Other Chairmen in The News

[QPR Report]

The Times/Tony Cascarino
West Ham shows days of leech-like football owners are numbered


The takeover of West Ham United by David Sullivan and David Gold is a big moment for the Barclays Premier League, whether you’re a fan of the club or not. It could mark the start of a new set of takeovers by owners who are realistic and sensible, instead of the dreamers or leeches that have gone before.

I expect there’ll be a rash of takeovers in the coming years as existing owners try to get out of football after discovering it isn’t the cash cow they expected. Sullivan talking about West Ham having a 110 million GBP debt and Portsmouth’s plight are wake-up calls for the game. The level of debt is so horrifying that the Premier League must act by increasing its regulation of clubs’ finances.

A tighter grip on clubs’ balance sheets by the authorities – and Uefa are doing their bit by trying to exclude clubs that are heavily in debt from the Champions League – is surely the way forward. Portsmouth’s mess is all the excuse the Premier League need to get more involved



Portsmouth’s misfortune and West Ham’s flirtation with disaster could do for football what the credit crunch has done to the financial industry – force tighter regulation and more careful borrowing after years of irresponsible behaviour. Salaries of 70-80,000 GBP a week at clubs such as Portsmouth and West Ham? Madness. Portsmouth and West Ham owing so much after all the talent they’ve sold? Unbelievable.

I love gambling but I know that you never risk everything. You don’t put all your assets on the line. But this is what Premier League clubs seem to have been doing, mortgaging themselves to the hilt or overspending to the limit and beyond. At stadiums across the country it’s been football on the pitch and Russian roulette in the boardroom.

Given the amount of television money handed to clubs just for being in the Premier League, it’s ridiculous that they should get themselves into such deep trouble. Clubs have been careless and over-confident. Their owners must be held to account. And it’s not just aspiring clubs the size of West Ham, Portsmouth or Hull City – giants such as Manchester United and Liverpool have been revealed to be heavily in debt and financially-stretched.

The big clubs will be safe in the end, of course. There will always be someone ready to bail out or buy a Manchester United or Liverpool. I reckon they’ll both have new owners within a couple of years. But the likes of Portsmouth? It wouldn’t surprise me if they went into administration soon and lost nine points automatically, sealing their relegation. Maybe then other clubs would sit up and take serious notice. Football obviously didn’t learn from the decline and fall of Leeds United. Perhaps the game needs another reminder of the perils of overspending.

Going forward, I still expect the biggest stars to attract massive and growing wages, but the Premier League will be more like American sports, where the elite players earn ten times what the rank and file get. Clubs will still pay out 100,000 GBP a week to the household names, but they won’t be shelling out 50,000 GBP a week to players who are relatively ordinary. Squad sizes will be smaller – why does any club need 35 professionals? And youth players will be given more of a chance. Football will still be lucrative, but it’ll be more realistic and accountable.
timesonline.typepad.com/thegame/2010/01/days-of-leechlike-football-owners-are-numbered.html

[QPR Report]

The Guardian/Louise Taylor
- Hull City take legal action against their former chairman Paul Duffen• Premier League club issue proceedings in the high court
• They seek 'to protect the commercial best interests of the club'

Hull City are taking legal action against their former chairman Paul Duffen, with the case due in the high court today. Duffen left the KC Stadium in late October when he was replaced by Adam Pearson.

Hull yesterday issued the following statement: "Hull City Football Club has now issued legal proceedings against Paul Duffen in the high court. This action has been taken to protect the commercial best interests of the football club against the actions undertaken by Paul Duffen while in office at Hull City."

Duffen left suddenly in the wake of stark warnings that the club was facing a potential financial crisis and Russell Bartlett, Hull's owner, immediately hired Pearson as chairman.

Duffen last night said the club started legal proceedings in response to his own claim. "This [the club's action] is in response to legal action initiated by me in early December with regard to monies that are owed to me under the agreed terms of my resignation in October," Duffen was quoted as saying in the Daily Express. "The matter is now in the hands of the courts and I'm happy for that to run its course.

"I took over at Hull when they were 21st in the Championship and I helped lead them to the Premier League. I'm so proud to be associated with them in the most successful period in their history."

Pearson was Hull's previous owner before being bought out by a consortium featuring Bartlett and Duffen in 2007. Once the £12m takeover was completed Duffen became the chairman and public face of Hull. After presiding over promotion to the Premier League – the first time Hull had reached English football's top tier – he promised substantial investment in Phil Brown's squad and proved true to his word when the talented but injury prone midfielder Jimmy Bullard became the club's record signing, joining for £5m from Fulham last January.

By October, though, Hull were being cautioned that their uncertain financial position threatened the club's "ability to continue as a going concern". The club's accounts, filed five months late to Companies House, revealed that in the event of relegation they would need to generate a £23m surplus just to meet their existing liabilities.

The grim forecast from the club's accountants, Deloitte, emphasised the need for an imminent financial overhaul to safeguard Hull's future. In the accounts for the year ending 2008, which were due on 31 May but only filed in October, the club made a £9,764,850 loss during a period that culminated in winning promotion to the Premier League.

Most telling, though, was Deloitte's prediction that Hull would need to raise an additional £16m should they retain their Premier League status this season and a further £7m again if the club slip back into the Championship.

Duffen, a father of five with a love of fast cars who is a former chief executive of Catalyst Media Group plc and earlier worked in sales and marketing for Procter and Gamble, swiftly stepped down, saying at the time: "I must take responsibility for a disappointing 2009."

www.guardian.co.uk/football/2010/jan/21/hull-city-paul-duffen

[QPR Report]

BBC
Hull accuse ex-chairman Duffen of misusing club money

Hull reached the Premier League under Duffen's guidance
Hull City have begun legal proceedings against former chairman Paul Duffen after accusing him of spending company money for his own personal use.

The Premier League club also alleges Duffen's company received payments from agents in return for using those agents to deal with the transfer of players.

Duffen denied the allegations at a preliminary hearing at the High Court in London on Friday.

A date for the trial of the issues has not been fixed.

An order freezing Duffen's assets made last Friday was lifted and substituted with an order to value and place a charge on a property but orders for disclosure and charges over a property have been agreed. Duffen also agreed to hand over computer files.

Duffen's barrister, Lexa Hilliard QC, told Mrs Justice Proudman that although Mr Duffen had consented to the orders "this was not to be taken as an admission by my client of any of the allegations against him".

Earlier on Friday, Hull said in a statement: "The company believes that Mr Duffen has acted in breach of his employment contracts and fiduciary duties as a director, through the use of company monies for his own personal expenditure and other wrongdoings.

"The company also believes that he has acted in breach of his employment contracts and fiduciary duties as a director, through the payment of certain monies by third party football agents to Mr Duffen's services company, in return for which Mr Duffen procured that Hull City contract with the agents for business.

"Consequently, on 15 January last, the company successfully sought and obtained a High Court order freezing Mr Duffen's assets.

"The company also wishes to clarify that, contrary to a tabloid newspaper article today, Mr Duffen has not issued any legal proceedings against the company and Hull City does not believe he has any basis whatsoever for doing so."

Earlier this month new Hull chairman Adam Pearson claimed there had "not been enough care and attention done to the transfers and the deals".

Duffen was part of a consortium that bought the Tigers from Pearson in June 2007, the year before they were promoted to the Premier League.

They began the 2008-09 season well but struggled towards the end of the season and only escaped relegation on the last day of the campaign.

Duffen stepped down as executive chairman of the club and Superstadium Management Company Ltd in October 2009, with Pearson returning to the club as chairman.

At the time, a formal statement said the club "wishes to express its gratitude to Paul for his outstanding contribution as chairman during a period of unprecedented success for Hull City AFC."

Manager Phil Brown said "we have had tremendous unprecedented success during his time at the club and I would personally like to thank him for all his support."

But in December 2009, Pearson said he was calling in auditors to try and sort out the club's finances, after their 2008 figures revealed a shortfall of around £16m.


newsvote.bbc.co.uk/sport2/hi/football/teams/h/hull_city/8473519.stm

[QPR Report]

BBC Blog

Matt Slater | 22:34 UK time, Thursday, 21 January 2010

Taxing times for football's fritterers

If fans of Portsmouth FC have not acquainted themselves with the recent history of King's Lynn FC they might want to take a crash course now. The seemingly tenuous links between the two clubs are getting painfully close and the next three weeks could decide if they make the ultimate connection.

Non-league King's Lynn became a non-club last month when Her Majesty's Revenues and Custom (HMRC) gained a winding-up order from the High Court. The taxman was tired of IOUs and wanted his unpaid PAYE, NI and VAT - £77,000 of it.

The club, with total debts of more than £200,000, couldn't pay and that was that. 130 years after their formation, the Linnets were no more. It was a cruel end for a relatively well-supported club but it was entirely avoidable.

King's Lynn had been living considerably beyond their means for years. This was compounded by a failure (not entirely their own) to upgrade their stadium. Sound familiar?


It should, because leaving aside all the conspiracy-theory shenanigans of who actually owns the club (and why), Portsmouth's tale is straightforward. You can call it "living the dream" or you can follow Premier League chief executive Richard Scudamore and call it what it really is, "rank bad management".

The South Coast club's myriad problems, on and off the field, have been played out in public for the last six months. Keeping tabs on Pompey has become a blood sport.

The three different owners, the seven straight league defeats to start the campaign, the missing wages, the crippling debts and the withheld TV money - it has been a humiliating experience for a club that was competing with Europe's finest only 14 months ago.

And it could be about to get much, much worse.

On 10 February, Pompey's battle-weary legal team will probably be suiting up for the biggest clash in the club's 112-year history: Portsmouth v HMRC in a sudden-death VAT play-off.

I say probably because there is still a smidgen of hope Pompey can sidestep this rocket. An attempt to have the winding-up petition unwound before it got started was rejected on Wednesday by Justice Newey. But it was clearly not a straightforward decision (he described it as "difficult) as he spent two days listening to Pompey's claims of being overcharged and then another day pondering his verdict.

When that finally came, it was in HMRC's favour but Newey did grant Pompey a seven-day window to appeal. Neumans LLP, the solicitors acting for the club, said any appeal would have "a real prospect of success", although there has been no word of when that appeal will come.

Portsmouth fans should start praying the confidence of their lawyers (and they've got a few) is not just bravado. Reporters following their travails have become accustomed to hearing optimistic noises from the club only to discover the worst-case scenario has actually occurred.

Like almost everything involving the club at present, the details of the case are murky.

The taxman, who doesn't say much, is believed to be chasing almost £11m in missing payments. The club, however, says more than £4m of this has been paid since absentee landlord Ali Al Faraj took control in October and they dispute the rest. They have even suggested the club could be due a small refund.


This may well be true but circumstantial evidence suggests otherwise. The club has fallen behind with transfer payments to at least five different teams and failed to pay its staff on time in three of the last four months (the players are not expecting to see February's wages on schedule either).

In fact, it would be fair to say that being a bit behind with VAT is almost a default (excuse the pun) position for football clubs, particularly those further down the league ladder.

Southend United are a good recent example of this paper-shuffle approach to accounting. It took numerous trips to the High Court to persuade owner Ron Martin to finally write a cheque for £2.1m. He later admitted the club had been guilty, "almost inadvertently", of using the "HMRC Bank as a stop-gap".

Accrington Stanley have also been down this road of late and Cardiff City and Notts County have winding-up orders of their own to stew over.

Pompey's predicament is so perilous because the taxman is thoroughly fed up with football clubs and is in the mood to make an example of somebody pour encourager les autres. But nobody can say they haven't been warned.

The clubs should have got their houses in order as soon as HMRC lost its preferential status in insolvency cases in The Enterprise Act of 2002. Whereas it had once been at the front of the queue when a company went bust, it was now in the scrum with all the other creditors.

This had enormous implications for the national game because of league rules about paying all football-related debts (wages, transfer fees and so on) first and in full. At a stroke, the HMRC's indulgence of club debt was over, and who could blame it, particularly when faced with the well-intentioned but morally unjustifiable practice of putting footballers first.

This season's spate of tax crises is part of the post-2002 trend but it is also a more acute response to the global downturn and this country's ravaged finances. Every penny counts.

Former star Sol Campbell claims Pompey owes him £1.7m in unpaid image rights and bonus payments

It is ironic that another of Pompey's problems is a lawsuit for unpaid image-rights payments to Sol Campbell. There are many at the Treasury who feel image-rights clauses in contracts are a con to avoid tax, particularly as the cash is usually paid to off-shore accounts. One of the juicy details to emerge from the Manchester United bond prospectus is that HMRC is investigating £5m-worth of these payments at Old Trafford.

Another factor to consider is the timing of Portsmouth's hearing. HMRC knows its transfer windows and clearly feels calling in its debts whilst the indebted have a chance to do something about it is a canny move. Further player sales seem inevitable if Pompey are to avoid the fate of becoming the first Premier League to enter administration.

That, of course, would increase the likelihood of relegation, a Domesday scenario for a club as indebted as the 2008 FA Cup champions. If that happens "doing a Leeds" might be the best Pompey's blameless fans can hope for, as doing a King's Lynn is...well, let's not go there.

We should remember in all this that football is only being asked to do what the vast majority of us do as a matter of course. Former US President Franklin D. Roosevelt once said taxes "are dues we pay for the privileges of membership in an organised society". That is something Pompey, and football, should ponder.

As well as my blogs, you can follow me when I'm out and about at twitter.com/bbc_matt

www.bbc.co.uk/blogs/mattslater/2010/01/taxing_times_for_footballs_fri.html