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Pompey snatch last-gasp victory over taxman

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Matt Slater | 07:01 UK time, Friday, 6 August 2010

I should have known it would be Portsmouth's day when I phoned the club's administrator Andrew Andronikou a few hours before the big announcement at the High Court to ask him a legal question.

"Matt, I'm going to have stop you there," Andronikou said. "I've got something very important to do... and that's finish my lunch." Enough said, Andrew.

Mr Justice Mann, however, was determined to reintroduce some suspense into the day's events. The hour-long wait for his ruling on HM Revenue & Customs' (HMRC) appeal against Portsmouth's planned escape from administration came and went in a courtroom surprisingly full of clerks, journalists, lawyers, Pompey fans and Southampton supporters.

Where is he? What does this mean? Which side looks happier? The guessing games stepped up a notch when a still-to-be-seen Mann summoned both barristers to his room.

We scrutinised HMRC barrister Gregory Mitchell and his Pompey counterpart Richard Sheldon when they emerged minutes later, but these two could play poker for their lives and look unruffled.

And so it was something of a surprise when Mann slipped into his chair, breezily apologised for being late and then, with no further fanfare, dismissed HMRC's challenge and sparked Pompey celebrations.

A Portsmouth fan celebrates outside the High CourtPortsmouth's fans finally have something to cheer about. Photo: Press Association

There will be many of you wondering how Portsmouth - a club now synonymous with fantasy finances - pulled this off. The answer is simple. They may well have spent money they didn't have, achieve successes they didn't deserve and run up debts they couldn't pay, but they did not break insolvency rules - and that is all that mattered.

So HMRC's arguments about the iniquity of football's millionaires-first repayment rules, the general iffiness of clubs making "tax efficient" image rights payments to players with dubious "brand value" and the serial nature of Pompey's antics were irrelevant. This case, in Mann's opinion, boiled down to one key question.

Was the vote to decide how Pompey get out of this mess (with an agreement to pay creditors a reduced amount of the monies they are owed) organised correctly?

Before I answer that I should probably refresh your memories. English football likes its prodigal children to return to the fold with a Company Voluntary Arrangement (CVA), a deal to repay creditors a reduced amount of the money they are owed.

These deals tend to last three to seven years and can be expected to return anything from a barely-better-than-nothing 1% to a could-be-a-lot-worse 30%. Andronikou's plan for Pompey is a five-year CVA that should see every creditor get at least 20% of what they are owed.

Of course, some creditors - UK-based football clubs, leagues and players - do considerably better. They get 100% of what they are owed and they get it first.

This is the so-called "football creditors rule" and it drives HMRC nuts. That's because HMRC once enjoyed special status, too, but must now join the queue behind football's own. In no other business sector is this the case. As a result, the taxman invariably says "no" to football CVAs.

This can have disastrous consequences for clubs as they are usually penalised more points for exiting administration without a CVA than they are for going into administration in the first place. These points reductions tend to end in relegation and a further reduction in the club's value.

In order to proceed, a CVA needs the backing of 75% of the debt, not 75% of the people owed money. Plainly put, if the total debt is £100m and you are owed £25m of it, you get 25% of the votes. And anything more than 25% is a blocking vote.

That is crucial as HMRC argues it is owed £37m out of a total Pompey debt of £130m-ish (the number is hard to pin down) - more than enough voting power to block the CVA.

But when the vote came to be taken two months ago, Andronikou only gave HMRC £24m-worth of votes. This meant the CVA was approved by a healthy 81% majority.

Hold on a minute, that's cheating, isn't it?

Well, not according to the insolvency rule book or Mann.

You see, HMRC waited until two days before the vote to increase its claim from £24m to £37m. The additional £13m was for tax avoided by the club when it paid significant sums to its players, usually to offshore tax havens, for their image rights.

A recent phenomenon in British football, clubs make image rights payments so they can use their players' likenesses or names to sell tickets, shirts and other merchandise. It has quickly become common for 15% of a player's remuneration to come in this form, which is handy as these payments are taxed at a much lower rate than income tax.

HMRC, unsurprisingly, is not convinced every player at every club has an image that generates the kind of business 15% of a typical Premier League salary would warrant. This is probably a fair point and one the taxman intends to pursue in these days of austerity.

But returning to the matter in hand, Andronikou was within his rights to say, "Woah, where did that £13m come from?" Or words to that effect.

He could not be expected to verify that amount in the time available - as is his duty - so HMRC could not be given the additional votes. The rest is history.

So where does all this leave the soap opera that is Portsmouth and the more serious drama of HMRC's assault on football?

For the club, Thursday's victory is huge. So conclusive was Mann's judgement that HMRC said it would not be appealing. This was a surprise as it had strongly indicated that it would not take defeat lying down.

Andronikou can now push on with his CVA and press the Football League to lift the transfer embargo on the club. Manager Steve Cotterill will be delighted as he is currently limited to 20 players and is without a goalkeeper at the moment, with the season due to start on Saturday.

The biggest tranche of the first annual "parachute payment" from the Premier League was due at Fratton Park on Thursday but that £9m (much of the rest has been spent already) will be transferred directly to UK football creditors by the Premier League. This should leave Pompey debt-free on that front.

The next step will be to complete the return of the club to its most recent owner Balram Chainrai, who is currently working his way through the Football League's beefed-up fit and proper person test (now renamed as the Owners and Directors' Test).

The Hong Kong-based businessman claims to have become the club's fourth owner last season almost by accident but he is now keen to take it on again. A deal to buy the club out of administration is in the works and Pompey's assets will be transferred to a new Chainrai-owned company.

This could happen in weeks, although the old company - Portsmouth City Football Club Ltd - will continue in administration for nine months until liquidation. A thorough investigation into what has been going on at Fratton Park in recent years can then take place.

The amount Chainrai will pay for his new, largely debt-free team will be what it costs to fund the CVA over the next five years, approximately £15m, with the first £3m payment coming in the autumn.

That this should come to pass will upset some fans as much as it has annoyed HMRC, which must now write off 80% of its debt, but a Pompey out of administration, in the Championship and without massive debt or a points handicap is considerably more attractive to bidders than any realistic alternative.

I am reliably told there is somebody "on the inside rail" who will come on much harder now the threat of liquidation has passed.

What next for HMRC, and its increasingly fraught relationship with football, is far less certain and far more interesting (with apologies to Pompey fans).

This was a bad defeat but that does not mean it was not a fight worth fighting. Points have been made and football has noticed.

The Premier League, for example, was represented in court on Thursday and I understand it wrote to the judge to explain just how important the football creditors rule is for the integrity of the competition.

That, and what HMRC views as an industry-wide abuse of image rights, will be the next taxman v football battle and nothing Mann said this week should prejudice how that goes.

We await a date for that one - the Premier League has already counter-attacked with a challenge to have it nipped in the bud - but in the meantime I intend to watch some football. You know, actual football. Let's hope it catches on.

As well as my blogs, you can follow me when I'm out and about at http://twitter.com/bbc_matt

Comments

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  • Comment number 1.

    Well done Matt!

    That's one of the most succinct distillations of the current Pompey mess I have read recently.

    Not only have you managed to set out what the background issues are but also where it leaves the club and any potential purchasers now.

    As for Pompey, maybe, just maybe, they can start to look forward and hold on to a Championship berth by their fingernails (providing they can entice some more players in, that is ...)

    As it's Pompey though, I'm sure there will be more twists and turns in this saga yet!

  • Comment number 2.

    For a long time Football clubs have thought themselves above the law and all this case proves... is that they are.

    Ask yourself, why should you and I pay our taxes diligently, when football clubs with billions going through them, much of it going into the pockets of rich players and agents, can get away with not paying their fair share of tax??

  • Comment number 3.

    It was a good day for Portsmouth and from a purely football perspective i'm glad they've survived the latest battle. But i'm sure i'm not alone in wondering just how it is possible for a football club to get themselves in such a dire situation in the first place, let alone see light at the end of the tunnel.

    In the "real world" Portsmouth football club as a company would have disappeared long before now, with considerably smaller debts. Football clubs operate to a different set of financial rules, which i'm not sure if right.

    There are too many clubs operating way beyond their means to achieve short term success. What will happen to the likes of Man City when the sugar daddy leaves? With all due respect to Portsmouth's fans, something big needs to fail for football to open its eyes to what it's become.

  • Comment number 4.

    Disgrace. I dont understand why some football teams are careful with they're money after watching the Portsmouth debacle? If I was a chairman I would just spend what I didnt have and then get a CVA and pay it off at 20%!!! Its worth the gamble when the punishment is so weak!!!

  • Comment number 5.

    A good day for Portsmouth fans and football fans alike. However, it's a disgrace that footballers are above HMRC when it comes to creditors priority. I feel this needs changing.

  • Comment number 6.

    @3 'What will happen to the likes of Man City when the sugar daddy leaves?'

    When will you people understand!? Our owners are in it for the long term, having invested hugely, not only in the club but recently pledging £1 billion into developments in the area of Manchester near the ground.

    They won't be leaving anytime soon:

    http://www.financialadvice.co.uk/news/property/87946-manchester-city-sign-1-billion-property-development-agreement.html

  • Comment number 7.

    This image rights payments to offshore companies is one of the most cynical things that football has ever descended to.

    Taxes pay for old peoples pensions, amongst other things, so this is a rather blatant example of stealing from the elderly who already have one of the lowest value pensions in Europe.

    Portsmouth Football Club are clearly one of the reasons why. Who do the courts exonerate next? Osama Bin Laden?

  • Comment number 8.

    'But returning to the matter in hand, Andronikou was within his rights to say, "Woah, where did that £13m come from?". Or words to that effect.'

    -----------------------

    But vice versa surely we all had a right to an explanation on how AA managed to 'massage' the total dept figure ! Independently verified at around £70 mil then AA managed to increase it to over £100 mil & finally finishing at £137 million !! & funnily enough this reduced the HMRC voting percentage allowing the CVA to be passed.

    UnJustice Mann has well & truely been duped !!

  • Comment number 9.

    @6 'When will you people understand!? Our owners are in it for the long term, having invested hugely, not only in the club but recently pledging £1 billion into developments in the area of Manchester near the ground.'

    ---------

    Firstly I don't begrudge Man City for their money or hold it against the fans etc.

    I'm simply saying that before Man City had their Sheikh they simply could not afford the players/wages they have now. If they stay for 10 years it's expecting a lot for Man City to transform into such a profitable club to sustain your current outlay on wages/players.

    Portmouth's won the FA cup and spent a massive outlay on new players and wages, which as we have seen is completely unsustainable for a club of Portsmouth size when the money dries up.

  • Comment number 10.

    I find the whole thing disgusting. The club will be back with the previous owner? But he has essentially avoided paying debts to a lot of small businesses who can't afford fantastic lawyers and because they won't pay HMRC what is owed, they owe us money.
    As to hmrc's change of value, when was the debt increased to 119 130million ( or whatever) surely thats also relevant to the 75% of 'votes'.

    The leagues need to fix the football first rule, to somehow include a 'small debts need to be paid 100%'.

  • Comment number 11.

    I bet Hull City & everyother club breathed a sigh of relief though .... all how been given a green light to spend at will without any consquences.

    Just hope Pompey supporters dont need to use their locallly unfunded hospitals any time soon !

  • Comment number 12.

    @6

    So what IF City are in it for the long term? The time will come when FIFA say enough is enough. City are destorying football, as the competition is no longer a level playing field. Same applies for Chelsea. It's just a battle over who has most money now - that's not a sport. This is proven by people like Barry, who said he would only ever leave Villa for the Champs League, then low and behold, ended up at City. People like Toure...would never leave Barca, hold on, he's at City too! And demanding £200,000 A WEEK to play. There is not a prayer that City have that kind of money without handouts, it's just a matter of time, and not a prayer that players like Toure are even worth that amount - no footballer is.

    After all, football fans are becoming increasingly disillusioned with the 'sport'. Many fans I know are turning to other sports, mainly rugby, where the competition is fair and the action is better. Once all the fans leave football, the marketing gimic that City have become will end - their owners will leave and woo woo...City will die.

    Personally, I hope City die sooner rather than later. I support Middlesbrough, who got into substantial debt trying to keep pace with the Premier League leaders, and look at us now. Portsmouth had the same aim, and any one with sense agrees they should've died long ago.

    Personally, I much prefer supporting Boro now, rather than in the 'glory' days of EUFA Cup finals. We're in looking forward to a great season, and none of the BS about chasing champions league football. We are a proper community team now, and I believe the only team in the world who are offering multiple shirt sponsors this season, to give the smaller businesses in Boro national coverage.

    There is more to life than a trophy in the cabinet, especially when time is taken to consider how many other people/businesses the charade at Pompey has affected, and I am disgusted that they owe monies to St Johns Ambulance (who do a sterling job) and other charities. Football is too big to control itself, and from this judgement, there is nothing any law can do to reign it back in.






  • Comment number 13.

    Relieved for Pompey fans who I'm pretty sure are just glad they've still got a football club to support. As I said in an earlier blog - HRMC need to go after the former owners rather than the club itself.

  • Comment number 14.

    Re. post 10. Davefb, Balram Chanrai became owner by default when a loan that he had made to one of the previous owners was not repaid. As is his right, he took control of the club to protect his investment. He cannot be blamed for the mess that PCFC finds itself in; that blame must be firmly laid at the doors of the previous owners and Directors. If (and almost certainly when) PCFC Ltd goes into liquidation, a full forensic accounting investigation into the financial mismanagement of the club over the last 5 years can be made, and skeletons currently hidden in cupboards will come tumbling out.
    The Portsmouth administration saga is far from finished yet!

  • Comment number 15.

    "A good day for Portsmouth fans and football fans alike"

    No, not at all. A terrible day for football fans. Portsmouth were in one of the richest sporting leagues in the world and over period of several years foreign owners emplyed accountants who actively refused to pay nearly £18,000,000 in taxes owed. The money was there, they could have paid it, they made the decision not to do so.
    The sooner HMRC get their hands on a big club and force them under the better; a wake up call is needed.

  • Comment number 16.

    Absolutely right, MGUK82. Sheer, unadulterated relief.

    I take on board everybody's points regarding the morality of the situation and I'm sure everybody would retain their holier-than-thou attitude if it was their club about to go to the wall.

    And for the record, the St John's Ambulance were not out of pocket as we, the supporters, collected the required funds and donated it to them.

    There needs to be a proper independent investigation into the goings on at Pompey (and arguably at many other clubs) - the people involved should be, at the very least, banned from ever being involved in football again.

    Also an honourable mention for the poster who stated that the Man City guys are in for the long haul - how delightfully naive.

  • Comment number 17.

    There goes £20m of our money.

    This makes it less likely those really responsible for this mess will ever have to face justice.

    Pompey will be signing players for six figure fees in a few short weeks, just like Palace just have and no-one within football will have learned anything.

  • Comment number 18.

    @ Angry Old Man

    With due respect, you don't know nearly enough about this whole saga to make those comments regarding Chainrai.

    The ins and outs of it would take me all day to explain, but I can assure you and anyone else that Chainrai's motives and actions thus far are at best unclear.

    There is an awful lot of devil in the detail, ask anyone from any of the Pompey supporters groups/SOS Pompey etc and they will tell you it is far from clear cut when and why Chainrai became involved in the club. I think you'll find that SOS Pompey's official position is that with Chainrai in charge again we will be right back here before the season is out.

  • Comment number 19.

    The thing that grates the most about this whole debacle is that Pompey have expected and received special treatment. When things haven't been going their way they whined until they got what they wanted - parachute money early, transfer embargoes lifted, a win over HMRC. Despite the criminal gross misconduct by the Pompey board that "spent money they didn't have, achieved successes they didn't deserve and ran up debts they couldn't pay" they and the club have got off scott free.

    Even the punishment of the points deduction didn't hinder them. When Southampton went into administration whilst in the relegation zone of the Championship, they were told the 10 point deduction would be applied that season if they stayed up or the next season if they went down. Whith Pompey at the foot of the table they would have gone down regardless of the points deduction so why did the same rules not apply in their case?

    The blog may well say everything was above board with regards to the insolvency rules, but I just can't help but think any club, not just company, outside of the Premiership would have gone to the wall already or at the very least had the football book thrown at them and found themselves starting the season with a very large points overdraft. Look at poor Salisbury, they just failed to meet the last payment of their CVA and were relegated two divisions, no ifs or buts. Would that have happened to Pompey?

    All that we can learn from the Portsmouth case is, if a team in the Premiership goes into adminstration, it will be wrapped in cotton wool and helped through the "traumer"

  • Comment number 20.

    @19

    I believe that was because Southampton stupidly went into adminsitration after a given date, at which point the rule you mention kicks in. Pompey did not do this.

    Are you a grumpy Southampton fan, perhaps hoping for a different outcome yesterday?

  • Comment number 21.

    "Our owners are in it for the long term"

    Portsmouth's dubious owners were in it for the long term too... until they weren't and this happened.

    Football has learned nothing and changed nothing. It will take the recession and the next case (Hull?) to force the government to act.

  • Comment number 22.

    I find it hard to believe that Chainrai wasn't aware the club hadn't paid its PAYE bill for the last year or so when he took control of Pompey. He may have been suckered into the deal and thought he would get a quick return on his loans (which as secured, he'll get back, when other creditors will have to make do with 20p in the £1), but did he also see a way out via administration?

    If Chainrai now gets fed up with Pompey like Gaydemak did and no firm offers come in to buy him out, won't the club be back at square one yet again?

    Question for Matt or other experts, if Pompey fail to maintain payments as agreed in the CVA, will that mean immediately liquidation or just another round of Administration etc etc??

  • Comment number 23.

    "We are a proper community team now, and I believe the only team in the world who are offering multiple shirt sponsors this season, to give the smaller businesses in Boro national coverage."

    Someone call the naivety Police.

    Boro are only doing that because they are desperate and cannot attract a big name single sponsor anymore now that they are in Division 2 again.

    Steve Gibson has paid for everything at Boro (Ravanelli on £75,000 a week in 1997 FFS!) for almost twenty years and even though he is a fan the club are doomed when he pulls out, just like Whelan at Wigan.

  • Comment number 24.

    @22

    Yes, or if Chainrai sells anything that's not nailed down to get his cash back and then some, then mysteriously decides he's no longer interested.

    Not that I'd accuse him of plotting anything like that.

  • Comment number 25.

    #5 how can you say it is a good day for football fans!!! You are saying it's OK for your club to lie, cheat and deceive hard working companies out of money and our taxes to play a game of football. It's OK for football clubs to get all their multi millions back without losing a penny when charity money that has been raised or the likes of St Johns Ambulance not receiving their money either.

    This is really a black day for football and it's authorities. If they are to continue to receive 100% of their money then they should not be allowed to vote on the CVA. The FA, PL and FL are a total disgrace and are abusing the tax payers whilst laughing at us.

    As Portsmouth are now in the Championship surely all the parachute payments that are being made to Portsmouth should go directly to outstanding non footballing creditors and nothing to football. AT least that would mean about £40 million being collected.

    Lets hope that the HMRC win their next battles with the Premier League and the Football Creditors Rule. These imagine rights are a joke. You go to watch your football team and not who plays in them so no rights should be paid to them. Maybe shirt sales are a different thing and they could get rights for that but when clubs are selling out most of their matches it has nothing to do with who is on the field.

    Matt will Portsmouth suffer any other deduction now? I thought they had to come out of administration before the start of the season and as that is only 2 days away then surely they should have more points docked!!

    With people going on about Man City you don't have to worry. Soon the UEFA Financial fair play rule will come in and stop them and possibly Chelsea and maybe even Barcelona from playing Champions League football because they will have overspent and have no way of breaking even. Lets face it the only reason players ever went to Chelsea and now Man City is because they would over hype their salaries. This then means everyone else gets paid too much and are spoiled which means you have more Portsmouth's soon.

  • Comment number 26.

    Sorry to disappoint you Nick, but as we now have a rubber-stamped CVA, we can come out of administration any time before the start of the 2011/12 season with no points penalty.

  • Comment number 27.

    Jdawg76, indeed.

    Pompey's points deduction, like Palace's last season, has proved to be absolutely no punishment at all.

    Pompey would have gone down anyway and Palace would almost certainly not have gone up.

    So there has been no adequate punishment ON the pitch to act as a deterrent to other clubs who trade insolvently, avoid millions in taxes and win competitions as a result ahead of other well-run honest clubs.

    Yesteday was a sad day for football and for Britain's integrity TBH.

  • Comment number 28.

    Gaydamak didn't "get fed up" with Pompey.

    His dad's dodgy money ran out, that's all.

    As an associate of Gaydamak's Chanrai is every bit as dodgy. He never wanted to own the club and still doesn't. Taking over was the only way to protect his loan.

    It's good that some Pompey fans recognise this (see above) and understand the inevitable consequences.

    This decision has actually hurt Pompey fans just as much as the rest of football just as the laughable way the Conference bent over backwards to allow Chester to start last season.

  • Comment number 29.

    Well explained Matt. Just a couple of questions: Will HMRC be expecting 20p in the pound on the £37m or just the £24m? Will HMRC go after the club on the image rights issue and claim tax evasion?

    I think people should be careful before they claim this as a victory for football. Yes, a victory for the football industry but this is yet another nail in the coffin for the integrity and morality of the game. Lest we forget that Pompey racked up huge debts despite a large and predictable income stream, they cashed monies collected for charity into their own accounts and didn't pay them back (thankfully rightminded Pompey fans paid them back from their own pocket), they've abused the regulations around image rights to allow millionaire players to earn even more money, they carried on trading and racking up debts when clearly insolvent, and ultimately have left traders and the tax payers short of 80% of what they owed. Not to mention the tax evasion proceeding already in motion against Storrie, Redknapp and Mandaric. And the punishment for all of this? A 9 point penalty which had no impact at all on their final league position.

  • Comment number 30.

    SouthseaSaint the HMRC have a court date with the Premier League in regards to the image right issue. I think they are also trying to take court action over the football creditors rule as well.

  • Comment number 31.

    I think that's the bigger issue here - both rules are, frankly, a disgrace.

  • Comment number 32.

    I can see HMRC going after certain individuals for tax evasion in regards to the image rights at Pompey. HMRC have already started to go after clubs if they are late after one payment now, so the 'Bank of HMRC' no longer exists.

    Clubs should also be forced to pay their transfer fee in one go. If you cannot afford the transfer fee, you cannot buy the player. Simple. This will stop most of the Football Creditors owed. I think it's farcical that Pompey still owe money on players that they've already sold on for profit.

    Pompey now start a long road back. I still think they'll be one of the favourites for relegation as the FL will probably continue their transfer embargo, but their fans shouldn't really complain, as survival is an achievement.

  • Comment number 33.

    Excellent blog. I would like to make two points: Portsmouth owed HMRC £13 million. This was beefed up to £24 million in late payment fines and interest. By being allowed to make these incredibly large charges HMRC made the club's position far worse but more importantly reduced the amount of money available to pay the ordinary creditors what they were owed. Effectively HMRC will be paid back at 35p in the £ on their actual debt, rather than the 20p in the £ going to unsecured creditors.
    Secondly, the use of leveraged buyouts and the transfer of debt onto the balance sheet of the club was a key reason behind the size of their massive insolvency. Leveraged buyouts should be made illegal, as should the transfer of debt: when you buy a new car your car does not owe you £20k or whatever you paid for it. It has a value in and of itself but it does not owe the purchaser a damn thing. The same should pertain to buying a business.

  • Comment number 34.

    @12

    'Personally, I hope City die sooner rather than later. I support Middlesbrough, who got into substantial debt trying to keep pace with the Premier League leaders, and look at us now. Portsmouth had the same aim, and any one with sense agrees they should've died long ago.'

    You also seem to forget Middlesbrough was liquidated in 1986 through bad financial management, even having to take a loan from the PFC to pay the players - and they weren't chasing any league leaders then either.

    I don't think any Portsmouth fan is over joyed about the financial affairs of the club right now, as it means we won't be looking for any sort of success or improvement for the next five years - at least - and are certainly looking forward to finding out where the money went.

    After all, it's us who bought the replica kits and paid for the season tickets, it's our hard earned that was ending up in some dubious director's back pocket instead of going towards how the club should have been legally and properly run.

  • Comment number 35.

    It disgusts me that companies, which at the end of the day that is what Portsmouth Football Club is, can run up huge debts by spending money they don’t have and basically cheat, then get away with just paying off a portion of their debts. Should a ruling not be applied to the parachute payments which the Premier League is paying to these clubs when in this situation?

    Parachute payments are now ludicrously high now, meaning that clubs being relegated are in a good position to play yo-yo from the Championship to the Premier League because they are given huge financial support. To provide these clubs with funding across 4 years is basically ‘wet nursing’ them for far too long. However back to my point with Portsmouth, if they are only going to settle 20% of their debt over 5 years why should they receive the full 100% parachute payment, should that not be paid in proportion to what Portsmouth is paying its creditors. Thereby they should only receive around £10m across the four years. But I guess if Portsmouth received a reduced parachute payment then the creditors would have received even less than the 20% they were offered!

    These days the Premier League is an ever inflating cash cow for a small proportion of clubs, and many clubs will get stung trying to compete. I admire those clubs who have been promoted but are not willing to jeopardise the future financial stability of their club just to remain there by spending large amounts of cash. Let’s face it the ridiculous sums of money are generated mainly by the players wages, and this has to be looked into and capped, how individuals can demand such ridiculous sums of money each week is beyond me, especially when I look at our own domestic players. These same players who then graced the World Cup stage and were shown up for what they really were, overpaid and average.

    Football needs to take a long hard look at itself, and that has to start with the Premier League, quite frankly the Premier League has become a disgrace and is not something to be proud of.

  • Comment number 36.

    Great news for Pompey fans. Still don't understand how Chanrai can now buy the club back for as little as £15 million though?! Surely Pompey are a more attractive proposition than that or have I misunderstood? And why can't the administrators auction off the team like they've just done in the US with Hicks' basketball team for $500 million odd?

  • Comment number 37.

    At least all the money NOT received by schools, hospitals & other public services, pathed a way for Pompey to reach 2 FA Cup finals & a European tour !!

  • Comment number 38.

    An excellent blog, although not sure I'm happy with references to HMRC "assaulting" football, when really it's the other way round!

    "The Premier League, for example, was represented in court on Thursday and I understand it wrote to the judge to explain just how important the football creditors rule is for the integrity of the competition."

    I'm sure a lot of people would like to hear why this ridiculous rule is important to the integirty of the competition? It's not just the responsibility of buying clubs to ensure they have the funds to do so, surely any selling club with a bit of business sense, will do a thorough background check into the company they are about to do a multi-million pound deal with?

    Or is this just another example of irresponsible football!

  • Comment number 39.

    #22

    If they default on their CVA payments the club should be put into liquidation, but this is up to the supervisor.

    AA was the supervisor of the administration at Swindon, where the CVA stated that payments of £100k was due every year in the first 4 years, and a 'bullet payment' was due in the 5th year of £900k.

    In every year the £100k was late, and the owners at the time, under pressure from the Trust, admitted in the final year that they could not afford the final payment. 30th June 2007 came and went, and still no payment, but since AA said that the owners were looking for 'investors', there was no need to do anything, despite the creditors committee putting pressure on AA to call a creditors meeting.

    Nearly 6 months later the club was taken over, with the bullet payment paid within months, the club has only been released from the CVA nearly 2 years after the payment was met.

    I hope that helps with your question.

  • Comment number 40.

    Good news everyone! Go out and spend spend SPEND! Spend as much as you want and run up astronomical debts. Why not go to exotic lands and stay in the most up-market hotels? Buy as many souvenirs as you like - heck, buy the souvenir shop! Stay away as long as you like, come home again and spend some more on maybe building an extension, don't bother asking for planning permission though. The council may well take you to court, but just make sure you sell the court a sob story about 'thinking about the occupants of the home and what an impact it would have on their lives' and the case should be dismissed by lunchtime. This will give you time to go grab a bite to eat at the poshest restaurant in town and maybe, if you're feeling generous, (chances are you're not) pay for everyone else's food as well. Oh and if you're feeling a bit rebellious, why not rip off a few charities? It's a great adrenaline rush and they can't do a thing about it! Bonza!
    You're probably thinking "But I don't have that much money." Well that's no problem, because you see you can do all this with money you don't have, and almost certainly never will have and be safe in the knowledge that you will get off scot-free and be able to get on with your life unjustly and unpunished.

    Result!

  • Comment number 41.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 42.

    The bitterness displayed by some of the posts on this blog is frankly laughable. Portsmouth Football Club were profligate, spent money on the basis that their owners would support that spending: it is clear that a club with 20,000 capacity cannot afford a team of quality names and that the only basis for this has to be external funding from the directors of the company. It is those directors who should be pursued for the outstanding debt: you can blame the whole capitalist edifice if you don't like it. What do you think "limited liability" is meant to do? It protects directors from the consequences of their profligacy.
    Pompey are no worse than many other clubs. Their case was exacerbated by Gaydamak turning off the external funding and the financial manoeuvrings of various "owners" post-Gaydamak who never actually put money into the club but loaded it with additional debt - until Chanrai came along and put some emergency funds into the club. If he did this as a clever way fo getting the club on the cheap - so much the better.
    Don't pretend that Pompey are the only club in this position - look at Blackpool's players still waiting for promotion bonuses. Serial administration fodder like Sheffield Wednesday: Pompey are just more high profile. What would happen to Liverpool or ManUre if the banks that leveraged their buyouts foreclosed on their loans or refused to refinance when due? Bye bye both.

  • Comment number 43.

    Spot on Bud.

    Did you realise that the changes to the F&PPT are exactly what were proposed by the Pompey group that met with the Premier League earlier this year?

    Almost word-for-word in fact.

  • Comment number 44.

    "Portsmouth owed HMRC £13 million. This was beefed up to £24 million in late payment fines and interest. By being allowed to make these incredibly large charges HMRC made the club's position far worse but more importantly reduced the amount of money available to pay the ordinary creditors what they were owed. Effectively HMRC will be paid back at 35p in the £ on their actual debt, rather than the 20p in the £ going to unsecured creditors."

    Do all such fines and interest apply to all limited companies who pay their tax late?

    Stop blaming HMRC for doing their job.

    When the Government can't afford to open or improve your local school or hospital now you know who to blame...

  • Comment number 45.

    #34, "even having to take a loan from the PFC to pay the players"

    What an excellent Freudian slip.

    #42, I think by bitterness you mean not having an obvious selfish vested interest bias.

  • Comment number 46.

    #34, "it's our hard earned that was ending up in some dubious director's back pocket"

    What a self-indulgent fiction.

    Pompey fans' money hardly made the tiniest difference.

    Massive TV and sponsorship money pays for the Premier League, not those who attend matches. They are just a nice background for the cameras.

    In Pompey's case that money was obviously supplemented by huge amounts of Arcadi Gaydamak's cash. Google him to see where that probably came from.

  • Comment number 47.

    "I hope will be brought to task by the HMRC when they run an inquiry into the eventually liquidated old company."

    Is anyone really naive enough to believe that that will happen now?

    It is now in everyone's interests to draw a line under what happened and quietly brush all that under the carpet.

    Every day that passes makes the evidence harder to find to successfully investigate and prosecute Gaydamak, Storrie and Redknapp. I hope the case goes against Redknapp and Mandaric in the Autumn but after this circus I won't be holding my breath.

    Meanwhile football has learned nothing and it's Hull's turn next.

  • Comment number 48.

    "Serial administration fodder like Sheffield Wednesday"

    I think you mean serial RELEGATION fodder precisely because they have refused to go into administration to avoid their debts.

    Such is the warped logic of our current second division.

  • Comment number 49.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 50.

    'the real culprits' will, hopefully in the end be exposed. All this goes back to a certain Mr Gaydamak Jnr. What has gone on at Pompey is nothing short of criminal and needs to be addressed.
    All the fans can do is support their beloved club but we've all been tarnished by the goings on in the boardroom.

    So much money has flooded into the game at the top level in such a short period of time that greed has overcome any meaning regulations to control it.

  • Comment number 51.

    What does this case prove? That football clubs can continue to get away with. A poor outcome that further undermines whatever integrity was left in football.

  • Comment number 52.

    So Chainrai now owns the club with a much reduced debt.

    What I never quite understood was how this came about when he had 2 secured loans made to the old club - 1 against the ground and the other against the clubs shares.

    When loan payments were not made, he reposessed both the ground and the club.

    He was also one of the largest creditors, with his secured loans being paid in full (not at 20%), as well as owning the ground and the club???

    I do look forward to the investigation when the original business is wound up in 9 months time. It will be interesting to see where the money all went.

  • Comment number 53.

    What I don't understand in all these cases is why the owners aren't being prosecuted for theft. The PAYE was deducted from the employees wages on behalf of HMRC, it is then HMRC's money. Portsmouth instead of then handing HMRC their money, spent it on something else. If I did this it would be theft.

  • Comment number 54.

    ClassyBandWagoner: who do you support? How much do they owe? Apparently the Premier League in its entirety has NEVER made a profit. Individual teams, like Arsenal, might have done so but the collective has always overspent.
    As for HMRC fines etc, yes they impact on all defaulting companies - and frequently push struggling companies to the wall with their ability to charge huge fines and usurious rates of interest. Finally, the tax avoided / evaded (the last government introduced legislation that said if you cannot prove your tax avoidance is not purely to avoid paying tax due it is evasion and the tax plus fines and interest become due) by the FTSE 250 would pay for all the hospitals, schools and front-line staff one could want. The comparatively minuscule amount Pompey owed is just a bat for the bitter and twisted and hypocritical to beat them with.

  • Comment number 55.

    A lot of people are upset that Portsmouth football club have not been sufficiently punished.

    From an insolvency law perspective, this process is not about punishing a company. It is about (1) dealing with an insolvency situation in the way that will get back the most money possible for the creditors (which may mean rescuing the company if that gets the creditors more than they would have received if the company had been wound up and its assets sold off) and (2) punishing the owners and directors if they have been guilty of wrongdoing. For example, in this case it seems pretty clear that there has been wrongdoing at Portsmouth FC, while their actions may have caused other businesses to become insolvent through no fault of the owners or directors of those companies.

    If the system works properly (a big if), Portsmouth football club will be able to continue, while any owner or director who has been guilty of certain specific practices will be disqualified from being an owner or director of PFC, or any other company, and may be personally liable for some of the debt.

    This should happen, and I'm sure the evidence is there to be uncovered, yet I have a gut feeling that those responsible will never face such penalties. But if Portsmouth FC continues without them, then the company isn't a wrongdoer which has got away with it, it is a company which is now independent of the wrongdoers who misused it.

  • Comment number 56.

    Afternoon all, thanks for reading and commenting. Good to see this topic, which I think has real significance to all football fans, is still attracting such passionate views.

    You're all doing a blinding job of debating the key points without me getting involved so I'll just answer the questions directed at me.

    The Last Lighthouse Keeper (8) - You're right. It certainly did look like HMRC and AA were involved in some kind of private joke for a while (You say you're owed 25% of our debt, do you? Not anymore you're not) and I have blogged on this before. But there are a couple of things to be said here. One, it is fairly normal for a company's debts to increase as it lurches into admin. All kinds of bills come out of the work and there is often a lag while the admin checks them all out. And two, while AA was clearly mindful of the 25% figure, HMRC was too. A big chunk of its debt comes from fines and other fees.

    JDawg76 (19) - You make a good point about Pompey getting a degree of special treatment. You're right, if Pompey was in Salisbury's division they would have been toast months ago. Actually I think they would have been liquidated if they were an FL team last season. It was only their PL status that kept them afloat for final months of season. The PL couldn't afford the hit to its reputation/brand so bent over backwards to keep them going. And now it's the guaranteed revenue stream of the parachute payments that underpins them going forward. £48m over 4 years buys a lot of leeway.

    ChocolateBoxKid (22) - What if Pompey fail to meet CVA requirements? Good question and the answer isn't clear-cut. It really depends on the circumstances. If they massively miss the payment and look like a complete shambles again then they're back to square one: administration if there is any hope of being saved, or liquidation if there isn't....and the latter would look more likely given the failure of the CVA. But CVA payments can be missed and just massaged away if it is deemed to be in the best interest of the creditors. AA has experience of this at Swindon. I think the Swindon CVA he administered missed a couple of annual payments and was late with the big "bullet payment" at the end. But he somehow managed to keep the show on the road and the terms of the CVA were eventually met in full - although I have been told he hasn't officially closed it yet at Companies House, which is causing some concern at County Ground.

    Nick Hove Actually (25) - Nope, Pompey, providing they don't mess things up, should avoid any further points penalties. They have already been punished by the PL for going into admin and if they exit via a CVA the FL will be satisfied. The season's start thing is a bit of a red herring. Pompey could actually have played all season under admin without any further penalty. The rules, as I understand them, state you cannot start two consecutive seasons in admin. Stockport got very close to testing this rule this summer.

    SouthseaSaint (29) - I think that still has to be decided. Justice Mann wasn't making a ruling on whether Pompey owe HMRC £37m or not, he was just saying there were no grounds to reject a CVA that had been correctly approved by the rest of the creditor base. My reading of the situation is that HMRC will now have to demonstrate to AA, possibly via the courts, exactly what they are owed. Will they pursue Pompey for tax evasion? Perhaps. Although they may concentrate on getting a football-wide deal on the image-rights situation. That might be a cap on the % clubs can pay for image-rights or a deal on what rate they can be taxed on. Watch this space.

    Tomorrowsdream (36) - Yes, I'm a little confused by that although I got that number from somebody who should know (shouldn't say who but his name is mentioned in the blog). I thought the "value" was supposed to be closer to £30m. But when you think about it just how much is a Ch'ship team worth? Particularly one with a dilapidated stadium, not many players, a CVA to service, no credit rating & vital development land in the hands of another creditor.

    Holdem Supremacy (38) - Fair point, poor choice of word. HMRC might have lost this one but it has considerable moral weight behind its arguments. In regard to the football creditors rule you're absolutely right to ask just how it helps maintain the comp's integrity.....but let's leave that one for next time!! Big subject that.

    Classybandwagoner (47) - I share some of your scepticism but I really really hope we do get a proper investigation. I intend to stay on the case so I hope HMRC does.

    Cheers all, Matt

  • Comment number 57.

    #54, Wimbledon, not that it makes any difference to my opinions.

    Our dubious owners created massive debts (by buying and paying players we could not afford like Hartson and by loaning the club the money at 10%) then getting relegated. Then they used those debts as an excuse to justify franchising the club's League place to MK just to get a supermarket built as their exit strategy.

    Once in MK franchise's new owner got rid of those debts anyway (paying 6p in the pound IIRC) as Pompey just have, so pardon my cynicism.

    But then we were no Pompey. Still your fans continue this ridiculous "long-suffering" rubbish when the opposite is true. You are one of the few big city clubs that are too big to be allowed to fail completely, for public safety reasons if nothing else.

    Ask Aldershot, Maidstone, Wimbledon or Chester fans how long-suffering they think you are.

  • Comment number 58.

    "The comparatively minuscule amount Pompey owed is just a bat for the bitter and twisted and hypocritical to beat them with."

    £20m in tax is the most any football club has avoided paying so far. Even Leeds only managed £7m and Palace £3m.

    Care to guess what the Hull figure will be?

  • Comment number 59.

    I am Portsmouth through and through and of course I am overjoyed that we can now start to rebuild our great football club. However, I do hope that legislation changes so that no other supporters have to go through a similar situation in future. The way our proud tradition has been tarnished will be difficult to recover from, but recover we will. I wish the HMRC every success in any future case they undertake as I believe the football creditors rule is wrong. I also want legal proceeding to take place against all of the parasites that have striped the flesh from our bones. Everyone knows the list of people responsible for the bad management that led the administration. They shouldn''t be able to walk away with our capital and use it to start a virus elsewhere. All of football has to change and make sure all clubs are run by fit and proper people. I am so proud that Pompey have got through this, but I am ashamed of the action of a few. The taxman should be paid first in full and then the other creditors should accept what''s left. I understand why other supporters feel cheated, because believe me we feel the same and more. I ask for some solidarity between all clubs and ask you not to judge our football club too harshly. We should all blame the fat cats who are turning our beautiful game into an ugly one. We just need to clear the decks, load the cannons and set sail for future victory. PLAY (at least we can now) UP (one day just maybe) POMPEY (till I die)

  • Comment number 60.

    "I wish the HMRC every success in any future case they undertake"

    How utterly hypocritical.

    "Your" club escapes without any serious punishment on the pitch (you would have been relegated anyway without the nine point deduction) and yet you wish them luck in the NEXT case...

  • Comment number 61.

    One point overlooked in the comments here so far(and we now know in the reporting of the case prior to the decision)is that Justice Mann's decision was based on the fact that HMRC had failed, contrary to a requirement in law it seems, to provide details of the increased amount owed to them in suffcient time for the administrator to deal with their claim and the subsequent effect on voting. This is an oversight on the part of HMRC's lawyers (in house or engaged externally ?)- they appear to have fundamentally failed to prepare their case by not considering this or worse doing so and ignoring it. By doing so it turns out they handed a get out of jail for free card to the other side. If I employed solicitors to represent me and they dropped the ball by making a fundamental mistake like that then their professional idemnity insurers would be on full alert ! Let's hope the spotlight falls on the failure of those employed by us at HMRC to represent our interests both in letting the debt build up and the subsequent events and not just the other scandalous issues raised by the goings on around Portsmouth and football insolvency/finances in general.

  • Comment number 62.

    Murk, did you go to Selhurst Park in 2003 with the other 10,000 Pompey fans who helped the bankrupt franchise survive financially over that summer?

    Where was the supporter solidarity you now wish for then?

  • Comment number 63.

    #59 I do hope that legislation changes so that no other supporters have to go through a similar situation in future.

    This statement has become a platitude. Fans of clubs who are punished (or not) all say this but little if anything is done.

    I hate to say it but it is only when the first big name goes bust that football will stand up and listen. For that reason alone I hoped the decision would go HMRC's way!

    What I can't understand is how HMRC allow clubs to run up the bills they do, if my business is a day late with it's VAT or PAYE I have HMRC on the phone!!

  • Comment number 64.

    ClassyBandWagonner: is that AFC Wimbledon or MK Dons? If you want a lesson in the cant and hypocrisy of football fans you just need to look at the history of your club, whichever one it is. You couldn't get enough local support to maintain a team in Merton yet you bawled and sulked like babies when somebody came up with a plan to ensure the survival of the club by moving it from one dump to another - and did your best to destroy your own club. I don't think Portsmouth fans have any moral lessons to learn from followers of the crazy gang.

  • Comment number 65.

    Blimey - classybandwagoner - you really are very upset by this whole thing arent you. And agree with other posters, the bitterness is just pouring out of you!

    You are bitter that 10,000 fans went to watch their team play?! And you suggest that this was done knowingly to help the individuals running your (old) club into what is now MK Dons and profiteering from a supermarket build?! This is not rational.....

    Also, punishing the fans and the 'new' club of Portsmouth is not going to give you any real justice, it wont stop other individuals ruining other clubs... I sympathise with you as do all real football fans im sure. But the fans of PFC are not the guilty parties here... the moneis generated by the club from transfers, TV, Gate, Sponsors, Prize money etc etc should no way have generated the debt stated by AA at Pompey.

    The people that are guilty of the total mismanagement and therefore the debt at the club should be the ones that are held accountable. This is the only way to stop individuals from creating the mess that we are in now. Punishing the fans and the club will never stop these individuals - just look at Peter Ridsdales involvement at Leeds and Cardiff, that is surely proof enough.

  • Comment number 66.

    Regardless of all else that has been said yet another football club has got away without paying their taxes- they have stolen from every tax payer in this country. Is there any probity in football when even the (supposedly ethical) Cooperative Bank told Sheffield Wednesday not to pay the tax man to avoid cash flow problems during the closed season. I believe that the government ( of which HMRC are a branch) is frightened of the repercussions if a major team goes to the wall. If I don't pay my taxes how long would it be before I was in front of the courts???

  • Comment number 67.

    So the only punishment Portsmouth have recieved is the -9 points last season, which took them from bottom in the league to....bottom in the league. So, no punishment at all then. What about all the clubs who operate fairly but have been relegated or knocked out of cup competitions by Portsmouth playing players they can't afford. How is this in any way fair on them?

  • Comment number 68.

    I'm a Palace supporter, albeit lapsing badly at the moment. I do take slight issue with the chappie who suggested that our points deduction was no punishment at all because we 'almost certainly' would not have been promoted anyway. I believe we are only a couple of points off the play-offs at the time so the deduction did have an impact.

    Nevertheless...Palace have now been in and out of admin twice in the last 10 years or so. It's fair to say that the circumstances this time around were somewhat unusual, more to do with the former Chairman's ego and the almighty mess he got himself into with ownership of the ground than any concerted 'spend money you don't have' campaign. In fact, the horns had been drawn in on the playing side for a couple of seasons, with the squad largely comprising freebies and products of our (excellent) academy system.

    The recnet emergence from administration was, as seems the case with Pompey, greeted with much celebration and back-slapping by the majority of Palace fans. Purely from an emotional viewpoint, I can entirely understand that. But as others have already pointed out, it does leave a sour taste in the mouth when we immediately start bringing in new players once the slate has been 'wiped clean'.

    When negotiations with the CPFC 2010 consortium who eventually took ownership first got underway, there was talk of our CVA offering creditors 2p in the £. I was out of the country during the latter stages of the saga, missed the final confirmed CVA details and have not actually had the appetite to find out what it was. I do hope it was not 2p - if so it's pretty shoddy to be honest. This is no reflection on the consortium, who said from the outset that they were reluctant bidders and I would expect them to negotiate the best deal they could from a business perspective. They are also headed up by genuine Palace fans, which makes a change from Chinese, Syrians, international arms dealers, oil oligarchs, porn barons and the like. Good luck to them.

    But I do have a great deal of sympathy with the likes of Sheffield Wednesday, who for over a decade now have steadfastly resisted the temptation to take the easy route out via administration and instead have made a long-term commitment to honour their debts in full (thus far - they aren't out of the woods yet).

    The Sky and Champions League money has gradually eroded away at the integrity of football for me. I can't remember ever looking forward to a new season less - the thought of another year of hype and histrionics is more than I can bear. The likes of Mourinho being seen by many as some sort of messiah, and the Dutch team's cowardly desecration of their heritage at the World Cup illustrate to me just how cynical the game has become. It is too late now, the damage has been done and I don't think even the likes of Pompey being liquidated would have made Scudamore and those other prats wake up and smell the coffee. Something much more radical would be needed.

    If I had my way I would like to see the Football League just close the door on the Premier League - we won't accept any of your 'relegated' clubs, you're on your own to set up your European league or whatever other rubbish you think will make you more money. That, allied with a new framework governing the financial stewardship of FL clubs - including the abolition of all these shell holding companies set up so that directors could leech money out of clubs (hello Ron Noades) - wopuld at least result in a competition which bears some resemblance to that of the 1980s and before, when teams largely succeeded on merit within a relatively narrow range of financial capacities.

    Sorry about the pretty meaningless rant but I have found it quite liberating to get things off my chest!

  • Comment number 69.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 70.

    PompeyBud, punishing the fans is not the way no, but you also have to think that Portsmouth fans have had more rewards over recent seasons than they should have, at the expense of fans of other clubs who operate fairly (or less unfairly perhaps I should say!)

  • Comment number 71.

    #64, The only way "Wimbledon" survived is because its fans reformed it. The massive loss-making property deal masquerading as a football club in MK wasn't survival in any meaningful sense.

    Lucky that no Pompey fans have "bawled and sulked like babies" all over the internet the whole year long isn't it?

    If you think Merton or Wimbledon is a dump then I can only assume you have never been there.

  • Comment number 72.

    "What I can't understand is how HMRC allow clubs to run up the bills they do, if my business is a day late with it's VAT or PAYE I have HMRC on the phone!!"

    Presumably folk like Pompey just hang up on them. What else can they do that they have not done? When the club was late with a quarterly payment (for a huge amount given the daft size of footballers' wages) they issued a winding-up order.

    HMRC don't have their own Police Force and the real Police have better things to do.

  • Comment number 73.

    Pompey's new co-sponsor will have its logo on their new shirt
    HMRC

  • Comment number 74.

    As a Pompey season ticket holder, I am much relieved at the result and look forward to being able to concentrating on re-building the team.

    However, the way the club had been managed financially was appalling and should not be allowed to continue.

    As clubs are not willing/capable of self-regulation the role of the Premier League / FA also has to be questioned.

    Similarly, why did HMR&C allow the debt to stand for so long and keep increasing?

    It is unfair on all tax payers that "Football Creditors" receive prefferential treatment. Could a possible solution be for the Premier Leage / FA to underwrite a Bond or other financial guarantee to ensure tax and NI are paid. This might focus everybody on the need for robust financial management.

  • Comment number 75.

    #68, Being a "only a couple of points off the play-offs" in January is hardly guaranteed promotion, is it? Even if you were in them, the chance is still only 25%.

    Pompey and Palace have effectively suffered no punishment on the pitch at all for deliberately avoiding many millions in taxes.

    Whilst that continues to happen other clubs will be run like this by other charlatans.

  • Comment number 76.

    Palace's CVA was 1.9p in the pound BTW.

    So that's 1.9% of @£3m (roughly £60,000?) in taxes that they have to pay back, over a long period of time too (usually several years)

    This week they signed a player from Ipswich for around £200,000...

  • Comment number 77.

    Classybandwagoner

    You are still missing the point that your irrational bitterness is blindfolding you from...

    Its the individuals that are causing these problems due to bad legislation and ineffective regulation.

    You can put as many clubs out of business as you want but this wont affect the greed fuelled individuals who have no care for our national sport.

    I am disgusted with what has happened with Pompey and ashamed - but if we do not address the root cause of the problem it will not go away. I am desperate for these people to get their just desterts and hope that the HMRC will 'take this personally'. Please try and look at this pragmatically - its local business, who are also fans, as well as the taxpayer that have suffered the ill gotten gains of the few that legislation supports and regulation does not deter. Its the community and city that has suffered the most from the effects of the farce at Pompey. And just because you suffered, you want to punish them even more?! They have doctors who can help you...

  • Comment number 78.

    #74, "However, the way the club had been managed financially was appalling and should not be allowed to continue."

    It just has been by this decision.

  • Comment number 79.

    #77, "I am desperate for these people to get their just desserts"

    Of course you're not.

    You're going to be happily watching Division 2 football at Fratton Park with no points deduction.

    When's your next big money signing due? Next week?

  • Comment number 80.

    Classybandwagoner - you really do need help.

  • Comment number 81.

    All smells a little fishy to me.....

  • Comment number 82.

    #80, yeah I do, 20 million quid's worth...

  • Comment number 83.

    Why do people keep saying we are diddling hospitals, charities etc? A £13m image rights is nothing to what banks seems to burn every day!

    Those who mention St John's Ambulance, I seem to remember the fans paid that off and another chairty by donations at several home games, was this reported? Nope....

  • Comment number 84.

    @ 79, lets hope so!

    The moral indescretion that that would be, would be small fry to the greater good of you spontaneously combusting in your irrational bitter hatred.

  • Comment number 85.

    My personal views on Pompeys owners, the players who demanded their obscene wages ahead of local businesses and the tax office and most of all, Mr (in)Justice Mann, would get me arrested for simply stating the honest views of the majority.

    This case, above all has proven conclusively just how corrupt football and big business in general is, we all know how Pompey deliberately cheated the system and now they've got away with it.

    What next?
    United already dodge tax because their own debts outweigh their revenue; this may be the case for other clubs too before anyone claims bias; yet they have a turnover that ranks alongside businesses in the FTSE 250 and many/most other clubs don't pay HMRC until threatened to do so.
    HMRC need to force the issue, if it means sueing the FA, PL and any/every individual club to get some justice then they have little choice other than to do so.
    In the end the people who lose out are me and you, it's the nation that gets shafted when taxes aren't paid, not just a sports club.

  • Comment number 86.

    #83, not sure what tax-paying banks have to do with this case.

    #84, yeah, everyone who disagrees with Pompey getting away with this is irrational and filled with hatred. That's the only reason why they disagree...

    #85, even Man United aren't even close to the turnover of a FTSE250 company. Why does every football fan think football is some huge industry? Presumably because of its blanket media coverage.

  • Comment number 87.

    @86

    No, just you.

  • Comment number 88.

    The majority of people in that courtroom yesterday representing Portsmouth FC were not around when the financial mess was going on, suprisingly they've all walked free of the club (including Storrie who's left without a fuss).

    Plus those who say we 'cheat' and get 'special dispensation' then how can we win on all 5 counts? I think we provided a strong case and the HMRC provided a weak and ill-thought out case.

    I want the rules of football tightened, wage caps etc. Maybe even a Bundesliga approach where you have to supply financial evidence before each season.

  • Comment number 89.

    #83 we know the fans paid off the debts. That's not the point. The club also collected charity money from fans, sponsors and other donations and never handed it over to those organisations. This just proves how low down and underhanded your directors were.

    Remember if it wasn't for St Johns Ambulance attending those games you wouldn't have been allowed to play them!!

  • Comment number 90.

    Funny how everyone always wants the rules strengthened after their club has benefitted enormously from abusing them.

    More meaningless platitudes from Pompey fans without a stitch of honesty, decency or humility.

  • Comment number 91.

    Hahahahahaha - Classybandwagoner = hypocrite (quote "honesty, decency or humility) oh dear ones grip of reality is very very loose, someone call a doctor!

    Hope you enjoy yourself at Plymouth tomorrow, or watching on the telly probably arent you!?

  • Comment number 92.

    Congrats to Pompey.Having supported a club who lost out to the taxman after several epic battles,I know the emotions the fans are going through.I think that the fans should be setting up a supporters trust(if there isn't one already in place) to preserve the future of the club in some shape or form.My club did it and I don't know what I would do without being able to see football every Friday night!

    This might help Pompey fans:http://www.corkcityfc.net/home/foras/what-is-foras/

  • Comment number 93.

    Classybandwagonjumper - I think I was actually agreeing with you in my rambling roundabout sort of way. Is it just the fact that I'm a Palace fan that you don't like? I admit that Uncle Ron screwed a good deal of money out of your team as well over the years.

    Just to clarify - I think I am saying (gulp) that it would have been better in the long-term for football if Palace hadn't emerged from administration with a deal to pay off 1.9p in the £ (thanks for clearing that one up - now I really am depressed) - whatever the consequences that would have spelt out for the team I have supported for over 30 years.

    I found your over the top hammering of my side-comment on the points deductiuon a tad harsh as well - of course we had no guarantee of promotion, but it's equally ludicrous to state that we had no chance at all of going up from that position. Can we agree to disagree on that one - all water under the bridge now anyway, and as stated previously I would have been quite ambiguous in any event about another season floundering at the bottom of the Prem.

    I totally agree with you that sympathy for Portsmouth should be thin on the ground, just as I expect it to be for Palace. I think many people make too much play of the link between the 'supporters' and the 'club', which at the higher echelons at least, has long since eroded away. I certainly don't take any pride or satisfaction in our latest escape from administration, in fact I find the whole episode sufficiently embarrassing to ensure that I won't be attending the Leicester game on Saturday (usually an important fixture for family reasons which I haven't missed in over a decade despite being marooned in rural Lincolnshire).

    Thanks for taking the trouble to set me straight though. I may see you on the non-league terraces before too long.

  • Comment number 94.

    Just 24 hours after the court case, Pompey are already at it again...

    Releasing players (young ones) so they can reduce their playing squad in order to bring loanees in....therefore getting around the 'transfer embargo'...

    Just like the 'embargo' in January, when they brought more players in (increased their wage bill after not paying players month on month) Pompey are playing the system.

    You can bet your bottom dollar that the 'replacements' won't be earning less than those released...

    Pompey should have been wound up at the original court case - they were proven to be trading insolvently - but the judge gave them extra time, and *whooooshhh* - administration...

    They're good at administrations Pompey...1999 was great.

    Karma gets you in the end. Can't wait for the Storrie court case.

  • Comment number 95.

    saintly - i totally agree with most of what you say - especially the Storrie court case, I believe So'ton had a similar type in Rupert Lowe?

    However - some of the young players that are being released are on ludicrously high wages (yes, I know...) without the liklihood over ever holding down a first team place.

    I go back to what I have said before - Portsmouth need Southampton and vice versa -each club is greater for the rivalry of the other and if one dies, the other loses part of itself... I want a derby twice a year - nit too much to ask is it, oh and with Pompey winning, which might be stretching things a bit in the future!

  • Comment number 96.

    First, as a Saints fan, I'm glad for the sake of their fans that Pompey has survived.

    Second, I've got to say the US system for sports teams is much better than this. I'm no expert, but I believe it works the way other business franchises work: ownership of a franchise can be withdrawn by the league from owners who don't do certain things, like stay out of jail or pay their creditors. It's then given to another, vetted person or group who've expressed interest.

  • Comment number 97.

    Regardless of what anybody thinks about the legality and integrity of what the Pompey owners did or did not do, I think that this was more about how scared the other Premier League owners were that, if Pompey were made to pay what they owed, that the rest of them might then be made to pay tax their bills too and have their financial dealings put under a microscope. That, I suspect, is why the Premier League was represented in court. They were all scared that they might be next. And, given what has become apparent during this whole episode, for them to reportedly tout the 'integrity of the competition', is frankly majestic in its two-faced arrogance.

  • Comment number 98.

    Good to see the fans happy, although as Matt states, the FA cup apperances and PL years are tainted by the debt. I suppose all of us can claim the FA cup win having paid for it!

    So what happens now, Cotterill claims to want a level playing field, but what is that? Should they spend as much as Scunthorpe or Doncaster on wages or compete with the likes of Boro and QPR?

  • Comment number 99.

    Generally a complicated article but truthful account of behind the scene goings on. There's no way I can revel in any club's insolvency but it does raise questions of prudence. No person (legal or physical) will ever develop with clouds of debt hovering overhead. You'll be too distracted sorting out repayment schedules, sapping energy in the process.

    There might still be a case of salary caps that level the financial playing field a bit. Salary caps would tame the tendency to Real Madrid or Man City your way through the market and distort spending patterns and opportunities. Alternatives would be to adopt socialistic models like what the Bundesliga utilizes to keep tickets down, stay close to the fans, and tame runaway spending.

    It's disheartening especially for funds that maintaining top four status is a product of crippling debt that doesn't match revenue or is pegged on revenue streams. The madness has to stop for the game to develop. Any club outside the top four (as my best example) should not be reduced to selling players or scrapping the bottoms of the market to buy.

    To me, beyond the jargon employed in the above is very sobering reality for all clubs. Anyone can go through the Pompey route. You only need look at Parma and Leeds to realize that.

    A good read overall.

  • Comment number 100.

    I'm happy that the taxman pursues companies that are negligent and evasive with such fervour. After all, it's our money Football needs to enter the 21st Century The goings on at Portsmouth reek of moral laxity and greed from all concerned parties. Clubs shouldn't be able to go into debt, simple as that. And let's not forget, it's not the players wages or players mistakes that were the main problem at PFC, it was the people in the shadows enriching themselves at the taxpayers expense.

 

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