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Football’s failure is coming home

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Football’s failure is coming home

Yesterday saw Chester City FC wound up, as well as Cardiff City and Southend United given stays of execution in relation to winding up petitions they are facing from HMRC. At the same time, Portsmouth FC announced that it is to make 85 of its staff redundant

The redundancies at Portsmouth demonstrate the wider impact felt when a football club finds itself in financial difficulties and is something that is likely to be seen at those other clubs that are facing financial crisis. In the case of Portsmouth, the Administrator, Andrew Andronikou, has decided to reduce costs by cutting the club’s wage bill and the number of people that it employs. An Administrator has the power to terminate employment contracts and make employees redundant where their employment is inconsistent with them running the business and so Mr Andronikou is acting perfectly within his powers to take such a step.

However, what other steps are being taken to reduce costs? Mr Andronikou has suggested that ‘one or two’ players had indicated that they would be willing to take a salary cut. It is not clear whether they are to be taken up on this offer, or if this offer was made by the players of their own volition or actively canvassed by him. It is clear that paying salaries throughout the club has been a consistent problem for Portsmouth and players and staff alike have received their pay late on a number of occasions prior to it entering into Administration. It is not clear if the players are being paid at present, however if they are then questions have to be asked as to what steps are being taken to investigate reducing costs by securing pay cuts from them.

It is also unclear what advice the players are getting from the PFA on their predicament. If Portsmouth, or any other club for that matter, does go into liquidation then the players will be out of a job and will receive no salary whatsoever. Whilst players at a Premier League club like Portsmouth may not struggle to find new clubs if this were to happen, given the present financial climate they are likely to find that the contracts being offered are not as lucrative as those they presently enjoy. Therefore, it may well be in the interest of the players themselves, as well as the club at large, to be considering taking this step in order to try and help ensure their club’s survival.

This may well be a step that many clubs have to take in the future. David Sullivan, the West Han United Chairman, has indicated that even if his club avoids relegation then the players’ will be asked to take pay cuts. This has to be a sensible solution for any football club that is suffering financially as they struggle to survive. After years of being cushioned by television money from Sky, has financial reality finally caught up with the Premier League?”

11 March 2010 

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