Another Black Week For Portsmouth

Another Black Week For Portsmouth

By on Jan 29, 2010 in Finance, Latest | 8 comments

There will be some nervous tapping away at hole in the wall machines on the south coast of England this morning. In an email sent earlier this week, Portsmouth Football Club warned their staff that they may not be paid again this month. It is the icing on the cake of another desperate week for the Premier League club, who face a winding up hearing at the High Court in London on the tenth of February. On the pitch, the team itself had a reasonable time of it, beating Sunderland in the FA Cup last weekend and then managing a draw against West Ham United during the week. At this stage in time, however, anything that they manage on the pitch is overshadowed by their antics off it.

The symbolism has been striking this week, most notably with the closure of the club’s website due to non-payment. The club’s website bill must be one of its smaller monthly outgoings, whilst the importance of keeping it going surely cannot be lost on a club that is more desperate for money than it ever has been before. As if that wasn’t bad enough, this particular power cut also knocked out their electronic advertising hoardings for their match against West Ham United on Tuesday night. The stench of insolvency is in the air at Fratton Park.

It is the non-payment of the club’s normal staff, however, which is the most alarming aspect of the club’s current travails. When the non-payment of staff at insolvent football clubs is mentioned, the mind tends to turn to the players and their thousands of pounds per week and it doesn’t seem to be quite so much of a problem. Even the most profligate of players can probably take care of themselves for a few weeks. For the office staff and the club’s other employers, however, things might not necessarily be that simple. Portsmouth Football Club is neglecting one of its core duties if it fails to pay its staff today. It should hang its head in shame if their staff’s wages aren’t paid this morning.

Meanwhile, Peter Storrie told Quay Radio that his position at the club is becoming untenable. This isn’t, as one might expect, because he has presided over a period in the club’s history during which it has stumbled from one crisis to another, not been paying its tax bill, seen its website closed because they didn’t (or couldn’t) pay the bill on time, have repeatedly failed to pay their players and staff on time and have seen one protest march against the way that the club is being run, with another one planned for their match against Stoke City next month. It’s because he has found out that transfer deals are being carried out behind his back.

Portsmouth were recently – and very tentatively – allowed back into the transfer market. They’re only allowed to sign players on free transfers, and they marked the occasion by signing Quincy Owusu-Abeyie on loan from Spartak Moscow until the end of the season. The people that  keep the club ticking over during the week may well look on with dismay as another well-paid player arrives at Fratton Park. It seems unlikely that they won’t lose players before the end of the January transfer window. Younes Kaboul and Asmir Begovic are still being linked with a move to Tottenham Hotspur – the moves that have troubled Peter Storrie so much – and there is still talk of David James going to Stoke City.

Players, though, are the least of their worries. Are Portsmouth capable of making it through their upcoming winding up hearing safely? We don’t know yet. It is unlikely that any winding up order would be made final at the first hearing, but the threat of administration and a nine point deduction hangs over the club. What we know for certain that the club was “shocked and surprised” when the petition was served in the first place, and that they then stated that they were disputing the amount of VAT that was outstanding. At this stage, however, it is impossible to believe anything that comes from the club. This morning, The Independent is reporting that even Avram Grant is considering his position after a promise from the club that no further players would be sold was broken.

The internal strife at Portsmouth Football Club and the hurt feelings of Avram Grant and Peter Storrie are of little concern to HMRC and the club’s other creditors. Their responsibility is to get back the money that the club hasn’t been paying as it should be, and the farcical situation there is no-one’s responsibility but that of those that have been running the club so ineptly over the last couple of years or so. At this stage, it is impossible to say how there can be a happy resolution to the club’s current predicament. The latest crisis can be averted by paying £2.7m to the taxman by the 10th of February, but the longer term prognosis for them remains grim.

What happens to them if or when they get relegated from the Premier League and their revenue drops? If the club is forced into administration, what will be salvaged from the wreckage of the club that won’t leave them fatally wounded?The Premier League won’t help them. Their silence on the matter of Portsmouth Football Club has been deafening over the last couple of weeks, and the feeling is starting to grow that they are merely keeping their fingers crossed that the worst of the club’s problems can be postponed until the end of the season, at which point they become the responsibility of the Football League and life can carry on as per normal in the Premier League – or at least the illusion of it can. All the time, though, the mask is continuing to slip.

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    8 Comments

  1. Once the dust has settled from this debacle, I hope the spotlight will turn to the FA and their so-called Fit & Proper Persons Test. It has become quite clear throughout all of this that Portsmouth’s owner, Ali Al-Faraj, who incidentally has never been spotted at Fratton Park or any other ground in the UK, is neither fit nor proper to run a football club. It’s also looking increasingly likely that he either has no money, is unwilling to spend anything to help Pompey keep afloat, or is hoping to run the club into the ground and sell off the assets before the club’s creditors get a sniff.

    The F&PPT should have been called further into question following the corruption and money laundering trials of Thaksin Shinawatra but it wasn’t. As usual, the FA were seduced by the money and despite the owner being as bent as a nine bob note, he was rich, and therefore he must be a jolly good bloke.

    I sincerely hope that whatever becomes of Portsmouth FC (as a Saints supporter, I hope they at least exist long enough for the derby on the 13th), one of the big outcomes will be that the F&PPT is brought to book for allowing people like Al-Faraj, the Glazers and Shinawatra into the game.

    Joe

    January 29, 2010

  2. Forget this probably non-existent Arab chap, Peter Storrie, Milan Mandaric, Alexandre Gaydamak and Harry Redknapp should all fail to pass a Fit and Proper Persons’ Test.

    Without money laundering football would be in an even worse state than it is already!

    Martin

    January 29, 2010

  3. My heart goes out to the real supporters of any club being mismanaged in the way Portsmouth is but if Pompey go to the wall (or Palace) it might just be the wake up call that football administrators need.
    The FA and Football League have allowed massive inequalities to develop where clubs in the Premier League and top end of the Championship are awash in money and in a position to generate ever more, so that snouts are permanently in the trough. At the other end of the spectrum lower division clubs scrape by on a pittance and can only look on in envy when one Premiership player’s weekly wage would keep them going for half a season.
    If a ‘big club’ goes maybe the administrators will look more widely at ALL of football.

    Mark Wilson

    January 29, 2010

  4. The issue with a Fit and Proper Person’s Test is that it is fundamentally flawed.

    What you have to remember is that no one will be found “unfit” unless they are legally “unfit”, ie like Vaughan from Chester where he is a banned director.
    Without such an obvious, proved in a court mark against you the FA will ALWAYS deem the owner to be “Fit and Proper”.
    Why?
    Simple, they do not want someone with the cash (or even supposed cash) to threaten them for what would be libel or slander by accusing them of being unfit despite no actual proof.
    I don’t know the exact wording of the “test” but you can bet your bottom dollar that the FA will never find against an owner unless someone else has already banned him from a directorship or similar.

    They run scared from any legal threat – proof of that came in May 2002 when faced with a threat of legal action from Koppel about denying WFC the right to trade in Milton Keynes the FA said “We disagree with the move but…….” before passing the buck to a three man commission.

    The FA are useless and they make sure that the “rules” they make up are also useless – anyone who deosn’t realise it is deliberate is a fool.

    Jertzee

    January 29, 2010

  5. The problem started with the sudden withdrawal of funding – we were spending like a top 6 club (with top 4 wages!) with the infrastructure in place of a top half club… in league 1. Without any major source of income besides TV money and constant cash injections from Sacha Gaydamak it should have been obvious that the house of cards would have to fall sooner or later. That it was not immediately obvious – in fact, the suggestion that it would was actively laughed down – is testament to how much we can be seduced by money and success. The constant refrain from some people of “where has the money gone?” is equally ridiculous – we made substantial operating losses in every year of Gaydamak’s reign and had to pay off £30mn+ to Standard Bank last summer, amongst other debts. Storrie – who should be considered neither saint nor sinner in this debacle – tried his best to stabilise the club but without the constant loans and investment from Gaydamak it was basically not possible to do so with any success. The situation is akin to trying to pay off a mortgage on a mansion having just been reduced from the CEO of Microsoft to a software engineer at the same.

    That isn’t to absolve anyone from blame. Al Fahim clearly did not have the funds to run the club and it is hard to believe that Al Faraj is any better endowed – indeed, all evidence so far is to the contrary. It does not help that Al Faraj, Jacob and especially Daniel Azougy appear to be specifically and systematically stripping the club of any assets of value. We cannot even afford (if, and it is an enormous if, the Express can be believed) to hire out a storage container for our training equipment. This is a direct and avoidable consequence of years of financial mismanagement, underinvestment in infrastructure and an entirely unsustainable business model combined with an attitude from the current owners which appears entirely malign towards the long-term health of the club in favour of making a quick profit. This cannot go on. I am a lifelong Pompey supporter. I cannot be sure if, this time next year, I will be supporting a club that is even in the Football League.

    Jack

    January 29, 2010

  6. Touched upon above, but where were all the protesting fans when they were buying internationals like they were going out of fashion on gates of 20000??

    Live the dream by all means, but don’t whelp when the bill needs paying.

    mick

    January 30, 2010

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