Chimes of Doom at Portsmouth

What on earth is going on at Portsmouth? It’s a question that will have been bugging football fans across the country recently. How is it that a club can go from being FA Cup winners and in the UEFA Cup to being on the brink of extinction in the space of two years? Their financial problems are huge and there seem to be fresh revelations daily. As I write this, the club are said to be around £60m in debt, need to pay HM Revenue and Customs £12.1m by Monday and are lumbered with a £3m wage and tax bill. The staff have been paid late in four of the last five months. The Premier League are withholding TV and transfer money until Portsmouth settle debts with other clubs and have rejected the club’s desperate request for permission to sell players outside the transfer window. And just to make matters worse, Sol Campbell is suing his former club for £1.7m in unpaid bonuses and Peter Storrie, the chief executive and one of the few people who has been at Fratton Park through all of this, is facing charges of tax evasion. The club itself is due in court on March 1st to contest a winding-up order and face a very real threat of liquidation or at least administration. Even if they stay alive, relegation from the Premier League is almost certain.

So what has happened to Portsmouth in the twenty-one months since they lifted the FA Cup? From the squad that beat West Brom in the final, only four of the players remain there. Numerous good players have had to be sold and replaced with largely worse, unknown players from abroad or from the lower leagues. The club have acquired almost £80m since May 2008 through the sales of star players such as Jermaine Defoe and Lassana Diarra, which makes their current situation even more bemusing. With Harry Redknapp moving to Tottenham and top players leaving, things inevitably got worse on the pitch. Tony Adams understandably failed to continue Redknapp’s overachieving whilst Paul Hart and Avram Grant have done their best under the circumstances.

The simple reason why they’re in this situation is that the club has spent money which it didn’t have (whilst avoiding tax) under a series of bad owners since Milan Mandaric stepped down as chairman in September 2006 and sold all his shares to Alexandre Gaydamak. During his three year reign, Gaydamak spent big money on players such as John Utaka and Pedro Mendes whilst also setting out his plans for a new stadium, something which now seems a distant hope. Gaydamak, now the club’s biggest creditor, sold the club at a profit in the summer of 2009 to Sulaiman Al Fahim. But after just three months, during which he had to prevent the club from going into administration, Al Fahim sold 90% of his stake to Saudi businessman Ali Al Faraj. Al Faraj promised investment and things looked up for Pompey fans but the massive debts remained and Al Faraj had to get a loan just to pay the players. There seems to be a problem of misinformation and lack of communication in the whole affair – Al Faraj never attended a single Portsmouth match. Then earlier in the month, Hong Kong businessman Balram Chainrai became the latest mystery owner at Fratton Park and he has said this week that unless a new owner is found soon, the club will go into administration (they may well be by the time you read this) and will become the first top-flight club ever to do so.

The whole shambolic story just goes to show the fine, brittle line between success on the pitch and financial capitulation. Portsmouth aren’t the only ones. English football is being blighted by greedy owners who are happy to spend money that the club doesn’t have in order to make a quick profit. The FA’s ‘fit and proper person’ test for buyers would probably permit Osama Bin Laden. It has been revealed recently that Premiership clubs owe more money than all the other top European clubs put together. Manchester United, the biggest football team in the world, have debts of over £700m, which has led a group of supporters to launch a buyout campaign against the Glazer family. Similarly, Liverpool owners Tom Hicks and George Gillett are said to owe around £273m to the Royal Bank of Scotland. These big clubs are walking a dangerous tightrope by operating in such enormous debt. Of course it’s unthinkable that a club like Manchester United would go bust but Portsmouth may not be the last ones. The lower leagues are packed with clubs who have achieved success on the pitch, spent big in order to be able to compete at the higher level and then descended into financial and football decline – Leeds, Nottingham Forest, Bradford and Sheffield Wednesday are just some examples. My own team, Southend United, faced a winding-up order from HMRC in November having got into trouble financing a new stadium and Cardiff City are in a similar situation. For the last decade the Premier League has been riding on a wave of spiralling transfer fees, wages, television money and ticket prices. As the ‘credit crunch’ begins to alleviate, let’s hope that the Portsmouth saga might teach the people in power to be more prudent.

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