Generic clubs in financial crisis Thread

[Royal Rother]

No.

[exileinleeds]

Don't suppose this will help Mike Ashley's business.


http://news.bbc.co.uk/sport1/hi/footbal ... 487075.stm

[Dirk Gently]

As an aside, the bloke who bought the company name of Pompey's former trading company, Portsmouth Football Club Limited, off-the-shelf and "for a bit of fun" is now being hassled by creiditors who reckon he owes "several hundred thousand pounds".

http://www.guardian.co.uk/football/2010/jan/31/portsmouth-fan-told-pay-club-debts

[Russell Street]

Perhaps they can harass John Portsmouth Football Club Westwood too. Please.

[Baines]

Isn't it an offence to knowingly trrade whilst insolvent?

Not a criminal offence, but a director of a company may be liable to an action by the liquidator of his company if he knows or ought to have known that the company couldn't avoid liquidation, and the company carried on trading anyway. If "guilty" the director can be forced to contribute to the company's assets.

The action is only available in the event of a liquidation, so if the PFC Ltd just goes into administration instead the problem doesn't arise.

[Dirk Gently]

Trading whilst insolvant is one of the things Mike Lewis was found guilty of at Exeter.

http://www.dailymail.co.uk/sport/football/article-458762/Businessman-jailed-Grecians-fraud.html

[Baines]

The article suggests that it was fraudulent trading which was the relevant offence, which is a little more serious.

[Pseud O'Nym]

Can anyone enlighten me as to whether the HMRC cases against Redknapp and Mandaric are criminal or civil matters? The press reports are a tad confusing.

[Dirk Gently]

Can anyone enlighten me as to whether the HMRC cases against Redknapp and Mandaric are criminal or civil matters? The press reports are a tad confusing.

Criminal cases - the charge is "conspiracy to defraud and false accounting" - I think teh same applies to Storrie as well - and it's ll to do with payments which allegedly were received from aborad and which weren't declared.

[Nick Shorey my Lord!]

As an aside, the bloke who bought the company name of Pompey's former trading company, Portsmouth Football Club Limited, off-the-shelf and "for a bit of fun" is now being hassled by creiditors who reckon he owes "several hundred thousand pounds".

http://www.guardian.co.uk/football/2010/jan/31/portsmouth-fan-told-pay-club-debts

This is crazy. That club is absolutely fcuked.

[Barry the bird boggler]

From the Financial Times...

REVENUE RAISES ITS GAME AGAINST FOOTBALL CLUBS
By Roger Blitz, Leisure Industries Correspondent, from the Financial Times

As football's struggling clubs fight on the pitch to stave off relegation, they often face an even more formidable opponent off the pitch: the taxman. No fewer than eight clubs, from Portsmouth in the Premier League to Hinckley United ofthe Conference North Dvision, face court dates following winding-up petitions brought by Revenue & Customs.

Tax experts say Revenue inspectors are getting tougher with clubs' failure to pay on time. "The gloves are off," says Gary Ashford, chairman of the Chartered Institute of Taxation. Four clubs that faced a court date with the taxman this week had to confront their financial woes -publicly. Championship club Crystal Palace entered administration on the eve of a court hearing, incurring a 10-point deduction from the Football League. Chester City of League Two announced it was up for sale for £1, if the purchaser could clear its debts.

The situation at Championship club Cardiff City has led Peter Ridsdale, chairman, to apologise to the club's fans and say he would stay on to see it through its "short-term financial challenges".

Notts County posted a statement on its website that it had managed to convince Revenue & Customs that it had a new investor poised to clear its debts.

Football has a poor record of financial rigour. Its high-profile and chequered history of dubious transfer deals mean clubs' tax problems attract more attention than companies in other sectors, says Mr Ashford. "The Revenue has always viewed football clubs with suspicion," he says. "There is a nosey aspect - they would much rather look at a football club than at other companies.

They would always be very excited to look at a football club." Stephen Herring of BDO says rumours of cash payments in football ensured the taxman's interest.

So did the fact that wages are such a large percentage of a club's expenditure. "The Revenue is a significant creditor," says Mr Herring. Thrown into the mix is a long-running investigation by a specialist team in the Revenue's Solihull office into payments by clubs to foreign players, some of which have been channelled through players' image rights companies. But if the taxman is taking a hard-line approach with football, it may be bound up with the government's own cash shortfalls.

Paul Ellison, football insolvency specialist at RSM Tenon, says the Revenue was "bending over backwards" to help football clubs in 2009, but was now seeking to boost its coffers and no company will be spared, whatever the sector. "There was a distinct change from December. They are being much harder," Mr Ellison says.

Others say that long-standing warnings on football clubs' sustainability are merely being proved correct. "Some football clubs have benefited from HMRC's support, but this can only ever be in the short term," says Richard Fleming of KPMG. "Once 'time to pay' arrangements have been breached - in some cases more than once - it is inevitable that HMRC must take action."

John Beech of Coventry University says more clubs will follow. "Those most at risk are those with benefactors that are personally feeling the pressure in the current economic climate," he says. "An HMRC petition may yet prove to be the straw that breaks the camel's back."

[Comfortably Numb]

As an aside, the bloke who bought the company name of Pompey's former trading company, Portsmouth Football Club Limited, off-the-shelf and "for a bit of fun" is now being hassled by creiditors who reckon he owes "several hundred thousand pounds".

http://www.guardian.co.uk/football/2010/jan/31/portsmouth-fan-told-pay-club-debts

This is crazy. That club is absolutely fcuked.

But

Sunderland defender Nyron Nosworthy will reportedly join Sheffield United in preference to cash-strapped strugglers Portsmouth on Monday.

and more

[TBM]

I was listening to 606 last night and some Bournemouth fan phoned in and made a good point.

They (Bournemouth) still have a transfer embargo cos they're repaying some tax/debt they owe but Pompey have had theirs lifted yet the HMRC have still sought a winding up order.

[Skyline]

I wonder how much of the financial malaise affecting football in this country is down to the fact we have so many professional football clubs. Even if you only include 1/3 of the Conference (and that's probably an underestimate) there are 100 professional clubs in this country. IIRC, in other European countries those clubs below the second tier tend to be run on a semi-pro basis at best, with the attendant reduction in wages and other costs.

Would be interesting to see numbers for other European leagues, to see how the English league stacks up.

[Stranded]

I wonder how much of the financial malaise affecting football in this country is down to the fact we have so many professional football clubs. Even if you only include 1/3 of the Conference (and that's probably an underestimate) there are 100 professional clubs in this country. IIRC, in other European countries those clubs below the second tier tend to be run on a semi-pro basis at best, with the attendant reduction in wages and other costs.

Would be interesting to see numbers for other European leagues, to see how the English league stacks up.

It's an interesting point, though as part of any comparison you would perhaps need to take attendances in to account. Some clubs in the Conference get 3k or more, I'd be amazed if clubs in the 5th tier of Italy, Spain etc

[Rev Algenon Stickleback H]

I wonder how much of the financial malaise affecting football in this country is down to the fact we have so many professional football clubs.

None.

Clubs are in trouble because they are spending money they don't have, and know they don't have. You could halve the number of pro clubs and teams would still spend too much.

[TFF]

The Premier League has confirmed it will hold on to more than £2million from Portsmouth's January transfer revenue to cover debts.

The body has taken the step so that Chelsea and Watford will both receive cash owed to them by the financially-stricken club from the transfers of Glen Johnson and Tommy Smith respectively.

Portsmouth earned £8million from selling defender Younes Kaboul and keeper Asmir Begovic and, once the players' wages have also been covered, the £4million remainder could prove an important lifeline.

The club will use a chunk of the cash to try to persuade HM Revenue and Customs to reschedule the payments on the £7.5million owed in VAT.

However, another creditor has also joined in with HMRC's winding-up petition to the High Court on Wednesday next week.

Grosvenor Basingstoke Properties are claiming they are owed money by Portsmouth though that is being disputed by the club.
Separate dispute

Meanwhile, Portsmouth are also involved in a separate dispute with former owner Sacha Gaydamak over whether they have missed a deadline in paying a £9million chunk of the £28million they owe to him.

It is unlikely however that Gaydamak will take any action to push the club towards administration because that would not be in his best interests in terms of reclaiming his debt.

Portsmouth say they expect to pay the players' wages for January "in the next day or two".

The latest move by the Premier League comes after it also handed over television revenue payments to Pompey's creditor clubs last month.

http://www.skysports.com/story/0,19528, ... 38,00.html

Will Pompey still be around in eight days' time?

[PieEater]

Portsmouth earned £8million from selling defender Younes Kaboul and keeper Asmir Begovic and, once the players' wages have also been covered, the £4million remainder could prove an important lifeline.

Shurely that's not £4m for a months wages!

[TFF]

Portsmouth earned £8million from selling defender Younes Kaboul and keeper Asmir Begovic and, once the players' wages have also been covered, the £4million remainder could prove an important lifeline.

Shurely that's not £4m for a months wages!

I read it as £2M, given that the PL kept £2M back for Watford and Chelsea. Even so, £2M

Though I wasn't aware that transfer money went via the Premier League. Is this special measures for Portsmouth, a condition of lifting the embargo?

[TheMaraudingDog]

MUST seem quite confident that a supporter led takeover can happen as soon as this summer, they believe they have the people and the money in place.

Meanwhile IMUSA seem a tad more realistic thinking a deal can be done with investors meaning a trust would hold 25% of the shares.