Minus 10 – Pompey Don’t Do Summers …

By on Jul 13, 2012 in Finance, Latest | 28 comments

… 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With Pompey’s 2010 CVA being superceded by its 2012 CVA, the League has ruled that the creditors under the former were not given the opportunity to indicate their satisfaction with the latter.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.

The Football League

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

You can follow SJ Maskell on Twitter by clicking here.

You can follow Twohundredpercent on Twitter by clicking here.

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    28 Comments

  1. Pompey have got let off scot free again.

    they should have been fined 30 points.
    10 points for their second failed CVA
    10 points for their third CVA
    10 points for not paying their taxes and debts.

    Luton/Leeds/Bournemouth/Rotherham all got higher fines of points…..

    hopefully the FA will fine them also with points and ca$h to stop the cancer in the game…..

    old wag

    July 13, 2012

  2. Blimey Pompey got off light! But to be fair If they even exist in two years time it’ll be a miracle, roll on the good times.

    Joe Roughnek

    July 13, 2012

  3. Tell the League to get stuffed.Talk about kicking a dog when it’s down.
    let’s start again by starting in the highest non-league and building a team to be proud of once again

    Andrew Martin

    July 13, 2012

  4. An intelligent and informed article by Mr Maskell. Fans (including me) must be wondering whether it would be better to start the season in League One with -10 points, with a hastily put together team of free transfers and unattached players, and with every prospect of relegation to League Two (and the carried forward debt), or to be liquidated and to start afresh with a totally new Supporters Trust owned club, free of the demands of over-paid players, no carried forward debt, and with the fan base the size of Pompey every prospect of promotion from Conference South. But, if a brand new club, would this give Portpin a tighter hold on Fratton Park because the League sanctions would not apply? And would Portsmouth City Council uphold the current planning constraints on Fratton Park? (It might come to a Council vote?) If so Fratton Park could be developed for commerce or housing and the new club might have no Fratton Park. And also what about the land around Fratton Park? It is so complicated it is hard for fans to see the best way forward, I would welcome Mr Maskell’s comment on how things would stand, especially regrading Fratton Park and the surrounding land, if the club was liquidated and the Trust started a brand new club.

    Adrian Breakspear

    July 13, 2012

  5. correct me if i’m wrong but isn’t this the 2nd CVA not the 3rd.. if so you can knock 10pts off that and lets be fair they’ve already been docked points in the Premier league and in the Championship so with this points deduction it has to be close to 30 points anyway. Sorry but saying the club deserves more points this time around is f’in ridiculous, all your really doing now is hurting the fans, all the people that have done wrong are long gone.

    Matt

    July 13, 2012

  6. As with the Rangers situation, there still seems a remarkable lack of contrition on behalf of Portsmouth fans.

    The prevailing view is ‘we’ve suffered enough, call off the dogs’.

    Well, I’m afraid Portsmouth racked up a huge amount of debt during the ‘glory days’ of winning the FA Cup – which most Pompey fans celebrated without questioning where the money for their star-studded squad came from – and there is still plenty of this debt to pay back. Sorry chaps.

    Frank Heaven

    July 13, 2012

  7. Agree with Frank above, when CSI bought the club there were plenty of Pompey fans who were very quick to come out and say “these guys are the real deal” and so on as if the previous few years had never occurred. Have absolutely no sympathy for them, if the fans were so against owner x or owner y, why did any of them continue turning up at the football matches? A month’s boycott of matches would have made any owner sit up and take notice, but they still kept happily attending games.

    Chris P

    July 13, 2012

  8. Agree with Pompey fans taking control of THEIR club and starting again in non league.
    Aldershot, Wimbledon, Chester, all showing that it’s perfectly possible… and in fact preferable… gives you time to find your feet and learn, while having a jolly good time rising up the ranks.
    Or you only have to see what happened to Luton with serial points deductions and a desperate attempt to keep their heads above water…

    SW19 Womble

    July 13, 2012

  9. I have no sympathy with pompey fans.

    Committee members of the PST say they didn’t dare question CSI for fear of being seen as negative & rocking the boat.

    CSI say their spending spree was to placate the “demands of the fans”.

    The fans stood by & said nothing & now want to blame anyone & everyone but themselves.

    What really galls me as a football fan is how their fans celebrated blowing off £130million of debt & despite having players they clearly can’t afford bleat & moan about the size of their squad & demand more signings.

    The sooner this rancid club dies the better for all of football

    David

    July 14, 2012

  10. David.

    Whatever you may think about the way that club has been run into the ground, and how the fans have enjoyed the ‘good times’. They do not deserve the despicable sentiment you left.

    I hope the club can shed its hellish recent past and come back financially sustainable while keeping one of the best fan bases in the country.

    S.

    Simon

    July 14, 2012

  11. Simon, you may feel that but an awful lot of people don’t.

    Their fans stood mute as fraud was committed in front of them, fraud that most of football could see but they ignored. They are now getting their just rewards & hopefully, in a few weeks time, will be put down for good.

    No sympathy from his Villa fan.

    David

    July 14, 2012

  12. David, there are plenty of examples of clubs living beyond their means (most of the prem and championship clubs). When CSI bought Pompey we all thought they invested money in the club, it wasn’t until they also went bust that we found it was yet more loans on top of the debt we already had. Many Pompey fans would now settle for liquidation, not to avoid paying their debt but to get rid of the hangers on that seem to re-appear after we come out of administration.

    John D

    July 14, 2012

  13. I love the reaction of fans who dont really understand. Pompey should die for spending above their means and winning the FA CUP? seriously 80% of the premiership teams are in LOTS of debt, Man City bought the premiership, like Utd bought it last year, both clubs in 100′s of millions pounds of debt, ours was a fraction of that. Stood by why fraud was commited? How do portsmouth fans know about the financial dealings of the owners? How are we to know our owner is a con artist, or in the example of CSI, ripping of banks? We only find out when you do, in the papers. There is so much unjust hatred directed towards portsmouth fans for something out of there control, yes we celebrated when we won the fa cup, but we also celebrated when we had a team of free transfers and rejects and got to another fa cup final and lost to chelsea, and we will still celebrate when we play away to leyton orient and bradford, thats fans do, support through everything!

    Chris P

    July 14, 2012

  14. To those that suggest that Pompey fans have only themselves to blame for pompey’s predicament because they embraced csi without question seem to forget that csi was given the green light to take over Pompey by the football authorities via the fit and proper persons test. How can fans be blamed when those supposedly in control sanction a takeover and then penalise the fans yet again when this company crashes only a few months later, with no investment in the club and a loaded debt of 10 million. Who really is to blame here?

    Danny Boy

    July 14, 2012

  15. Blimey, some harsh comments on here. So much for fans sticking together.
    My only comment is about this site. You have a terrific writer on here in SJ Maskell and you render his/her words almost illegible by making the type this awful grey colour. Grey on a white background? Try black please.

    Dinksy

    July 14, 2012

  16. Its somewhat ironic that a Villa fan criticising Pompey is ignorant of his own club’s rampant overspending thank to Randy Lerner doping the financial performance of his club. Glasshouses and stones spring to mind. Can’t think why…

    JCL

    July 15, 2012

  17. Some very selective memories on here.

    CSI were found out to be dodgy within ONE HOUR of the announcement of their interest, by a simple google search.

    Bournemouth refused to deal with them.

    Their bank had been refused a UK banking licence.

    When the FL delayed giving their approval of FPPT, the only noise coming out of Portsmouth was how the FL were sabotaging their season because they couldn’t sign more players until approval had been obtained.

    If their management showed a little more dignity and remorse, like Ally McCoist, then people may be a little more sympathetic. As it stands, the only way to earn any respect is to liquidate and start over with a CLEAN club.

    Pete

    July 15, 2012

  18. I would just like to point out to all that many questions of CSI were asked, they simply refused an audience with the fan instead with only selected members of the press.

    Their frontman, a Mr David Lampitt, continually insisted that all was well.

    Da Boss

    July 15, 2012

  19. From all the self-righteous comments on here I have concluded that Pompey is the Tony Montana of the Football League.
    As the Scarface hood put it: “You need the bad guy so that so that you can point your finger and say we are better than him. But you are no better, you just know where to hide.”

    And PLEASE sort out this awful grey type!

    Dinksy

    July 15, 2012

  20. A few comments to clear the air from a Pompey fan.
    Firstly I see the old chestnut that we cheated to win the FA Cup is again being rolled out. Lets be clear when Pompey won the Cup in 2008 the Club was under the stewardship of Sacha Gaydamak. At that time all taxes and wages were paid and Gaydamak was underwriting the ‘spending spree’ on players we ‘couldn’t afford’. This is no different to Abramovich at Chelsea and Makhtoum at Manchester City. Unfortunately for us, the credit crunch later that year hit our benefactor hard and he had to put the club up for sale. Even so, under his tenure, all bills were paid – it was only when he sold the club on to a series of other owners that the financial crisis arose.
    With respect to CSI/Antonov, the reality is that many fans questioned the suitability of CSI as owners before the deal was done. However, we were assured that the Club’s affairs were under the closest possible supervision by the Football League. CSI would not talk directly with the fans or share their plans – they said they were ‘shy’. We have been let down badly by the FL who did not do the supervisory job that was required.

    Colin Gutteridge

    July 15, 2012

  21. What really shocks me is the fact that other football fans wish another club to cease to exist. I am confident that any real football fan would never wish this upon anyone.

    There have been some ridiculous statements blaming Pompey fans. The sad reality is that nowadays, fans are the ones that are thought of last.

    Regardless of whether Pompey fans agreed with the ownership or not, fans of any club will turn up to support their team on the pitch. Witnessing the highs on lows on a pitch is why so many love football, this is why fans go, not wanting to get involved in the politics surrounding ownership.

    I firmly believe that there is more to the Portsmouth saga than most fans of other clubs have read into, therefore some comments may be ill-informed. As noted above, fans of other clubs should be worried with the state of their own club, rather than wishing ill fate upon others.

    Whilst Portsmouth is one of the biggest cases of spending beyond their means, this is so rife in football that any number of clubs could be next. Maybe then those fans will realise what a horrible situation it is for fans to be in and regret their previous comments.

    Dan

    July 15, 2012

  22. @ David (Villa fan), I love this “The fans stood by & said nothing & now want to blame anyone & everyone but themselves”. Do you really think Pompey fans could have had any say in the clubs finances ? I can guarantee you the fans were very concerned when Arab buyers were involved yet no-one ever saw them, likewise when CSI came in and people like Peter Storrie could not/did not issue any statements much to the fan’s requests for info. Sorry David but your comments smack of a lack of insight because it involves some other club and not yours. Are you seriously saying if Villa went through a similar glory years period like Pompey’s, you would not bask in the sun for a little while, especially after years of being a middle of the road club? No, you and all the other critics would do what every other Pompey supporter did – that is go with the flow, enjoy the success, think big times were ahead and assume those in control were doing their job, not mugging everyone off. Most Pompey fans are disgusted with the way people having been ripped off. Do you honesty think we want to drag the club’s name through the mud just to ‘cheat ‘ other clubs out of success? Think again.

    simon

    July 15, 2012

  23. Didnt say, Pompey’s situation highlights the mockery that is the FL’s ‘fit and proper test’. Whether reople have sympathy or blame, this test solved or proved nothing other than a way to ruin the club.

    simon

    July 15, 2012

  24. Colin, I totally agree with your comments about Chelsea’s and Man City’s benefactors and finance. There’s been far too much of it in the past and I’m glad that new financial fair play rules are coming in to restrict these practices.

    However, you’re wrong in saying that all of Pompey’s bills were paid during Gaydamak’s time. Sol Campbell is still claiming money due from 2008 and I believe other players and ex-players are also owed money (despite the FCR). Also HMRC’s previous claim included unpaid to taxes dating back to Mandaric’s time. The financial shenanigans have been going on for far too long. Three Administrations in just over 13 years says it all.

    Incidentally, the Gaydamak family’s financial woes in 2008 were as likely caused by the lawsuit they lost against Chanrai and co, as by the global financial crisis.

    Pete

    July 15, 2012

  25. There’s some breathtaking cheek and ignorance from fans of other clubs on here. You’d think Manchester United, Manchester City, Chelsea, Aston Villa and just about every other club had never spent more than its income before.
    It seems the verb to invest is conjugated thus: Our club invests to buy the players it needs to compete; your club spends money it hasn’t got; our bitterest rivals bought and cheated their way to the Cup/Championship.
    There’s one further to add: when owners talk about investing money, it usually means loaning their club money at advantageous terms to themselves.
    Debt is fine as long as it’s serviceable and sustainable but what would happen to Chelsea if Abramovich was arrested in Russia or to City if the ruling family was brought down in Abu Dhabi? How wealthy is the new Kuwaiti owner of Forest and is his tenure going to make them another Man City for the moment or another Blackburn-style car crash?
    Hopefully, the new financial fair play rules will wean football off its debt culture and a community-owned Pompey will be in the vanguard of a new breed of clubs able to compete and build for the future in a more responsible way.

    Rich

    July 16, 2012

  26. Sadly the understandable and honest efforts of Portsmouth fans and the hopeless vested interests of the football authorities has virtually ensured that those responsible for this chaos (Mandaric, Redknapp, Storrie, Gaydamak) will remain rich and free.

    Nathan

    July 16, 2012

  27. “So much for fans sticking together.”

    10,000 visiting Pompey fans bankrolled the franchise back in 2003.

    No-one cares about your club apart from you. Get used to it.

    Nathan

    July 16, 2012

  28. “…when Pompey won the Cup in 2008 the Club was under the stewardship of Sacha Gaydamak. At that time all taxes and wages were paid and Gaydamak was underwriting the ‘spending spree’ on players we ‘couldn’t afford’.”

    Where was Sacha Gaydamak getting these millions?

    Nathan

    July 16, 2012

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