White Knight Syndrome Conflicts Pompey
What have the following all got in common? Suliaman Al Fahim, Laurence Bassini, Balram Chainrai and Levi Kushnir? Apart from the fact they all seem intent on bringing joy to the hearts of the Fratton Faithful by throwing money at Portsmouth Football Club? For it seems there has been a virulent outbreak of ‘white knight syndrome’ among aspiring football-club owners down Pompey way.
If the 100 controversial owners series currently running on this site doesn’t contain five Pompey owners at the top of the list already – what’s the betting that by the time Ian gets to it, that top five will have all had a go at buying the club? Serial fantasists, insolvent property developers, invisible men, Mafia targets, fraudsters, de-frocked lawyers and human rights abusers have all had a finger in Pompey history since August 2009, along with a wide range of inept businessmen.
Pause to fight the wave of despair induced by the constant underestimating of football fans that such characters seem to indulge in.
Ten days ago Ian King outlined the new bids for the club. Today, the unlikely advent of either Fahim (no proof of funds, not deemed Fit and Proper) or Laurence Bassini (ditto – reported to have put in a bid, described as ‘not a game-changer’ by the administrator, on Tuesday) taking over the club raises a number of suspicions. It needs to be clear that both these bids are an irrelevance in the current ownership battle although both were attractively phrased in terms of the returns for the creditors – particularly secured creditor Portpin – and led fans into the realms of ‘money for players’ dreams again.
Suspicions were further aroused in the strangely-broken statement of plans by Portpin late last night (Tuesday 18 September). Why Portpin should chose the medium of a community radio station with a reach not far beyond the island of Portsea itself is a conundrum. Why their statement is one that represents the biggest volte face since Brutus turned on Caesar is a more interesting one. They appear to have turned from oft-stated ‘reluctant owners’ to enthusiastic football club developers in the last week. One wonders if they are afraid of the opposition as it is possible that the Trust are getting very near to ‘preferred bidder’ status.
However, there are a number of worrying things about the current state of flux at Pompey which have wider implications for the Trust movement. On Friday last week the Pompey Supporters Trust had its bid to buy the club out of administration passed to the Football League. The bid is in direct competition with that of Portpin – the company that holds secured creditor status on the club. Both bids have received a contract of sale from Administrators PKF.
If the Pompey Trust (PST) succeed in buying the club it will be an enormous victory for the Trust movement in English football. It will be the biggest single buy-out attempted by a Trust so far. It will place the idea of a football club at the centre of the business rather than the idea of football as a business. As such it will be a small step towards the slowly swelling tide of change in in the English football governance model.
Currently the success of that bid rests with the Football League. They have already made stringent terms for PFC retaining the ‘golden ticket’ that allows them to play in the League. Over the weekend it transpired that they did not feel that either bid was completely satisfactory, despite the opinion of PKF. The League was seeking greater assurances. I suppose we have to be grateful that they are taking pains, but we thought they were doing that in October 2010 and look what happened after that.
The hurdle the League have put in front of the Trust is one that requires proof they can guarantee the necessary payments required to meet the Football Creditors’ Rule. PST have matched Portpin’s compromise offer to football creditors – mainly players – of £8.5m over four years. £8m of parachute payments are due to the club over the next two years in addition to a recent £3.4m payment that sits in the club account waiting for the new owners. However, despite this, the League want a bank guarantee or company guarantee to prove funds are available to pay the football creditors bill. The Trust is a brand new company with the sole function of running PFC, should they take over. So they are in no position to provide such guarantees. This nudging of the goal posts by the League, were it to prove to be a valid requirement which PST are disputing, could prevent any clubs becoming community owned in the future.
Meanwhile, Portpin have their own problems with the Football League. With many fans suspicious of their intentions toward the club, particularly in the light of their on-and-off bids – the timing of which seem to match the payment of the above mentioned £3.4m, there are still issues regarding the level of debt Portpin are proposing to transfer into the new company. Portpin have been told they can only transfer £5m of the £18m they claim to be owed – money for which they hold a charge on Fratton Park. It is this charge that is the obstacle to them receiving the green light from the League. You have to ask therefore if Portpin are seeking to challenge the value put on the Trust bid for the ground?
The realisable value of the charge is dependant on the value of Fratton Park. The Trust’s valuation has been made independently and has led them to offer £2.75m for the release of Fratton Park into their ownership. Portpin have not had the ground valued. But they have received two other offers, from Fahim and Bassini, neither of whose bids are under consideration. These bids could be claimed to represent genuine market value, however. Interestingly Bassini is being represented by Andrew Andronikou, the administrator of PFC in 2010 who sold the club to Portpin.
Portpin have already been critical of PST in the media. Interesting then that they should slant their late night statement to incorporate PST strong points regarding community, stability and stadium development. But no matter how they dress it up the clearest indication came in the central phrase of the polemic. ‘Do not judge us on our words but on our actions. Portpin is looking to take decisive steps to deliver this objective. We are offering a multi-million pound, multi-year overdraft facility to The Football League to give the business a cash flow safety net and ensure all unsecured and football creditors are paid.’ Indeed these are the actions of Portpin since 2009, actions that provide an overdraft facility that keeps the club indebted to them. Overdrafts, of course, bear interest. Interest that increases debt.
It condemns the club to return to the broken model of governance that Supporters’ Direct describe as a ‘a chronic and deep-set financial instability,’ owing more and more to their owners. How long before this becomes unsustainable again?
No matter how much Portpin dress this up with promises of new infrastructure, building the club ‘back up to its rightful place,’ future stability and a future of happiness over the rainbow it cannot free the club from the need to generate more to feed their needs than it would under community ownership. It is a model built on sand.
Portpin’s track record is not good on this. As property developers they would be shareholders first and foremost in any enterprise that supports PFC. It is almost as if they have come alive to the potential in a project for which they promised exactly the same outcome in 2010, when they claimed ‘they are here to bring much-needed stability to Portsmouth Football Club,’ and promised ‘ integrity and 100 per cent transparency.’ So stable did they make the club that they sold it on to an alleged fraudster whose funds were frozen within six months of purchase, leaving the club not only owing Portpin £18m still but also adding another £10.5m to the load of debt. Throughout their tenure they showed no inclination to engage with fans – such was their interest in the community of the club.
In the new statement fans, some nicely titillated by the putative bids of Fahim and Bassini, are dangled promises on a stick that history tells us are unlikely to be filled. It seems a sign of desperation that Portpin are using the much publicised advantages of Trust ownership to dress their debt-laden offer.
Meanwhile, the Pompey Supporters Trust continues to work quietly and professionally towards their target. The superiority of their claim rests in the fact that the fans hopes and wishes for their club will not be subject to the whims an some owner more interested in his percentages than in the ambition to run a Proper Pompey football club. The investment of time, money and passion will go into the club and not continue to be drained out as has been witnessed at Pompey since 2009.
It is time for the Football League to find the courage to make the ethical choice and move the governance of football forward, not leave it in a perpetually sinking spiral of financial failure fuelled by the broken promises of media hype and fantasy.
UPDATE: As this article was published it was announced that both bids appear to have passed the Football League test, although the Owners and Directors Test is still to be taken, The League have bravely batted the decision back to PKF.
The Pompey Trust is still taking pledges to back their bid. Information can be found here
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