Pompey: Where the Bids Come From

By on Feb 18, 2013 in English League Football, Finance, Latest | 0 comments


There has been a rare old tussle going on down Pompey way this last week. In microcosm our beleagured club continues to be a perfect illustration of all that is questionable about football governance as it currently stands. On 7 February it appeared that the long running Pompey Supporters’ Trust bid to buy the club was about to be scuppered by a consortium led by Keith Harris. The Trust are awaiting the outcome of a frequently postponed court hearing to determine the value of Fratton Park before they can proceed with finalising the purchase of the club. Administrators’ PKF and charge holder Portpin have been playing cat-and-mouse over this case since last December. The Trust are offering Portpin £3m. Portpin want considerably more. A week before a hearing to fix the date of the case, the Trust were informed of Harris’ bid.

Harris had cobbled together a pair of ‘passive investors’ , vet Alan Hitchins and  Financier Pascal Najadi along with two would-be executive directors, ex-Swansea Steve Hamer and ex-Pompey (of Hiroshima fame) John Redgate.

Despite Harris stating, straight faced, that his consortium broke all links with the past, he was immediately contradicted by his own plan. This was to lease back Fratton Park from the current charge holder, Portpin, thereby avoiding the need for a court case. Harris claimed he would be purchasing the ground at a later date. He then declared that he had a £3m player budget. Sound financials there then. Nothing for infrastructure but £3m for players. Pompey fans have heard this before – see Milan Mandaric, Sacha Gaydamak and their ownership policy. Promises but no substance. In any case such spending seemed likely to come to grief up against the League 2 Salary Control Protocol rules. Meanwhile Portpin would hold security should the plan fail by still owning the ground – very similar to the way they secured their risk under CSI’s ownership.

Pompey fans weren’t buying it. It seems the Football League wouldn’t either. Not only did they turned the bid down on the basis that they were not prepared to consider any other bids at this late stage they also added, ‘bearing in mind where the bids come from.’ Now there is no doubt the Harris bid was better for the creditors than the PST bid.They were offering an extra 1p in the £ on the CVA (3p rather than 2p) and a quicker payment of the football creditors (2 years rather than 4). So it was acceptable to a creditors’ meeting and indeed it seemed for a time that the Professional Footballers Association were unwilling to let it go, even after the Football League stopped it in its tracks, being disappointed at being third in line for parachute payments under the PST plan rather than first under the Harris plan.  Their mood meant that they had not signed off their agreement with PST in time for the court hearing on 14 February, triggering yet another, 7 day, adjournment.

This prompted the Portsmouth MP Penny Mordaunt to ask, at Prime Minister’s Question Time in the Commons, ‘Does the Prime Minister take a dim view of people who say one thing and do another, such as  …  purporting to support fan ownership of football clubs while undermining the community buy-out of Pompey, as the Professional Footballers’ Association has done this week?’ Mr Cameron wished the bid well in his reply. This prompted a ‘hurt’ reaction from the PFA, a suggestion that Ms Mordaunt was not being very truthful from Gordon Taylor along with his express backing for the PST and their bid.

There is every chance that the Football League will be intransigent on this. The political pressure on the Football Authorities to get a grip of the governance of the game is stepping up with the recent DCMS follow up to the government enquiry into football governance recommending government intervention into a number of areas, including club licencing and a rescinding of the football creditors’ rule. Getting the Pompey situation wrong so that Portpin are allowed another period of control over the club, as they would have with Harris’ lease back agreement over the ground, will not impress anyone. The League have put pressure on the administrators by placing a June deadline for the club to come out of administration. If it does not then Pompey will not be featuring on any of its fixture lists for next season. PKF were given no doubt about where they were expected to go next. To court to determine the value of Fratton Park.

So it was odd to wake up this morning to find that Harris had renewed his bid on different terms, including an offer to the Trust of a 15% stake and a seat on the board for free and a promise to buy back the ground within a year. A strange one this, given that his PR man, the egregious David Bick, had said something completely different in the Portsmouth Evening News on Saturday:

The ‘stadium deal’ described by Bick centres on leasing Fratton Park from Portpin rather than buying. It is with a view to a permanent purchase, although Bick was unable to pinpoint the time frame for completion of the sale.

What’s more, he admits Portpin wanted it structured that way.

Bick added: ‘There’s a deal leasing the stadium. In terms of Keith buying it, they (Portpin) do not want to do it that way at the moment.

‘The sellers want to take rent for a period of time. It is particularly to do with future value, they don’t want a panic sale or lower valuation.

‘The fact is a deal has been done with them. It will be leased to buy, but they (Harris) are not going to give a time frame at the moment.

‘It secures the use of Fratton Park for purpose for a period of time.’

Mr Harris did not, however, include any promises from Portpin in regard to their time frame. So maybe wishful thinking was in play. Or maybe Portpin were wanting to see if his management of the club got him through the one year barrier, having been let down last time by CSI who only lasted five months before Mr Chainrai had to call in his charges. Given Harris’s business background and the kind of people he does business with, Carsen Yeung for one, Mr Chainrai maybe does well to be cautious. After all, Mr Harris brought CSI to Pompey. His unknown passive investors, Hitchens and Najadi, are no more alluring as football club backers, neither having shown any interest in football before in their business careers.

The pattern is becoming tiresome to Pompey fans as can be seen from the #gohomeHarris Twitter campaign. Of course, the chances of the Football League changing their mind being slim, it really matters very little what promises Mr Harris makes. So you have to ask, what is it all about?

Two things spring to mind. One is that the only barrier to the Pompey Supporters Trust is the court valuation of Fratton Park. Once the administrator gets the court’s permission to sell at the price the Trust is offering then its game over and Portpin must take their fight elsewhere. They already have a case lined up against the unfortunate Vladimir Antonov of CSI for the payment of their money. They may have to continue their argument with PKF. But the club and ground will be out of their control. Any spanner that slows down the finalisation of the bid, or lurs away partners to the agreement (as was seen with the PFA), is useful. The closer we get to the end of the season the better the prospect of liquidation. The only one who this favours is the one who will control the major asset – and Portpin have their debenture still firmly in place and unchallenged if they can avoid the court room. Of course, having someone seemingly willing to pay more may help Portpin’s case for a higher valuation – but the nuts and bolts of such a bid have to hold water and this one seems somewhat hastily constructed with little transparency about where the money is coming from.

The other, is the football establishment’s fear of the Supporters’ Trust movement and of government interference in their world. If the tactics employed throughout the Pompey debacle are anything to go by this fear is becoming palpable. Ethical business practices are embodied by the Trust movement. You have to ask – who has most to lose if those values become mainstream in the Football world?

On Thursday 21 February PKF and Portpin are scheduled to go to court to set a date for the valuation hearing. Keep an eye on that date. If the hearing goes ahead you will know. The Trust are on course for the biggest ever victory for ethical football governance.

The Pompey Supporters’ Trust is still taking pledges for community shares. Details 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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