Birch bemoans ‘fragile’ Pompey business model

120578-959_BARNSLEY_POMPEY_SR_18/2/12'Action from Pompey vs Barnsley at Oakwell.'Pompey administrator Trevor Birch at Oakwell.''Picture:Steve Reid (120578-959)
120578-959_BARNSLEY_POMPEY_SR_18/2/12'Action from Pompey vs Barnsley at Oakwell.'Pompey administrator Trevor Birch at Oakwell.''Picture:Steve Reid (120578-959)
Pompey's Jack Whatmough heads at goal against Oxford United. Picture: Joe Pepler/Digital South.

Picture gallery: Oxford United 3 Pompey 0

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Portsmouth Football Club – the first to fall.

As misfortune would have it, they were also the second to take a tumble.

Yet many others are waiting in the wings while the Blues continue to dominate the stage.

According to Trevor Birch, the demise of Pompey reflects ‘fragile’ club models which are becoming common place in football.

The high-deficit approach is everywhere.

Chelsea, Manchester City and QPR are just some also relying on benefactors to continue plugging debt abysses.

It is a lack of self-sufficiency which, ultimately, has cost Pompey dear – twice.

First came Sacha Gaydamak, heralding in the spiralling debts which eventually saw the club enter administration.

Then arrived Convers Sports Initiatives, resulting in the Blues entering administration for a second time in two years.

These remain depressing times for Pompey fans as they seek a sixth different owner since August 2009.

Other clubs, though, operate the same policy which has led to such a scenario.

And, according to Birch, these remain just as susceptible.

The Blues’ administrator said: ‘It is difficult to make a definitive statement (about what has gone wrong) because I am only talking subjectively from what I have seen from the outside.

‘But, undoubtedly, the fragile nature of the ownership structure seems to have caused the club problems.

‘When you are running a high-deficit model, which they (Pompey) have done, it is totally reliant on the strength and stability of those owners.

‘That seems to have been a bit fragile.

‘You have to have somebody who is continually pumping money in on a guaranteed basis and it doesn’t seem to have had that.

‘It always seems to have been robbing Peter to pay Paul in the way it has been run.

‘You cannot just say it is here. Look at other clubs running high-deficits using the benefactor model.

‘Chelsea and Manchester City, you could say, if those owners walked away they would be in a different position.

‘These guys go and that’s it. If an equivalent funder doesn’t come in then the actual basic business model doesn’t work.

‘So you will have a liability rather than asset which is going to lose you X number of money a year.

‘That, in my opinion, is the unstable nature of football at the moment.

‘We have the greatest league in the world in the Premier League but you could say there is an encouraged instability and it is not self-sustainable.

‘It is reliant on these mega benefactors.

‘Which is why Uefa and the authorities are trying to bring prevention in by way of the Financial Fair Play regulations.

‘Rather than cure it, it is about prevention.

‘If you have to break even then maybe clubs don’t get into this situation. It has to be a level playing field.’

The Financial Fair Play regulations take effect in 2013 and permit losses of up to £37.5m over a two-year period, with the aim of eventually breaking even.

In a recent report among Europe’s top clubs, 78 had spent more than their entire income on wages.

One of which came from the Premier League in Manchester City, recording a loss of £121m.

And Birch believes such a high-deficit approach adopted by them and, to a lesser degree Pompey, is perceived as generating an unfair playing field.

He added: ‘The reason why you get a 10-point deduction for administration is not because you have put the club into debt and people haven’t been paid.

‘It’s the fact you have been able to pay players more, therefore getting better players and distorting the transfer market by inflating transfers.

‘Therefore, the performance on the pitch has been distorted.

‘The punishment is not about good husbandry or good housekeeping, it is about keeping a level playing field in terms of competition.

‘At the other end of the spectrum, where is the difference with the owner putting money in the team?

‘What that also does is distort the playing field, but there are no sanction against that so that’s why they are trying to bring in Financial Fair Play.

‘The 10-point deduction is about penalising those clubs trying to compete against major benefactors.

‘Otherwise, the natural position of some clubs – if they didn’t over-extend themselves – might be in the lower league.’