Russia to Portsmouth via Germany – the trip that could revolutionise English football

by Adam Mills

Eighth in the Premier League. FA Cup Winners for the first time since 1939. A new owner keen on building a world-beating team, worth over £100m. The first time the club have ever played European football. A new £600m 36,000 stadium under development. Stability in the management structure; stability within the playing squad.

Roll on five years, and the story is very, very different. Eight different managers. Five different owners. Two administrations. Two winding-up orders. Over £130m in debt associated to the club. Two relegations into the third tier of English football, and now a new ownership battle shaping up involving several parties. It’s a sorry state of affairs for Portsmouth Football Club.

Rooted to the foot of League One, Portsmouth are currently on a 22-game winless streak – a club record. They’ve had 51 players turn out in the royal blue of the club this season alone, with nineteen players left on the books of the club, either on loan or short-term contracts. They’ve already had ten points deducted for their second administration in three years, and after every single full-time professional at the club left at the start of the season, there’s a danger that they’ll be in the bottom tier of English League football next season, with no players, no coaches, and no money.

It’s been twelve months since this latest saga began. Ten points were deducted from their Championship total in last February – which, ironically, would have saved them from relegation in May. Nearly 40 staff were made redundant before the end of last season, whilst club administrator Trevor Birch, of PKF, announced that debts were spiralling, with the figure in late April 2012 sat at around £61m – and this is when this complex, precarious situation gets complicated.

Previous owner Balram Chainrai, who bought the club in 2010 and immediately ploughed them into administration, was owed £19m, whilst Convers Sports Initiative, led by Vladimir Antonov, another former owner of the club and the man who purchased the club from Chainrai, invested £10.5m into the club – except that payment was, in fact, never made. Two years’ worth of wages were owed to some, totalling nearly £4m, and HMRC were due £2.3m. £38m was debt with regards to the previous administration with UHY Hacker Young. And if you can get your head round all that, then you’re doing well.

Birch said at the time that the chance of survival was ’50/50′. In reality, not a soul knew how it would pan out, but there were a group of people who were sure as hell not going to let their club fall into the abyss of debt-riddled, liquidated clubs.

The Portsmouth Supporters Trust have become key figureheads in the battle for survival on the South Coast. Last June saw the PST, led by Ashley Brown, enter talks with Birch and the administrators to take a majority stake in the club. By inviting fans to invest a minimum of £1,000 in ‘community shares’, the club were aiming to become the largest community club in the United Kingdom, eclipsing the likes of Wycombe Wanderers, Exeter City and AFC Wimbledon.

It follows the simple ideology of a fan-owned club – something that has slowly been sold from the English game. With rich oligarchs appearing left, right and centre, the higher levels of the English League system is owned by a handful of people with expensive cars, fifty houses and a butler named Cuthbert.

What the PST are proposing is that for a small fee, you can own part of your club, despite owning a third-hand Vauxhall Vectra, a flat in a tower block and a dog named Spot. The simplistic idea isn’t anything new, nor is it radical, but it allows the club to be supported, run, and owned by the same group of people.

The system works in other countries – German clubs are nearly all owned by the fans, whilst Barcelona and Real Madrid are two of the biggest clubs in the world – and owned by their members. It isn’t an ownership scheme that is reserved for small, lower-league clubs, but is, in fact, a billion-pound global industry.

The discussions between the PST, Chainrai and PKF have continued over the last few months, with a few glimmers of hope. Chainrai withdrew his offer for the club in August, leaving the PST as the only party interested in the club. However, Chainrai then bid again, throwing the whole situation back into disarray.

Then, another curveball – another former owner, Sulaiman Al Fahim, submitted a formal offer as part of a consortium, and in September, Laurence Bassini, former owner of Championship club Watford, made a bid. In the space of three weeks, Brown and the PST went from the only hope for the club, to a member of the scramble for a piece of the pie.

But the breakthrough came in October, with the PST being named by Birch and PKF as ‘preferred bidders’. Agreements were made between party and administrator, with the sticking point being Chainrai’s ownership of Fratton Park, and his refusal to sell up. A £2.75m offer was rejected, and a battle in the High Court loomed.

And whilst all this went on off the pitch, it remained turmoil on it, too. No stability within the club meant that a squad couldn’t gel. A manager attempting to excel on a budget of a paperclip and three buttons walks away. Just three players are currently contracted to Portsmouth – unprecedented in professional football. But the whole situation within the club is unprecedented – let alone the playing squad issues.

But since the start of the New Year, things have at least looked a little brighter for the future of Portsmouth Football Club. Despite sitting at the bottom of League One, 12 points from safety, and with the trap door to the bottom tier of the Football League looming large, fans seem happier than they have for a long time.

11,000 people fill Fratton Park week in, week out, even though the club haven’t won a game since October 20th. With the High Court decision postponed twice, there was a feeling of inevitability about it. That was, however, until this month.

At the start of February, Keith Harris, ex-Football League Chairman and of former Red Knights fame (the group of multi-millionaires supposedly lining up a £1bn+ bid for Manchester United), launched a bid alongside a consortium to take over the club. At the time, it cast doubt over the PST bid, but proved that although the last few years for Portsmouth have been toxic, the future remained bright. Why would a financier, who has built his fortune on aiding football club takeovers, launch a bid for a club deep in debt and trouble if he didn’t see a conceivable way for it to work out?

But the Football League rejected any notion of Harris’ takeover bid, stating that ‘any change of preferred bidder at such a late stage would only create further uncertainty,’ and threatening the club with membership loss should the club not come out of administration by the end of this season, meaning the club would lose its Football League status.

The League said that the only bid they will consider is that of the Portsmouth Supporters Trust, who have already been approved by the administrators, the club board, and the Football League. This, in essence, means it’s the PST, or a complete liquidation of the club.

The High Court date has now been set again for mid-April at the very latest, meaning the club could be financially ‘sound’ by the last kick of a ball on the final day of the season. Forcing Chainrai to relinquish his control on Fratton Park, and ultimately Portsmouth Football Club, has been a long, arduous process, but one that looks as if it is finally coming to a very slow conclusion.

The sorry tale of Portsmouth is one that has been a driving force to new regulation and legislation with regards to football club ownership. The aforementioned German ownership system explicitly states that a minimum of 51% of the club must remain under ‘member ownership’, ensuring that the fans will benefit first and foremost, as opposed to the companies and businessman backing clubs up with gold bullion bars purely as a hobby.

Forcing clubs to be majority-owned by fans and communities sounds like it may adversely affect club finances, banning multi-millionaires investing all their cash in a new striker, or an extended stand, or club debt. Except it is that last point that is the sole reason the English system have investigated how to get fans and members back involved in the ownership of their club.

Back in 2009, before the whole Portsmouth fiasco exploded on a scale never before seen in the English game, Chester City Football Club were embroiled in an administration issue, with Stephen Vaughan, owner and Chairman of the club, instructed by the Football Association to reduce the portion of the club he owned. It was due to the fact he failed the ‘fit and proper person’ test, and in a very typical ‘fit and proper’ way, the FA believed that by forcing an owner out at a low level within the Football League, other clubs would do the same and ensure no issues would appear within their ownership structure.

Except it was a major defeat for the FA in the long run. More and more owner issues have arisen despite each individual passing the Fit and Proper Person Test – Portsmouth’s numerous owners; Venky’s at Blackburn; Craig Whyte at Rangers; Dennis Coleman at Rotherham; and the clubs that have been dissolved due to poor ownership – Rushden & Diamonds, Gretna, Farsley Celtic, and notably, after their row with the FA, Chester City. The test doesn’t work, and harsher legislation is being campaigned for to bring the Premier League and Football League in line with a more fan-centric ideology.

German football has, over the two decades, been relatively quiet on the European stage. The once-dominant force of football, Bayern Munich, have only recently recovered to put themselves back on the map. The international team haven’t faired well in major competition, and whilst the rest of the continent were rubbing their hands together with glee as more and more billionaires appeared with a wad of cash and supposed love of the game, Germany had been working quietly in the background to build infrastructure for the future.

The unique ownership system of the clubs in the German football leagues ensures that a fair deal is received by all. Ticket prices are affordable; stadiums are massive, yet always full; major community support; low wage bills, yet massive revenues. It comes as no surprise that six of the top ten European average attendances involve German clubs when ticket prices for Bundesliga matches average at around €15.

Of the Top 20 richest football clubs in the world, four are German – Bayern Munich, Borussia Dortmund, Schalke 04, and Hamburg. So community-owned clubs don’t work- really?!

Portsmouth have been the way clubs shouldn’t be run over the past five years. There’s now an opportunity for them to become the blueprint on how clubs should be run. The Football League have an opportunity not only to rescue a club in desperate need, but to also help fans get their clubs back.

Other models, such as the German ownership system, work – now it’s time for England to try and follow suit.

You can come and say hello over on Twitter – I’m @AdamMillsUK, or you can comment in the box below!

14 Responses

  1. Andy Marks says:

    Adam
    As a Pompey fan of 50 years, it’s so nice after all the pain we’ve suffered, to see the press begiinning to hear and see our plight. In some areas of the press, you’d think that it was our fault that the club’s been destroyed. We need the support of investigative journalists to highlight the abuses by a number of owners but more importantly, Portpin/Chanrai. He/they are still trying to have the club liquidated so that he gets what he says he’s owed, though it’s obvious he wants more out than he’s ever put in.
    The fans are innocent and need help to achieve the aim.
    Let’s hope we can become the first German model club and preferably the new Bayern.

  2. Bart_Gunn says:

    An excellent, well researched piece Adam. I am a life long Pompey fan now living in Ireland and having to suffer this endless saga from afar. I hope we’re nearing the end and that PST can takeover the club, though I am still unclear as to how their business case will work whilst paying off debts. But I would rather support a fan owned club perenially in League One or Two than be a Premiership mainstay, flooded in debt and being run by ruthless mercenaries only trying to line their own pockets. Play Up Pompey!

  3. Muttley says:

    Saviour of Portsmouth FC- Sulaiman al Fahim- the Sheik of Sonapur, Dubai….The Doctor , Diplomat and the Prince

  4. Gaz says:

    Good article. It’s worth pointing out that the ‘bids’ submitted by Al Fahim, Bassini and Harris were all orchestrated by Portpin/Chanrai as a means of the latter recovering more of their ‘investment’.

  5. shaun fraser says:

    Well spoken Adam,as a Pompey fan and football fan the sooner clubs are run for the benefit for the fans the sooner debt will leave football.the start of the premier league was the catalyst for our current plight.football and Pompey needs to be back in the hands of fans asap.it should be all about the glory (or lack of it) not who can make the most money.we must follow the German model.

  6. Karlos63 says:

    A fantastic piece, having supported Pompey for over thirty five years now I have seen the fall rise and fall of my favoured club, hopefully the next stage will be a staedy rise back to the top, but in the German format, I hope the PST go to Germay to learn how Supporters ownership can work for real.

  7. Yeah right says:

    Yeah right. Harris former FL chief and well known football financier is controlled by Portpin. Lol.

  8. Dan says:

    Great article, well considered and researched.

    Fans are very cynical about club ownership, so the task of turning them onto alternatives is not by any means easy.

    However, the problems of ownership structures and the financial management of clubs is beginning to be seen as the elephant in the room for many. The plight of Pompey is a stark warning to all clubs around the country, large and small.

    We need, however to begin believing that fans are not powerless in all of this, and we do in fact have a voice and an opportunity to make change.

    We hope Pompey will be a bright beacon for all other clubs very soon! Heavens Light Our Guide! PUP!

  9. Pompeyinoz says:

    Good article which highlights the plight of Pompey and maybe other clubs down the track. As a Pompey supporter for over 50 years I would not want any fans to be put through the angst that we have had to endure over the past 3 years. Anyway upwards and onwards and if we are a blueprint for other clubs so much the better.

  10. paulv says:

    Great article,

    You’re absolutely right, we were the model of how to not run a club. It’s amazing that it ever happened though. It seems no-one learned from Wimbledon or Leeds. Or come to think of it Brighton, Palace, or even Portsmouth’s first swim in administration back in the 90s

    Whilst we will (hopefully) come through this it appears that others still haven’t cottoned on, I fear for QPR if Fernandes gets bored….

    Cheers for the support
    Play Up Pompey

  11. PAJ says:

    Great piece of journalism. What is disturbing is that clearly no-one will be held to account or even prosecuted for the fraud, money laundering, embezzlement etc that has been engaged in by some individuals for their own personal gain.

  12. Phil C says:

    The only cautionary note that should be struck though is that the £1000 that fans are asked to pay will not buy a share in the traditional sense, it is in reality just a donation. And given the scale of debt the Trust are likely to take on, further donations next season may be more urgently required just to help running costs. The financially ‘sound’ status you mention that they will achieve may still in fact prove to be elusive.

  13. Paul Collins says:

    Agree PAJ football club and supporters always suffer while the wrong people get away with it all the time .Until the FA or F/L bring in rules to change it more clubs are going to go the same way

  14. Jamie says:

    lots of generalisations about the german game, and some misinformation. this ‘wow – german football is really fan friendly’ is such a broken record. every third article on this site mentions it

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