Arsenal News » Portsmouth go bust just before they play The Arsenal.

We’ve been talking a bit about motivating your players and demoralising them in an earlier post.

I then replied with an earlier post that was earlier than this post but not as early as the post I called an earlier post in the last paragraph.

I thought was enough – two posts in one day.

And then suddenly all hell broke lose. Portsmouth, it seems, have discovered a new way of destroying a football club, just hours before they come to play us.

Here’s the story step by step…

1.  You hire Arry Redknapp, which is rarely a good thing to do, and then look on from afar as he is taken to court over unpaid tax which he strenuously denies.  You laugh at Southampton whom Mr Redknapp has just left, crowing over their sad plight which leads to liquidation and a 10 point deduction.   Stupid Saints.  Hello Arry.

2.  Then you look on as Milan Mandaric strenuously denies allegations, which go back to his time as Portsmouth chairman from 1998 to 2004, about taxation issues.  He too will appear in court next year, and you think, well, nothing to do with us.  He and Arry, perfectly innocent.  No problemo.

3.  Indeed, you say again, nothing to do with us guv. You are happy to be taken over by an Arab consortium because we all know the Arabs have lots of dosh and they have bought Manchester City and look how wonderful life is there.

4.  It is a trifle frustrating that the consortium is without money, but no worries, they probably weren’t real Arabs and anyway who cares because there is another consortium waiting in the wings, but ooops, they don’t have money either.  How did that happen?

5.  The EPLban all transfers until the debts owed to Arsenal and others are paid off (total to English clubs about £10m).  Defenders of Arry say that it is not his fault.  Nor that of the previous chairman.  And no one says it is there fault.  Just one of those things.

6.  In October and November 2009 the club omits to pay its staff on time.   That’s one of those things too.   Easy mistake to make – like forgetting the good lady’s birthday.  You can always make it up next time around.

7.  On December 23rd Revenue and Customs issue a winding up order against the club, but (as is correct and proper) do not make this public.  Your club doesn’t make it public either.  Instead…

7.  On 29 December the executive director Mark Jacob briefs journalists saying that the Premier League embargo will be “lifted next week” and that “the players and staff will be paid this month’s wages on time on December 30th.”   Now that is odd.   Did he not know the truth?   Very strange one that one.

8.  On December 30th the staff are not paid. News about the winding up order becomes public via a BBC reporter.  Can’t trust reporters can you?

A winding up order is issued when a company has failed to pay its tax on time.  This would include National Insurance contributions, VAT on gate receipts etc, and PAYE taxation on players’ wages etc.

Revenue and Customs do allow companies in trouble to extend payment of the debt, but ultimately if they see no chance of being paid then they seek an order in court to wind up the company, and sell off the assets.

A winding up order can result in any one of three things…

a) The company finds the money and pays the debts

b) A new owner comes along and buys the whole lot from the liquidator.  The new owner might be the existing owners inside a new company.  They buy the whole lot from the liquidator, and agree to pay say 10p for every £1 owed.  This is what that awfully nice Mr Bates did at Leeds, and I must stress this is perfectly legal under English and Welsh law.

c) The liquidator fails to find a single buyer and instead sells the players as he can, sells the ground, and so on.    The liquidator pays himself first and if there is anything left over, that goes to the creditors.

So, back to the issue of motivation. How motivated would you feel today as a Portsmouth player.   “Come on boys,” says the manager, “I know you ain’t been paid, and I know the club is about to close down, and I know you are bottom of the league, but lets win this one for the supporters shall we?”

And how good would that make you feel to be an Arsenal player, knowing that your club’s debts are secured against the stadium, that the agreed amount is being paid every month, and that the club is very restrained when it comes to buying players?

I reckon whoever you are, whoever you play for, you’d be thinking, some of these EPL clubs are in real trouble.  I think I’d sooner go to Arsenal.

(c) Tony Attwood 2009.