Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of! Football Finance

Portsmouth: the continuing soap

Posted by John Beech on February 7, 2010

One of my friends, who is also a colleague and a fellow Pompey fan, always says that supporting Pompey reminds him of a John Cleese quotation: “I can cope with the despair. It’s the hope I cannot handle“, which reflects rather well my personal feelings at the moment.

The club of course is facing its fourth owner this season, Balram Chainrai. The circumstances of him acquiring ownership are unusual in the football sector, but certainly not unknown in the wider business world – the club had failed to repay a loan to Chainrai, and he exercised an option in the contract of the loan to claim ownership (of 90% of the shares in the club) (1). Unlike his predecessors he has readily admitted that he has no interest in ownership and is looking to sell the club.

Not surprisingly this refreshing honesty has caused ructions. A representative group of five supporters have met with the Premier League to discuss their concerns (2), and the Supporters Direct website reports the meeting (3) thus:

Fans from the Pompey Supporters Trust and SOS Pompey campaign were today promised a ‘detailed investigation’ into the new owner of Portsmouth Football Club during a lengthy meeting with Premier League CEO Richard Scudamore and Mike Foster.

The League promised that Mr Chainrai will face a detailed investigation into his ownership of Portsmouth FC including a face to face interview with the Premier Leagues Business Intelligence Specialists.

The meeting, which followed correspondence from the Trust to the League expressing serious concerns about the Club less than a week ago, was described by the Trust as ‘highly productive’, with the Premier League announcing a number of specific measures it intends to take to ensure the effective regulation of Portsmouth Football Club in future, including the right to intervene and administer the club should it prove necessary.

In addition, the Premier League will consider our suggestion of the possibility of onsite day to day scrutiny of Portsmouth’s operations for an interim period.

The Trust went on to say “We are reassured that the situation at Portsmouth Football Club will continue to be a matter of the highest priority within Premier League headquarters. Mr Chainrais’ ownership of Portsmouth Football Club will face an unprecedented level of scrutiny and any further failures to fulfil the ordinary obligations of a Premier League club will bring swift and immediate action.”

My heart welcomes these reassurances emanating from the Premier League, but my head has a number of problems with all of this:

  • To submit Chainrai, and Portsmouth, to particularly strict scrutiny suggests that there is some flexibility in the application of the Premier League rules & regulations and their Fit & Proper Person Test.  This is simply unacceptable.  In any case, if the Premier League does act particularly rigorously, it leaves them open to legal challenge from both Chainrai and the club itself.
  • It is not the application of the rules & regulations and the Test that is at the heart of the matter – it is about the effectiveness, the actual strength and weakness, of those rules & regulations and the Test in particular.  Clearly they are deficient, and getting excited about how rigorously they are applied is simply avoiding this, the real issue.
  • It is a case of shutting the stable door after the horse has bolted.  If a club’s board is to expose itself to the risk of losing ownership through defaulting on a loan, it is then, when such a loan contract is signed, that the Premier League should be scrutinising the Fitness and Properness of the potential new owner, not when the loan is actually defaulted on.

The whole process seems to have drifted into a dysfunctional approach.  If Chester City had taken a loan from the Bank of England, and the latter had acquired ownership of the club through the Vaughan family failing to keep up repayments, would the Conference be focusing their attention on the financial suitability of the Bank of England as a club owner?  (Actually, probably best not to think about the answer to that one, but I’m sure you get my drift!)

If Chainrai is quickly successful in finding a new owner, he will become a tiny footnote in the club’s colourful ownership history.  It is Ali Al Faraj who will be remembered, and how he somehow passed the Fit and Proper Person Test.  It is the next owner who worries me – Premier League, please help me to cope with the hope by doing a fit and proper job of scrutiny with him.

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