Is The Portsmouth Crisis Deepening?
Premier League clubs, it should be remembered, enjoy every single advantage that the football world can throw at them. They have massive television contracts which give them an annual amount of money that would keep most lower league clubs going for years. They have the opportunity of European football. They have sponsorship deals and a global reach which is completely unprecedented in the entire history of the game. In short, if you can’t run a Premier League football club and keep it solvent, then you have a serious, serious problem, and Portsmouth Football Club have a serious, serious problem at the moment.
Of course, things are bad enough for them on the pitch, with the team having lost each of its opening seven games and being rooted to the bottom of the Premier League table. Off the pitch, however, a sense of crisis seems to be engulfing Fratton Park after the players weren’t paid for the end of September. This all comes back – and this will not surprise anybody that regularly reads this site – to Sulaiman Al Fahim, who earlier this week made a statement confirming that he had found the means to provide £50m worth of refinancing to the club. By yesterday, though, the players hadn’t been paid and the club’s other executive directors stating that, “It is very disappointing to all of us that the players have for the first time had to wait for their contractual remuneration for reasons entirely outside the club’s control”.
Where, then, is the money going? The answer to that is the Standard Bank of South Africa, who loaned the club’s previous owner Alexandre Gaydamak tens of millions of pounds under what are believed to be extremely onerous terms and are now demanding repayment. There was a fire sale of players earlier this year (which in no small part accounts for the club’s current league position), but this has clearly not raised enough money to keep the club solvent, even though (as Chief Executive Peter Storrie told ESPN), “All the money from the player transfers and the Sky TV money, all of the £35 million from January, has gone straight to the Standard Bank”.
Clearly, this is not a situation that is tolerable in anything like the medium to long term. If Portsmouth cannot find immediate funds, there is every possibility that Standard Bank will push for the club to be entered into administration or worse. Not even relegation, the usual bogeyman of the cash-strapped Premier League football club, is their main issue at the moment. The main issue is securing funding to ensure that they can at least pay their players and service their debt throughout the rest of this season. Failure to pay their players would mean that their contracts would become invalid and the players could leave for other clubs. The Professional Footballers Association are said to be closely monitoring the situation.
Sulaiman Al Fahim had been said to have a meeting with two Saudi Arabian brothers and businessmen, the Faraj brothers, on Sunday, but whether he will be able to keep even this appointment is now open to question after the website arabianbusiness.com confirmed that he had been admitted to hospital in Dubai and was undergoing tests for an as yet unknown condition. The report states that he has been photographed in the hospital and that he is not attached to any drips, so whether his condition is serious or even exists at all is still up in the air. However whether he is in ill health or is feigning ill health is almost irrelevant – what seems certain is that the immediate funds promised to the club seem unlikely to turn up in the next couple of days or so.
In the, realistically speaking, increasingly unlikely event he were to come through with the money, though, the terms under which this £50m has been obtained are as yet unknown. Desperate people are usually more susceptible to harsher terms when borrowing money. This, of course, is basic risk management on the part of the lender. The longer term worry (or at least one of the worries) for Portsmouth supporters is that the club is now merely robbing Peter to pay Paul. The debt to Standard Bank will disappear, and be replaced with a £50m debt to someone else, with the terms of the new loan unknown and with the likelihood of relegation from the Premier League increasing with every passing week. What would happen to any refinancing deal were the club to be relegated at the end of this season? Until the terms of it are known, no-one can say for sure.
Portsmouth play Wolverhampton Wanderers at Molineux tomorrow in a Premier League match that they surely need to get a result from if they are to stop the on-pitch rot that has seen them sink to the bottom of the table. When questioned on the issue of his wages, defender Hermann Hreidarsson said that, “We didn’t get paid but someone came down from the payment department and reassured us we will get paid tomorrow [today]“. We will know by later today whether the money has been found to pay the players, and we will know by tomorrow evening what effect this instability is having on the team. The broader issue of the long term future of Portsmouth Football Club, remains in the balance.