Pompey – We Will Never Die

Most of my UK readers will probably be familiar with the news that Portsmouth Football ClubPompey – are in dire financial trouble for the second time in three years.

After our owner was arrested and his parent business went bust, we are about the enter administration, are massively in debt with some particularly nasty creditors, and the team are struggling near the foot of the table. For a team that spent seven years in the Premier League, won the FA Cup and were playing AC Milan in the UEFA Cup just four years ago, where did it go so wrong?

For me, the problems began when Milan Mandaric sold up to Sacha Gaydamak. Whilst Milan might have been a self-publicist, and liked the sound of his own voice, he didn’t spend money that we didn’t have. Gaydamak, on the other hand, was nothing but a front for his arms-dealing Russian father, Arkadi Gaydamak. At the time in 2008, we were told that the Gaydamaks wanted to sell up because their portfolio had taken a hammering in the credit crunch.

After a protracted period where the club was up for sale, Gaydamak sold to Sulaiman Al Fahim in the summer of 2009. Yet it quickly appeared that Al Fahim – the so called Donald Trump of the Middle East – didn’t actually have any money. He swiftly sold the club on to Ali Al Faraj, who again we were told was loaded. Yet it quickly transpired that not only did he not have any money, but there was a distinct possibility that he didn’t exist. The club was asset stripped, with players being sold by shadowy ‘representatives’ such as Mark Jacob and Daniel Azougy, under the noses of the then Chief Executive.

Al Faraj – or Al Mirage as he is now known – was thought to have taken out a massive loan in order to fund the club – £17m has been rumoured – from a Hong Kong businessman, Balram Chainrai. Al Faraj defaulted, and Chainrai stepped in and took over the club. He quickly put it into administration. The administrator, one Andrew Andronikou of UHY Hacker Young, somebody who had links with Chainrai. Football creditors were paid in full, while other creditors – such as the St Johns Ambulance and the Pie Company – were only paid a small percentage of their dues. Chanrai then, after having written off a large proportion of the debt, bought the club and became a ‘reluctant owner’.

In the summer of 2011, Chanrai sold the club to Convers Sports Initiatives, owned by Vladimir Antonov. A Russian businessman, it later transpired that Antonov had been refused permission to open a bank in London by the Financial Services Authority due to concerns over his business practices. Yet somehow he passed the Football League’s fit and proper person test. Crucially, Chanrai remained a creditor to the tune of £17m, and held a debenture over Fratton Park.

All seemed hopeful, until just before Christmas Antonov was suddenly arrested in Britain. The Lithuanian authorities had requested his arrest and extradition in connection with his Bankas Snoras. Convers Sport Initiatives promptly went into administration. The administrator? None other than Andrew Andronikou. Remember, Chanrai is still a creditor, and now effectively owns the ground. Without an owner and with no cashflow, Pompey are due to go into administration. With it comes the a ten point penalty, which puts us out of the relegation zones on goal difference only.

Andronikou is due to be appointed as administrator, and is reportedly requesting that interested parties need to prove that they have £100m to invest in the club. £100m? The theory is that Chainrai- through Andronikou – is seeking to drive Pompey to the wall, in order to get his money back. But there is a much bigger conspiracy theory at work. Prior to the credit crunch, the Gaydamaks were involved in a court case over a debt they owed a businessman. Who? None other than Balram Chainrai. The amount? Funnily enough, £17m. Is it possible that either Chanrai pursued the Gaydamaks and chose to target Pompey, or that the Gaydamaks let Chainrai take over by stealth, and Al Fahim and Al Faraj were just stooges, or naive enough to be caught up in the issue?

Whatever happened, Pompey have had five owners in just over three years, who have put nothing into the club, run up massive debts based on the club, and took out all of the incoming cash flow – asset stripping on a grand, but legal scale. The web is now so tangled, it is hard to see how things can be resolved. Such practice is endemic in English football – the Glazer family took over Manchester United for an incredible amount, took out a huge loan based on the club to finance the purchase, saddling the club with a huge burden. Without facing an liability at all for the debts, they then take out money that comes in, and charge consultancy fees and the like.

Where things go from here, we do not know. But it is certain that one of England’s most famous old football clubs will be facing a very bleak time for some years to come. After the home match against Ipswich last night around a thousand of us stayed behind in the Fratton End and staged a protest against the continual mismanagement of the club by non-Football men.

In terms of the link between a sporting or social insitution and the history and identity of a town or city, Pompey has very few equals. We can only hope that whatever happens football will slowly pull itself back from the brink, and Pompey will somehow rise from the ashes.

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20 Comments

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20 responses to “Pompey – We Will Never Die

  1. Brian Iddon

    Hard to believe the fall that Portsmouth FC have taken.One minute they’re winning the FA cup and moving to a new ground,the next they’re deep in the do do.

    The suits who cause the mayhem just seem to get away scott free.

    Funny old world.

    • James Daly

      It is hard to believe, but in another sense, its another chapter in Pompey’s history. FA Cup Winners in 1939 and League Winners for two years running in 1949 and 1950; in the fourth division by the late 1970′s; then back in the top flight by 1988; administration in the late 1990′s; seven years in Premier League, FA Cup winners in 2008, UEFA Cup campaign; now going downhill again!

  2. pompeydoomcrew

    The thing that really annoys me with all this is as ever those that are responsible i.e all the crooks that have owned the club and used it to money launder and asset strip will as walk away absolutely scot free no questions asked and it’s us the fans that are the ones that end up taking the punishment as normal!!

    • James Daly

      Kind of like society in general really – bankers, politicians etc cause all the dramas, we pay the price, they slope off scot free.

  3. So refresh my memory – do you guys play in the American Football Conference, or the National Football Conference? And what’s your record against the Dallas Cowboys or Pittsburgh Steelers? ;)
    (Trust me, your team could beat my hometown Chicago Bears at football. American, European, Australian, or any other type you could name! :D )

  4. x

    What amount is a fair wage for a premier league footballer?

    • James Daly

      Well, my feelings on that are that everyone should earn what they deserve, not a penny more or a penny less.

      In my line of work we are graded; our salary is assessed in terms of core responsibilities, duties etc. How many people you manage, what budgets you control, the income you generate, etc. If you do that for footballers, the responsibility is negligible – well, perhaps as role models or in terms of community work; unless you are the captain you don’t really manage anyone. But in terms of income generation you are responsible for bringing a lot of money into the organisation.

      • x

        True. But if your wage bill is more than what is brought in then the you are in trouble.

        I suppose football reflects wider society in that it lives on borrowed money.

        • James Daly

          Totally. What was it Charles Dickens sad about Mr Micawber, something about income exceeding outgoings = happiness; outgoings exceeding income = misery. That stands for anything in life. Or at least it should do.

    • Brian Iddon

      It sure the hell ain’t 250k a week.

      There needs to be some sort of wage cap.It’s just crazy the money thats going out of the game in players wages.The trouble is that players now have to much say,with the help of their agents,in how the game is run.

      Real football still exists in the lower divisions.If more supporters started following smaller clubs the game overall would benefit.

  5. Mania

    I think that with England footbal teams isn’t over yet… Remember Romanov’s Edinburgh Hearts with it’s troubles… Another Lithuanian-Russian problem besides Antonov-Baranauskas…

    James Daly are you going at TNA?

    • Mania

      I think that problems* with

    • James Daly

      I think there is a long way to go before English football implodes, as seem likely eventually. Football embraced boom-and-bust economics after Sky/Taylor etc, and there is a big bust on the way. Only then perhaps might some realism and regulation creep in.

      I do go to the National Archives, but not as often as I would like due to other commitments.

  6. x

    Another thing I don’t understand is deducting points for going into administration. Though soccer is a business having penalties on the sport side for infractions on the business side is a step too far. Further it is counter productive if it means the club gets relegated and so loses potential revenue that could help it recover.

    • James Daly

      My problem with that, is that Pompey are in trouble because of a string of incredibly dodgy owners. Owners who were vetted by the League, and passed the fit and proper person test. Yet the FSA had serious enough concerns not to let Antonov open a bank in Britain, and anyone with access to google and 5 spare minutes could see that he was bad news. The players, supporters and employees of a club do not approve the owners, the league do. It’s on their conscience.

      Having said that I’m not too bothered what league pompey play in, as long as there is a Pompey and a Pompey that reflects the city’s proud history and culture. Because the past 4 or 5 years certainly do not.

      • x

        Well what makes me laugh is that Rangers can owe £49million.

        I bet if my Dad’s little business transgressed tax laws HMRC would be there like a shot with a fine.

        Amazing.

        I think money is starting to ruin rugby union.

        • James Daly

          What happened with Rangers is that they paid their overseas players, well, overseas. They set up an ‘Employee Benefit Scheme’, based offshore, which players joined, and received their salary through things like pensions, shares, things like that. Not a scrap of tax was paid by employer nor employee, and it went on for nearly a decade. Look at the hoops a sole trader or a small businessman has to jump through. Yet one of Britain’s largest clubs clearly flouts HMRC laws for a decade!

          It isn’t any one particular club that is at fault, but the system overall that allows or even encourages the culture that makes it a fertile territory for fraudsters.

          Rugby Union is showing the signs of going the way of football – stroppy young players acting petulantly rather than getting down to winning, for one. Anyone remember Danny Cipriani? Even cricket is going that way. Two words – Allan Stanford…

          • x

            Well these schemes for getting around using a proper “payroll” are showing up all over the place. Wasn’t there a report of it happening even in the NHS? Even the BBC doesn’t pay its leading lights. Many of them are actually employees of their own private companies; they hire themselves out to the BBC.

            • James Daly

              HMRC are all over the employment/tax issue like a rash at the moment. Put it this way – if you employ freelancers to do a job for you as an organisation – imagine you’re a building firm, and you want a bricklayer for a couple of hours a week, on and off. You might come to an arrangement with Joe the bricky, whereby you pay him a flat rate for any work and he’s effectively self employed. Then its his responsibility to pay tax by self-assesment, etc. Now, HMRC are looking at these kind of casual arrangements, and wondering if companies/organisations are using them as an excuse to keep someone off the payroll and avoid tax.

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