Portsmouth may be 'the last major insolvency' in football, says expert

Sports law specialist Trevor Watkins of Pinsent Masons, the law firm behind Out-Law.com, was commenting after administrators BDO agreed a deal with creditors Portpin on Wednesday to enable a Portsmouth FC supporters group to claim ownership of the club.

The Football League had warned Portsmouth FC, which has spent 14 months in administration, that their membership of the League was at risk if they failed to exit administration before the end of the season. The Pompey Supporters' Trust's (PST) bid to take control of the club hinged on its ability to obtain control of the club's stadium, Fratton Park, which Portpin currently holds ownership of.

However, a judge at the High Court announced on Wednesday that an agreement in principle had been reached for the sale of the stadium to PST.

PST spokesman Colin Farmery told Out-Law.com that the Trust has raised three separate funds in order to enable it to obtain both a majority shareholding in Portsmouth FC and to secure the ownership of Fratton Park.

Farmery said that Portsmouth supporters had been given the chance to buy £1,000 shares in the PST which the Trust would use to buy equity in the football club. So far supporters have pledged approximately £2 million of which about 60% has been "cashed" by the Trust, he said.

In addition, Farmery said that approximately £1.5m has been raised from a number of individuals who were each investing "in excess of £50,000 each" directly into the football club.

A third pot of funds has accumulated to enable the PST to purchase Fratton Park, Farmery said. A property group and Portsmouth City Council have lent the PST a total of more than £2.6m, repayable as short-medium term loans, to help the PST meet a schedule of payments to Portpin over the months and years to come, he said.

"We are absolutely delighted to come to an agreement with Portpin," Farmery told Out-Law.com. "We are now looking forward to the challenge of being the biggest community club in Britain. We should not underestimate the significance of this to the wider football family because the football club is going to be a trailblazer for community ownership."

Trevor Watkins of Pinsent Masons, which advised BDO on the Portsmouth FC administration, said that rules on financial discipline installed by the Premier League and Football League, as well as the football governing body in Europe, UEFA, should ensure that there is no repeat of the troubles encountered by Portsmouth FC.

"With football under increasing scrutiny in terms of how it administers its finances, Portsmouth FC could well be the last major insolvency that hits the industry," Watkins said. "We very much hope and trust that this is the case. The considerable effort that has had to be put in to reach this point reflects on the never-say-die attitude of all those involved at the club and its supporters."

"The significant development [with the agreement being reached with Portpin] marks both a new beginning for the club and I believe the beginning of a new, financially responsible era for the football industry. Whilst this is a tremendous solution, the future of football is much brighter. It anticipates a world we are already seeing where commercial rights increase in value and complexity and in turn drive the international appetite for investment in the game," he said.