The BBC reports that Portsmouth will today become the first Premiership football club to enter administration (equivalent to Chapter 11 bankruptcy protection), and for their endeavours the club has been described as “dysfunctional”, with the suggestion that Pompey’s business methods had gone “against all good governance”. This was the take of accountant Nick O’Reilly, who recently had the dubious pleasure of looking over their books.
Portsmouth will have nine points deducted from their already abysmal 16-point haul for the entire season thus far, and hence are almost certain to be relegated (demoted) to the Championship, with the associated financial costs.
This is a club that, only 15 months back came within seconds of beating AC Milan. However, like Leeds United, it was a club that bought big-money players on the basis of on-field success, and when that success began to dry up (because football is like that), things began to go wrong. It’s been like one of those slow-moving action scenes in a movie, Portsmouth’s degeneration into financial meltdown. Their manager Harry Redknapp jumped ship almost 18 months ago now, with rumours then that Pompey’s finances were terrible and that Redknapp was moving to avoid being associated with the ugly downturn in playing fortunes that was almost certain to follow.
And as always, the focus will be on the fans of the club, who have to suffer the uncertainty of knowing whether their club will continue to exist. I have to admit, as the supporter of a team struggling against relegation to League Two (the fourth professional English division), I have only partial sympathy with the supporters: They were taken on a wonderful ride through the upper echelons of English football, but Portsmouth has never been, nor will it ever be, a big club. The local area doesn’t have enough to provide the kind of fan base that can support a big football club.
Nonetheless, there is the point that fans tend to be the ones left suffering in all these kind of situations (Leeds United, Notts County, Chester, Newcastle,…), where awful decisions are made by people in board rooms that affect the team’s fortunes for years and even decades to come. But surely that’s business? That’s why it’s important to appoint good managers and good CEOs and so on, and not be duped by the bad ones that are actually asset strippers. If it’s not supporters of a football club, it’s recipients of pensions, it’s loyal buyers of some product, that suffer.
The example of Notts County is particularly telling, where even the supporters trust sold its shareholding for nothing to Munto Finance, who then “disappeared off the face of the earth”. Will people ever stop being fooled, or will the incentives for foolers to stop fooling ever dissipate? Unlikely, while football continues to attract so much TV money…