks earlier – ‘Bill is a nice man, Bill is a good man’ – to ask him if he could ‘pull a team together’ to buy the club. A lifelong QPR fan, who was born in a block of council flats opposite the Loftus Road ground, Power was eager to take control once again of the club’s fortunes. With the acrimony of their boardroom bust-up a thing of the past, their next meeting took place in the chairman’s suite on 15 July, after a pre-season friendly against Celtic which ended with QPR being hammered 5-1. Power, having consulted certain business associates with the funds to take on the club and its debts, was in a position to sit down with Paladini and talk figures. But this time Paladini was in a chipper mood indeed.
Said Power: ‘He told me to put my chequebook away. He said he was confident of being able to do a deal that was going to reverse the fortunes of the club beyond anyone’s wildest dreams. He told me to leave it with him.’ A few days later Power was taken into Paladini’s confidence and was incredulous at what he heard. The people he was talking to, said Paladini, were Briatore and Ecclestone. Power added: ‘He said, “Look, be totally discreet, but that’s the magnitude of the people I’m talking to.” I couldn’t believe it. I thought he had gone potty.’
About two weeks later, on the morning of 14 August, Paladini told Caliendo about his talks with Briatore and Ecclestone and how close he was to completing a deal that would resolve the club’s long-standing financial problems. During these months of financial crisis Caliendo had also been trying to find a buyer and, said Paladini, claimed to be in promising negotiations. ‘He say: “I’ve got another deal on the table with some Russian or some people for about £50 million.” And I say, “Bullshit! I don’t believe that, Antonio.”’
Paladini claimed that later that day they a signed a legal document stating that whoever failed to conclude an agreement with his party by Friday, 31 August would resign and sell his shares to the other person. ‘I sign a piece of paper with Antonio, saying … if I can get a deal [with Briatore] to get us out of trouble, we don’t go bankrupt, we save our face, we lose some money but we get some back, I do it. If you do it, do it. I sign the paper here with my barrister and everything.’ The date was important because the club ‘had to pay the bill of the taxman, £900,000. So I said: “Antonio, you know our [tax bill] commitment. If you come up [with the money] by Friday [31 August], you can take the club over. I leave the club, you give me my money, you do what you want.”’
Later that same day, just hours before QPR lost 2-1 in a home game to Leyton Orient in the first round of the Carling Cup, Caliendo issued a statement through the club’s website announcing that Paladini was being dismissed as club chairman, which was followed by another statement asserting that the club was not for sale. Caliendo’s actions led to a highly public stand-up row between the two men in the chairman’s suite, with direc
tors of both teams looking on, and which was reported the following morning in embarrassing detail on the message board of the Orient fans’ website. The animosity between the two men had reached such a pitch that a battle for control of the club was anticipated at a boardroom meeting scheduled for later that month.
But while Paladini’s talks with Briatore were continuing on course, Caliendo was having serious problems. And on Thursday, 30 August, 24 hours before the deadline, his deal had gone south. Said Paladini: ‘He tell me he can’t get these people, that they bullshit him, and they didn’t come up with the money. We had a meeting on the Friday with the ABC people and they say: “If you don’t do this deal with the one or the other … I don’t care who you do the deal with … we get the administrator in by Monday.”’
After lengthy meetings with Paladini and Briatore’s advisers, which continued through to the Friday, Caliendo agreed to stand down as chairman of QPR Holdings Ltd, sell his shares at the price he had paid for them – £276,488 – and waive claim to £4,851,000 he had loaned to the club. A further loan of £2 million, which would be interest free, would be repaid once the £10-million loan to the ABC Corporation had been settled. Zanotti would also have to stand down from the QPR Holdings board and sell Wanlock’s shareholding at the price he had paid, £199,000. Paladini, on the other hand, would sell some of his shares, continue in his role as club chairman and have a highly lucrative five-year contract in his pocket.
Paladini believes Caliendo was fortunate. ‘He is a lucky man,’ he said. ‘Like I am. If we didn’t have Flavio to come in, we’d have gone bust. Caliendo would have gone bankrupt, I would have gone bankrupt. The club might have gone into administration. What kind of money would he have got back? Yes, he lost £6–7 million. But that’s football. Caliendo had a chance to bring in a new investor. It didn’t happen.’