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)
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.’
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Comments
There are 82 comments to this article
Page 1 of 6
saintern
Thursday, February 23, 2012 at 10:23 PMStotle still banging on, if you care to read my initial thread, please explain at which point i was "gloating". I was actually saying i hope you guys get out of it ok. I assume you dont do a lot of reading then.... and the fact you keep banging on about "winning the league and this must get to us".... reality check, it was in the 40's, i am actually chuckling that you think we sit here worried about the fact you won something 70 years ago. If i was you, oh well, you may win the Blue Square soon, will you bang on about that all day long.
Exile in Somerset
Thursday, February 23, 2012 at 08:03 PMSeedhouse, the way football is in this country means that it will happen again and again. Promotion to the Premier League is worth so much money that clubs gamble, paying over the odds. SFC have spent money on players this season as have West Ham, Leicester, Cardiff et al. To recruit these players costs a lot of money in transfer fees and wages. What happens when the gamble fails? They can't all succeed.
Seedhouse Rides Again
Thursday, February 23, 2012 at 05:59 PM@77. I think that's what everyone has been trying to say. You got out of jail, wrote your debts off, clean sheet etc etc and then did it all again - albeit on a smaller scale. I've lived in various cities around the country and when I speak to old friends who support those teams - Wolves, Forest and Bolton - they all say the same thing and don't think you deserve yet another chance. That's not me winding them up by the way, that's their genuine reaction. In Birch you've got the one man who can save you and I'm sure if he was brought in earlier and whilst the window was open he would definately have done so. He may still do so but you've tied his hands behind his back, blindfolded him and kicked him in the nuts - in a manner of speaking!
Mike Darke
Thursday, February 23, 2012 at 05:50 PMIt would be great if we could just read sensible comments on here, instead of having to put up with the tiresome,childish and irrelevant rubbish from those who just want to trade insults, whether it is from either Pompey or Southampton fans.. Its all so pointless, especially in our current predicament. Southampton have come through some lean times themselves and are now doing really well. Good luck to them, as it has got nothing whatsoever to do with us.
bagmann
Thursday, February 23, 2012 at 05:01 PMI think it unfair when other fans say we should have realised we were trading beyond our means, and we cheated other clubs by getting to a cup final. When you have a rich owner (which clubs haven't) putting up money you are led to believe they are putting their own money into the club. In the case of CSI, when they said go get a few players in to make yourself competetive, it was fair to assume CSI were stumping up the cash. It has become clear in hindsight that nobody was putting their own cash into PFC, they were just loaning the club money it couldn'y afford to borrow. How many of us realised that at the time? When a new owner surfaces it might be well to remember we are probably going to go down the same route again.
Exile in Somerset
Thursday, February 23, 2012 at 03:54 PMAnyone who watched Pompey when we had players like Diarra, Muntari, Campbell and Defoe knew that we were being massively subsidised and if we're honest we knew it couldn't go on (Mr Redknapp certainly dissppeared as soon as the tap was turned off!). What I can't believe is that having got out of the situation and with a new owner we did it again. For that reason alone it was quite right that the board were all forced to leave yesterday. I just feel sorry for the ordinary workers who kept our club running on a day to day basis who no onger have a job. Best of luck to all of you.
Removed by moderator
Thursday, February 23, 2012 at 03:53 PMPhil Ashworth 4, post 62, Osgood left us in 1977, the rest of your post is difficult to understand, and complete bullsh1t, any chance of re-writing it in plain English? might be able to help you then :)
Exile in Somerset
Thursday, February 23, 2012 at 03:47 PMPost 66 - Great to read your comments. I';s a massive shame that the extremely vocal, but very small minority of fans of any club ruin the reputation of all of us. I would hate to see Southampton in the Premier League as it would put you back above us (a balance I thoought we had put right) but I certainly don't want any club with good supporters go out of business. Maybe some of the people of all persuasions on this board who just want to write vile comments and insults could learn... - or just go away.
Pompey Dave from Devizes Wilts
Thursday, February 23, 2012 at 03:26 PMIts nice to see Trevor Birch providing us with some honest answers and figures. Keep talking Trevor and keep us all informed at what is going on. Something no one including Lampit has give us over the past 2-3 months. Albiet other than Lampits phone call to fantasy radio last Monday
Harry Stotle
Thursday, February 23, 2012 at 03:04 PMPost 71 It's the tone we dont't like Seedhouse....and the manipulation of the facts. I only quote the honours because it cuts to the chase when the silly patronising stuff starts coming in. It is an undeniable fact whereas talking about who is to blame can go on all day and invariably ends up with us being told to sit on the naughty step by self-righteous red tops. You might gather this is a sensitive time!
Harry Stotle
Thursday, February 23, 2012 at 02:57 PMPost 69 - Spot on Phil
Seedhouse Rides Again
Thursday, February 23, 2012 at 02:47 PM@68. I'm listening Harry. Don't think I've posted anything silly and have tried hard to rise above the comparison between the clubs thing, although I must admit failure on that one. Although it does take two to tango. Every time someone tries to be objective about the here and now yourself and others start quoting 2 cups and 2 titles and this and that and before you know it the whole thing collapses into a row again. Actually, scan back through the thread and then say whether it's you or me that's been provocative.
Harry Stotle
Thursday, February 23, 2012 at 02:43 PMSeedhouse - Read post 66 and try to learn a lesson about the kind of red top posting that gets our respect. Nice sentiment Local Hero expressed without a hint of moral condescension.
Phil Ashworth 4
Thursday, February 23, 2012 at 02:30 PM@58 Steve - couldn't agree more....watching all the soton posts ..we roughly get one sixth support...great..........one sixth outright verbals,..accepted........one third condescending or sanctimonius...pathetic........and the other third just pretend to be Pompey fans that either state BS or just try oh so subtle wind ups.....sad............I have never been to their site.....and can only imagine that would only want to go there for a bit of a light hearted wind up.....which must explain why most of the "fans" on here do the same in a multitude of different guises.....therefore a lot of the stains come on here with a hidden agenda.........which eventually gets "found out"......Congrats off to all the good saints fans though.....
Harry Stotle
Thursday, February 23, 2012 at 02:22 PMPost 61 - Well said B_army. Are you listening Seedhouse?
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