Taxman beats tactical retreat in Pompey battle

HMRC have clearly backed off for some unexplained reason. Pompey should be used as an example to all other clubs that this is not acceptable. The fans can always go and support Havant & Waterlooville anyway...

Good blog Matt.

Please continue to keep us informed, the people who got the club into this mess have to be exposed. This is the least the Pompey fans deserve.

Pompey were always likely to be relegated this season so a nine point deduction is not a penalty. Surely they should start with ten point penalty in the Championship, why should they start off on a level footing with other clubs who have managed their affairs properly whilst Pompey have cheated their way to an FA Cup win and Premier League survival.

Portsmouth seem to be imploding, and no amount of HMRC wavering will stop that. It seems that it is just a matter of time until Pompey fold completely.

It is less than a month since Chester were expelled from the Conference for an unpaid tax bill of just £26000. And yet Portsmouth can run up a £15M deficit? How does that go? Surely Pompey should also be expelled from the league?

Tough action is called for, and that may be the only way that other clubs will sit up and take notice.

And before Pompey fans shout me down.....They would do well to have a look at Newport. A team that almost disappeared, and yet are on their way back, having done things the "right" way.

I don't think HRMC are wavering, they have to comply with Administration laws, which offer Pompey some protection, same as everyone else. However, the debt hasn't gone away and it doesn't take a genius to work out the HRMC will no way accept a cheap few pence in the pound deal as happened at Leeds etc. They want full settlement and I imagine, will be all over Pompey for years to come, no matter what new owner they find.

Regarding the club "cutting to the bone"... how can they justify keeping all the loan players they currently have? Their cost must heavily outweigh sacking a few backroom staff.

Matt your biog, states: Hi, I'm Matt Slater and I try to shed light on what's happening behind the scenes in sport - so everything from football finance to Olympic squabbles.

When are you going to shed any light on football finance?

From reading your blog it seems to me that all you do is repeat titbits of gossip from hanging around ladies hairdressers.

Come start talking about the real stuff, why were Redknapp & Storrie receiving % payments of player sales?

How many other UK managers and CEO's are receiving the same.

Why is money disappearing out of so many clubs into the pockets of owners?

Why are players getting away with image right payments?

Why are sports reporter so poor at reporting outside the top few teams?

When will the fans get their game back from Sky?

Come stop the gossip and get investigating.

"I should probably state fairly quickly that it is nonsense because McCarthy-Fry would never do anything like that and even if she wanted to, she couldn't. The Treasury is a machine that brooks no human interference."

It's far more likely than the far left theory of Osama being dead and used as a boogeyman .....

I agree with bluenose in the fact that the points penalty should be a real punishment. If the club are going to go down anyway, without the deduction, then it should be applied to the following season otherwise it is no deterent at all. This has been the case before for lower league clubs. Premier league exceptions should not be made, the process has to be the same across the board.

Maybe if Pompey are closed down under a Tory Government, the Labour-leaning-but-flippable Southampton Itchen and Southampton Test might turn blue... ;)

Seriously, I find it hard to see Pompey surviving the next few years. HMRC have stepped back a little (too much, in my opinion), but under a deficit-slashing Cameron administration (which, polls notwithstanding, I thoroughly expect to see in May) they will come in all guns blazing, and the probable result will be the closure of the club and the necessary drastic reform of football financial legislation. Indeed, multiple clubs will go to the wall shortly afterwards and a major Football League reorganisation will follow (return of regional divisions in the Football League anyone?).

You know, its time football fans wised up. Its no good embittered Birmingham fans coming on here and having a go at Pompey. WHAT HAPPENED AT POMPEY WILL COME TO A CLUB NEAR YOU SOON - unless football helps itself and regulates the business side properly. This is not part of the internecine war that is club football - its about the very survival of the game itself. Get your heads out of the sand and take a good hard long look at how your club is run.

Well done to HMRC for finally starting actions against football clubs if they don't pay their taxes on time. It makes me very angry that some teams think they can get away with not paying taxes.....I pay it every week on my salary and my employer pays it to HMRC on time every month why should these football clubs be given any special treatment because they are football clubs?

I'm interested to know why HMRC let the outstanding tax sum get so big before taking action - why weren't they chasing Pompey for payment all along the line?

Indeed PompeyOops. The standard of BBC reporting is poor. Where is the actual news or information contained in this? Where do we get to know anything we don't already?

Can we have a blog that actually includes actual information, or includes reasons as to why information was difficult to get hold of, what lengths were gone to find this information, and how you are going to find out more information.

Being at university in Portsmouth (although not a portsmouth fan) i really feel sorry for the portsmouth fans. I went to the birmingham league match last week, and the performance was so non existant, but the fans never gave in and never went quiet, even at 2-0.

The club is being punished because of the illegal acts that have taken place in the board room. People like Gaydamak, Storrie and all of the other joke owners of portsmouth should be investigated by the police and banned from ever having any role at a football club again. I similarly think the way this club has been run has been a discrace, and I think its a discrace that a large profit making organisation like the Premier League has not monitered the situation and just let it happen, because after all, its the fans and clubs which make this league the most watched around the world, and create so much revenue for them.

Hopefully they'll learn from their mistakes, but it wont give back Portsmouth their football club, as I think they will just slip into the obscurity they previously rose from.

One has to question the logic of deducting points from clubs that go into administration. All this does is assure relegation, and in this case possibly a further deduction next season to ensure another relegation, thereby making absolutely sure that the club goes compeletely skint. Ludicrous and totally unfair on both fans and creditors.

OK there needs to be controls to ensure clubs don't get into debt and those controls need to come from the Premier League and FA - like how about capping players' salaries and transfer fees boys? Get out of the smoke filled rooms and start using your brains. The obvious is staring you in the face.

And how will denying Portsmouth the money they are earning from their FA Cup run help anyone? Or refusing them a European place if they win the Cup? Or refusing to allow them to sell and lease back players?

Be assured that Pompey are the first of many PL clubs that will fall as the days are over when rich sugar daddies can financially support football teams. The stuffed shirts at the PL better wake up to this or their cosy jobs will be gone and we will be back to 4 leagues run by one organisation which may have learned a lesson - and perhaps we'll all be better for it.

Exactly.... lazy journos in the main who can't be bothered to look behind the real facts.

And as for other fans of the prem league who are gloating EPL is about £3Billion in debt. Hypocrites!!

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When are you going to shed any light on football finance?

From reading your blog it seems to me that all you do is repeat titbits of gossip from hanging around ladies hairdressers.

Come start talking about the real stuff, why were Redknapp & Storrie receiving % payments of player sales?

How many other UK managers and CEO's are receiving the same.

Why is money disappearing out of so many clubs into the pockets of owners?

Why are players getting away with image right payments?

Why are sports reporter so poor at reporting outside the top few teams?

When will the fans get their game back from Sky?

Come stop the gossip and get investigating.

"Come start talking about the real stuff, why were Redknapp & Storrie receiving % payments of player sales?"

Mike Newell was getting the same at Luton (10%, apparently), and alleged it wasn't an uncommon practice. Perhaps a more important question would be, "How many other managers/directors are getting a cut of player sales?"

"Pompey were always likely to be relegated this season so a nine point deduction is not a penalty. Surely they should start with ten point penalty in the Championship, why should they start off on a level footing with other clubs who have managed their affairs properly"

Assuming HMRC continue their previous policy, they will refuse any and all CVAs put forward (Luton's new board, 2020, offered full repayment and HMRC still rejected it on principle), which means Portsmouth will fail to meet the League's golden share criteria and be deducted points by way of penalty, as has happened to Leeds, Luton, Rotherham and Bournemouth in recent seasons. How many points, however, depends pretty much entirely on the League's whim (not their exact words, but accurate to all intents and purposes).

Why did Portsmouth get the points deducted now and Southampton get them after being relegated, ie. doubly punished?

The Premier League's governance of its member clubs consists of them shutting their eyes, putting their fingers in their ears and shouting "la la la la la".

No one is dared to question the "greatest league in the world" even if it is clearly financially & morally bankrupt.

A very illuminating article that opens a whole area for debate about club ownership and the various scams, etc to avoid paying out the creditors, etc.

Christine, the rules are different from the Premier League to the Football league. Saints suffered under the rather harsh Football League rules, the Premiership are softer.

However, if Pompey can't sort out a CVA by the time they have to register with the football league for next season, they will suffer a points deduction then.

Good blog, however, some of the comments made by posters make me sick. To accuse Pompey of cheating for using loan players is to accuse most teams of cheating, as they virtually all do it. Whilst I am opposed to the principle of loaning players to other teams in the same league, the rule is there so it's going to happen.
Also, how would these same posters feel if it was their team that was being dragged through the mud? The perpetrators of the 'crimes' that have placed Pompey in this dreadful mess have all gone leaving us to suffer the consequences. We are all the innocent victims of money men exploiting the beautiful game. The people who created this mess get away Scot-free, whilst Pompey get penalised - it's all wrong and the Premier League has a lot to answer for.

It sickens me to hear fans of other clubs demanding further punishment next season. HMRC's block of the initial admin was what delayed the deduction - if applied at the time requested Portsmouth were still in with a chance of survival. Points deduction hurts nobody but the fans of clubs - be they Luton, Leeds, Chester, Southampton etc etc - for the love of the game the penalty should punish the buffoons who rack up unsustainable expenditure against clubs (not themselves). So how about banning any Chairman/Owner/Director who overesees that behaviour from running ANY business for 10 years. Something that Draconian would certainly put an end to the chancers that have appeared in football since the Sky gravy train came along. I applaud clubs like Wolves and Burnley who are run financially well - I only wish Pompey had owners who had done that.

To accuse Pompey of cheating for using loan players is to accuse most teams of cheating,

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I think the point about loan players is how can Pompey afford to pay them when they have no money and are sacking office staff?

I can understand the contractual obligation to the full time Pompey players who have PFC contracts, but not players of other clubs for whom PFC are paying their wages & loan fees (and as revealed in the papers this weekend, generous agent loan fees too!).

It's not as if Pompey don't have enough players on their books to be able to put out a team for the rest of the season. If needs must, they can play nippers from the youth team, other teams in Administration had to do that.

The point about the players being the club's "shop window" is also clearly only for those players under PFC contracts. Loan players have no value to the club/business.

So, is it cheating? Maybe, maybe not, but it's at least bending the rules.

Since Pompey went into administration, 2 non-league clubs went to the wall (Chester City and Farsley Celtic). The problems at the top filter down to the very bottom, its like a rotton tooth, problem is that the premiership will collapse if the football pyramid below it falls to pieces.

Personally, i'd have a strict wage cap, to keep the good english players here i'd take the hardline not used by the RFU, play outside the UK, don't play for England, you'd then see what the Gerrards, Rooneys etc value more, money or their country, maybe get some pride and fight in the national team, teh backbone that wins world cups, something the present lot don't have.

Next i'd merge and regionalise League 2 and the BSP, 90% of the BSP are full time and on bigger budgets already, so it wouldn't make a huge difference. The North/South feeder leagues are in place, so the pyramid would be restructured as:

Prem
Champ
L1
L2N/L2S
BSN/BSS
Feeder tiers below (Northern Premier League etc)

Regionalised games cuts down on travel and hotel costs and more fans can get to games in the lower leagues, increasing attendances.

Next I'd ban, 100% all televised saturday football with the exception of the FA Cup and International Qualifiers during the football season, for manchester based teams a Man U/City 12:30 saturday derby is devastating for attendances, ditto in merseyside. There are 93 professional sides outside the premiership, no need for people to watch football on the TV on a saturday.

I'd tighten the financial regulations and make paying the tax bill mandatory, any club found to have not paid its tax and football creditors to recieve a 20 point deduction immediately, administration would be a 30 point penalty, really hit the clubs hard where it hurts.

Its tough, it will never happen, but it would sort football out.

To Malcom Clark,

I don't believe anyone on here thinks anything other than Pompey are being done because of the owners, and previous owners, trouble with paying the bills.

I have an enormous amount of sympathy for any fan who finds their club in this position, and for me it really is a case of "there but for the grace....." etc etc.

As a QPR fan, I have seen us go into administration, and have bucket collections outside the ground. Even with a so-called "Sugar Daddy" are we any better off?

If it took QPR going bust, and re-forming from the ashes, 7 leagues down, to make the powers-that-be realise that football is wildly out of control, then I'd be prepared to take the hit. Football is on the verge of a precipice where any number of clubs could go, and probably will.

But, take heart from the Newport story.....It is possible to see light, even at the end of the longest tunnel.

It is sad that some comment about point deductions without checking basic facts.

It has always been the case that if the club go into administration before a defined date the points are removed in the current season.

This is what has happened at PFC.

If the club go into administration after the defines date then the point deduction is applied based on whether it will cost them more during the current season or the next. They are the rules, nothing has changed.

If PFC fail to come out administration before the new season starts they will again suffer a points deduction in that season.

If they come out of administration without a CVA, again they will suffer a points deduction in that season.

It is all so simple, no rule changes, no rule bending.

If you don't understand the rules then find out before posting.

It is bad enough having to put with the tripe served up by journalists without acting like them.

Loan players quite often have a part or all of their wages paid by the loaning club - making them cheap to run. There is a benefit to the likes of Spurs in having Jamie O'Hara playing on a regular basis so that they can monitor his progress (and boy has he progressed at Pompey) and further evaluate his usefulness to their squad set up.
As for the bile directed at Portsmouth by fans of other teams: what sad individuals you are. Even Manchester United and Liverpool would be in serious trouble if their debts were not so huge that the banks will keep lending them money. Pompey are not big enough to command bank support: that is the only difference,

Im a Southend fan and I know exactly the financial issues facing clubs, both "big" and "small"....our issue is that were building a new 22,000 seater stadium and the chairman, Ron Martin, banked on us being in the Championship with this shiny new home. Now sitting in the relegation zone staring L2 in the face, its obviously gone a bit t*ts up for us.

Gone a bit off topic there, but even as a fan of a club who, in all likelihood, will go into administration either this season, or the summer, I back the points deduction as a deterrent. Even if it hits the fans more than the clubs (which im not sure if it does, as people within the clubs have a vested interest in which division their club are in) it needs to happen to stop clubs getting an unfair advantage.

Things need to change from the top of the game right down to the lower leagues to sort out the mess that many clubs have got themselves in. There is so much money in the English game now that we sell our soul to become the best / biggest / most successful team in the world to the highest bidder......everyone knows it will end in tears, but the pot of gold at the end of the rainbow is too tempting to resist.....

And, for all his anti EPL comments, Platini has got it right......lets get him at the head of the FA and see if he can (as Micheal Jackson said) make a change.....

Sadly HMRC will not vote in favour of ANY football CVA due to the Leagues insistence that "football debts have to be paid in full...". Expect a further points deduction at the start of next season.

I always considered Portsmouth to be a shining example of a promoted club that leveraged a positive attitude and ambition, as epitomized by your FA cup win. How unfortunate that despite that, Portsmouth will be relegated, while other teams with negative park-the-bus, hoof & hack attitudes such as Hull, Wolves, Burnley & Blackburn may survive another year. Hope the likes of Newcastle & Portsmouth bounce back into the PL with their attitude intact soon.

Fantastic article. No bias. Very intriguing.

Maybe the business plan Administrator Andrew Andronikou (AAA) presented to HMRC was behind the "back-off"?

If Portsmouth are managed at an above average level, HMRC will recover much of the money they are owed (or even all of it). Forcing Portsmouth out of business would be irresponsible if the business plan showed that HRMC would get some money within a fixed time period. Also, HMRC would be blamed by other creditors for removing any chance of them getting paid.

A large percentage of businesses which close down are caused by the HMRC. To criticize them is ridiculous. They choose the option for each company based on evidence, not feelings or conspiracies. Many businesses recover from Administration, and almost every single one who does was helped by HMRC.

The future looks rather bleak from a footballing perspective. Why would someone take over the club now? There are several clubs in the Championship who have larger stadiums, better facilities (youth team, training, scouting etc) and an existing reliable staff.

RE kit men/catering staff.

The "lower level" employees are always first to be cut. The club will continue running with them not there. This begs the question, if they are not needed, why were they employed in the first place?

Firing "higher ups" may not solve anything. It is likely they would need to replace them with a new employee. There is no place for wishful thinking.

Also, they can't cancel players contracts. AAA is not stupid, he knows the only way Portsmouth can "cancel" players is by selling them.

Any business which fails or is failing causes a mess. The aim of everyone involved is to clean up the mess, ideally with the company still running and people getting paid.

BarcaGooner - I am not sure where you are coming from about Burnley being hoof and hack, particularly when Owen Coyle was in charge. Our so called negative tactics contributed to Burnley going for all out attack and losing all but one away game. Fair point about Blackburn though.

And Portsmouth being a shining example? Is that a joke? By selling themselves to the son of an illegal arms dealer? By trying to break in to the top 4 with crowds of 20k? By paying more to their players than they were earning in income? By refusing to pay tax and NI?

Sorry, but if you are looking for a shining example, look at Burnley. Salary cap of £15k per week, no bank debts, modest squad size, no outrageous transfer fees.

Doubtless we will get relegated this season, but at least we will survive financially, and at least our club has been honest in the process.



Sorry, but

Matt Slater,

Your blog is, as usual, very interesting but gives no new information. What has happened at Portsmouth is nothing short of disgraceful. The financial dealings at Portsmouth have not added up for years and the supporters (the lifeblood of football clubs, newspapers and tv companies) still have no answers as to where the money has gone

When are the BBC – or any other so called journalists – going to do some proper investigative journalism and expose the ex-chairmen, ex-directors and ex-managers that have bled our club dry?

#7: "I agree with bluenose in the fact that the points penalty should be a real punishment. If the club are going to go down anyway, without the deduction, then it should be applied to the following season otherwise it is no deterent at all. This has been the case before for lower league clubs. Premier league exceptions should not be made, the process has to be the same across the board."
Not sure how much you do or don't know about the process in the FL so I'll try to elucidate slightly. The points deduction is 9 in the Prem due to reduced opportunity to make the points back up, less games compared to a League club (although my maths says it should be 8). It's worked out at the end of the season by adding the deduction back on. If Portsmouth would still be relegated (likely) then the points deduction gets applied to next season. The question here is whether it'll be increased to 10 as they'd now have 46 games to get the points back instead of 38.
What SHOULD happen if Portsmouth are already relegated without a deduction is they should start next season in the Championship on -10. If that doesn't happen, I should think there'll be a rather loud noise from 23 other football clubs, Leeds fairly likely to be among that number.
Of course, the FL and FA continue to baffle football fans and observers everywhere with their often nonsensical decisions or lack of, and habit of passing the buck, so we'll have to wait and see.

18. At 11:58am on 17 Mar 2010, ChocolateBoxKid wrote:
The Premier League's governance of its member clubs consists of them shutting their eyes, putting their fingers in their ears and shouting "la la la la la".

Sorry Chocolate Box Kid you have got this entirely wrong.

The Premier League sit in there Ivory Towers with there underpants on their heads, with two pencils up their noses and saying whipple!! To all questions!!

Why did Portsmouth get the points deducted now and Southampton get them after being relegated, ie. doubly punished?

Southampton were doubly punished because they delayed administration until they were relegation certainties - seen by many as a cynical move to effectively avoid any penalty from the points drop. There is a deadline after which the penalty is not imposed until the following season - whether this was in place before or after the Southampton case, I don't know.
Of course, everyone can say that Pompey were going down anyway, but mathematically they could have stayed up, and the deadline for deducations this season has not yet passed.

People are getting confused between Premiership rules and Football league rules on Administration and points deductions.

As far as I'm aware, there is no cut off date in the Prem for declaring administration.

That rule only exists in the Football League, for a club in the league at the time.

Pompey will come under football league rules the day after the end of the Prem season. At that point they have to come out of administration and have a CVA to avoid any points deduction in the Championship.

Football needs to look at itself today reflect on what's happened to a lot of clubs recently and go back as far back as the Leeds situation. The problem at Portsmouth is not going to go away. They will not be the last. At the team management level a manager or coach is not allowed to manage without taking qualifications. Football is more than a business to us supporters. I would be the first to put my hands up and say I would love a rich benefactor to by my club and win the league instantly and by my login you can guess who I follow and we have waited long enough but I would rather wait than let this happen to my club. There needs to be stricter rules and regulations by FIFA. Clubs at all levels now are going to the wall. Portsmouth should never have been allowed to get in to this mess. The FA should be accountable somewhere here along with the previous owners, they need to stop clubs being bought and controlled by people that appear to have no knowledge of the game or understand it's position and responsibility. They should be required to report regluarly on there situation so things loke this can be avoided. If Portsmouth go out of business during the season, and I know this is a big "if", The tables would be drastically effected and this would have a knock on effect on many other industries that support the Premier league and football as a whole. I would like to see stricter publicised vetting of any owners. What’s it going to take? One of the big four to go under before any one reacts? Football has for to long seen itself as untouchable and it's not!

I don't see why so many people feel sorry for the fans. If the club had been run properly they'd have had nothing to celebrate - no Premier League, no FA Cup win, no European nights against the likes of Milan.

If they hadn't 'cheated' to drink at the top table then they would have probably spent most of that time in the bottom half of the championship (where they no doubt are heading). I'm sure the fans of those clubs who have spent the last few years living within their means and as a result have had no success at at all would give their right arms to have enjoyed what the Pompey fans have. Especially as the 'punishment' will be just to return to their rightful level.

Chocolateboxkid made the following ridiculous comments:

"I can understand the contractual obligation to the full time Pompey players who have PFC contracts, but not players of other clubs for whom PFC are paying their wages & loan fees (and as revealed in the papers this weekend, generous agent loan fees too!).

It's not as if Pompey don't have enough players on their books to be able to put out a team for the rest of the season. If needs must, they can play nippers from the youth team, other teams in Administration had to do that."

If you followed the story you would know that Portsmouth have sold virtually all their players and had to set up loan deals at the end of August on the last day before the transfer deadline. They still haven't been able to fill the subs bench for several games.

The idea that they put a team of "nippers" on the field is so naive it's not true - at least they are getting supporters turning up and have the prospect of earning some money from the Cup - not likely if they were playing the nippers.

Some rational thought please chocolatebox.

Fantastic read Matt.

Your final sentence " By sticking to its guns in this case, the taxman could help football save itself" strikes me as highly pertinent, and a warning to all football clubs who choose to overspend while not settling their statutory dues and demands - And perhaps also a warning to the "powers that be" to oversee their members spending behaviour much better than recently.

The FA should have a more hands on role in monitoring the finances of football clubs, thereby stopping 'mismanaged' ones getting into this state.

Alex said:

"What’s it going to take? One of the big four to go under before any one reacts?"

I'm afraid that is exactly what it will take Alex.

I wonder how much lee-way i would be granted if i decided to stop paying taxes.......!

Yet another example of english clubs living outwith their means.

princessclairina - Southampton were not relegation certainties at all. It was because they entered administration after a certain date (i.e. punished for holding out as long as possible) when there was still a good chance of staying up. It was only in the last 3 games that there was no chance of surviving. It was Rupert Lowe's fault for delaying as he knew the rules, if he had done it sooner, this season wouldn't have started on -10.

This stupid rule about a certain date is ridiculous, because Pompey are far more likely to go down anyway - so the points deduction is no punishment at all. The only hope is that Pompey do not get a CVA by the start of next season and get the -15 point deduction.

This is an ideal opportunity for the Premier League to act (even if it is rather late). In my view Peter Storrie should be banned from any further involvement in football. As CEO of the club he has to take a large amount of responsibility for its downfall. He certainly took a salary in line with a hands on CEO. He must have known a long time ago the club were behind with paymnets to HMRC and other clubs, yet continue to sign new players, pay himself a large salary and fly his team of multo millionaires by private debt when he couldn't be bother to pay the St John's Ambulance bill. It seems to me he is not a fit and proper person to run a football club and should therefore face a life ban.

If you followed the story you would know that Portsmouth have sold virtually all their players and had to set up loan deals at the end of August on the last day before the transfer deadline. They still haven't been able to fill the subs bench for several games.
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No they havn't sold all their players. The Administrator himself said last week they have a current professional playing staff of 40 players (bbc website makes it 36 and soccerbase 35). I believe you need 11 outfield players and 7 subs, so 18 players for league games, so they have more than enough players before even looking at playing the Youth team.

What I find absolutely incredible, is that following the point deduction and the ban on competing in Europe, is that they will still be awarded the Parachute Payment. The EPL rightly dumps them in the Championship and then promptly awards them millions of pounds. I'm not interested in whether or not the administrator needs that money or how just the points penalty is, it's just plain stupid. The EPL have previously awarded monies due to Portsmouth to be witheld and paid to clubs in lieu of transfer fee's, so why not give the Parachute Payment to the Tax Man.

Following the previous point deduction fiasco, especially Luton's draconian 30 point penalty, I suggested that rather than hurt supporters and potential investors with point deductions, both the FL and the ELP should adopt a deposit scheme for Directors/Owners. Upon taking control of a registered club, each and every director on the board should hand over a large deposit to the Governing Body. Those monies should be subject to strict regulation with regard to the lawful administration of their club and the due payment to all creditors. In the event of maladministration those deposits should be forefitted. Hurting their back pockets may just keep them straight.

It would not only sort out the 'Chancers' and those promising funds but prevent those borrowing vast sums and lumbering clubs with ridiculous interest payments. For heavens sake, whether you like the word or not, club ownership is a Franchise, of which a fee should be paid to the Franchisor, namely the League. If you break the terms of that Franchise, you loose the initial fee.

Thanks for trying to clarify things, Matt, But.....

"The parallel with Chester (and Kings Lynn, Farsley Celtic et al) is tempting but the numbers can be misleading. The turnover at a PL club (even a poorly-run one) would dwarf Chester's so the taxes generated are that much greater."

Therefore, with perspective, the issues are exactly the same! Chester could not / did not pay their £26000 bill and are liquidated. Pompey, with a little perspective on the relative sizes of the clubs, are in the same position, but are not liquidated. Is this fair on the Chester fans?

The reason that Pompey will not fold is because the EPL will do all they can to bolster the club, before relegation, as it would take the sheen off of the "World's Greatest League".

I wish people would stop going on about a salary cap for players. I know they are on ridiculous wages but it is down to the clubs to act responsibly and create their own salary cap. Arsenal have been doing that for years and players stay within the cap that the club set.

I have an easier way of stopping all these clubs from going into administration and to start to be run properly. If they go into administration then they are kicked out of the league. No ifs or buts and make them start at the bottom of the pyramid again and work their way back up.

This doesn't stop clubs from going into debt as all businesses and clubs do from time to time but it will stop it happening year after year living off the never never. I also think that someone should challenge the FA by them allowing all footballing debts be paid in full when other creditors will only get a percentage of what's owed to them.

I would also love to hear about all this rumour about managers getting a percentage of players salaries or wages when being sold on. Surely this is a bung no matter what way you look at it and the likes of George Graham got sacked and banned from being a manager for a long time. If this is true then it has to happen to others as well.

I don't understand why clubs also pay agents in transfers. Surely the agent is acting for the player in which the player should pay him instead.

With regards to the loaning of players. I believe that now most clubs that have a player on loan pay his salary. Most PL clubs will subsidise a club if they are playing outside the PL in a lower division though.

"PL is doing it all it can (without upsetting the other clubs) to keep PFC afloat. The last thing it wants is a liquidation. V bad for the brand."

Precisely...therefore Pompey have much more to fear when they ARE relegated. The FL may well stand back and let them collapse. What better way of warning your other 71 members, than to allow that to happen?

Would that be in the games interest? Harsh as it sounds, I think, YES. Chairmen up and down the country would get a seismic shock and be forced to examine their own clubs minutely. Boards would probably take an even closer look at what is going on on the playing side, and perhaps some good may come out of this situation.

That said, should people stop buying their Sky packages (And I'm NOT one of those!) the EPL would be bankrupt in 2 years. Then, we'd see possibly 4 or 5 of the PL teams in financial misery. Liverpool? Man Utd? Everton? Could clubs as big as these find themselves in as big a hole??

Some thoughts - a CVA can only be rejected by more than 25% of the creditors involved. At present, HMRC represent less than 25% of the debt so cannot by themselves invalidate a CVA.

Second, it would appear to me that it was October and the Al Faraj takeover is when the PAYE elements stopped being paid by PFC. The approx. £8m that was in the HMRC court action is VAT on transfers. My broad calculations are that approx £2m is owed to HMRC over the wage bill each month. £18m would appear to be in the right ball park.

Third, it should be obvious that prior to recent events this season, PFC have been paying tax regularly. People can't seem to get their heads around the costs of running any premier league football club. It is expensive.

Fourth, it is worth noting that the administration team that met with supporters 10 days ago admitted that there are missing millions unaccounted for. This too relates to the Al Faraj period of ownership. HMRC have every right to be suspicious and wanting light on what has happened.

Interesting news about possible future challenges to Chainrai as a secured creditor. This could either delay a sale or see the monies held by the administrator until the creditors fight it out among themselves as to the cut each will receive.

I'm offering my opinons as a Leeds fan. And whilst we were docked 10 points one season and 10 the next, which stopped us from gaining promotion, i agree that this was a fair punishment.

Likewise, Portsmouth should be deducted points next season. For those bemoaning poor old Pompey, these were the same fans not blinking an eye lid as you brought in expensive signings, won the FA Cup and enjoyed your trips into Europe. Portsmouth, even more so than Leeds bought that success. Leeds had over half a team of home grown players (Robinson, Kelly, Harte, Woodgate, Smith, Kewell), who do Pompey have?

Ultimately had Pompey not overspent, then another club would have won the FA Cup and probably even be in the Premier League right now. Pompey would have gone down a couple of years back when they BOUGHT their great escape. In some respects that was the start of it all.

The simple fact of the matter is that Pompey are now relegated. So like another poster said, why not return all the loan players? It makes no sense to keep hold of them all on 20,000 or 30,000 grand a week - or maybe more! Get rid of them, blood some of your youngsters and prepare for next season.

This argument of 'its not fair on the fans' is a load of bull. Were the fans up in arms when you won the cup? No. Did you even remotely believe that with crowds of 20,000 and no corporate hospitality you could be signing the quality of players you were? Something was clearly going wrong. Leeds' debts were not that much more than Pompeys and we were relying on Champions League money and double the attendance figures - which begs the question "Where did the Pompey board think the money was coming from?"

Sure the fans are hurting now, but it will be a wake up call. And lots not kid ourselves, Pompey are a relatively small club, with a small fan base, who were punching above their weight (unfairly) The fans should be used to trolling lower league grounds, as Pompey are hardly an established Prem side. Ultimately you've had a few years you will never forget, and if thats at the expense of 5 or 10 years out of the Prem then so be it. I wouldn't swap Leeds' barmy European nights for the World. And League 1 is not so bad anyway, come join us!

With regards to Aerospace Mango's last few posts, I don't think it's realistic to compare the assets and revenue of a Premier League club to Chester.

Even if the relative proportions of the income and debts of the two clubs were identical (which I doubt), Portsmouth stand a much better chance of being able to pay back their tax debts from the Championship than Chester ever would have, due to parachute payments, television money and possible cup runs.

Similarly naive are Portsmouth fans who i've heard complaining Manchester United and Liverpool have a much higher debt than them and yet are still running...

I think readers should also know some history of Portsmouth North constituency. The previous Labour MP was Syd Rapson who owned a house in Paulsgrove. During the paedophile demonstrations, locals took the opportunity to settle scores (lazily called the "paedophile riots" but us locals know better). Included in the score-settling was that the house next door to Syd's was petrol-bombed. Nobody knows to this day whether it was actually Syd's house that was meant to be targeted.

Sarah McCarthy-Fry is well aware of those events and also the effects of PFC supporters entering the local political arena in the early 90s over a proposed new stadium at Farlington. A local Tory councillor (now Tory party leader in Portsmouth) had his house 'bricked' at the time if I recall correctly. The political fall-out (local elections) from the dispute has affected local politicians deeply and scars are worn. Penny Mordaunt is right in her assessment of Portsmouth politics.

A few points
1. People complain about points deductions being given to clubs as it 'punishes the fans', well while it's bad for the fans of the clubs that have been punished, if that club wasn't given a points deduction it would be bad for the fans of the other clubs in that league who hadn't done anything wrong and who were complying with the rules. The only other punishment that is fitting for clubs that break the rules is a financial penalty and bearing in mind portsmouth have no money and can't pay their existing debts anyway, that option is irrelevant.

2. As has been pointed out portsmouth do still have a large squad and whilst I can accept that some of the loan players are in contracts with the clubs they can't get out of, are all of them? And another point, have portsmouth made some of their actual own players available to other clubs in the way of loans - I know premiership clubs can't sign anyone but there are a lot of championship clubs that might benefit from some of those players - looking at their squad list 4 players are out on loan but 3 of them are untried youngsters. Weber and Smith were playing in the championship last season for example, and with 3 forwards on loan surely they're fairly well covered in this position.

3. There's another point about the finances and the players. As has been pointed out in numerous articles some of their players are on large wages and unfortunately they can't really do anything about changing those players contracts. However, within those contracts I'm guessing that players must be on bonus payments for wins, goals, clean sheets and progress in the cups. How much of the prize money for the FA Cup run is likely to be eaten up by further payments outside of wages, to players?

4. I still don't understand how in spite of the threat of administration and court action by the HMRC, Portsmouth were able to sign Ricardo Rocca on a full time contract and Owusu Abeyie (ok they may not be paying all his wages), at the end of January.

55. At 2:03pm on 17 Mar 2010, LiKW wrote:
Some thoughts - a CVA can only be rejected by more than 25% of the creditors involved. At present, HMRC represent less than 25% of the debt so cannot by themselves invalidate a CVA.


But am I correct in thinking that it is only the unsecured creditors that can vote to accept or reject a CVA? If this is the case, and much of the debt being set against secured creditors such as "debts to other football clubs", Chanrai and Gaydamak, that would surely mean that HMRC are the major percentage of unsecured creditors, and could therefore carry the day if they wish?

51. At 1:48pm on 17 Mar 2010, AerospaceMango wrote:
Thanks for trying to clarify things, Matt, But.....

"The parallel with Chester (and Kings Lynn, Farsley Celtic et al) is tempting but the numbers can be misleading. The turnover at a PL club (even a poorly-run one) would dwarf Chester's so the taxes generated are that much greater."

Therefore, with perspective, the issues are exactly the same! Chester could not / did not pay their £26000 bill and are liquidated. Pompey, with a little perspective on the relative sizes of the clubs, are in the same position, but are not liquidated. Is this fair on the Chester fans?

The reason that Pompey will not fold is because the EPL will do all they can to bolster the club, before relegation, as it would take the sheen off of the "World's Greatest League".

53. At 1:54pm on 17 Mar 2010, Matt Slater wrote:
Fair comment, AerospaceMango (51), and you're absolutely right that the PL is doing it all it can (without upsetting the other clubs) to keep PFC afloat. The last thing it wants is a liquidation. V bad for the brand.

But there is another important difference between PFC and Chester. The latter were effectively run into the ground by complete wrong 'uns who appeared to lose all interest in the club towards the end and stopped contesting the winding-up petition. Some may say there isn't that much of a difference between them and Pompey's mob but they at least have contested the winding-up petitions with every legal trick they could come up with.

Well theres another few big differences between Portsmouth and Chester. The first is that a large majority of Chester's fans actually despise their previous owner and were for several seasons staying away in protest, the effect was that their gates dropped dramatically and therefore income was reduced. A number of them were actually writing to
the football conference to ask for them to kick chester out just so they could finally get rid of him and start again.

Secondly at one point the players of Chester refused to get on the bus and travel to a match until they had been paid, having not been paid for several weeks. When they didn't get the money they actually had to postpone the match at short notice.

And thirdly the most important difference is that chester were eventually kicked out of the league mid-way through the season. Without the league, they had no games, and thus no way at all of generating income and therefore no way of paying their debts, which made liquidisation was inevitable.

On a final note, good luck to their former supporters in getting a new incarnation of Chester off the ground.

Thanks for the reply Matt.

But:

Why is money disappearing out of so many clubs into the pockets of owners? - Is it, though? It's disappearing into lots of pockets (mainly players, agents and other club employees) but this isn't a new thing. Most owners end up seriously out of pocket. That said, huge fortunes are being made all the time, and they're being made at the expense of the game's supporters. But then that is what happens with under-regulated industries in a capitalist society.

I was thinking percisely about the Glaziers on this one.

why were Redknapp & Storrie receiving % payments of player sales? - It's not completely proven that they were/are (I've tried to get paperwork but haven't managed it yet) but a very good source has assured me HR gets a cut on the sales of players he bought. Storrie we know gets a slice on deals. Sadly, this is not against the rules and plenty do it. I remember Colin Murphy getting a wedge of Southend's Collymore money years after he had been canned.

Redknapp is know to have got a 10% cut of the sale of Crouch to Aston Villa. He had not bought this player for the club.

What I would really like to see is the media driving this investigation forward. We really need to know what is happening to our clubs. Lets leave the celebrity angle alone for a while and really dig deep into the whole set up.

I agree with you about Sky. I refuse to have it. I truely believe that the rot stated in 1992. See David Conn.

61 - Jon Parker

As I understand it, all creditors vote on the CVA for the 75%/25% split. A second vote of non-secured creditors requires only a majority decision to ratify the full vote. Gaydamak's £30m is unsecured and represents the majority of unsecured debt.

I believe that the HMRC have held back for the simple reason it is in everyone's interest, including HMRC's, for Portsmouth to be still operating come the end of the season.

The tv money and ticket receipts from the FA Cup semi final and possibly a final appearance will help tide them over till then. The parachute payment allied to a mass sale of players of value may be enough to satisfy creditors and allow a CVA.

Assuming that there isn't too much money missing, as a couple have alluded to, this may well make Portsmouth as a relatively debt free club, admittedly without the parachute payment an asset worth something for someone to buy in the Championship.

Shorn of the really big earners a club with a solid local support could probably survive in the Championship assuming that the CVA can be agreed to stop a points deduction.

these problems were made by the board and previous owners.

One small point that has been overlooked as regards the points deduction. The Premier League and the Football League are 2 seperate organisations therefore the points deduction for next season would have to be implemented by the Football League for an event that happened before next season starts. At the moment Portsmouth are still in with a mathematical chance of not being relegated.

Without naming names do you think anybody involved with Portsmouth is going to face criminal charges? Or more importantly should they? Yes or no will do.

Grest blog as ever though, really enjoy reading your articles.

51. At 1:48pm on 17 Mar 2010, AerospaceMango wrote:

Therefore, with perspective, the issues are exactly the same! Chester could not / did not pay their £26000 bill and are liquidated. Pompey, with a little perspective on the relative sizes of the clubs, are in the same position, but are not liquidated. Is this fair on the Chester fans?
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You have missed the fact that Chester were going under last season as well, thay have had 2 years to try and sort this, if Pompy are still in this mess next year I would expect them to be wound up.

@ Phil

"The simple fact of the matter is that Pompey are now relegated. So like another poster said, why not return all the loan players? It makes no sense to keep hold of them all on 20,000 or 30,000 grand a week - or maybe more! Get rid of them, blood some of your youngsters and prepare for next season.

This argument of 'its not fair on the fans' is a load of bull. Were the fans up in arms when you won the cup?"
------------------------------------------

It's not the Pompey fans it's unfair to. It's other clubs still in the running for things that may have dropped points to Pompey earlier in the season. Their rivals now get a shot at a youth team? All the stuff you refer to is fine, but should happen in May, not now.

I can't help thinking that the whole delay was partly caused by Portsmouth's FA Cup involvement - reaching the semis will generate another couple of million for creditors. Significant that the FA had the right to throw Pompey out, whilst in administration, but because HMRC was challenging it the FA took no action before the quarter-final - and now it would be unthinkable to expel a semi-finalist and give someone a bye into the final...

The investigation will probably never really be pushed forward.

Whilst the EPL holds such a tight rein at the top, no one will be able to break the code of silence. Whatever happened to Mike Newell's belief that the game was rife with bungs?

If managers are taking a cut of the transfer fee, then doesn't that qualify as a bung? If I know that one of my players is worth £7M, and I stand to get 10% of any deal, then I am going to be more inclined to sell that player. Could this have been going on at Pompey?

Let's say it has....If you've got transfers worth £35M, then that's £3.5M that's been taken out of the club, by the manager, with no comeback......No wonder they want to jump back on the roundabout when they get sacked....it's a lucrative life!

Surely, this would be in a contract? Therefore, it can be proved? Therefore, if seen as unlawful, why can it not be stopped?

LostmekecksintheGmex - good point, that wasn't something i was particularly thinking about, but does make sense.

However, if i was a Pompey fan, i wouldn't really give a monkeys about whether it effected other clubs, as it could be the difference between going bust and still having a club. Look at it from a slightly different perspective. Pompey had to sell some of their better players this transfer window, so their squad is weaker than at the start of the season. So realistically any club playing Pompey earlier in the season was at a disadvantage. As long as Portsmouth field their strongest possible team out of the playing staff available to them, i don't think they are doing anything wrong. Ultimately, Portsmouth cannot afford these loan players, so they should be sent back IMO.

Goes to show we need to sort out ourfinancial rules. Uefa bottled it and have put their 2012 deadline back to 2015, for clubs to have their finances in order. If we react now we can secure the premier league product for years to come. The super bowl is played in one country yet attracts a global audience of nearly a billion . Ok there are difference such as use of the draft system, but things such as rules on debt and wage caps and ageent fees,(dont see many poorly paid players in the NFL) could easily apply to the premier league. (and the foot ball league too) The only people who would lose out would be the mediocre and squad players as only results and consistency would pay the big bucks to balance the wage cap. Pompey should be the wake up call football is a buisness admitedly with tradition and community identity thrown the faster we realise that, the faster we secure the english football leagues vibrancy and future.

"HMRC represent less than 25% of the debt so cannot by themselves invalidate a CVA."

How unsurprisingly convenient...

Comparisons with Vaughan's similarly engineered CVA at Chester (which HMRC successfully challenged in court) are very relevant here.

It is not simply a cut of the transfer fees recieved by the selling club, it is also about agents greasing sticky palms too.

It should be outlawed and contracts re-written immediately. The amount of money lost to the game since Mike Newell blew the whistle is unforgivable and begs the question of culpability within both the ELP and the FL administrations. Mawhinny hints that he would be even tougher on those failing clubs, what he could do is, put a stop to the backhanders, allowing the selling clubs to realise fully their assets. A full and forensic investigation into fee's payed, legal or illegal, will prove mind blowing to all supporters. Managers, Coaches and CEO's are employed to develope the clubs, not as Financial Brokers.

It's going to be amusing if the "document" proving Gaydamak's £30m unsecured debt ever sees a court of law.

I see little chance of a CVA being agreed as HMRC will quite rightly reject anything that gives (unsecured) football creditors preference. Why are taxes, which have been collected, not been paid and why has this been allowed to build up? The football authorities (FA, Premier League, Football League et al) need to have a tighter grip on members and insist on confirmation on a quarterly basis that taxes due have been paid up to date - failure should be automatic relegation at the end of the season!

Regarding the club "cutting to the bone"... how can they justify keeping all the loan players they currently have? Their cost must heavily outweigh sacking a few backroom staff.
---------

More posts from people who dont understand employment law.

Contracts like the ones that players have can only be terminated by:
1. Payment in full
2. Mutual consent, usually including a compromise compensation amount
3. Some pre-determined and pre-stated criteria
4. Disciplinary reasons.

Wheras permanent employees can be made redundant with only basic statutary payments.

Terminating players contracts without their consent is not going to be any cheaper than retaining them, that includes loanees. Additionally football league rules state that long-term loans can only be terminated in transfer windows.

A simple straight answer as to the question of why club officials receive a % of player sales? - It works as an incentive for managers/CEO's to gain the most value from player trades for their employers (the club). By personally gaining a %age of their sale (or usually the profit), it incentivises the official (Usually Manager/CEO) to buy as low as possible and sell as high as possible. For example - if a manager buys a player for £10m and sells that player for £20m they will often gain 10% of the difference i.e. £1m The club gains £9m. This is better for the club than the manager having little interest in the purchase price and possibly even refusing to sell the player because of the effect on the team. To use the example above - if without any incentive mechanism the player is bought at £12m (instead of £10m) and sold at £18m (instead of £20) because the manager/CEO have no interest in negotiating hard for the best prices - the gross benefit to the club will only be £6m. Therefore the club is actually £3m worse off on that deal.
This is widely adopted within the professional game, as player trading is a key element of a managers skill set, so why wouldn't they be incentivised to achieve the very best results. Even scouts are incentivised to "discover" players - thereby saving potentially huge transfer fees in the future.
To believe that in the transient world of football, Managers/CEO's would automatically "do their best" out of some misguided loyalty to their employer is unrealistic.

"Contracts like the ones that players have can only be terminated by:
...
4. Disciplinary reasons."

So all Pompey fans need to do is find and provoke your players into actions worthy of discipline or sacking and it will save your club millions.

Like Sol, I shall waive my fees :)

75 & 77: ClassyBandwagoner: the £30m debt to Gaydamak has been known since last summer and evidence has been provided to the court of that. You're confusing different allegations.

HMRC did question the £17m that Chainrai put into the club (i.e. was it the club or Falcondrone which received the monies) - an issue which as Matt reports above is still not entirely satisfied.

78. Peterwsm: The HMRC can only reject a CVA if they make up more than 25% of the debt owed. Currently they don't. The real issue is what Gaydamak does re the CVA as he is the majority unsecured creditor.

Oh God, not another 9/11 conspiracy theorist, please.

This is a farce, just because this is a "football" club it is being let off the hook in case they upset some chavvy caravaners!

Only just logged on and seen the news and comments so apologies for the lateness of responding to what is, as far as I can see, yet another cack handed attempt at running football.

I have always maintained that sport and business don't mix too well... too many conflicts of interest, especially when something like what is happening to Portsmouth.

I don't like to see popular (or even little clubs) go to the wall because of 'business decisions' that have been made for the club.

Deducting 9 points from Portsmouth is a pointless exercise. Banning them from possible European competition smacks of utter stupidity.

Surely if a club is suffering 'financial difficulties', helping them get out of that predicament would be at the top of any agenda, business or sporting?

If I was the tax man looking to recoup the x millions of pounds due, or any other creditor for that matter, surely it would make better 'business' sense to allow the club every 'sporting' chance of escaping relegation, with the added bonus of all the financial rewards that would help further the clubs cause. To escape relegation now would be purely down to merit... not 'being done a favour' by anyone.

Kicking them out of European competition does not make any sense either for exactly the same reason.

But surely the club SHOULD be punished for their debt? It is not fair that they be allowed to continue to trade in their financial state. Getting in the administrators AND having their TV money taken off them AND the transfer embargo imposed so they cannot SPEND any more. All these conditions would go along way to getting the club out of debt. Yes, they would be hampered, but to take the club forward under such conditions could be achieved under careful management on the pitch and behind the scenes.
A well managed club will always prosper regardless of imposed conditions, so long as they are not punitive.
The current measures, I feel, are exactly that.

Matt,
Great to read more of your infatuation ith the symptoms (but never the root cause, you're right, you WOULD be fired) of my beloved PFC.
But your analogy about US Sport failing to "deal with doping until Government agencies got involved", is delusional.

There is no punitive action against culprits of any substance, whether coaches, team management or ownership, let alone the broadcasters and media who turn a blind eye to it all, because home runs, dunked basketballs, 350 yard drives, concussioning hits sell tickets and advertising.
Sure, some minor-leaguers, journeymen get slapped on the wrist, but only participants in sports run by non-US "agencies" apply custodial punishment, Marion Jones for example, Floyd Landis losing his TDF title.

The NBA pretty much summed the whole thing up on discipline (nothing to do in this case with drugs) by reacting to guns being drawn in mid-air card games by banning mid-air card games.

I hope you'll soon be able to tell the real story of PFC.

"Deducting 9 points from Portsmouth is a pointless exercise. Banning them from possible European competition smacks of utter stupidity."

Its only a pointless exercise in this case because they will probably be relegated anyway but there must be a deterrent to try to stop clubs over spending and getting into similar situations (remember pompey were paying over 90% of turnover in wages, an unsustainable amount). Remove the points penalty and you remove the deterrent.

Pompey are not 'banned' from europe. They failed to apply for the correct licence to do so so the failure is entirely theirs.

The points deduction seems to me to be a weak tool to cover up the inadequacies of the FA. Whatever its aim, a blanket ban makes little sense to me. Without the deduction, we had a weak team with an outside chance of escaping relegation, playing their last games with a degree of commitment. Now you have a team with nothing to play for, players whose only motivation is to secure another job and the real possibility that the team will not compete just turn up. This is great for the sides playing Pompey but hardly fair on those who have faced a more competitive team in the earlier matches.

I am surprised in Portsmouth's case that they have not resorted to legal action against the FA on the grounds that their problems were no different to those of many businesses who have over stretched themselves since the credit crunch and the FA have been complicit in the problems by certifying that any of the recent owners were fit and proper persons to run a club.

I suspect that the reason that HMRC has backed off is more due to a realisation that if they push too hard these fit and proper people will let the Club go into liquidation and they will get virtually nothing. That might be morally the right decision but financially they would be writing off millions of our money. And then there are the debt mountains of Liverpool and Manuchester United. How much do they owe HMRC?

Never ever dismiss rumours about Labour MPs, even if the rumours seem ridiculous, as we've all seen on hundreds/thousands of occasions over the last decade or so, that they'll say/do anything to keep their snouts in the trough, even lie repeatedly infront of the camera.

I doubt that it's true and like you say, the Treasury don't like interference, yet as sad as it would be if Pompey were wound up, any other company haemorraging money, with so much debt and little if any chance of paying up, would have been shut down months ago.
The FA need to introduce far stricter rules on money management and maybe even follow their own guideline re the 'fit and proper owners test' they already have.

Matt and various posters - HMRC have NOT "backed off" !

They cannot proceed with the winding up petition because Portsmouth FC has gone into Administration - so the petition has to be dismissed in accordance with the Insolvency Act 1986.

HMRC queried the validity of the Administrators' appointment - based on what security Chainrai held and what money he was owed - but have been satsfied that the appointment is valid. I would have been astonished if it had not been valid because Mr Andronikou would have checked exactly those issues before accepting the appointment.

If however the Administrator cannot sell the club and exit administration via a CVA, then the Club would eventually go into liquidation.

Matt,
Just to add an update from the news department(ESPN Radio): Ron Washington, manager of Tom Hicks's Texas Rangers, tested positive for cocaine use last year. How long do you thnk it would have been acceptable for Rafa to retain his job under similar circumstances? Mr.Washington, of course, will start a new season with the Rangers.
And: I assume you are aware that it's a matter of public record that baseball players suspected of using hgh etc are now known to have lied with impunity as they testified under oath to Congress.
As I say, you have chosen an unfortunate analogy; hopefully the British authorities will deal with any criminal conduct at PFC more appropriately.

The real money issue for the Pompey fans is that these monies have been loaned into the club when it was obviously insolvent - they will however be repaid with interest and other exit fees along with huge professional fees and this will all be at the expense of other creditors and the football club as a whole. Where better regulation is required by government is to look at these "vulture funders" who go into the insolvent situations purely for their own benefit.

I don't understand why you believe this to be a conspiracy? It is common practice for a creditor to apply for a winding up order to force a company to do something about it's situation.

The directors are perfectly entitled to put the company into administration, however a secured creditor (floating charge holder anyway) can override this and have his own administration instated. HMRC thus falls in it's position in the queue to be paid out and now comes much further down the list with the unsecured creditors such as trade creditors or consumers who have bought things on credit (in basic terms).

In real senses if Portsmouth had gone on much longer without doing something the directors could have been open to a case of wrongful trading and so it is likely that HMRC pushed them to think about this. As for claiming against past directors this would be up to the administrator to decide as he has to bring any actions.

Deducting points from a company who places themselves in administration is essential, it avoids the problem of moral hazard that was experienced in the airline industry in the US where companies were placing themselves in Chapter 11 proceedings, thus being able to avoid paying certain creditors expediently, which meant they had an unfair advantage over other companies who then began to fail. Thus if there was no penalty it would almost encourage clubs to apply for administration frequently.

I personally don't see how the Premier League can hold back TV money from them. If it is part of the contract that they be paid this it is against the law that money can be 'set-off' against other outstanding debts. Thus I believe that the administrator may well apply to the courts to have this returned. Football rules may well say football creditors are preferred, but if they aren't in law, then tough luck. Football can't make itself higher than the law, it just makes it unfair for the failing clubs as they're stuck between a rock and a hard place.

Sorry my post is pretty boring I just thought it needed to be said. Portsmouth to me seems typical of a company of wanted to grow faster than it could actually plan for. Unfortunately if anything goes wrong, they get screwed, as has happened here. This is an important point for other clubs. It may be unrelated but if Governments in the EU have an agreed limit (albeit often broken) on defecits, surely football clubs should as well?

So it would appear its not just the bankers who are both morally and finacially bankrupt.

Perhaps its time to put an end to this 'football looks after football' nonsense we have been hearing for years.

However, if the government does try to step in and sort this mess out (and given how much cash they are owed they should) then FIFA/UEFA will just ban english teams form all competitions, world cup all the way down.

What stinks here is the sheer volume of money involved and the fact that not even the owners and accountants seem to be able to tell us where it has all gone.

I am not that big a fan of football, not because I don't like the game, but because, like many, I have fallen out of love with the lack of anything resembling a team sport anymore where it just seems to be a collection of spoilt indulged rich kids that have no understanding of the 'fans' that pay the wages.

Even if I ws a season ticket holder at one of the 20 franchises of the premier league I still have to question why the tax payer has to subsidide a business that has more people on over £1m per year who are not even required to perform at the top level to get paid than the city of London ever did.

At least the bankers made some money on paper before stealing all our cash, the footballers have just rocked up, kicked a ball for a few minutes each week and then got paid even when they were cr@p, and for most supporters outside the top six or so, thats what happens most weeks.

There are other key differences between Chester and Portsmouth - it's really irrevelant to say one had debts of £26K and one has debts of £65M so it's unfair that Portsmouth survive.

Debts only matter when considered in relation to assets and revenue streams. Cheshire West & Chester Council owned the Deva Stadium, and needless to say Chester's players woul dnot fetch the same market value as Portsmouth's, nor do they have the TV monies, merchandise sales or fan base. People (inc. UEFA) need to realise that, as with a mortgage on a house, debts are not necessarily a problem if properly managed.

Reading some of the comments, regardless of the financial situation, anything that says we as fans should feel guilty for winning the FA Cup is treated with total contempt as far as I'm concerned. In the end many of us just pay up and go to support our team regardless of ownership and will continue to do so.

What staggers me is people are thinking more about "how do we punish X team" rather than trying to solve the problem. As far as I'm concerned, unless you limit debt finance/effective gifts to clubs and find ways to limit spending by clubs worldwide, you won't do anything to address the problem. Many clubs are financed in the same way as we were, what keeps them from going under is good will.

If we want to stop football having financial problems, clubs have to become less dependent on individuals or parties from outside the club itself. The Premier League philosophy is dead set against this: only by out-investing any other league are we able to maintain "the best football league in the world". For the majority of clubs, this means outside investment and situations like you see at PFC.

As a Pompey fan, I just sit back and see what happens, as at this time, things are out of the fans' control. We'll no doubt be hit with a 20 point penalty next season, so I don't know what fans are worrying about. If we can get good management at the top of the club and still have a club, we'll be in a good position to rebuild the club.

What seems clear now is Portsmouth got a lenient HMRC hearing. Administration was always going to be Plan C, and will ensure the club clears msot of its debts. Perhaps there needs to be a top penalty introduced (eg 10 points on entering admin, and 1 point deducted for every million written off). Administration can gain you £40 million cleared for the cost of 10 pts. In this example, I would deduct 40 points on exiting administration.

88. At 5:34pm on 17 Mar 2010, Tony Geo wrote:
And then there are the debt mountains of Liverpool and Manuchester United. How much do they owe HMRC?

Nothing. That's why they're not being chased. Man Utd and Liverpool have large bank loans (yes, and Utd have the Bond now) which they are currently able to service. Their debt is much larger, but its irrelvant.
Chester got wound up over debts of £26000 so why haven't Pompey just been wound up already as they owe more than £10million. Man Utd and Liverpool actually pay their debt as agreed and are not using HMRC as an overdraft facility.
End of.

Matt I notice that you removed the part about Harry Redknapp apparantly getting percentages of transfer fees, why is that?