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Portsmouth go bust just before they play The Arsenal.

We’ve been talking a bit about motivating your players and demoralising them in an earlier post.

I then replied with an earlier post that was earlier than this post but not as early as the post I called an earlier post in the last paragraph.

I thought was enough – two posts in one day.

And then suddenly all hell broke lose. Portsmouth, it seems, have discovered a new way of destroying a football club, just hours before they come to play us.

Here’s the story step by step…

1.  You hire Arry Redknapp, which is rarely a good thing to do, and then look on from afar as he is taken to court over unpaid tax which he strenuously denies.  You laugh at Southampton whom Mr Redknapp has just left, crowing over their sad plight which leads to liquidation and a 10 point deduction.   Stupid Saints.  Hello Arry.

2.  Then you look on as Milan Mandaric strenuously denies allegations, which go back to his time as Portsmouth chairman from 1998 to 2004, about taxation issues.  He too will appear in court next year, and you think, well, nothing to do with us.  He and Arry, perfectly innocent.  No problemo.

3.  Indeed, you say again, nothing to do with us guv. You are happy to be taken over by an Arab consortium because we all know the Arabs have lots of dosh and they have bought Manchester City and look how wonderful life is there.

4.  It is a trifle frustrating that the consortium is without money, but no worries, they probably weren’t real Arabs and anyway who cares because there is another consortium waiting in the wings, but ooops, they don’t have money either.  How did that happen?

5.  The EPLban all transfers until the debts owed to Arsenal and others are paid off (total to English clubs about £10m).  Defenders of Arry say that it is not his fault.  Nor that of the previous chairman.  And no one says it is there fault.  Just one of those things.

6.  In October and November 2009 the club omits to pay its staff on time.   That’s one of those things too.   Easy mistake to make – like forgetting the good lady’s birthday.  You can always make it up next time around.

7.  On December 23rd Revenue and Customs issue a winding up order against the club, but (as is correct and proper) do not make this public.  Your club doesn’t make it public either.  Instead…

7.  On 29 December the executive director Mark Jacob briefs journalists saying that the Premier League embargo will be “lifted next week” and that “the players and staff will be paid this month’s wages on time on December 30th.”   Now that is odd.   Did he not know the truth?   Very strange one that one.

8.  On December 30th the staff are not paid. News about the winding up order becomes public via a BBC reporter.  Can’t trust reporters can you?

A winding up order is issued when a company has failed to pay its tax on time.  This would include National Insurance contributions, VAT on gate receipts etc, and PAYE taxation on players’ wages etc.

Revenue and Customs do allow companies in trouble to extend payment of the debt, but ultimately if they see no chance of being paid then they seek an order in court to wind up the company, and sell off the assets.

A winding up order can result in any one of three things…

a) The company finds the money and pays the debts

b) A new owner comes along and buys the whole lot from the liquidator.  The new owner might be the existing owners inside a new company.  They buy the whole lot from the liquidator, and agree to pay say 10p for every £1 owed.  This is what that awfully nice Mr Bates did at Leeds, and I must stress this is perfectly legal under English and Welsh law.

c) The liquidator fails to find a single buyer and instead sells the players as he can, sells the ground, and so on.    The liquidator pays himself first and if there is anything left over, that goes to the creditors.

So, back to the issue of motivation. How motivated would you feel today as a Portsmouth player.   “Come on boys,” says the manager, “I know you ain’t been paid, and I know the club is about to close down, and I know you are bottom of the league, but lets win this one for the supporters shall we?”

And how good would that make you feel to be an Arsenal player, knowing that your club’s debts are secured against the stadium, that the agreed amount is being paid every month, and that the club is very restrained when it comes to buying players?

I reckon whoever you are, whoever you play for, you’d be thinking, some of these EPL clubs are in real trouble.  I think I’d sooner go to Arsenal.

(c) Tony Attwood 2009.

31 comments to Portsmouth go bust just before they play The Arsenal.

  • skwam

    and as we see stan cronke drawing closer to taking over arsenal, will such stability be his objective as well? i wonder

  • Marc

    I seem to have been out of touch today and this is the first of it I have heard. On SSN’s Portsmouth are denying that a formal winding up petition has been issued.

    I know that all regular readers of this site and Tony have been waiting for this to happen to a PL club, now Portsmouth seem to be in their final death throes it still seems surreal that this could happen in the self proclaimed richest league in the World. Could this spark off a wave of panic amongst creditors of clubs with huge debts and might Portsmouth be the first of several? Who knows but you wouldn’t bet against it.

    As for the game tonight it could go either way with the Portsmouth fans and players raising up and putting in one last performance, hopefully Arsenal like all apex predators will smell blood and take an easy meal.

  • It is always a question of why people want to buy a club. Is it…

    a) because they love the club
    b) they love football
    c) they expect to sell it again at the end and make a profit
    d) they expect to get a dividend
    e) they like the kudos of owning a club
    f) they want to give it to their sons to play with

    Without knowing why Kronke wants to buy we can’t really tell.

  • Portsmouth are not denying that they are facing a winding up order. They are saying they are shocked and surprised by it. There is a huge difference. Here is the statement taken at 1710 GMT from the official Portsmouth FC web site.

    PFC Statement

    Portsmouth Football Club has not been formally served with a winding up petition and is shocked and surprised this action has been taken in respect of VAT, PAYE and National Insurance Contributions which either have been, or are about to be paid, or are disputed.

    The club is disputing the VAT amount outstanding and has formally notified HMRC of this. We expect HMRC to withdraw their demands forthwith.

    Otherwise we anticipate a hearing being held in early January 2010 during which we will request that the High Court order HMRC to withdraw their demands.

    Since the takeover by Ali Al Faraj in October 2009, extreme efforts have been made to reach payment arrangements with HMRC to allow the owner time to deal with inherited debt.

    To date the new owner has injected a total of £9.7m of new funds to HMRC – £5.7m paid and security to the value of £4M.

    In such a tough economic environment the club finds it hard to understand this action by HMRC.

    It is well known that the business has been in a difficult position following former owners’ decisions and the current owner is committed to resolving this and moving forward.

  • brookessy

    From a lot of reading I think Kroenke is pretty much dedicated to sport but he is no mug so I would guess its mainly B and C. Another of our major shareholders is more E and F (except its them who wants to play real life football manager). I would prefer Kroenke!

  • Pablo

    Kroenke has sound ownership in the US. His Colorado Avalanche are a free spending powerhouse in the NHL with several titles. The Denver Nuggets almost went to the NBA Championship lasst season and has been on a steady climb up the league every year since Kroenke purchased the club. He also owns 40% of the St. Louis Rams in the NFL. The primary owner has just died and the club is up for sale. Kroenke is ineligible to purchase the rest as there is a rule among the NFL, NHL and NBA that says no one can own clubs in different cities. Therefor, to be able to find a buyer for the Rams, Kroenke’s shares would most likely be part of the offer. A sum that could earn him up to $400 million US. That sum would be enough to purchase a very large chunk of shares of The Arsenal, not all, but more than half. He never interferes with the management of the club, just marketing and media rights.

  • Sean

    Notice how many clubs in dire financial trouble have been touched by the Golden Handshake of the Premiership?

    Watford, Norwich, QPR, Palace, Portsmouth, West Ham, Swindon, Leeds, Ipswich, Forest, Wednesday etc. etc.
    All clubs with proud (and often more interesting histories, certainly than Chelsea’s) than the Top 4, yet all in a more perilous position than at any other time in the last 130 years.

    The big guys can cope, the lesser lights are routinely thrown (often willingly) into a battle they simply can not win.
    Soon they won’t even be able to compete.
    I’ll give it ten years before there is a European League and another five on top of that before there is a World League.

    Funny thing is that there’s more chance of Barnet v. Dagenham & Redbridge still being a fixture in 2040 than Arsenal v. Chelsea.
    Why?
    Because a 20 team World League isn’t going to want an Arsenal or a Chelsea……it’ll want a London Allstars United.

  • SharkeySure

    Great article !!

    Very timely, very good effort.

    Your URL still reads like shit though, and this layout’s not gonna win you any prizes either !!

    Yours sincerely

    SharkeySure 😉

  • Marc

    Tony – At the time of my comment SSN’s were running a breaking news banner claiming that Portsmouth were denying the winding up petition. They seem to have changed their story.

    Sean – Their is undoubtedly more money coming into the upper tier of English football than has ever been seen. The problem lies with the morans who run the majority of clubs. Henry, Cesc, Pires, Rooney, Gerrard, Drogba, Ronaldo, Torres etc can all earn, should earn and deserve to earn huge wages. They are superb footballers who light up the game (please note I included Rooney and Gerrard in an attempt to show balance) the problem is the number of mediocre (or worse) players earning large wages. Name one player at Bolton, Hull or Blackburn who come any where close to being a good player let alone decent yet all these players are multi millionaires. Self deluded chairman, encourauged by ignorant fans who seemed to believe that by over paying crap footballers they would usurp Arsenal and make the promised land of CL football. We are currently going through the worst recession in over 70 years because of peoples belief they could live beyond their means. Society is now paying the price as football soon will.

  • Phil Gregory

    Good read Tony. I saw the winding up order on the news this morning and have to say I wasn’t surprised. Unless someone is happy to take them over and keep them as a lossmaking club (most likely in the Championship) then I can see the end for them.

  • Hartwick89

    Anyone want to take a guess at a score now? I say 20-0! Ha.Ha. Seriously, stay away from “the Golden Goose.” The thing that discourages me the most of a takeover of any kind is the impact it would have on Wenger. And, I am naive , honestly when it comes to the board and Wenger. But, I feel to date that relationship has evolved and it benefits the club. This is relatively known. The unknown is what is worrisome. Portsmouth is now experiencing the unkept promises of Mandaric and now the supposed rich Arabs. In regards to Arsenal no Billionaire gets involved with a business venture without completely dominating the current business model. As we have all agreed it is working quite well amidst a troubled world economy. I just don’t see a happy ending if Arsenal get involved with any new Billionaire’s. Especially, one’s that are aggressively buying, buying, buying. Call me crazy….No don’t do that! What did you say?

  • walter

    This week in Belgium in the PL Moeskroen went bust and stopped during the season because of the same reasons as Portsmouth. This after a dead struggle from several months.
    A bit the same like Portsmouth ?

  • JediKnut

    So if Portsmouth don’t find a buyer (& I don’t see how they could), and after the players are sold… what happens to the club? It shuts down? What about the league? Does it continue without Portsmouth? How does it work? It could be an unfair advantage to the teams who haven’t yet played them…

  • Hartwick89

    Uh! Huh! You say what? Uh! Huh! You say what? Gole Nasri!!

  • Hartwick89

    Match Stats
    Portsmouth Arsenal
    7(2) Shots (on Goal) 8(3)
    10 Fouls 1
    1 Corner Kicks 6
    1 Offsides 2
    37% Time of Possession 63%
    1 Yellow Cards 0
    0 Red Cards 0
    1 Saves 2

  • Hartwick89

    Match Stats
    Manchester United Wigan Athletic
    12(6) Shots (on Goal) 4(1)
    2 Fouls 7
    3 Corner Kicks 1
    1 Offsides 0
    61% Time of Possession 39%
    0 Yellow Cards 0
    0 Red Cards 0
    1 Saves 3

  • Hartwick89

    Oh! Yeah….na!Na!Na! Good Bye! Aye Flinty! On the Mark? Ramsey you Lil Devil! OK let’s let up a bit welcome Rosicky….

  • Hartwick89

    Bastards! Just when I get cocky…I guess I need to get back to work real soon….

  • Hartwick89

    Damn! There you go! Make a little… get down tonite! get down tonite! Good Song!

  • Hartwick89

    Wait a second is the fn Carling Cup? Welcome aboard Eastmond!

  • walter

    They are just a bunch of lightweight players and there is no debt in the squad.
    Wenger must buy, buy, buy, buy and buy. 😉

    No Cesc, no RVP, no Bendtner, no Theo, no well you got my point by now I guess and then to win 1-4 in Portsmouth…
    Well some will say it is just that Portsmouth didn’t turn up but it is about time to maybe think that it could well be that other teams don’t turn up against us because we don’t allow them to turn up.

  • Getty

    Where is Arry’s sympathy to Portsmouth now? I guess he is busy defending (oops denying) himself from tax evasion charges he is facing. He is not taking any responsibility for the trail of destruction he is leaving behind. I hope he doesn’t die before his dream of finishing the TOP FOUR. You got to give Mancini credit after winning two games in the row he said that ManC will win the title. Why chase everybody’s elusive dream of top four anyways?

    It is interesting to see what really happens to Portsmouth. That will be a real education as to what will happen to the other offenders.

  • Mark

    Could Pompey, or any other club, be liquidated mid-season, and screw up the whole league Tony?

    My question goes out to anyone else who knows the answer.

  • Marc

    If the PL copied the example of what happened to the club in Belgium then all the results against Portsmouth would be discounted – I bet the scousers are on their knees praying.

  • Hartwick89

    So why doesn’t Kroenke with supposed billions and a pension for being successful with sport’s teams prove it by purchasing Pompey?

  • Mark

    Pompey and Circumstance

    Ah Ok Marc…..so here is my updated prediction for the Portsmouth V Arsenal match. My postdiction.

    “We will win……yes, we will thrash them, by 3 or 4 goals, but it will all be straw in the wind. Pompey will promptly go bust, all this seasons games will be retroactively anulled, and in the end , I will be proven right, we don’t win”

    Its a mad mad mad mad Corporate World.

  • The only precedent I can think of for a club going bust mid season in England is Accrington Stanley in around 1960. They went down mid-season and all the results involving them were removed from the record and the table adjusted.

    The club went out of existence, was reformed and they re-entered the pyramid (just like AFC Wimbledon) and the new version of the club gradually worked themselves upwards.

  • Cape Gooner

    I know we support AW in all he does, but what he has done is becoming more apparent and it is just awesome!

    After the Olympiacos and Blackburn games I said that if Cesc continues to play that well, we were a good thing for the title. Unfortunately it didn’t happen. Until Aston Villa. What we saw there was at a different level. And then Diaby came through with two great games, and when he went a bit quiet, Ramsey stepped in. And Song – someone on this site recently suggested that he was as good as Essien – I thought they had lost it, but not anymore. This boy is special and he will become accepted as the best DM around by all, not just us lot.

    I have long thought that the D & Gs were fucking idiots. Now I am sure. I don’t want to get too excited about beating a team that must be huge favourites to be relegated. But I do want to get excited about the quality of our play and I want to get very excited about the depth of our squad.

    After 19 matches (2 against Portsmouth, none against Bolton) we have 41 points. I expect us to end up closer to 90 than 82. If Cesc is fit for our fun four matches starting in 4 weeks time, I think we are better than 50/50 to make 90.

    Can we win the CL? We need one of two things to happen. Either our forwards must find some form or we must avoid Chelsea and Barcelona until RvP is back.

  • Sean

    Portsmouth have paid ridiculous wages for their ‘dream’ and the supporters and the city are, and will be, paying the ultimate price.
    Their ‘dream’, though I can’t think why, was the Premiership.

    Arsenal’s ‘dream’, though I can’t think why, is playing and competing in the higher reaches of European football.
    Despite the rampant greed of the last 18 years, I don’t believe that Arsenal have yet reached their ‘Portsmouth’ moment where they, in order to compete in a European or World League, may have to give up all they hold dear…..or downgrade.

    If there is any smugness (and there shouldn’t be, it’s dull) about competing in the ‘Champions’ League, ‘don’t speak too soon for the wheel’s still in spin’.

    What will AFC do when the big boys from India, Dubai, China, the USA, Africa and Russia are at the table and they want a Super League?

    If you think it’s mad, and greedy and immoral now (and you should, how can players on £3,000,000 a year look you in the eye?) you just wait a few years.

    I’m just glad I downgraded long ago.
    Barnet, Dagenham, Leyton, Wingate etc. still have a tiny bit of soul left…..the Premiership does not.

  • Hartwick89

    @Sean-What did you downgrade to? As far as souls go maybe you should become a coach for a local football team. There is plenty of opportunity to teach good morals,ethics. Remember as far as world football goes I believe it is the responsibility of the fan’s of a given club to protest prior to when this business happens. Player’s get paid what can be afforded. The Portsmouth management knowingly or not started down this path long ago. Unfortunately, Portsmouth fans had the responsibility to do something. Could have been not showing up for 1 game collectively…I don’t know? And as fans go this blog for instance Tony would have posted a headline long ago: “If you love this club than we need to do something, meeting tomorrow.” If you know anything about this club and its early origins we have already had a Portsmouth moment….Read Tony Atwood’s piece “Making the Arsenal

    By Tony Attwood

    Published 30 October 2009, price £12.99
    310 pages. Cat No: 978 1 86083 759 3

    In 1910 the financially impoverished Woolwich Arsenal FC were taken over by Henry Norris, who at the time was also Chairman of second division Fulham.

    This much, and Norris’ attempt to merge the two clubs, is well known and well documented. Indeed Arsenal fans have every reason to feel grateful to Henry Norris for it was he who took the Gunners to Highbury, who fought for justice for Arsenal in the match-fixing scandals of the pre-war years, and who established the modern Arsenal under Herbert Chapman.

    But what has never been clear is why Henry Norris bought Woolwich Arsenal in the first place. There was no financial advantage, no footballing advantage (the club were bottom of the First Division when Norris took over) and indeed, no other benefit to Norris that is obvious to the modern eye.

    “Making the Arsenal” is the first ever book which aims to explore what happened to this world-famous football club one hundred years ago, as it tells the tale of one journalist’s attempt to find out exactly what Henry Norris was up to – and why.

    Set firmly amidst the contemporary events of the 1910 miners’ strikes, the spy paranoia, Dr Crippen, the anarchist threat and the violence surrounding the Suffragette movement, the book tells the story of Jacko Jones of the Daily Chronicle who uses his position to untangle and finally expose the extraordinary events that surrounded the birth of the modern Arsenal FC.

    If you would like to buy a copy of the book direct from the publishers just click on the appropriate link below

    If you are in the UK click here for delivery details
    If you are in the rest of Europe click here for delivery details
    If you are in the rest of the world click here for delivery details
    Tony Attwood, author of Making the Arsenal, is an Arsenal season ticket holder, the Committee Member of Arsenal Independent Supporters Association responsible for AISA’s “Arsenal History” project, and a contributor to both the Highbury High fanzine and the Arsenal Player Database on Arsenal.com.

    Tony also edits two daily blogs. UNTOLD ARSENAL fervently supports the Wenger revolution and draws on a team of top writers to provide daily news and analysis of all things Arsenal.

    WOOLWICH ARSENAL tells the day to day story of the club 100 years ago.”

    So there you have it Arsenal’s Portsmouth Moment…And, now we have learned as an organization and hopefully we will never have another Portsmouth moment. And, the start is you, and me..because we have an impact! But, maybe it’s too late for Portsmouth…But, maybe Usminov or Kroenke are available.

  • Valentin

    Want to know how desperate Portsmouth were for success and how irresponsible they behave in order to obtain?
    Lassana Diarra more than double his wages from Arsenal to there. Knowing that he wanted to leave to have more playing time and secure his place in France’s team for Euro 2008 and Porsmouth were the only bidder.
    The same with the majority of other players who were well overpaid. When you think that Defoe, Crouch and Kranjkar are said to have taken a pay cut to leave.
    Ridiculous wages, dodgy signings, taxes irregularities, small stadium, limited catchment area and appeal, owners under investigation here (Mandaric) or abroad (Gaydamak, …) for fiscal and financial fraud are a sure recipe for disaster.
    They may not avoid the winding up order until the end of the season.
    If they do it will because they will have sold most of their playing staff in January.
    Unless they then get good players on loan free of charge, they will will be relegated.
    Once in the championship, the fall will be brutal and quick.
    Long term, their stadium with only places for 15,000 cannot sustain a premiership club.
    Because of the global financial crisis they cannot even rely anymore on selling their ground to a property developper.

    I believe that next season other premiership club will also be in dire financial situation. Liverpool FC, Everton FC, Hull City FC are the most obvious candidates for financial oblivion.
    The FA may end up doing what is done in France. Clubs can only enter a competition if they can prove that there is enough money for the entire season (taxes, debt servicing, wages, transport cost, …).
    If they fail that basic test, they are then automatically relegated and told to put their house in order. They are then force to sell players. Short term, it tends to make the situation worse, but in the long term it means that the club survives rather than bury itself even more under debt that it has no chance to ever repay. Unless of course some rich mug come and buy it to make it its play thing.