What a mess, with all the owner changes in the last year something has really gone wrong/taken place that has been allowed to happen and as a result could destroy the club.

Didn’t a similar thing happen to Leeds when they were in the premier ship?

Actually, this is probably worse. The Leeds story is basically that they were in the top 4, which means they get into the Champions League which means another £20m in income a year, give or take. They signed a load of players on expensive contracts assuming they would continue to get into the champions league and therefore would have that extra £20m every year to pay those contracts. Then they came 5th. And didn't get the extra £20m. But the contracts had been signed and the players still had to be paid. Thus Leeds ended up with massive debts and no money to buy or pay the best players any more, so they slid down the league, losing more money each year in a kind of nasty spiral. They're now something like 65 places lower in the league than they were when they made the gamble of staying in the top 4...

With Portsmouth, they signed a lot of players on very expensive contracts without having the prospect of champions league football to finance them. They just did it because.. they felt like it. OK, they got an FA Cup (which earns you about £5m) and a run in the UEFA cup (which actually earns you pretty much nothing in Premier league terms) but other than that.. they just never had the money. They have small ramshackle old ground so don't get a lot from ticket revenue or corporate hospitality. They don't sell much merchandise. They get the bare minimum income from TV (which is still quite a lot but nothing compared to what Manchester United or Liverpool get). They just seemed to be throwing money around with no real concept of the possible consequences.

The worst bit of all is Harry Redknapp, their ex manager (who jumped ship just as things started to look at all dicey). He asked for most of the players who have bankrupted the club to be signed, yet he accepts no responsibility for their predicament at all.

Clubs that have been managed by Harry Redknapp : Southampton, Portsmouth, Bournmouth, West Ham, Spurs.
Clubs that are now crippled by massive debts : Southampton, Portsmouth, Bournmouth, West Ham.

yes Harry, nothing to do with you at all...

I think that the biggest problem is that the wages of relegated clubs are way too high. Yet the income from being in the lower division is substantially less so the club struggle. It should be a mandatory option that players wages are cut for the duration of the contract while in lower divisions. They can always be restored if the club get promoted again.

Remember the owners who have run the club into the ground (with the aid of Storrie and Redknap) passed the fit the proper person criteria which until recently didn't even ask if the prospective owners even had any money.
Diarra was sold for £20 million when we had debts of £30 million and a month later pompey had declared debts of £40 million. Then as each player has been sold the debt goes up. Conclusion none of the money raised by the sales ever went in to paying things like PAYE and VAt and the other debts. Thus the Tax man cometh to shut it down.

Apart from the scumbag owners, Storrie and Redknap. The FA have to take some responsibility. They are suppose to be the custodians of the beautiful game but are just as useful as Ofcom.
The only time football will sort out its financial farce is when a big club goes under.

There's a system called 'parachute payments' where clubs are given some of the Premier League TV money for the first two years after they drop out of the Premier league. There are two problems with this system

1) The Premier League is so much richer than the Championship that even the limited parachute payments mean that the clubs that have dropped down are by definition the best resourced clubs in the Championship. Thus the most likely to get promoted back up. You end up with the so called 'yo yo clubs' like West Brom - too rich to stick in the Championship, too poor to stick in the Premier League.

2) The parachute payments last two years, player contracts generally last three or four. Thus if a club gets relegated and actually doesn't get back up to the Premier League within two years, it's effectively stuffed. This has happened to several clubs - Southampton, Charlton and Leeds to a degree - the result is almost always administration or worse. Most of the clubs who were in the Premier League and didn't get promoted back into it in two years are now in the even lower divisions, because the effect of still being in the Championship with no parachute payments and contracts to fulfil is usually devastating.

There are solution to this that have been discussed. The Premier League board recently debated the idea of making parachute payments spread over four years rather than two but this was rejected by the clubs - obviously, if they pay out more in parachute payments, the clubs in the premier league get less. And most of them are on the edge financially, so it would literally be turkeys voting for Christmas.

The second and, to any sane person, more sensible idea is just pay players less. There are utterly average players getting paid far too much money and also too much money being paid to player's agents. There's a practice where, as well as taking 10% (say) of the players earnings, the agent will charge the club usually a multimillion dollar fee to ensure the player signs a new contract. In any other business this would be at best a conflict of interest and at worst illegal but it's standard practice in football - Portsmouth owe several agents a total of about £11m. That's not to players, that's to player's agents. Why are clubs paying player's agents at all?

The statistic that is most telling is this one : Portmouth's wage bill last season was 107% of it's income. Tell me how anyone who thought that was a good idea could possibly pass a 'fit and proper person' test.

The US NFL has a system whereby the wages of the players are capped, and the clubs total wage bill cannot exceed around 68% of the total revenues. That would solve many clubs problems when demoted. It would also stop them getting so high that the club is at risk. The problem is that for the players they can get another job with another club so do not care about the finances of the club so if they drive it bankrupt they can still play somewhere else.

The FA need to have a mandatory clause in all players contracts where by the wages are automatically dropped, and players are tied to the club for the duration of the contract. If they start playing up because they are not in a premier league team then the team could release them once the player has reimbursed the club for the balance of the contract. So if they had 4 years left at £200 000 per year, then they can buy their way out of the contract for £800 000.

As for agents that is a scam so it does need to be looked at.

The Aussie NRL has salary caps and one team, Melbourne Storm, has just been found guilty of breaking those caps. Two titles stripped (2007, 2009) and a guarantee of no points this season.

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