Mid-day Ticker: Portsmouth enter administration, Arsenal cuts debt and more

Avram Grant (Getty)

By TRAVIS CLARK

Over in England this morning, Portsmouth managed to make the wrong kind of history. They became the first Premier League club to enter administration in the league's history when another buyer wasn't found by Thursday's deadline.

The club has struggled with debt and a revolving door of ownership this season. Their debts are estimated in the range of £60-70 million, and four different people have owned the club since the beginning of the 2009-10 season. Financial control of the club will go over to an administrator who will attempt to stop the financial bleeding.

Going into administration also means that Portsmouth will be relegated to the Championship barring a miracle — they'll be deducted nine points prior to the season's end, but will be able to play out the rest of this season. Peter Storrie, the club's chairman, is expected to step down as the club tries to cut costs and remain a viable business heading into next season.

Here are a few other stories for Friday:

ARSENAL CUTS DEBT BY ALMOST FORTY PERCENT

From a tale of financial woe to one of success in the Premier League. Thanks to an upturn in sales of the Highbury Square property (the old stadium was converted into an apartment complex) Arsenal has managed to cut debt down to just over £200 million — nearly forty percent of the club's debt. Along with the debt reduction, the North London club also announced a profit of £32.5 million in six months prior to the end of November 2009.

VAN DER SAR SIGNS NEW DEAL WITH UNITED

Speculation over who Manchester United's future will be can be put on hold for at least one more season. Edwin van der Sar signed a one-year deal that will keep him with the club through the 2010-11 season. The Dutch netminder turns 40 in October and has shown little signs of slowing down this season as United attempt to hunt down Chelsea and win a fourth straight Premier League title.

CHESTER CITY EXPELLED FROM FOOTBALL CONFERENCE

If Pompey's money problems were bad, at least they still have a league to play in. The same can't be said for Chester City, a club that was previously in Blue Square Conference, the fifth tier of English soccer. Chester faces a winding up order and the rest of the league voted to expel the club from the Football Conference immediately.

ADEBAYOR BANNED FOUR MATCHES

Emmanuel Adebayor found himself in hot water once again this week, getting sent off in Manchester City's 3-1 loss to Stoke in the FA Cup. Thanks to Adebayor's previous run-in with discipline this season — when he stamped on Robin van Persie's face — an extra game was added to his suspension, and the Togolese striker will serve a four-match ban.

LIVERPOOL SUFFERS SKRTEL BLOW

Thursday's Europe League win came at a price for Liverpool — it was revealed that defender Martin Skrtel suffered a broken metatarsal in the club's 3-1 win against Unirea Urziceni. Rafa Benitez's defensive options are even more limited with Glen Johnson still on the mend from a knee injury earlier in the season.

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What will happen to Portsmouth? Is Arsenal's stability a good sign for the English game? When will van der Sar retire?

Share your thoughts below.

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30 Responses to Mid-day Ticker: Portsmouth enter administration, Arsenal cuts debt and more

  1. Rory says:

    I’m glad the economic downturn won’t hurt Arsenal as much anymore. They have been smart with their money and serve as an example of what to do… it would have been a shame if all that fell apart because they couldn’t sell off their old stadium one lot at a time.

  2. Rory says:

    Wait… did that Chester article say the team was folded because it owed 26,000 pounds in tax money? Yet Portsmouth were given forever it seems to pay back a lot more?

  3. paul says:

    There is more to the Portsmouth story than meets the eye. Rednapp’s transfer dealings all made big profits when they were sold. Johnson, Defoe,Crouch,Diarra Sp? and others brought in $90 million + and given TV money it’s hard to see wages alone leaving them $100million in debt. The club has been looted by Gadamayk sp? or his father who was reputedly the real owner. The club has been looted. We’ll see what comes out in the wash.

  4. aristotle says:

    Has anyone in official capacity brought this up?

  5. aristotle says:

    Sounds kind of funny. Arsenal are a great success because they have slashed their debt to a ;ittle over $200 million pounds. Portsmouth are in administration because they owe 60-70 million pounds.

  6. Sideways says:

    Arsenals’ debt is due to the Emirates Stadium (sort of like a mortgage) and their operating profit is around 35 million pounds a year.

  7. Josh D says:

    Ives and co – can we see a ticker that doesn’t 90% of the time revolve around England? There are other leagues and countries I would love to keep tabs of.

    Cheers!

  8. Don says:

    I second the motion.

  9. Charles says:

    EPL is a joke.

    How can a league having its 20th place team go Chapter 11 ?

    I bet the NFLs 20th place team is worth over $250 million. Granted the revenue of the EPL isn’t as high, but come on it is not that big a discrepancy.

    This is not isolated.

    Ditto with more coverage of other leagues comments, the Brazilian league is almost impossible to follow.

  10. paul says:

    Gadamayk’s father owned the Beitar Jerusalem team, I think, or maybe it was Hafia. He is reported to have Russian mob links and was not a fit and proper person etc to own Portsmouth. This was investigated but nothing came of it. Rednapp himself has pointed out the huge profit from his transfer dealings. it will be interesting if the people in charge of the receivership investigate how this went down, but I’m not sure if that is part of their brief. As far as I know Alexandre Gadamayk claims he is still owed money from the original sale, so it is hard to figure where all the money went.

  11. Kevin_amold says:

    Yes indeed. We need more coverage of Shakhtar Donetsk’s exit in the Europa League yesterday….

  12. Mig22 says:

    Yeah, the debt load in simply not that large for a club that won the FA Cup last year (or the year before). It’s a cash flow issue and the crux of it is, somebody is mismanaging that club (or stealing from it).

    Maybe we’ll see more investigation by the British high court (bankruptcy/adminstration court).

  13. eurosnob says:

    see MLS, thats how you structure a league; success is incredible amounts of monetary failure…..

  14. Mig22 says:

    There is no minor league competing for NFL dollars and the EPL has no salary cap. Different worlds that can’t be compared.

  15. Jorge says:

    Actually, in 2007-2008, EPL’s gross revenue was the fourth highest of any sports league worldwide.

  16. A Guest says:

    Most of the NFL clubs have debt to value ratios of 1/3 to 1/2. Similar to Man U, Liverpool, Tottenham, Everton. Villa and Man City are close to 0 debt to value ratio.

    It is quite a bit more complicated than “league rules” = economic success/failure.

  17. Chris in Belfast says:

    The idea there being that ultimately, Portsmouth have a MUCH great chance of actually paying most of that back than a non-league side. Investors would want to get at least some of their money from Portsmouth back, which would surely add up to more than 26,000, while Chester probably didn’t have much chance at all of ever paying that back. If 26,000 is the debt, then investors would have just asked to fold the club and sell the assets.

  18. Chris in Belfast says:

    You’re forgetting how small their stadium is. It’s MLS sized. Even with tv money, they can’t make enough at the gate to offset the amount they have to pay in wages. In order to make that work they borrowed against future TV earnings, which meant they didn’t actually have that money when it came in, because it had already been spent. This team is a microcosm of everything that destroyed the US financial sector. In order to make it work they spent money that didn’t exist and borrowed money they couldn’t pay back.

  19. Chris in Belfast says:

    Arsenal are also running profits and have a business plan that will eventually reset their debt to zero. Pompey have no such future.

  20. Scott says:

    we actually do… but only because Fulham knocked their b!@$# a$$ out!

    @ Josh D… get over your butthurt. EPL is the most popular league worldwide and easiest to follow here in the States. And has the most ties to our National Team players currently. So no, it’s entirely warranted.

  21. Kevin_Amold says:

    That’s what I was hinting at Scott..

    COYW!

  22. paul says:

    Why do chairman let managers gamble with their premier league status. Oleary/ridsdale and Storrie/redknapp all signed a big majority of old players with no sell on value. We can all sign established players and have short success.
    You look at Arsenal today announce a massive profit all there team is young and worth a fortune.

  23. golfstrom says:

    charles’ point still stands, can you imagine an NFL, NBA, or MLB team financially self-destructing in a matter of months? This is what happens in the wild west of no salary caps, promotion/relegation, and huge TV contracts. Not saying it’s better or worse than American leagues, but it is what it is (love that phrase).

  24. Chris in Belfast says:

    Pompey made a lot of money on a lot of players who weren’t old wiht no sell-on value. Wages are what’s killing them, and an inability to increase gate revenue.

  25. jig says:

    but doesnt it sort of limit your understanding of the game if you only care about the Premier League?

  26. twigg says:

    “…the Brazilian league is almost impossible to follow.”

    That’s because it’s almost impossible to watch. Moments of brilliance not enough to offset all the diving, crying, and typical S. American antics.

    And if you think the EPL is a joke, you should study up on how the Brazilian game is run.

  27. JR says:

    Portsmouth is going to get relegated again next year too when they sell everyone to pay the creditors.

  28. KenCheng@mac.com says:

    Uhm, the NHL and the NBA could easily have a dozen teams go Chap 11, without work stoppages to reduce player salaries.

  29. Jdavids says:

    liverpool got the curse this season.

  30. Mig22 says:

    Sorry for the late reply but you’ll probably get notified in your email.

    You’re right that it IS difficult to pull enough money in at the gate to pay the wages for the players they signed. When the economy slide all around the world, ticket sales fell, merchandise sales fell, and the TV money did not increase as quickly due to advertising cutbacks. So they got caught out even though the debt load is not that bad in absolute terms.

    It’s a tough balancing act to run a Premiere League team but plenty manage to do it. AND, the economy is slowly improving which will help.