The grounds on which Pompey should avoid a points deduction

For most fans there will be the question of points deduction, a matter for the Football League. As it stands, at least for the moment, the company which owns Pompey, Portsmouth Football Club (2010) Limited, is not in Administration, as it is at pains to point out in its official statement (1); it is the parent company, Convers Sports Initiative plc, which is (2). It is the issue of how closely the two companies are linked that the Football League will have to rule on.

The obvious precedent to spring to mind is that of deadly rivals Southampton, where the decision was that the company owning the club and the parent company were so intimately involved that the club should suffer points deduction on account of the parent company going into Administration. It’s worth quoting from the Football League’s statement (3) at the time:

The [Grant Thornton] report [on which the decision was based] concluded, among other things, that:

1.The Holding Company has no income of its own; all revenue and expenditure is derived from the operation of Southampton Football Club Limited (SFC) and the associated stadium company.

2.The Holding company is solvent in its own right. It only becomes insolvent when account is taken of the position of SFC and the other group companies.

3.The three entities (the Holding Company, SFC and the stadium company) comprise the football club and they are inextricably linked as one economic entity.

If we compare the situation at Southampton then with the situation at Portsmouth now, there are major differences. At Portsmouth currently:
1.CSI does have income of its own and definitely does not derive all its income and expenditure from Portsmouth Football Club (2010)
2.CSI is insolvent in its own right; its insolvency does not arise because of any insolvency on the part of Portsmouth Football Club (2010) [I grant you that it’s hardly a cash cow, but it’s not Portsmouth that has brought CSI down]
3.CSI and Portsmouth Football Club (2010) are not inextricably linked as one economic entity; CSI’s website shows their structure (4) to consist of a number of unrelated subsidiaries: Boom!, DGB Convers, GP Week, Leaders, Power Play Golf, Sportpost and WRC, as well as Portsmouth FC

On this basis, there is a strong case that CSI’s Administration should not result in a points deduction for Portsmouth.

http://www.mirrorfootball.co.uk/new...ation-says-Football-League-article836217.html

 

Analysis by Matt Slater (Sports news reporter)

When Portsmouth went into administration in 2010, the points deduction was instant. But given the choice, the drop was better than the chop. They could be faced with the same choice again. That's the bad news. The good news is that Pompey aren't there just yet. The parent company is broke, not the club. Not yet. The obvious parallel is with Southampton in 2009 but there are probably enough differences between the two to persuade the Football League to give Pompey more slack than the Saints got. It's wiggle room, though, not an escape.

 

Very surprised.

FL should take a long hard look at themselves!

 

Are you having a laugh!?

 

Well, to quote another Monty Python song, which I'm certain most of us will feel relevant regarding the Football League's role in all this; "And pray that there's intelligent life somewhere up in space, 'Cause there's bugger all down here on Earth."

 

You are absolutely correct Wooperts, that is all you can do.
Others on this thread are making their predictions on the assumption that the Football League make rational judgements. Do not forget, these are the same people who thought CSI were credible people to own a club, despite all the evidence to the contrary.
I think the points deduction issue is very secondary to the question "how long can you carry on, given the fact that money is likely to run out very shortly?"
It is difficult to believe the club earning enough money to pay all its commitments
given the low level of income through the turnstiles.
I sincerely wish you all the best = but fear the worst.

 

I doubt very much that Pompey are actually breaking even at the moment. If the parent company is in administration, then it will not be able to make up the difference,and the CVA payments still need to be met. Come the end of the season, there will be no income, but the bills will still need to be paid. It might be difficult for the club to avoid real trouble unless a buyer can be found pretty quickly. The tranfer window looms large and it might be difficult to hold on to players. It gives me no pleasure to say it, but I can't see this ending well. Unless you find a buyer, that is.

 

Admin Andy has stated that funds are in place for the short term; January to February, so the race is on to find investment for the club for the medium or long term - his words not mine. My interpretation of that is we can pay the wages for the next 2 months but not at the end of February.

My guess is that medium term means Chanrai picking up the reins again while a new long-term owner of the club is found. That is not the ideal outcome for anyone. The ideal long term deal for everyone is that new long term owners are found for CSI. Why? Because ownership of the club as a single entity leaves it too exposed due to its own precarious financial state and the uncertain times we find ourselves in overall, whereas being part of a group of companies allows for the flexibility of mutual support within that group. The skill, of course, is in ensuring that at least some of the companies within the group are flourishing while others dip.

There is a lot of supposition in the air at the moment but one believable prognosis is that CSI were not immediately insolvent but were placed into administration to protect their assets - I understand that the assets of a company in administration cannot be siezed by outside forces, although I stand to be corrected by those with greater knowledge of these things.

Anyway, hope springs eternal for those of us in Hampshire of the blue pursuasion.

 

Firstly I should say, it's awful and completely scandalous what has been going on. No fans deserve to have their club treated in this way. I really don't know the answer, but any way to rid yourselves of the criminals from the last few years..they just all seem so inter-conected..even admin Andy is knee deep in it, why else would he be back? Anyway, regarding your second point, isn't the holding company in admin because of an action by chanri against pompey 2010? Also Andy's comment that you needed 10m and are still in red is worrying, and so are clearly not breaking even?

 

What I mean is they sanctioned the takeover, they're in the wrong!

 

Chris Akers admitted to the Guardian that Pompey received £10.5m in the summer to spend on transfers and wages from Antonov.

David Lampitt boasted recently Pompey were the second highest net spenders in the Championship this summer.

Where do you think that £10.5m came from? Stolen from Lithuanian/Latvian banks perhaps?

If Pompey are reliant on Antonov money as Mr Akers admitted, they aren't solvent in their own right. That source of income has now dried up with his assets frozen.

What they have done is taken a competitive advantage over other Championship clubs using potentially illegal money.

How are Pompey going to pay wages for the rest of the season and the CVA payments in March/April on meagre gates of under 12k home fans?

 

:O Oh!!! In that case, I retract my comment

Couple of things wrong there mate. First; and most importantly, Pompey are averaging 14K p/w - the "magic figure" if you like, the number we need to be hitting to be reletively financially stable.

Secondly, Pompey are not reliant on Antanov's money to continue running. We relied on cash from CSI to bring in players and fund wages, but without them we can still fund the club (although January transfers maybe out of the question).

Third and finally, as it has been stated before, Pompey have enough funding at the club to be without an owner until the end of February. That gives us THREE months to bring someone in who has the funds to service the CVA payments

 

That amount of £10.5m is a surprise to most of us. We understood there would need to be an initial investment as Pompey had only 8 players in contract at the end of last season, of those 2 are now out injured. We also were led to believe that the budget to bring in the players, necessary to field a team, was around £3-£4m. In addition funds were spent on the training ground and some necessary repairs at FP.

It sounds to me as though the amount quoted includes the first installment of the purchase price.

As for your other questions, perhaps you should address them to the FL who carried out the F&PP test, as the fans are not privy to the financial dealings of the club. CSI and PFC are private companies so their accounts, which are scrutinised by the FL and filed at Companies House, are not available to the hoi-poloi like you and me.

I would also advise you to use the word "allegedly" when you address your inflammatory questions to them

 

Read what I said again.

I said 12k "home fans".

Nope, the administrator of CSI has stated funds in place until the turn of the year. Antonov's money was funding the club, that has now dried up and wages and the CVA won't be met as the situation stands. If the CVA isn't met (it has already been delayed), then it is likely the club will be wound up.

As I said, the administrator said tun of the year so possibly just 1 month, not the 3 you think. Why would anyone buy Pompey over numerous over more attractive teams that offer more value for money. In buying Pompey they are taking on numerous legacy issues. Have a poor decrepit stadium, no training ground, a weak Championship squad etc.

 

1: We were told an average attendance at Fratton (not of home fans, average attendance) of 14K was needed, which we are hitting at the moment.

2: The CVA does not need to be paid until March. I'm 99% sure it hasn't already been delayed (maybe you can prove me wrong?), I do know that we have used 2 out of 4 years parachute payments to pay off the installments already due. Wages and such like can be paid up until February with no new owner - which we should have in place by then. Even if Chainrai has to return for a bit.

3: Many things wrong with this paragraph. To start, the administrator has said until February. Unless you can prove otherwise, I am sticking with the interview which I have seen him give, where he has actually said the word February. Secondly, you ask you would want to buy Pompey. Well, there are a few obvious issues which the whole world and it's mother knows about. However, now that we are only paying 20p in the £, we have very little debt (as stated by the administrator himself), much lower than a lot of potential clubs. We have a great fan base, and potential for growth. As for a weak Championship squad, jog on!

 

Nope...

Pompey are currently averaging 12,175 (quite often 2,000 of them will be away fans so that means only 10,000 Pompey fans)

http://itv.stats.football365.com/dom/ENG/D1/attend.html

It has been delayed already. Check the Hacker Young website.

The CVA hasn't started so don't know where you got this from "I do know that we have used 2 out of 4 years parachute payments to pay off the installments already due".

What makes you think you will have a new owner by February? What makes you thin Chainrai would be willing to put any more money in?

He did not say February. His words were "turn of the year".

"Great fanbase" - you mean the 10,000 of you that currently go to home games?

Yes, I do mean "weak Championship squad", have you not seen the table, you are level on points with a team in the relegation zone.

 

From one Naval Port to another and from somebody who well remembers the good old days of rivalry between the two, it really pains me to see your club back in potential turmoil once again. As was widely publicised and you know well, we have been well and truely through the wringer this year and I know well how it feels. To be in this position for a second time must be agony for you.

As for the FA well, who the hell knows what goes on in that place. Half the time I think they make things up on a whim. If they decide to dock you then there won't be any real surprise will there. With so much of the season left you could still get away with relegation so if you look like doing it and they have decided you should drop then they are just as likely to dock you more until you cannot get out of it. As for Administrators I have little time for them either. They should be called asset strippers as they just bang in for any cash that is going and get paid before anyone else. Ours persued the wrong bid for months when everyone was telling them it was not a going concern. Finally the penny dropped but just in time but not before they claimed over £1m in fees because their incompetance had stretched the thing out by months. The christmas hamper company that went bust last year has had Administrators and they are claiming more in fees than the company has so joe soap public who paid their money in at the outset will get nothing. Legalised money grabbing.

I hope your wish for a new owner comes along soon and you get one this time who will deal with the club in a fit and proper manner for all your sakes. Good luck and keep those chimes ringing.

 

Fair play Sir, last time I checked it was at 13,647 - I could not tell you what weebsite that was on though. So as it stands, I have to accept the figures you've provided. However, you are SORELY mistaken if you believe that there is an average of 2000 away fans going I would sugest that at the moment we are getting a core 11,500 - 12,000 home fans in at home games (which obviously is not enough to be self sufficent - hence why we only have funding until February). My mistake

We have been given an advancement in parachute payments to fulfil certain obligations of the CVA. I can't tell you where exactly these funds went, all I do know is that they were used for CVA requirements. I could turn the question on it's head and direct it at you, why do you think we won't have an owner by February? As for Chainrai, I think he would be willing to put a little more money in to prevent considerable losses. If he didn't take the club back and it got liquidated, he would lose substancialo amounts of cash. If he came back (not rebuying the club mind you, just legally retaking his assets due to defaulted payments on CSI's part), he could invest very litte; aka only wages and running costs, and secure his prior investment. BASICALLY: It would be in his best interest.

The interview which a physically saw with him had him using the word February!!! He may very well have said "turn of the year" wherever you saw/read/heard him say it, but it is obviously from a different source than me.

As stated above, we get more than 10,000 home fans at matches. For some games, numbers have been as high as 15,000 (home fans - not including away fans), but averages are brought down by Tuesday night games that are on Sky anyway.

I have seen the table, and have seen that it is all reletively tight at the moment. There is a mere 9 points between 22nd and 6th!!! We are not even half way through the season yet for Christ's sake. Not only that, but we had Cotterill the Clown at the helm for the beginning of the season, results (and performances) improved upon his departure. If you think we have a "weak championship squad", you are very misinformed my friend.