Join Date: Oct 2005
Interesting article about the terrible finances of Portsmouth and the rest of the EPL
On Edge of Extinction, Portsmouth Dreams
By ROB HUGHES
Published: February 14, 2010
LONDON — If England’s Premier League is the barometer of financial health at the top of the international sport, then soccer in 2010 is living a lie like some of the world banks up to 2009.
It seems like only yesterday that the English chided Michel Platini, the president of UEFA, for telling them how to run their business. Platini’s proposals to bar from the Champions League clubs that paid out more than they could earn were greeted with accusations that, as a Frenchman, he was envious of the Premier League’s model for success.
Some Luddites are still saying that. They give in evidence the fact that Manchester United, Chelsea and Arsenal are all still in the Champions League, which resumes this week, and any of them could win it.
Chelsea is totally beholden to its Russian owner, Roman Abramovich, who says he seeks no return — other than trophies — for the $1 billion he has provided the club. Manchester United is saddled with debt, courtesy of the Glazer family of the United States. Arsenal is also likely to go American, just as soon as Stan Kroenke decides to buy the last few shares he needs to beat the Russian Alisher Usmanov for control.
But the real story of English soccer is Portsmouth.
Pompey has been the flagship team of the naval base in southern England since 1898, but it was declared insolvent by a court registrar last Wednesday. It owes more than £12 million, or almost $19 million, to the British treasury, and many millions more to its players and to the clubs it purchased them from.
The creditors, especially the government, threaten to close Portsmouth within a month. This would destroy two competitions because not only is Pompey a member of the 20-team Premier League, it also reached the quarterfinals of the F.A. Cup over the weekend.
The defiance of its players and fans is what sport is all about, and a mockery of finance. Portsmouth is living on borrowed time, with borrowed money, and even borrowed players. Their monthly paychecks come, like the winds, with no certainty but their spirit saw them through Saturday when Portsmouth won, 4-1, at Southampton.
It was a victory nobody could have dreamed up when Southampton, the closest neighbor and longest-standing rival to Portsmouth, dominated the first hour’s play. At times only David James, Pompey’s 39-year-old goalkeeper, kept his team in the Cup.
James made two acrobatic, heroic saves. He berated his defense time and again. He was defying the sway of the contest the way that Portsmouth is defying the gravity of its situation.
Then Avram Grant, the Israeli who agreed to coach the destitute club three months ago, put on Quincy Owusu-Abeyie as a substitute.
Portsmouth does not own “Quincy.” It doesn’t own half its players. Rather it has them on loan, in Owusu-Abeyie’s case from Spartak Moscow.
Very much a traveler, Owusu-Abeyie was born in Amsterdam, opted to play for his parents’ native Ghana at the World Cup, and at 23 has played on the wings for Arsenal, Spartak and, on short-term loans, for Celta Vigo, Birmingham City, Cardiff and now Portsmouth.
Many clubs admire his skills, but few find him consistent enough to give him a permanent home. But within minutes of stepping onto the field Saturday, he was too swift for Southampton’s defense, and his composed, almost nonchalant low shot curled its way around the home goalie.
Southampton leveled, but moments later Owusu-Abeyie showed a glimpse of his craft when his pass released Aruna Dindane to score Portsmouth’s second. Then Portsmouth turned its meeting with its old foe into a rout, with Nadir Belhadj and Jamie O’Hara, another player on loan, striking goals.
The 4-1 result suggested a chasm between teams not 30 minutes apart by road. It put Portsmouth into the last eight of a competition that used to mean almost as much to the English as their precious Premier League.
Time, and the advent of the Champions League, changes that perception. Manchester United and Arsenal almost willfully gave up their places in the F.A. Cup by fielding understrength lineups and taking losses that allowed each of them to have a free weekend before United meets AC Milan and Arsenal plays Porto in Europe this week.
Why would they sacrifice one tournament for another? Because the Champions League offers approximately 10 times the income. This year it is worth an extra 33 percent in television and marketing revenues, and the big clubs are chasing the money.
It becomes a spiral of ever-expanding excess. The teams need the cash to pay the players more than the real income of domestic soccer alone, and UEFA, while denouncing the spendthrift tendency of the clubs, is the keeper of the purse that makes some of them do it.
There are exceptions. Chelski does not depend on earned income so long as it has Abramovich. When he arrived at Chelsea in 2003, the club was the Portsmouth of its day. Abramovich absorbed its debts with rubles he hopes will one day deliver the Champions League.
He hasn’t won it yet, but the F.A. Cup is currently in Chelsea’s trophy cabinet. On Saturday, Didier Drogba needed just two minutes to score as Chelsea devoured Cardiff City, 4-1. It was a routine victory against another club at the mercy of the British Exchequer.
On Sunday, two other clubs fighting financial ruin, Crystal Palace and Notts County, had mixed fortunes in the Cup. Palace is in administration and has been forced to sell players. But with an extraordinary goal struck from 36 yards, it held one of the favorites, Aston Villa, 2-2, ensuring a lucrative replay.
Notts, a club sold last week for a nominal £1, or $1.57, because it is loaded with $2 million of debt, was hammered 4-0 at Fulham.
Meanwhile, Portsmouth slowly sinks. Two years ago, it won the F.A. Cup, but Pompey’s owner then, Alexandre Gaydamak, the son of the Russian Arcadi Gaydamak, over-committed the club in pursuit of more success.
His team manager, Harry Redknapp, persuaded Gaydamak to spend like there was never a tomorrow. Redknapp has found another team to manage, Tottenham Hotspur. Gaydamak tried to sell, to dubious buyers who have come and gone. The creditors, including Gaydamak, are in the courts for millions that Portsmouth cannot repay.
Even Grant, the team’s Israeli coach, is dreaming. “We’ll keep fighting for as long as we have a chance,” he said Saturday. “The court is not in my hands, but I have the feeling that the court understands that football is not a normal business, and many people — fans, players and staff — are suffering when it is not their fault.”
The Inland Revenue, representing an indebted government, may not be so sanguine. The fear is that English soccer is a pack of cards waiting to tumble if one big club goes bust.
Pretty interesting. I didn't know the big clubs were in such bad financial shape. Compare that to the obscene moneymaker that is the NFL, and I really can't understand it.