Portsmouth Relegation/Wind-up Query

MementoMori

Just wondering if Portsmouth are wound-up (which there is a distinct possibility of happening) what will happen bets on the premiership, especially as regards relegation.

Basically according to rule 29 of the premier league if Pompey were wound up then only two other teams would be relegated and all of Portsmouth's results for the season would be scrubed.

That would leave the table looking a fair bit different (see below)

Would give Chelsea a nice little bump forward and would mean Pool going 3rd ahead of Arsenal. Would pretty much end Villa's chances of CL as they would be 8 points behind Arsenal on 4th with the same number of games played.

Down the other end looks like West Ham would be the hardest hit.

Even aside on what would happen relegation bets, would surely affect the prices at the top of the table in terms of the league, especially given the difference to Utd's Goal difference, when they would go from being one goal ahead currently to 6 goals behind as well as losing 3 points. It would surely positively increase Liverpool's chances of getting a CL place and negatively affect Arsenal's chances( especially if Liverpool won tonight) I doubt the market has taken this into account already so could it be worth adjusting bets on the basis of this. From what I've read about Portsmouth I have very little faith in their ability to survive until the end of the season. Assuming they do go bust, it could well be a smart play to back Chelsea for the title, Liverpool for Europe and West Ham for relegation.

I would assume there would be a knock-on effect in terms of top scorers market as well.


P W D L GD PTS
Chelsea 24 17 4 3 39 55
Man Utd 23 16 2 5 33 50
Liverpool 24 13 5 6 19 44
Arsenal 23 13 4 6 23 43
Man City 23 11 8 4 13 41
Spurs 24 11 7 6 19 40
Villa 23 9 8 5 19 35
Birm 23 9 7 7 -1 34
Everton 23 7 8 8 -3 29
Fulham 24 7 7 10 0 28
Stoke 22 6 9 7 -1 27
Black 24 6 7 11 -20 25
Sund 23 6 6 11 -10 24
Wigan 24 6 6 11 -19 24
Hull 24 5 8 11 -25 23
Burnley 24 6 5 13 -23 23
Wolves 23 5 6 12 -21 21
Bolton 23 4 7 12 -18 19
WestHam 22 3 8 11 -12 17

radharc

Brilliant post, definitely something that layers mighn't have taken into account. When will the final decision be made on Portsmouth and what do you reckon is the chances of them being wound up?

darsar

radharc wrote: »

Brilliant post, definitely something that layers mighn't have taken into account. When will the final decision be made on Portsmouth and what do you reckon is the chances of them being wound up?

+1, well alerted. Be very interesting to see what happens the layers money.

Kod-box

court case is tomorrow week.

MementoMori

I thought I'd bump this in case some people hadn't seen it.

Article from last night - so 4pm today the deadline for lodging their papers.
Given there doesn't seem to be any word of a new investor I'd imagine the end is rappidly approaching for Portsmouth.

On the parachute payments for relegation, Portsmouth approached the league to try and get this paid early in order to improve their case but the league basically told them no.

Portsmouth ready to deliver court papers that will decide their future
• Papers to outline complete financial position to high court
• Relegation-threatened club understood to owe up to £55m
Jamie Jackson guardian.co.uk, Tuesday 16 February 2010 20.34

Portsmouth have until 4pm tomorrow to lodge the statement-of-affairs document demanded by the high court. The papers will be vital in determining whether the club can convince the court that it should avoid being sent into administration or liquidation.

The latter would mean that Portsmouth would no longer exist and this season's league results would be expunged. The petition was brought by Her Majesty's Customs and Revenue, who are demanding £7.1m in unpaid VAT.

The SOA was demanded by the registrar, Christine Derrett, so a picture of Ports*mouth's financial position, which will include future income streams and commitments, can be understood by HMRC and the court. The papers are being drawn up by *Vantis, the accountants employed by Ports*mouth. Once provided they will be examined by HMRC and the judge before the hearing, which is on 1 March.

The SOA will include the club's creditors. Portsmouth owe around £30.5m to the former owner Sacha Gaydamak – though beyond last month's unpaid £9m instalment the remainder is not due until 2012 – plus at least £17m to the current proprietor, Balram Chainrai, for loans he sourced to the former owner Ali al-Faraj. When interest accrued on the loans is taken into account the total owed to Chainrai may rise to £22m.

Portsmouth's total liability to HMRC, thought to be around £12m, will be included in the SOA. It is understood the club place their total debt at between £50m and £55m. Other commitments documented should include money owed to player agents and future transfer instalments, each thought to be six‑figure sums. The club's wage bill – £1.8m of it for players – will also feature, as should some more modest commitments, including payments to maintain the club's website and matchday stewards.

Regarding income, they can point to future TV revenue from the Premier League this season,and parachute payments of £11m, should they be relegated, as seems likely.Avram Grant's team are eight points from safety. Ports*mouth also hope to attract new investment before 1 March to enhance their financial position before the court.

http://www.guardian.co.uk/football/2010/feb/16/portsmouth-debts-high-court-administration

SantryRed

I think the Premiership will make sure they finish the season tbh.

MementoMori

More details on the state of play for Portsmouth.

Can't see them seeing the season out.

Interesting that what the financial expert is saying in the piece below was pretty much exactly what the financial expert on Sky said last week.

Portsmouth on brink of insolvency with £22m needed to finish season
• Portsmouth face bankruptcy unless funds are found
• Balram Chainrai could acquire ground freehold and charge rent
Jamie Jackson guardian.co.uk, Saturday 20 February 2010 Article history

The full extent of Portsmouth's dire *financial position can be revealed today after the Guardian has learned that the club are set to be declared insolvent unless they can demonstrate to the high court on 1 March that they can bring in a cash *injection in excess of £20m.

A total of £22m is required for Portsmouth to continue as a going *concern until the end of season, otherwise they will fold. However, this depends on the Premier League's bottom-placed team *finishing 17th as all the club's forecasts have been based on avoiding relegation. If the club finish 20th then around £26m will be required to keep Portsmouth afloat. Even if Portsmouth were to enter administration, a total of around £14m would be required.

In a move that will anger fans, sources also claimed that the owner, Balram Chainrai, will be sold the freehold of Fratton Park to pay off £10m of the £17m the Hong Kong businessman is owed. He would then lease it back to the club for a minimum of 15 years for a rent of more than £1m for the first year, before the rate rises.

Portpin, Chainrai's holding company, will also consider sourcing finance should administration be entered. This offers the firmest evidence yet that Portsmouth are preparing for such an eventuality.

The stricken south coast club are due to return to the High Court on 1 March to hear the winding-up petition served before Christmas by Her Majesty's Revenue and Customs.

The statement of affairs, prepared by the accountancy firm Vantis, was received by the court on Wednesday and it is currently being examined by HMRC and its lawyers, in addition to the judge who will adjudicate the case.

On 1 March the statement of affairs will be heard in public for the first time. The winding-up petition concerns an unpaid bill for £12.1m in PAYE, VAT and National Insurance, though the club is disputing £7.1m in VAT.

Portsmouth will hope to emerge from the hearing having been allowed to *continue as a going concern. But this eventuality is unlikely unless sufficient *monies are raised by Peter Storrie, the chief executive, to meet the demands of HMRC, *convince the court that Portsmouth have regained solvency, and are further able to meet future financial commitments.

The Guardian revealed yesterday that a Hong Kong-based investment company, Endeavor Plan, has informed Storrie of a potential interest in becoming the club's fifth owner this season. A South *African consortium is also understood to be *considering making a move, although neither approach has so far resulted in a concrete offer.

The club are so concerned about their cash-flow position that this week they asked the Premier League to allow them to sell some of their players to raise much needed funds.

Although Fifa was believed to be prepared to back the proposal, the Premier League look likely to block it.

http://www.guardian.co.uk/football/2010/feb/20/portsmouth-high-court

Premier League to reject Portsmouth's transfer plea

The Premier League is expected to reject Portsmouth's request for permission to sell players outside the transfer window, BBC Sport understands.

Fifa, who sets transfer rules, has indicated it would look favourably on Pompey, who have debts of about £60m.

But the Premier League board feels it should not favour Portsmouth over other clubs who are battling relegation.

Pompey are due in court on 1 March to contest a winding-up order which could see them go into administration.

Should that happen, the club which is rooted to the bottom of the Premier League, will automatically lose nine points and almost certainly be relegated.

But if their transfer request was granted, helping them stave off administration, it would also aid their bid to stay in the Premier League, which is likely to infuriate their fellow strugglers.

Fifa confirmed on Thursday that it received correspondence from the Football Association relating to Portsmouth's financial situation.

Pompey face the threat of administration or liquidation and BBC sports news correspondent Gordon Farquhar believes world football's governing body will support their plea.

"The argument put to Fifa would say it's the integrity of the competition at stake here - if Portsmouth go under all their points would be cancelled and the league table would be falsely affected," said Farquhar.

"For the integrity of the sporting competition, it's better if the club can be kept afloat, at least to play out their fixtures until the end of the season."

In line with the rest of Europe, there are two transfer windows a year in England, running from 1 January to 31 January and from 1 June to 31 August.

Portsmouth sold three players in that window but their financial position has since worsened and they are desperate to raise extra capital by offloading more players.

Burnley manager Brian Laws claimed it would be "ridiculous" to allow Pompey to sell players outside the transfer window.

The Clarets are one off the bottom of the table, seven points better off than Pompey, and Laws said: "Whilst we have every sympathy with a football club that has difficulties, the only ones they should be looking at are themselves.

The level of debt associated with this case will mean it is unlikely a suitable or willing benefactor will be found - Portsmouth therefore face the very real threat of liquidation

Financial expert Simon Wilson
"They got themselves into it, (they should) get themselves out of it. I would hate to think the Premier League would allow them such a ridiculous thing beyond the transfer window.

"Allowing them to get a player out of the door, get some finances in, and then he goes and scores a goal against us that could be the goal that takes us down - that's ridiculous.

"I would think 100% of the Premier League would be saying the same, so I don't think they would get much support from the clubs."

Pompey have not identified any specific players for sale but reports suggest Algeria international Nadir Belhadj, midfielder Kevin Prince-Boateng and young defender Marc Wilson could be made available.

Portsmouth have already had four owners this season and are understood to be in negotiations with two buyers who are interested in taking them over.

They survived a winding-up order last week but were forced to deliver a detailed statement of their finances to both the High Court and Her Majesty's Revenue and Customs on Wednesday.

And they face another winding up petition from HMRC over an unpaid £11.7m tax bill on 1 March.

Hong Kong-based businessman Balram Chainrai became the club's fourth owner of the season in early February when he secured 90% of the club's shares after previous owner Ali Al Faraj defaulted on loan payments due to Chainrai.

Portsmouth are eight points from safety in the top flight and their players have been paid late on four occasions this season.

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

The Premier League recently withheld £2m of transfer payments and a £7m slice of television revenue to divert to Chelsea and Watford for the signings of Glen Johnson and Tommy Smith respectively.

The Fratton Park outfit are also being sued by former defender Sol Campbell for £1.7m for unpaid image rights.

Meanwhile, a financial expert Simon Wilson says Portsmouth face a very real threat of extinction because of their financial problems and he believes administration is an unlikely option.

"Arguably, the level of debt associated with this case will mean that it is unlikely that a suitable or willing benefactor will be found," said Wilson, a partner with restructuring experts Zolfo Cooper.

"Portsmouth therefore face the very real threat of liquidation because it is increasingly unlikely that an administration order will be sought or granted.

"In this eventuality, the players' contracts are no longer assets of the club and it would lose its membership of the Premier League.

"The role of the liquidator would be to realise whatever free and available assets still remain.

"The value of these assets would be nominal. While the unsecured creditors, including HMRC, would likely see no return from such a process, it is not in their interests to continue to support a business that is simply not viable and has no financial substance.

"To continue to underwrite the club would most likely result in greater losses at a later date. This would be an unprecedented case in the realms of the Premier League and would throw light on the fact that clubs can no longer rely on 'white knights' to rescue them from financial ruin.

"Many football clubs have allowed their levels of debt to grow to immense proportions. These debts cannot be serviced and investors simply don't have the appetite or ability to take on such poor business propositions."

http://news.bbc.co.uk/sport2/hi/foot...th/8522283.stm