By Micah Hall
26 August 2012
The long saga of Portsmouth football club’s turbulent ownership drama is set to reach a climactic denouement this week, as administrator Trevor Birch chooses between bids from former owner Balram Chainrai and the Pompey Supporters’ Trust.
If the Trust succeeds in taking control of their long-suffering club, it will become the largest community owned club in the country.
During Pompey’s meteoric rise to the Premier League and FA Cup winning glory, and their equally cataclysmic descent into the lower leagues, the one constant for press and public has been the supporters: loud, passionate and fanatically dedicated on the field, quietly professional and determined off it.
Pompey Supporters Trust was formed in 2009 with the express intention of taking ownership of Pompey out of the hands of speculators and rebuilding the club.
Since Sasha Gaydamak’s regime had their money supply choked off, the club has seen a procession of colourful characters come and go, leaving the club perennially bankrupt and somehow in debt to them all.
They took the risk and we paid the price.
There is a lingering perception that Pompey somehow got away with something.
In fact 29 points have been deducted, two bankruptcies and two relegations have followed. Pompey have no players barring the handful signed in desperation on one-month contracts to ensure we actually had a team to take the field.
Our youth prospects have been sold for a pittance. The crucial development land needed to rebuild dilapidated, crumbling Fratton Park has been lost, a casualty of the bickering between squabbling former owners.
‘Got away with it’ to Pompey fans sounds a bit like “crucifixion is adoddle”.
Which brings us to the present. Portpin, the company owned by Balram Chainrai and Levi Kushnir, came into the Pompey saga in 2009, when they made what might be the worst investment decision in the history of Pompey, or possibly, the world.
They decided to lend £17m to Ali Al Faraj, a man who they had never met and who may not even exist. They admitted their motivation for this was to make a short-term profit.
Of course, the money was immediately consumed by the roaring flames of debt that were licking around the club in full view of the world.
What induced Portpin to loan money to a bankrupt football club is a matter of speculation. What is certain is that their money is gone. Twice they have taken ownership of Pompey using their secured debt: twice they have walked away with even less money. So now they seek a renewed ownership of Pompey. Or do they?
They equivocated publicly about whether they would once again seek to resume ownership. Eventually, predictably, they submitted a bid. Following the reaction of supporters they withdrew it again, citing “the negative reactions and criticism of fans”.
Jubilation exploded across the internet. Hundreds of season tickets were sold the following day, taking the total over 8,000. Almost 18,000 fans watched the season opener against Bournemouth, despite most buying tickets when the club had no players at all.
Celebrations were abruptly cut short when the following week Portpin claimed to have been invited to resubmit their bid following discussions with Portsmouth City Council, administrator, Trevor Birch, the Football League and PFA.
Portsmouth News reporter Emma Judd swiftly debunked this claim using the phrase, “they all roundly denied it”, and the hard pressed Pompey fans again showed their wit and chutzpah by ensuring the twitter hash tag #THEYROUNDLYDENIEDIT was trending in the UK.
So now Trevor Birch is left on the horns of a dilemma that must make him look back fondly to his days as CEO of Ken Bates Chelsea, when all he had to worry about was beating Liverpool to the Champions League or going into administration.
Of course, the criteria for making this decision are not football ones or the answer would be obvious. However, surprisingly, the business decision is just as obvious: Portpin’s ambition is to somehow get their money back within three years according to Levi Kushnir.
The fact that Pompey are worth £2m, have no players, a 10-point deduction and Portpin intend to operate on a League 2 playing budget of £1.5m hardly suggests any obvious or reasonable road to recouping large sums.
Meanwhile, the Pompey Supporters Trust, has quietly, methodically, professionally, built a compelling business case. Raising £2m in deposit backed pledges from supporters, £1m from local businessmen and a £1.5m loan from Portsmouth City Council is a Herculean effort. It shouldn’t be that surprising though.
The Trust contains a series of highly professional and successful local businessmen and is advised by high-calibre insolvency professionals and
legal experts. As one online sage pointed out, they aren’t sitting in a pub whirling scarves around their heads.
These supporters and business people have shown personal financial commitment that is simply eye-watering. And this is the key: the difference between the two bids is that the Trust aims to put money into Pompey with no expectation of ever seeingit again.
Their plan recognises the long struggle ahead: to rebuild a shattered, toxic brand. To create a stable squad, academy and revenue. To win over sponsors who want to be associated with a good news story. Eventually, to rebuild Fratton Park to allow Pompey to bury the old ‘sleeping giant’ tag that has drawn idlers and speculators to the club like moths to a flame.
Realistically, only the Trust, guided by genuine love for the club, have shown any appetite for the task of running Pompey according to a sensible business plan: long-term investment plus years of hard work plus customer goodwill equals a better business.
The final, and most compelling reason for Trevor Birch to choose the PST bid: his job is to do the best for the creditors.
Portpin may be secured creditors, but what they want and what is good for them may not be the same thing. They are being offered £3m to walk away. It’s impossible to see how Portpin taking over will generate more money for them.
Not a penny of Pompey’s 2010 Creditors Voluntary Arrangement was paid. If Portpin return a large section of the paying public will once again withdraw their custom. Declining gates, declining revenues, a League 2 budget and a three-year exit plan simply does not reasonably
equate to an eightfold increase in the clubs value, or indeed any increase.
There is not one single shred of evidence to suggest that this toxic brew will result in Pompey’s long-suffering creditors, including Portpin, being more likely to be paid.
This utterly complex, baffling, infuriating saga finally comes down to a very simple premise: everyone benefits from a stable, and growing Pompey. No-one benefits from an unseemly scramble for the last few scraps on the poor man’s table.
The only people who propose a sensible, long-term vision for Portsmouth Football Club are its supporters, business and local authority. For football and business reasons, for fans and creditors there is only one realistic option for Birch.
Any other decision will surely find us all back here again, all too soon, still trying to understand what the hell is going on at Pompey.
Micah Hall is a Portsmouth supporter who blogs regularly at FansNetwork (access an archive of his work here) (He’s on Twitter here)
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