Sixteen Days To Save Portsmouth

By on Jul 24, 2012 in Finance, Latest | 9 comments

The darkest hour, optimists might say, comes before the dawn, to which pessimists might counter by saying that one of English footballs longest-running financial seems to be approaching its inevitable solution. At least, the rest of us may consider, we will at least have an answer, one way or the other. The decision of Trevor Birch, the administrator in charge of the yet again financially-stricken Portsmouth Football Club, to announce today that the club will be liquidated on the tenth of August if arrangement cannot be reached with players who are holding out for wages that the two rival bids for the club cannot agree a CVA with. In a statement that may well make the blood of many of the clubs supporters run cold, Birch said:

The facts are straightforward: under the terms of the offer for the club, in order to complete the CVA proposal, the players have to leave and conclude compromise settlements. This condition has been imposed by the Pompey Supporters Trust as well as by Portpin – both interested parties have made it clear that they won’t take on the club unless there is movement from the players.

We will continue to do all we can to facilitate these deals but the club’s future hinges on the willingness of certain players and their agents to sign up to compromise agreements that are affordable both in terms of the amount and timing of repayments. Unless we make significant progress on this front by 10th August then we are likely to have no option other than to close the club.

Clubs have been in this do or die position before. It was particularly commonplace in the early to mid-1980s, when a new owner would invariably step in at the last moment and make everything okay again – until, that is, the next time. The situation at Portsmouth, however, feels different. For one thing, there is no great plea for help from outside going on, here. The only plea being made is for the players concerned – reported as being Erik Huseklepp, Greg Halford, Liam Lawrence, Kanu, Tal Ben Haim and Dave Kitson – to see some sort of common sense and some form of compassion for the near-death of the club, even if it means some sort of financial loss for the players concerned.

At the start of this week, a group of supporters turned up at the clubs training ground with the intention of handing an open letter to the five of the six players – Kanu didn’t turn up for training, which has fuelled speculation that he is set to leave the club after all – concerned. Three of them – David Norris, Greg Halford and Erik Huseklepp – accepted the letter, although this in itself far from guarantees that they will take any notice of its contents. A fourth player, David Kitson, drove past the supporters but later apologised, stating that he had believed them being from the press, while the fifth, Tal Ben Haim, didn’t stop for them. Birch has stated this week that he is making progress with “three or four” of the players. Every action of these players is now being forensically analysed to try and establish who those with whom no progress is being made.

What, exactly, Tal Ben Haim was hoping to achieve with such behaviour is very much open to question. Should Portsmouth somehow surprise everybody and take the field for the start of next season, what reaction, exactly, does he think he’s going to get from supporters if the perception of him as the man who almost drove the club to the wall for the sake of his own bank balance sticks? He probably doesn’t care – no matter how many pledges of allegiance are sworn, no matter how many badges are kissed, footballers don’t love the football clubs that they play for, and any player that makes that bold claim is ninety-nine per cent certain to be a liar – and, we might even argue, why should he? He was offered a contract for a certain amount of money and he has fulfilled his side of the deal. Why should he care about his employers and their well-being if it is at his cost? Trevor Birch, at least, was more diplomatic, stating that, “If the club is liquidated, players will not be protected by the Football Creditor provisions. They will become ordinary unsecured creditors in a situation where there is unlikely to be any dividend.” It is to be hoped that these players see sense and make the decision that nobody will benefit if Portsmouth Football Club closes on the tenth of August.

It should, however, be pointed out that the players are not the villains in this piece. The argument for Ben Haim made above does have some merit to it. But neither is it the fault of the fans, it will be they that pay in a completely different way to that in which the players will should the worst come to the worst. The villains of the piece are the succession of shabby businessmen that have passed through the door of Fratton Park over the last few years, every one of whom has given no impression of being interested in anything other than enriching themselves through a variety of different inventive ploys. The players shouldn’t be left without a wage. The supporters should not be left without a club. On the other hand, a number of those connected with this club over the period of boom and bust that has occurred over the last six or seven years or so should be banned from the game for life. It’s time for the supporters to be handed this club. They are the only people that can be entrusted with running it. And it might be down to the players to make this a possibility.

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    9 Comments

  1. This isn’t going to be popular but I hope they go the way of Rangers, as they should have done beforehand.
    The only way teams will change their attitude is bankruptcy and starting again in non league.

    anon

    July 25, 2012

  2. Yes it might be down to the players to hand the club over to the supporters and, ironically enough, it seems the best way they can guarantee this is to refuse to leave or give up their demands.

    Play up Pompey even if it will be against the likes of Havant & Waterlooville and Newport, Isle of Wight for the next few years.

    Joe - Vancouver Canada

    July 25, 2012

  3. So many issues to comment upon but I’m going to focused on just one to give a little analytical focus of the PFC situation: the parachute payment schedule.

    Remarkably for a football club on the verge of liquidation, PFC have two years of cash flow available to them through the parachute payments worth in excess of £14m.

    Current Football Creditor liabilities are in the region of £10m including all the deferred wages to date and compromise deals with some players who have already left Fratton Park (Mullins, Mokoena etc).

    So there’s around £4m to pay the £500k to unsecured creditors, pay some of the administrators PKF bills and agree compromise deals with the remaining players. There’s also a hanging issue of £2m secured debt being owed to Gaydamak which hasn’t been resolved clearly.

    You would have thought that getting PFC to honour their CVA agreement & football creditors debts using the parachute payments schedule of two years would be the sensible timeline as it give security to all concerned and allows the club to live within normal League One income streams. This isn’t happening.

    Instead, players are being offered compromise deals spread over four years rather than two. Given that one of the Chainrai brothers has stated that they don’t want to be in charge after the parachute monies runs out and also given their previous history, doubts about their intentions have to be uppermost in the players mind. For Ben Haim who spent 6 months in 2011 not being paid thanks to a dispute between the Chainrais and his agent Pini Zahavi over a failed move to West Ham – cynicism is understandable.

    Yet it would be simple enough to have the parachute payments hypothecated to allow players to have the confidence to know that they would receive their compromise deals over two years.

    Such a hypothecation would mean that there would be little money available to underwrite the club’s trading position from the parachute payments and instead would require that the new ownership would have to provide that instead. This would be part of the discipline for the club to be “living within its means”. However it would mean that PFC would be free of football creditors by the end of next season. Something the rest of the Football League might appreciate.

    JCL

    July 25, 2012

  4. Yet another set of figures for the football creditors. The PST spokesperson has been referring to a total of +/- £30 million of football creditors with only £14 million on PP available. Hence the need for serious compromise by all parties. Portpin on the other hand are reported as refusing to consider giving over the PP income to cover football creditors

    Terry

    July 25, 2012

  5. why blame the players ? someone offers you a good contract and you accept…..

    Its not the players fault – its the management of Portsmouth – the greed and stupidity….

    Portsmouth were offering the best wages in the championchip last season and lost £ 45 million in 18 months without paying any of the previous CVA. The league should have thrown them out already !

    They need to start again (at the bottom of non league like wimbledon) owned by the fans. Balancing the books – only paying what they can afford.

    The FA/league have to take alot of the blame for this….but many more clubs need to fold before they will act – bringing in a wage cap and proper published accounts available to all……

    (the players are guaranteed their monies owed by the PFA / league – they sanctioned their contracts)

    old wag

    July 25, 2012

  6. @Old Wag

    In a liquidation scenario the players are guaranteed nothing. There will be no money in PFC to pay them. They will revert to unsecured creditor status. There is no money in the PFA for such a situation and the Parachute Payments revert to other Championship clubs, not the players.

    SJMaskell

    July 25, 2012

  7. There’s a comparison to be made with the Ashton Gate Eight, who were offered half the money due to them in order to leave.

    ejh

    July 25, 2012

  8. to DJMaskell

    ”the money goes to the other championship clubs”

    is that a written rule or one of the FA/league made up on the spot rules…?

    the fact is pompey have burned almost £ 200 million in unpaid bills and the fans and journo’s still dont get the cheating that pompey has got away with (I wonder who they will buy from the FA/league to cheat this time…)

    this will all go to court (imho) – £ 14million doent just dissapear unless its pompey…..pay up pompey – cheating again…

    old wag

    July 25, 2012

  9. It is what the Administrator, the Pompey Trust and Begbies Traynor have been told by the Premier League who are the source of the money.

    SJMaskell

    July 25, 2012

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