Portsmouth: anatomy of a crisis

Sums owed to agents, clubs and players from Peter Crouch to David James revealed in dossier of £105m debt
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The Independent Football

The full scale of Portsmouth's financial crisis was laid bare last night in extraordinary, unprecedented detail when the club's administrator admitted that Pompey's true debts are £105m and published a document detailing every last penny owed.

The "Report to creditors" reveals money due to former owners, collectively owed £38.2m, the majority of that to Alexandre Gaydamak; to HM Revenue & Customs, owed £17.1m; and to a variety of Premier League and foreign clubs, owed £17.3m in outstanding transfer fees.

Agents and scouts from 26 different organisations are owed £9.76m between them, including £2.1m owed to "super agent" Pini Zahavi. Players and former players are owed historic bonuses of £1.86m and image rights cash of £3.04m, while "trade creditors", mostly local suppliers, are owed £4.4m. These are all "unsecured" creditors.

Portsmouth also owe £14m to the last owner, Balram Chainrai, in secured loans. The Hong Kong-based businessman expects to be paid in full over the long term. As a specific condition of lending money to keep Pompey afloat, he secured his loans against the club's assets.

Portsmouth have further liabilities of around £14m to financial institutions who "advanced" them that amount of cash from parts of fees still owed to them by other clubs from the sales of Sulley Muntari (Internazionale), Glen Johnson (Liverpool) and Jermain Defoe (Tottenham). But those "debts" are not among Pompey's total of £105m because the owing clubs will pay the institutions directly.

One well-placed source told The Independent last night that the administrator, Andrew Andronikou of Hacker Young, is considering offering the unsecured creditors 23p in the pound to settle the debts; Andronikou said he is unable to comment and the amount has not been fixed yet.

The creditors will be informed of the precise value of the administrator's offer at a private meeting to be held at Fratton Park at 11am on 6 May, the day of the general election. They will then have until 6 June to decide whether to accept the offer or not. In order for Portsmouth to exit administration, via a Company Voluntary Arrangement, creditors accounting for a minimum of 75 per cent of the unsecured debt must accept the offer put to them.

If they accept – which is what Andronikou hopes and expects – then Portsmouth, who face an FA Cup final against Chelsea on 15 May, will then be able to move on to building for life in the Championship.

Questions remain over the precise make-up of the creditors who will vote, which could yet change the dynamic of the vote. English football clubs that are owed money, like Chelsea (still owed £1.02m for Glen Johnson) and Tottenham (owed £500,000 for Jamie O'Hara and more for other players) to name two, are "football creditors" whose debts will be paid by the Premier League out of cash earned by Portsmouth in the future.

Less clear is whether foreign clubs including Lens, Udinese and Lyons will now be paid in full, or whether they will have to scramble for their 23 per cent along with the taxi firms, caterers and other local businesses owed cash.

Similarly, it seems certain that historic outstanding bonuses to a range of players (including Johnson, owed £265,080, and Peter Crouch, owed £282,000) will be treated as "football debt" and those players will get their money through the insistence of the Premier League, if not the law. But cash owed to players for image rights is not necessarily protected as football debt.

The upshot of a complicated situation is that Andronikou will need acceptance of his offer by creditors accounting for 75 per cent of a proportion of £91m yet to be determined, but likely to be 75 per cent of about £70m, or £52.5m. If the former owners and HMRC alone accepted the offer, Andronikou and Pompey would be over the line, and it is believed that the taxman will probably be minded, this time, to say "yes".

Andronikou published the full list of the club's creditors on the website of Hacker Young, the accountancy firm for whom he works. It is a significant document in as much as it lays bear the sheer scale of waste and mismanagement. It will also prompt questions among some of those owed money.

Why, for example, is Chainrai's £14m secured? Because he made sure it was when he lent it, is the short answer. Why 23p in the pound for the rest? Frankly, because it is what Andronikou thinks creditors will accept and what the club can afford. Yesterday Andronikou told The Independent: "I already have a figure in my head for the settlement but I am not going to divulge it."

The creditors' meeting will fall on the same day as the election. Andronikou admitted that he had planned it so the story "flew under the radar" on the day that he made the official offer.

The biggest single chunk of the unsecured debt, £38.2m, is owed to the club's former owners, Gaydamak, Sulaiman al-Fahim and Ali al-Faraj. Chanrai took control of Faraj's 90 per cent stake – and, effectively, the whole club – in February when the club failed to pay back loans he had made to it.

Andronikou's report also confirms that Portsmouth owe almost £5m to former players in bonuses and image rights. The precise amounts of the image rights debts are not listed, but the players' names are. The former Portsmouth captain Sol Campbell is one of the creditors.

The club owe £17.1m to the HMRC in national insurance and VAT. In the past HMRC has been the most militant when it has come to the club's debts. It originally sought a winding-up order to secure debts and then opposed the club's move into administration.

Wages owed to players

£338,400 Owed to Sylvain Distin (left Portsmouth in August 2009)

£282,000 Peter Crouch (left July 2009)

£265,080 Glen Johnson (left June 2009)

£263,952 David James (still at club)

£122,670 Hayden Mullins (still at club)

£84,600 Papa Bouba Diop (still at club)

£84,600 Hermann Hreidarsson (still at club)

£84,600 Jamie O'Hara (still on loan at club)

£1.86m Total wages owed to players

Fees owed to agents

£2.07m Owed to Pini Zahavi, the hugely influential Israeli agent

£365,000 Stellar, a respected agency which represented Peter Crouch when he signed in August 2008 and Glen Johnson when he signed in August 2007

£9.76m Total owed to football agents

Fees owed to clubs

£4.5m Owed to Tottenham from the signing of Kevin-Prince Boateng and the loan deal for Jamie O'Hara (both August 2009)

£3.3m Italian club Udinese for the signing of Sulley Muntari (July 2007)

£2.54m French club Rennes for the signing of John Utaka (July 2007)

£2.4m Watford for signing of Tommy Smith (August 2009) and Mike Williamson (September 2009)

£1.8m Lens for the signing of Nadir Belhadj (January 2009)

£1.02m Chelsea for the signing of Glen Johnson (August 2007)

£17.3m Total owed to clubs for unsettled transfer and loan deals

Selected others

£38m Total owed on loans from previous club owners Alexandre Gaydamak, Sulaiman al-Fahim and Ali al-Faraj

£17m Owed to HMRC in unpaid tax

£5m Non-football debts owed largely to local suppliers

£3.04m Total owed to players in unpaid image rights