Pompey’s Spider Trap: Chainrai Walks But His Web remains
It appears us Pompey fans have upset Mr Chainrai and he no longer wants to own our club. In an spate of dummy spitting of some awe-inspiring magnitude on Wednesday he withdrew his bid to be our ‘reluctant saviour’ for a third time. Firing a tirade of self-exposing blame-shifting Mr Chainrai has taken up Portpin’s bid and walked. A Freudian psychoanalyst would have a field day with this little list of beefs. As one of those that has clearly contributed to beef number one, ‘the negative criticism and lack of support for our takeover by the fans of this club,’ I feel it incumbent on me to return the compliment. It has to be said though, that my blogging colleagues and I would like it known that we are happy to take this beef squarely on the chin. We feel the negative effect Mr Chainrai has had on the club since October 2009, wittingly or unwittingly, warrants such criticism.
Chainrai walking, however, does not completely free the club from his web. Whilst he remains the creditor-in-chief with a charge over Fratton Park, he still retains some influence over its future. He is still the chief negotiating force to be encountered by anyone wishing to take over ownership of the club. This appears to be something of a one horse race currently as the Pompey Supporters Trust seem to be the only bidder mad enough to take up the challenge. Currently they are riding a tide of increasing support as fans begin to realise they are the only solution left. Its the Trust or no one. Indeed, given the somewhat ‘staged’ manner of Chainrai’s going, it is tempting to think that it has only ever been so. There certainly has been no other credible interest shown.
It has to be understood that any rescue of Pompey is going to be a painful one for the club. The business has been mismanaged on a grand scale for decades. Throwing money at it is not the solution and deep down most fans realise that the club has to be brought back onto a sustainable footing. This means tight budgets and probably some seasons of lower league football. Progress has to be through wise investment in infrastructure rather than player gambles. That was never going to happen if an owner wanted to take money out of the club. This was Chainrai’s avowed intent. He made it plain that he wanted his money back. This fact he stated again and again and, despite the logic of some that in order to do so he would have to make the business sustainable by putting money in first, he made it clear that he was a reluctant saviour, in for the short term and had no intention of financing the club. Had he wanted to sustain the club he would have been better advised, and I believe was so, to protect his position by keeping PFC in the Championship last season. Putting £2-2.5m into the club last January, after CSI’s administration starved the club of cash, would have created a period of time during which the club could have been sold as a going concern by avoiding administration. Instead it seems Mr Chainrai, in classic Flashman stance, chose to play ‘hardball’ and tough it out. As secured creditor he could only have thought that administration bore no worries for him, after an attempt to ‘milk the asset’ by selling players in January failed miserably due to some rather blatantly inept management.
The Football League put the mockers on that belief. I understand that the conditions imposed on the ‘Golden Ticket’ for the club to enter the League One competition had a significant impact on the thinking behind Portpin’s bid. It was clear that preventing the carrying forward of secured debt onto a company taking over after administration was a blow. The security for most of the money was removed. It was also clear that placing stricture’s on the future indebetness of the club was a limiting factor for Portpin, in that they could not make further ‘loans’ and charge interest on them. The chances of making back the £18m were therefore limited. The minus 10 points made the club uncompetitive and therefore less attractive for any other private owner. So, we began to wonder, why was Chainrai determined to continue with his bid for ownership?
Portpin, like the Pompey Trust, made it a condition of their offer that the wage bill had to be trimmed and high earners had to leave the club. Players, at first reluctant to move in order to save Chainrai’s money for him, were gradually shed from the books. The last to go was club captain Liam Lawrence – despite his offer to extend his contract over a longer period at the same overall cost of the one he held. This dismissal was on the insistence of Portpin. Much had been made of the budget of £8.5m over 4 years that Chainrai had available to pay off these players, far outstripping the £2m over 4 years offered by the Trust. But with departure of the high earners it was expected that new players, already trialling with the club, could be brought in within the salary budget.
Yet for the League Cup game on 14 August Pompey had no senior professional players on their books. Instead, a battling team of youth players was fielded. The day before, manager Mike Appleton had been told that his promised budget of £4m was to be cut to £1.5m destroying the planned line up of players he had arranged to bring in. Appleton’s response was to call Portpin ‘slightly unprofessional,’ adding that it meant, ‘Relegation. Without any shadow of any doubt.’ This criticism, from a disappointed and very beleaguered manager seems to have been the last straw. At least according to Chainrai’s list of beefs.
Chainrai, it seems is a sensitive soul, for all his acclaimed business acumen. So sensitive that when he realised that Administrator Trevor Birch had committed a sum equivalent to the total of all the future parachute payments to the paying off of the players he professed to be appalled. More incredulous was his sudden realisation that other claims from football creditors such as former players and employees also needed to be met, so consequently, according to him, he threw in the towel. To be clear, these claims were always known to the club throughout administration. Only that of Kanu can be said to be in any way unsustainable. Given that the final demand of the FL was that the Golden Ticket was conditional on all football creditors being paid in full, unless mutually acceptable compromise agreements are put in place, there was no manoeuvre in the position he found himself in. One way or another taking the club over meant he was going to have to fund it in the short term before recouping his losses. This he appears unwilling to do.
There is no point in raking through Chainrai’s beefs any further. They are mostly spurious in the extreme and from start to finish clearly demonstrate that he expects everyone, from administrator to players, from local businesses to the fans themselves, to pay for his bad management of the money he is said to have invested in Portsmouth Football Club. To think how much we have railed against the Football Creditor’s rule in Pompey, only to have it as the saving grace that finally, unequivocally, exposed the truth of Chainrai’s business plan, which was to trap the club in his web and drain the life force from it as it struggled against the web’s many strands.
With the Pompey Supporters Trust now described as being in pole position to gain ownership of the club, things have started moving. Yesterday ten players were signed on temporary month long contracts. This says much for the pulling power of the club, most particularly in the form of its manager. The Football League has removed the ten point penalty, at least temporarily, as a new CVA is now needed. To give time for negotiations the club has been allowed to start the season in administration. £3.4m of parachute payments into the club have eased running costs for now, giving the club a chance for survival it simply did not have as Chainrai prevaricated over the terms and conditions of his ownership, seeking ways to maintain his web.
There is still much to do, however, to make the club financially viable. The terms of the Football Creditor settlements still have to be renegotiated, although there are some indications that there is a willingness to do this on the part of some of those creditors. The terms of the Trust’s potential loan from Portsmouth City Council for the purchase of Fratton Park have to be met, although again this can be done by the Trust assigning a portion year two parachute payments to this purpose as soon as they take over. The Football League has to approve the business plan of the Trust, and the figures on that are tight – details are available here. (Be warned, details change daily). One thing we can be sure of, the Trust will pass the Owners and Directors’ Test as the conditions for being a Trust Board member are more stringent than those imposed by the Leagues.
Ultimately the biggest hurdle still has to be Mr Chainrai himself. The Trust has offered him £2.75m for his charge on Fratton Park. This is way below his own valuation of the ground, around £7-8m, and far below the value of the charge of £17-18m. We already know that Chainrai doesn’t let go of money easily. It is clear there are still more rounds in this tug-of-war for the survival of the club. Although Chainrai pledges his help for the survival of the club most fans have, by now, learnt that he will only do so on terms that are beneficial to himself. Ultimately this may have to go to the courts to decide the value of the ground and hence the settlement of Chainrai’s charge. For PFC it will be the price of freedom. Of course, after that the real work of running the club begins, which will be no easy matter after the last 20 years of car crash economics.
One thing is for sure. The Trust is made up of proper Pompey fans. As such it is not in their nature to give up the fight. Like the team of proud and battling youngsters that turned out and truly played for the shirt at Home Park on Tuesday they will consider it a battle well worth fighting.
SOS Pompey are holding a ‘meeting’ on Frogmore Road at 2.15 Saturday 18 August to show appreciation for Michael Appleton, his team and the long-suffering staff of PFC. All fans welcome.
Pompey Supporters’ Trust is still taking pledges to help the bid. Details can be found here
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