Minus 10 – Pompey Don’t Do Summers …
… but if they did this one would be pretty much what they’d come up with. Just when you think it might brighten up another rainstorm blows through, drowning all hope of recovery. With the new points deduction imposed by the Football League yesterday Pompey’s Summer continues to mirror that of Rangers in a macabre North – South symmetry.
With Pompey’s 2010 CVA being superceded by its 2012 CVA, the League has ruled that the creditors under the former were not given the opportunity to indicate their satisfaction with the latter. Given that the 2012 CVA reduces their payment from 20p in the £ to 0.4p this would seem to have been a serious omission. Baker Tilly representing the OldCo (PCFC Ltd), now in liquidation, at the creditors meeting clearly was not good enough. As a consequence the Football League have imposed four clear conditions on Portsmouth Football Club, and any company that owns it, being a member of League One.
Those conditions in their entirety are:
1. Accept a deduction of 10 points in the 2012/13 season;
2. Agree that only a limited proportion of the secured debt from the previous club can be carried forward into the new company as secured debt.
3. Pay all football creditors in full, unless mutually acceptable compromise agreements are put in place.
4. Agree to a range of other restrictions on playing budgets, future borrowing and loan repayments for the next 5 seasons.
In some quarters of Pompey this led to gnashing of teeth and rending of hair in the time honoured fashion of fans feeling they have been punished for the errors of owners long since fled. And so they have. The litany of who to blame extends back into the mists of time. Where it begins frequently depends on when the blamer first started supporting the club, but the favourites are from the last four years of Pompey’s descent through the nine circles of hell; Gaydamak (father and son), Redknapp, Storrie, Al Fahim, Zahavi, Al Faraj, Jacob, Chainrai, Kushnir, Maneh, Yossifoff, Azougy, Andronikou, Lampitt, Antonov, Birch, the Premier League, the Football League and the Football Association are targets of criticism, both rational and irrational. Yet despite fan feeling it is hard to say that sanctions against the club, as a business, are not deserved. Few fans would disagree that to continually duck out of paying what is owed is acceptable from any business, and certainly not one run on greed as cynically and without proper care as has been the case at Portsmouth Football Club. The word on the street in Pompey has long been that many fans have had enough of being lied to, ignored, insulted and priced out of the club they love by such owners.
Condition 3 was always a given. The two potential purchasers of the club, Blaram Chainrai’s Portpin and the Pompey Supporters’ Trust, have both place a condition on their purchase that Birch reduces the wage bill. It is expected that any monies raised from transfers will go to pay the football creditors and lessen that total – in particular the large bill for deferred payments to players that has been run up. Both bids have plans for dealing with the remaining football debts.
It is in conditions 2 and 4 that the interest lies. First because they prevent a continuation of the problems caused by Portpin’s debentures in the past and second because they are laid so openly on the line.
In curtailing the secured debt being rolled forward in its entirety, the League prevents a repeat of Portpin’s actions last time it bought the club whereby it moved an £18m charge from PCFC (which it owned) to PFC (2010), which it also owned, re-securing it on Fratton Park. The ground is worth nothing approaching that amount. Any amount rolled on would be based on a more realistic valuation. In effect the League is saying to Portpin ‘you cannot realise the £18m you claim to be owed this way.’
In condition 4 the League also warns about the future loading of debt onto the club and makes a leveraged buy-out by another party more difficult. Spending on players was always likely to be limited, given the controls on wages now active in League 1, but the League appear to be warning that any ‘financial doping’ as was attempted with CSI’s £10.5m loan last season will not be acceptable. The 10 point deduction will also go some way to making that less worthwhile, reducing the chances of the club bouncing back into the Championship.
Administrator Trevor Birch has been quoted as saying, ‘Portpin are still reeling and reviewing the situation.’ Fans may be excused a certain schadenfreude moment on reading this. The only real surprise in regard to Portpin would be if that company really thought there was any chance that the £18m could be recovered from Pompey’s current situation.
The bigger surprise is the openness with which the conditions have been announced. It was said that conditions were imposed on Portpin on exit from administration in October 2010, but no detail was known. One wonders if the current re-convening of the Department for Media and Sport’s Enquiry into Football Governance may be a contributory factor. Increasing calls for greater transparency in football governance, from MPs, from Supporter Groups, in particular the Trust movement, and for an end to the culture of debt, may have all paid their part. There is no doubt that a section of Pompey’s support have become more inquiring about the behaviour of club owners in recent months, particularly after the demise of CSI. Led by a Trust now able to put together a potentially viable bid for a club in perhaps the biggest fan buy out so far, this indicates that such knowledgeable fans have to be taken seriously by other clubs in the future, rather than dismissed as ‘aliens’, ‘sickpots’ and ‘morons’, as certain owners are wont to do.
It is a sad indictment of where the game currently stands that fans have to know about business finance to ensure they have a club to support, but fan vigilance is still the most reliable way of keeping such owners in check. Fan complacency, as has been the case at Pompey under the ownership of both Portpin and CSI, is no longer an option. Pompey fans have learned the hard way. It has often been said it will take one spectacular demise of a club to bring home the problems of English Football Governance. Pompey is perilously close to being that club.
Birch now has to finalise the sale of the club. The League complete their statement thus, ‘The Board will consider the application for transfer of membership once the administrator has selected the final purchaser.’ Given the restrictions the League has placed on that transfer we can only hope Birch is left with little choice but to sell the club to the Supporters Trust.
The Pompey Trust is still seeking pledges from Pompey fans to back their bid. Information can be found here
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