Thought some of you may enjoy a feature on Pompey's financial mismanagement. It was certainly one of the most enjoyable articles I've ever written.
Manchester City announced record losses of £92.6m for the financial year, Manchester United’s owners looked to issue a £600 million bond to ease their debt burden, while Portsmouth failed to pay players and staff on time for the third successive month. All in all, it has just been another typical week in the Barclays (sponsor) Premier League, writes Simon Peach. In recent times tales of financial woe emanating from England’s elite clubs have been two-a-penny. Whether it be the so-called ‘big boys’ or those clutching onto the coattails, the majority of Premier League clubs seem to share a common bond: financial mismanagement.
The true financial disarray of clubs has been brought into sharp focus by the continued fall from grace of Portsmouth. The south coast club has been dragged further into the financial mire over the past year and now leers dangerously over the precipice. But it wasn’t too long ago that times were very different for the club. Under the stewardship of Harry Redknapp the club reached heights not seen at the Hampshire club since the mid-1950s. The likes of Lassana Diarra, Sulley Muntari and Sol Campbell were brought into the club, bringing class, skill and experience to the side. The players helped Portsmouth to unprecedented success in modern times, finishing the 2007-08 season in eighth place - their highest finish since 1954-55 - and with a trip to Wembley, where the team edged out Cardiff City to win the FA Cup.
The success fuelled Portsmouth’s ambition. Peter Crouch and Younes Kaboul were brought into the club in multi-million pound deals, signing lucrative contracts in the process, to help the club fight not only on the domestic front but in the UEFA Cup too. But then things started to go awry. Redknapp left the club and players began to flee as the club’s mysterious ownership situation lurched from one crisis to another. Portsmouth is struggling to pay wages believed to be £1.8 million a month, and owes numerous clubs millions of pounds for transfers as well as paying gargantuan wages to players - including one reserve player who is on a reported £80,000-per-week. Furthermore, the club has very few assets to sell.
Portsmouth has a small playing squad with a dearth of talent, a small rickety stadium that averages crowds of 18,929 - the second lowest in the league - and also rents pitches from the University of Southampton as the club has no training ground. In other words it appears the club has been built on quicksand. Portsmouth is riddled with debt to the reported tune of £75 million. The club owes £30 million to former owner Alexandre Gaydamak and was recently issued with a winding-up order from HM Revenue and Customs over owed VAT, PAYE and National Insurance contributions.
The club faces further trouble after Ligue 1 Orange (sponsor) club RC Lens started legal proceedings over allegedly broken promises regarding the transfers of left-back Nadir Belhadj and striker Aruna Dindane. Lens claims Portsmouth has failed to keep up instalments for Belhadj’s £4.2 million move and has gone back on a deal to sign £4 million rated Dindane once he played 11 matches for the club. Lens president Gervais Martel revealed to the Daily Mail that the club “are taking action through the European football tribunals as well as civil courts” and believes Portsmouth should be kicked out of the Premier League.
“Portsmouth should be treated like Mouscron,” he is quoted as saying. “We can't go on like this with clubs who don't pay their debts. Portsmouth have problems with all the clubs they've bought players from. We feel cheated.” The case Martel refers to is that of Belgian club Royal Excelsior Mouscron, which last week was thrown out of the Jupiler (sponsor) Pro League under a cloud of serious financial troubles. The Belgian Football Association (KBVB) removed the club from the competition after it forfeited its third successive match as players refused to play for risk of injury once the club entered administration. But would a similar sanction on Portsmouth be too harsh?
Martel brought up the view that allowing clubs to run themselves into so much debt is cheating. Is there a discernible difference between buying good players with money you don’t have then winning with those players you can’t afford, and for example diving for a penalty or even taking performance-enhancing drugs? Players get banned for taking illegal substances and reprimanded for diving, so should there be more severe punishments for spending money that will ultimately leave innocent people, clubs and organisations out of pocket? Former Bologna owner Giuseppe Gazzoni Frascara described such behaviour as “financial doping”.
It has come too late in many cases, but UEFA has set up a Financial Control Panel to bring financial fair play back to European football by making the monetary landscape more stable. The panel is responsible for attempting to ensure associations and clubs remain financially viable and will be headed by Jean-Luc Dehaene, the former Prime Minister of Belgium. “Throughout my career I have been confronted with challenges and bringing a degree of financial order to European football is certainly a challenge,” said Dehaene. “However, I am confident that we will be able to monitor and oversee the financial fair play system that will ultimately lead to a more stable financial regulation of European football.” The Premier League has also introduced strict new financial guidelines which are being implemented for the first time this season.
Such moves could have a huge impact on English clubs as Deloitte’s review of football finances last year revealed that Birmingham City, Wolverhampton Wanderers and S****horpe United are the only three clubs in the top two divisions operating without debt. English clubs will have to quickly change the way they operate to ensure they can survive on and off the field as the new rules come into effect. However, whether Portsmouth is still a competitive football club when the new regulations come into place is still less than certain.