Storrie to go as cuts begin at Portsmouth
Administrator promises to save club with range of money-saving measures
Saturday 27 February 2010
Avram Grant is staying as manager, but Peter Storrie is going, and the chief executive will not be alone. That was the immediate fall-out of Portsmouth's slide into administration yesterday with debts of £70m. The club will now incur a nine-point penalty, effectively condemning them to relegation as they will be 17 points short of safety. Nevertheless Grant, said the administrator, has promised to remain.
Not so Storrie, who as chief executive oversaw much of Portsmouth's period of excessive spending. He has talked of quitting for months but stayed, perhaps influenced by a salary which has topped £1m-a-year. He now says he will go when a new owner is found but, since his wages are likely to be one of the first targets of the administrator, Andrew Andronikou, who has pledged to cut "to the bone", he may be pushed before he jumps.
Andronikou, of insolvency firm UHY Hacker Young, told Pompey supporters, "I promise you we will save your club and take you forward" but initial comments suggested he was not entirely familiar with the peculiarities of football finance.
The administrator said he hoped to persuade the League at Thursday's board meeting not to impose the points deduction and to allow the club to sell players outside the transfer window, and hinted that player contracts could be terminated. There is, according to the League, "no chance" of the former and very little prospect of their going back on the last week's decision not to allow transfers. An exception could be allowing Portsmouth to arrange to sell players in the summer, and keep them on loan in the interim – if they can persuade buyers to agree. As for cancelling player's contracts, they are sacrosanct and can only be cancelled by mutual consent.
Since wages, along with interest repayments, are the main driver of the club's spiralling debts the administrators face a difficult task. On the credit side they will receive £5m from the League this season, and parachute payments totalling £32m in the next two years. In addition, said Andronikou, the main creditors, formner owners Alexandre Gaydamak and Balram Chainrai, want the club to remain alive which will help him achieve a company voluntary arrangement (CVA). But more problems lurk on the horizon. The Football League are reluctant to comment on their attitude to a team entering the Championship while in administration, or without a CVA in place, but the deduction of 10-15 points is possible.
The position is unclear as the case is unprecedented. Until now clubs who overreached themselves have at least had the decency to wait until they had been relegated from the Premier League to enter administration. That Portsmouth have not is something of an embarrassment for the "richest league in the world".
The League's view is that the implosion of a club which will have received more than £100m in TV payments by the end of this season is down to "rank bad management" compounded by some of those involved being more interested in what they could make from the club than in helping it. It is also confident that new measures which come into force next season will prevent a recurrence. These include an "early warning system" to flag up unsustainable expenditure, and a requirement that clubs do not roll over debts to other clubs or the taxman. It was the latter's winding-up petition, due to be heard in the High Court on Monday but now suspended, which forced Chainrai, the fourth and most reluctant owner this season, to put the 112-year-old club into administration.
Andronikou said he had "the responsibility of investigating the company's recent financial history, and if I find something untoward I will have to report it to the police," but added he was focusing on the future. To that end he will work though the list of potential buyers he has inherited but he stressed, "in view of the club's recent history I would like to make it clear we require up-front proof of funds, and references that will satisfy the Premier League and Football League's fit-and-proper person tests."
Pompey are not alone: Other crisis clubs
*Bournemouth: Eddie Mitchell, chairman, yesterday said he was confident the promotion-chasing League Two club would survive a winding-up petition to be heard on 31 March. The club owe £314,000 in tax but Mitchell said £100,000 would be paid soon.
*Chester City: The Conference yesterday expelled the bottom-placed club after it failed to fulfil its last two fixtures. Chester face a winding-up order on 10 March over a £26,125 tax bill and are currently for sale for £1.
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