Portsmouth FC in yet more trouble - administration again?

[brummie]

at least they are a premiership club eh ?

Feel for the fans, but all to happy to take their undeserved place in the premierleague.

how is it undeserved ?

Arguably it's undeserved because they've spent far beyond their means on the players that has kept them in the league. Not saying I agree with the sentiment mind.

 

Isn't it a bit "glass houses" for a Newcastle fan - or, for that matter, a fan of about three quarters of the teams in the Premier League, including the one I support - to criticise Portsmouth for spending far beyond their means, though?

 

This isn't just Portsmouth's problem, it is football's problem, and if something doesn't change soon, it will all go to tit.

Fair point, but there's quite a difference when a club hasn't been able to pay their players for several months this year IMO. Not saying the overspending doesn't need to stop, but there's quite a difference between Pompeys overspending and anyone elses.

 

No, there isn't that much of a difference.

 

Spending 100 percent of your turnover on salaries is unsustainable. Spending 80 percent of your turnover on salaries is also unsustainable.

 

One just becomes fatal quicker than the other.

[brummie]

That's the point, there isn't a huge difference.

 

Pompey was the extreme instance, but plenty of football clubs are run with sufficient disregard to the basic principles of business to find themselves in potentially the same problem pretty soon.

 

There are other clubs out there spending 100%+ of their income on wages alone?  Serious question that like, I'd be interested to know.

 

Certainly in comparison to most Premiership clubs (including us until this season) its a pretty large difference.

 

No, I don't think there are

 

What I meant was that very many football clubs operate on a basis which you would not find in any other business, where wage costs are an insupportably high proportion of turnover.

 

Portsmouth are the poster boy of football's meltdown, but for those of us who support clubs who either do, or traditionally have done, pretty much the same thing, if on a less imminently disastrous scale, to be going for the moral high ground is a bit hypocritical.

 

Football clubs are businesses, they don't operate in a special vacuum where the basic principles do not extend to them. It has got to end some time soon, and I reckon there will be more than a few chairmen looking at what is happening to Portsmouth and thinking "there but for the grace of God ..."

[macca888]

With the ridiculously high state of salaries been paid throughout english football and the high transfers fees paid, just to stay with the elite, you have to wonder how long smallish town clubs like Wigan, Bolton, Blackburn, Hull and even Sunderland can survive without rich benefactors bailing them out all the time.

 

The premiership will soon go back to the days of the 60s and 70s when first division clubs signed players from lower divisions which enabled those clubs to survive except now, it will be premiership teams hoping to sell players to the top 6 in order to survive.

 

In all honesty, the game in England seems to be heading for a huge change with the top 4+ heading towards forming a european league with europe's elite whilst the rest will battle on forlornly in the hope of reaching those heady heights one day.

[brummie]

Does anyone else think that the arse falling out of the football industry, and the tv money getting correspondingly slashed and football regressing a bit might actually be a *good* thing?

 

I know one argument will be that our league won't compete with other European ones, but beyond supporters of the Sky 4, does anyone really have any interest in that?

 

I have no desire whatsoever for any of those four clubs to be anywhere near European silverware.

 

I'd rather see 20 teams (or less, ideally) with eleven Warren Aspinalls running around if it made things more competitive.

[macca888]

Does anyone else think that the arse falling out of the football industry, and the tv money getting correspondingly slashed and football regressing a bit might actually be a *good* thing?

 

I know one argument will be that our league won't compete with other European ones, but beyond supporters of the Sky 4, does anyone really have any interest in that?

 

 

I have no desire whatsoever for any of those four clubs to be anywhere near European silverware.

 

I'd rather see 20 teams (or less, ideally) with eleven Warren Aspinalls running around if it made things more competitive.

I think you have a very relevant point here. The current champions league is a mini version of a european super league organised by FIFA. If the G12 clubs, or whatever they are called now, eventually form a breakaway european league, then all most TV revenue would obviously go to them. Most european leagues would be treated as also rans and we might find ourselves with a more even local competition. The only downside is the european league clubs will have first call on any talent coming through and I can see this scenario coming closer and closer with each passing season.

[Teasy]

 

 

No, I don't think there are

 

What I meant was that very many football clubs operate on a basis which you would not find in any other business, where wage costs are an insupportably high proportion of turnover.

 

Portsmouth are the poster boy of football's meltdown, but for those of us who support clubs who either do, or traditionally have done, pretty much the same thing, if on a less imminently disastrous scale, to be going for the moral high ground is a bit hypocritical.

 

Football clubs are businesses, they don't operate in a special vacuum where the basic principles do not extend to them. It has got to end some time soon, and I reckon there will be more than a few chairmen looking at what is happening to Portsmouth and thinking "there but for the grace of God ..."

 

Its not as if Portsmouth have done pretty much the same as most clubs and just got unlucky though.  A lot of Football clubs operate very near or just over their financial means and take financial risks, but I just don't agree that any level of financial risk is pretty much the same as any other.  The level of risk matters a hell of a lot, plenty of businesses outside Football take risks, but what Portsmouth have done is absolute financial suicide.

 

Doesn't matter though really.  We both agree that Football needs to calm down financially and that hopefully Portsmouth will scare a lot of them into doing so.

[Incognito]

Is it just me that has noticed that anywhere,except his current club,that Churchill dog has managed,is/has been in financial shite?

[Teasy]

No its been discussed here plenty of times, give him time at his current club, hopefully he'll turn it around

[afar]

Couple of points:

 

Brummie's crap about NUFC fans in glass houses. As Teasy said it's not the same at as as portsmouth. Pompey were way and above out of control, they have no fan base, it's tiny, they have a crappy ground with no corporate facilities. Success on the pitch, to whatever degree would never have made that club a profitable business. They were solely reliant on their rich benefactor. When he lost interest, they were always in the shit. Even if they wiped out their debt now, they would still not be able to pay their bloody bills.

Compare that with Newcastle, we sustained a high wage bill, too high of course for a number of years, but we had the ability through our fan base, corporate facilities and marketing to pay for that had we achieved success on the pitch. We have never filled for administration or have been issued wind up orders by HMRC. Even after going down, we regularily pull in crowds 5 - 10 thousand more than fighting for CL place Aston Villa. Ironically, if we go up this year, we could be one of the most healthy football clubs in the PL from a financial point of view. So I'm not really getting the Glass Houses line really ??

If anything I would be worried if I were a Villa fan, they do not have the loyal fan base to sustain their wage bill, they've been spending big for a few years now and Randy Lerner, is not the white knight he's painted as by the Villa fans, his mismanagement of the Cleveland Browns is a huge concern in the NFL and the Browns difficulties could quiet easily come back and bite Villa in the arse very soon. They are where they are right now, down to one person, Martin O'Neil, who is a fantastic manager, if he were to leave for whatever reason, I would be very concerned if I were a Villa fan.

I will agree though that football in general has been out of control in terms of financial responsibilities and the dificulties Pompey and West Ham and others are going through should be a wake up call to all clubs.

 

 

The other point:

Just read the rumours page on the Beeb and according to the Mirror (so we can probably take this with a pinch of salt), the premiership is preparing to bail pompey out with 32 million !!

TBH that would make me very angry if true.

[Exiled in Texas]

I siding with Brummie here....

 

Way out of control or slightly out of control?  The only difference is when the end comes.

[Colos Short and Curlies]

Couple of points:

 

Compare that with Newcastle, we sustained a high wage bill, too high of course for a number of years, but we had the ability through our fan base, corporate facilities and marketing to pay for that had we achieved success on the pitch.

 

 

Thats the thing though isnt it? We were running up substantial year on year losses and had run out of ways to generate money. If nothing had changed (ie a new owner or if Fred had got outside investment) then we could well be where Portsmouth are now

[afar]

Couple of points:

 

Compare that with Newcastle, we sustained a high wage bill, too high of course for a number of years, but we had the ability through our fan base, corporate facilities and marketing to pay for that had we achieved success on the pitch.

 

 

Thats the thing though isnt it? We were running up substantial year on year losses and had run out of ways to generate money. If nothing had changed (ie a new owner or if Fred had got outside investment) then we could well be where Portsmouth are now

 

You are missing the crucial point, we had the potential to get back in the black, if we achieved success on the pitch, there was room for revenue expansion. For Pompey there was never a chance in hell of them being able to get into any kind of profitable state, even if they went on to champions league qulaification, they just didn't have the fan base, or structure in place to sustain it.

I'm not saying we were anywhere near that responsible but our situation is or was the same as pompey's.

[madras]

Couple of points:

 

Compare that with Newcastle, we sustained a high wage bill, too high of course for a number of years, but we had the ability through our fan base, corporate facilities and marketing to pay for that had we achieved success on the pitch.

 

 

Thats the thing though isnt it? We were running up substantial year on year losses and had run out of ways to generate money. If nothing had changed (ie a new owner or if Fred had got outside investment) then we could well be where Portsmouth are now

 

You are missing the crucial point, we had the potential to get back in the black, if we achieved success on the pitch, there was room for revenue expansion. For Pompey there was never a chance in hell of them being able to get into any kind of profitable state, even if they went on to champions league qulaification, they just didn't have the fan base, or structure in place to sustain it.

I'm not saying we were anywhere near that responsible but our situation is or was the same as pompey's.

and there is the crux of the matter. to achieve success on the pitch it would mean going further into the red from the position we were already in.........you can't go on borrowing indefinitly and some say we had nothing left to borrow against.

[jdckelly]

Couple of points:

 

Compare that with Newcastle, we sustained a high wage bill, too high of course for a number of years, but we had the ability through our fan base, corporate facilities and marketing to pay for that had we achieved success on the pitch.

 

 

Thats the thing though isnt it? We were running up substantial year on year losses and had run out of ways to generate money. If nothing had changed (ie a new owner or if Fred had got outside investment) then we could well be where Portsmouth are now

 

You are missing the crucial point, we had the potential to get back in the black, if we achieved success on the pitch, there was room for revenue expansion. For Pompey there was never a chance in hell of them being able to get into any kind of profitable state, even if they went on to champions league qulaification, they just didn't have the fan base, or structure in place to sustain it.

I'm not saying we were anywhere near that responsible but our situation is or was the same as pompey's.

and there is the crux of the matter. to achieve success on the pitch it would mean going further into the red from the position we were already in.........you can't go on borrowing indefinitly and some say we had nothing left to borrow against.

wasnt freddie planning to borrow 300m for stadium expansion and other developments before ashley came and took the rug from under him?

[Jaehyun]

at least they are a premiership club eh ?

Feel for the fans, but all to happy to take their undeserved place in the premierleague.

how is it undeserved ?

Arguably it's undeserved because they've spent far beyond their means on the players that has kept them in the league. Not saying I agree with the sentiment mind.

 

Isn't it a bit "glass houses" for a Newcastle fan - or, for that matter, a fan of about three quarters of the teams in the Premier League, including the one I support - to criticise Portsmouth for spending far beyond their means, though?

 

This isn't just Portsmouth's problem, it is football's problem, and if something doesn't change soon, it will all go to tit.

Fair point, but there's quite a difference when a club hasn't been able to pay their players for several months this year IMO. Not saying the overspending doesn't need to stop, but there's quite a difference between Pompeys overspending and anyone elses.

 

No, there isn't that much of a difference.

 

Spending 100 percent of your turnover on salaries is unsustainable. Spending 80 percent of your turnover on salaries is also unsustainable.

 

One just becomes fatal quicker than the other.

You really think it's not much of a difference? Of course there's a difference. If the 'extent' of behaviour in this case, the degree of risk in financial gamble made 'little difference' there'd be no such thing as the financial world. Our wage to turnover ratio was around 70-75% in the premierleague, since then we've reuduced that wagebill by a considerable amount so when we get promoted again we'll be in a much more sound position. Portsmouth's wage bill was not far off us but they had much less turnover. Our godsend in disguise is probably Ashley paying off our debt and us getting relegated so that our money grabbers who weren't achieving results left, otherwise yes we might have ended up somewhere similar to Portsmouth how so many years down the track.

 

But to say that the difference between an 80% wage to turnover ratio has 'little difference' to a 100% wage to turnover ratio is simply absurd, just because both ours clubs have high wage to turnover ratios, a club that leaves 20% of its turnover for running costs, and a club that leaves 0% for running costs are pretty much the same thing? No way, that's ridiculous. That's like saying, a guy who's fit is in great shape, who enjoys MacDonalds or KFC once a week is 'little different' from an obese guy with heart problems who eats MacDonalds or KFC every second day, simply for the fact that they both eat MacDonalds or KFC too often.

 

EDIT: Forgot to add this but yes i'll be happy when Newcastle takes Portsmouth's undeserved place in the premierleague, undeserved yes, not just for their finances, but conclusively the fact that even before their 9 point deduction they're on 19 points.

[Mowen]

Does anyone else think that the arse falling out of the football industry, and the tv money getting correspondingly slashed and football regressing a bit might actually be a *good* thing?

 

I know one argument will be that our league won't compete with other European ones, but beyond supporters of the Sky 4, does anyone really have any interest in that?

 

I have no desire whatsoever for any of those four clubs to be anywhere near European silverware.

 

I'd rather see 20 teams (or less, ideally) with eleven Warren Aspinalls running around if it made things more competitive.

 

Much as I agree...all I can think about is football becoming as shit as that clip of women's football that made Keys and Gray cry with laughter. I'm sure it wouldn't get that bad, would it? I might kill myself if it did.

[Liam Liam Liam O]

Presumably the docking of the points is a punishment for spending beyond their means and gaining an unfair advantage in the league by doing so over clubs who haven't done the same.

 

The same overspending hasn't been punished in the FA Cup though here they now have a place in the semi final.

[BlueStar]

What happens if they beat spurs, then get wound up before the final? Would chelsea or villa just get a bye to the trophy? Would they have to go to wembley and just pick up the cup? To be honest, I'd travel down for that if it was us, beats rolling over to Arsenal or Man U

[Liam Liam Liam O]

What happens if they beat spurs, then get wound up before the final? Would chelsea or villa just get a bye to the trophy? Would they have to go to wembley and just pick up the cup? To be honest, I'd travel down for that if it was us, beats rolling over to Arsenal or Man U

 

We'd still lose.

[Heron]

Was genuinely pleased for them to beat Birmingham.

[AyeDubbleYoo]

Presumably the docking of the points is a punishment for spending beyond their means and gaining an unfair advantage in the league by doing so over clubs who haven't done the same.

 

The same overspending hasn't been punished in the FA Cup though here they now have a place in the semi final.

 

However, most other clubs have overspent just as much, they've just used better financial management to handle their debts.

 

[ikri]

Presumably the docking of the points is a punishment for spending beyond their means and gaining an unfair advantage in the league by doing so over clubs who haven't done the same.

 

The same overspending hasn't been punished in the FA Cup though here they now have a place in the semi final.

 

However, most other clubs have overspent just as much, they've just used better financial management to handle their debts.

 

 

Wouldn't that suggest that most other clubs haven't overspent?  If they've spent within their means to repay their debts then that's not really overspending. 

 

What Portsmouth did was spend far beyond their ability to ever repay, even if they'd managed to get into the Champion's League their earnings wouldn't have covered their expenditure.  They might point to their plans for a new stadium, but they've not been filling their current one so it's debatable that they'd have been able to meet their best possible income projections.

[AyeDubbleYoo]

Presumably the docking of the points is a punishment for spending beyond their means and gaining an unfair advantage in the league by doing so over clubs who haven't done the same.

 

The same overspending hasn't been punished in the FA Cup though here they now have a place in the semi final.

 

However, most other clubs have overspent just as much, they've just used better financial management to handle their debts.

 

 

Wouldn't that suggest that most other clubs haven't overspent?  If they've spent within their means to repay their debts then that's not really overspending. 

 

What Portsmouth did was spend far beyond their ability to ever repay, even if they'd managed to get into the Champion's League their earnings wouldn't have covered their expenditure.  They might point to their plans for a new stadium, but they've not been filling their current one so it's debatable that they'd have been able to meet their best possible income projections.

 

Yeah, fair point. I think there will be other clubs where the debt levels turn out to be unsustainable though, Pompey are just the first and worst example.

[Jaehyun]

Presumably the docking of the points is a punishment for spending beyond their means and gaining an unfair advantage in the league by doing so over clubs who haven't done the same.

 

The same overspending hasn't been punished in the FA Cup though here they now have a place in the semi final.

 

However, most other clubs have overspent just as much, they've just used better financial management to handle their debts.

 

 

Wouldn't that suggest that most other clubs haven't overspent?  If they've spent within their means to repay their debts then that's not really overspending. 

 

What Portsmouth did was spend far beyond their ability to ever repay, even if they'd managed to get into the Champion's League their earnings wouldn't have covered their expenditure.  They might point to their plans for a new stadium, but they've not been filling their current one so it's debatable that they'd have been able to meet their best possible income projections.

 

Yeah, fair point. I think there will be other clubs where the debt levels turn out to be unsustainable though, Pompey are just the first and worst example.

Spot on. Feel sorry for the fans yes, but I don't think the club itself is hard-done by the punishment, don't think it's unfair either, I think it's definitely fair presuming, if they hadn't spent beyond their means they might be in the championship instead of us. As harsh as what I am is saying, and the Villa fan before commenting that it's glass-housed for a newcastle fan, well if we overspend like them, we'll come under the same punishment, so don't see how Portsmouth are being treated unfairly, and don't see why we need to feel sorry for them. The only people I feel sorry for are the fans, not the club itself.

[ikri]

Presumably the docking of the points is a punishment for spending beyond their means and gaining an unfair advantage in the league by doing so over clubs who haven't done the same.

 

The same overspending hasn't been punished in the FA Cup though here they now have a place in the semi final.

 

However, most other clubs have overspent just as much, they've just used better financial management to handle their debts.

 

 

Wouldn't that suggest that most other clubs haven't overspent?  If they've spent within their means to repay their debts then that's not really overspending. 

 

What Portsmouth did was spend far beyond their ability to ever repay, even if they'd managed to get into the Champion's League their earnings wouldn't have covered their expenditure.  They might point to their plans for a new stadium, but they've not been filling their current one so it's debatable that they'd have been able to meet their best possible income projections.

 

Yeah, fair point. I think there will be other clubs where the debt levels turn out to be unsustainable though, Pompey are just the first and worst example.

 

Liverpool are the first that spring to mind, take away their Champion's League money and they'll struggle (probably to the point that they'd be forced to sell Torres & Gerrard and without them in the team earlier this season they looked woeful).

 

Aston Villa & Wigan owe fortunes but have rich backers, West Ham are right on the edge & relegation would probably see them in administration, Hull have already said that without the Premiership cash they'd go broke almost overnight.  I think that there are only 5-6 clubs in the Premiership who have incomes that currently exceed their outgoings.