A League Salary Cap + Portsmouth Problems Continue

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Guardian/Matt Scott

Greg Clarke gets serious with League clubs over salary caps
• Football League chairman sets up working groups on caps
• Groups to report back within two months on feasibility

Greg Clarke is attempting to convince all Football League clubs that the time has come to introduce a salary cap. Clarke's predecessor as League chairman, Lord Mawhinney, held dinners at the House of Lords for all 72 club owners but was unable to gain traction for the idea beyond its introduction in League Two.

Now Clarke, a former chief executive of the then FTSE100 conglomerate Cable & Wireless, has set out the business case for a rule change after a presentation to the Football League AGM in Malta last month. Since then the League has set up a working group in each of its three divisions looking at how to develop workable cost controls by which all 72 clubs can be bound. Persuading the Championship to adopt a salary cap may prove beyond him, but Clarke is tackling the issue head‑on and sits on the Championship task force alongside the League's finance director, Tad Detko, and representatives of four of its 24 clubs including Nottingham Forest and Sheffield United.

Six League One clubs and four League Two clubs are represented in each of the other divisional groups, along with two League executives in each. The groups will report back on the subject within the next two months. The case for salary caps suffered a blow when Notts County, in flagrant disregard of the 60% wages-to-turnover limit, won League Two while plunging into £6m of debt. Their sole sanction was a transfer embargo.

But with Mark Field, vice-chairman of the all-party parliamentary football group, warning here yesterday that the game risks a financial collapse as spectacular as that of the banking industry, there is now government focus on the issue.

Independent no more

The Football Association's recommendation yesterday to excise the "independence" criterion from its constitution is a final bullet in the corpse of reforms flowing from the Lord Burns review. But we should not weep over the specifics, since Lord Triesman's former title as "independent chairman" was always a misnomer.

Triesman's political instincts apparently led him to recognise that his power base lay with the amateur‑dominated council, since that is the constituency that would have re-elected him on another three-year mandate. Thus the chairman's interests were vested in a council dominated by the amateur County FAs and which is unrepresentative of the game's wider stakeholders. Far from the chairman being a conciliatory figurehead, the subsequent points-scoring – as in Triesman's speech on debt at Leaders in Football two years ago – served only to deepen the distrust between amateurs and professionals. Probably the FA will be better off with a "football man" in the role. But that does not mitigate against the urgent need for the more sweeping reforms the reactionary FA is not prepared to undertake.

Roger Burden has been confirmed as the FA's temporary chairman until after the World Cup 2018 vote by Fifa in December.

Sport turns to alliance
The Central Council for Physical Recreation is no more after it re-branded itself into the slightly snazzier Sports and Recreation Alliance. All barring two abstentions in the 66‑member vote at the CCPR's AGM yesterday were in favour of the move after it was decided the old name was too impenetrable to represent the interests of its sports-and-leisure-body stakeholders. Another development is that Prince Edward, chaired yesterday's meeting after taking over the presidency following Prince Philip's 58-year stewardship.

False dawn for Southend?

When auditors for Southend United's property and football companies went through the accounts they felt obliged to issue an amber-light warning over the club's solvency. In their "emphasis of matter", auditors state that without the support of their parent company, Martin Dawn, there would be "doubt on the compan[ies]' ability to continue as a going concern". So Southend fans concerned about their club being subject to an HMRC appeal for a high-court administration order would no doubt be less than delighted to learn that Martin Dawn is itself the subject of a winding-up order. From the taxman. The firm's proprietor, Ron Martin, did not return Digger's call yesterday but it is believed he disputes the six-figure sum claimed by HMRC, its second winding-up application against Martin Dawn in 12 mo

www.guardian.co.uk/football/2010/jul/16/football-league-salary-caps

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BBC

Portsmouth suffer fresh setback after HMRC appeal

Fratton Park will be hosting Championship football next season
Portsmouth have suffered a fresh blow after Her Majesty's Revenue and Customs lodged papers in an attempt to prevent the club coming out of administration.

Last month, Pompey saw a Company Voluntary Agreement (CVA) approved that would allow them to repay unsecured creditors 20p in the pound.

However, HMRC claims the amount it is owed allows it to block the CVA.

It means that Pompey will remain in administration and under a transfer embargo until the appeal is heard.

And the club's administrator Andrew Andronikou, who had been anticipating HMRC's appeal, warned the case may not be heard until October or November.

That could severely hamper new manager Steve Cotterill's plans for the coming Championship campaign, though Andronikou noted the club would be able to sign players until their squad numbered at least 20 players.

Portsmouth currently have 18 players listed in their first-team squad.

606: DEBATE
I remember being ridiculed on here around October last year for saying the Taxman was after Pompey and wanted to make an example of them. Although, believe it or not, gives me no pleasure in being right

For a CVA to be agreed, it must win the support of those owed at least 75% of the unsecured debt. The vote on 17 June saw the agreement win 81.3% of the vote.

But HMRC argues that £13m of debt was left out of the original calculations; if the £13m figure is included, says the HMRC, it would then have more than the 25% of the debt it needs to block the CVA.

"We are acting in the interests of all those creditors who are not in the football industry. We don't think it's right that they are offered 20p in the pound against full repayment all others," an HMRC spokesman told BBC Sport.

"HMRC feel we have been or will be unfairly prejudiced by the decision to accept the CVA, because we believe there were material irregularities in the way in which the votes of creditors were counted at the creditor meeting and because, to our knowledge, the full amount of our claim should have been admitted for voting purposes.

"Also we cannot agree with the striking out of £13m of debt which seriously undermined our ability to challenge the CVA."

BBC Sport understands the club could start the Championship season without any further points penalties, having been deducted nine points by the Premier League last campaign.

But the transfer embargo will be a problem for the south-coast club who were relegated from the Premier League last season following a campaign of complete turmoil.

Speaking on Wednesday before the news of the appeal was confirmed, Andronikou described the situation as an "irritant".

"It's going to be an irritant and, to put it simply, the embargo will stay for a longer period," said the administrator.

"As long as there is an appeal process, the registration embargo will continue to be in force for the foreseeable future.

"However, we expect any appeal hearing to be held in October or November. Before then, if the squad is below 20, we can still bring in players, regardless of the embargo. That is allowed and is something we are looking at."

news.bbc.co.uk/sport2/hi/football/teams/p/portsmouth/8826344.stm

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Guardian

Portsmouth face threat of points deduction after HMRC legal challenge• Tax authority disputes club's CVA with creditors
• Pompey's Championship return faces handicap

Matt Scott guardian.co.uk, Thursday 15 July


Portsmouth risk a heavy points deduction from the Football League after its administration process today suffered a legal challenge from HM Revenue & Customs.

The taxman lodged a complaint at the high court about alleged "material irregularities" in the creditor vote that led to the company voluntary arrangement being approved last month. The CVA, prepared by the administrator, Andrew Andronikou, proposed 20p in the pound to all creditors over a four-year period, which would have allowed the club to exit administration without a football sanction.

However, HMRC believes Andronikou overlooked its legitimate claims and is pressing for the CVA to be revoked. If the high court appeal is sustained, Portsmouth's new owners would then have to set up a new company through which to make an application under "exceptional circumstances" rules to be admitted to the Football League following their relegation from the Premier League last season.

Even if that was approved, the outcome would in all probability lead to a double-digit points deduction for Pompey.

There have been four previous examples of clubs failing to agree CVAs with their creditors, the highest profile of which was Leeds United in 2007. Leeds received a 15‑point penalty for their failure to strike a valid CVA.

The force of the taxman's feeling in the case is reflected in the fact that HMRC stands to lose considerably more of the £34m it claims to be due if Portsmouth City Football Club Ltd is forced into liquidation than if the club were to exit administration through a CVA.

In a statement released this afternoon, the tax authority said: "HMRC can confirm that it has today made an application to the high court that the decision of creditors of Portsmouth City Football Club Ltd [in administration] should be revoked or suspended."

HMRC claims that its interests "have been or will be unfairly prejudiced by the taking of that decision". It adds: "There were material irregularities in the way in which the votes of creditors were counted at that meeting."

Andronikou's own conduct in the administration has become the subject of a separate contention. HMRC has complained to the courts that he, as chairman of the meeting of creditors, was in breach of insolvency rules.

The statement added: "HMRC can further confirm that it has also appealed to the court under Rule 1.17 of the Insolvency Rules against the chairman's decision to refuse to allow HMRC to vote in accordance with claims totalling £13,293,651.72 submitted at the meeting."

The decision today extends Pompey's period of administration. This means that, unless the court hearing is expedited before 31 August, Portsmouth are likely to be subject to a transfer embargo beyond the close of the transfer window.

In the meantime, there may be a requirement to sell more of the first-team squad that reached the FA Cup final last season in an effort to raise the cash to cover operating costs until the conclusion of the legal dispute. Andronikou was not returning calls today.

www.guardian.co.uk/football/2010/jul/15/portsmouth-hmrc-administration