Portsmouth Going Into Administration

On a sad, but potentially momentous day for British football, Portsmouth have become the first Premier League club to enter administration

since the formation of the league in 1992. Whether the rest of the so-called “richest league in the world” – or perhaps the deepest in debt - and those who aspire to enter it take heed remains to be seen.

The decision will prompt the Premier League to issue a nine-point penalty next week, leaving Portsmouth facing almost certain relegation to the Coca-Cola Championship as they slip 16 points adrift at the foot of the league table. There may be further points penalties next season depending on the work of the administrator, Andrew Andronikou, of the accountancy firm UHY Hacker Young, in reaching agreements with creditors.

Balram Chainrai, the owner, had indicated that administration was inevitable if no new buyer was found this week, with a winding-up petition by HM Revenue & Customs over a bill of £12.1 million to be heard in the Companies Court on Monday. The official announcement came on the club website. “At 10:20am today Portsmouth Football Club was placed into administration following the filing of a notice of appointment at the High Court."

Peter Storrie, the Portsmouth chief executive, later confirmed that he would resign from the club once a new owner was found. Storrie, who negotiated some of the excessive player contracts that have brought Portsmouth to this point, had been expected to stay on albeit at a considerable reduction to his previously hefty salary – he has denied that it is £1.4 million, saying that it is around half as much. "While accepting as chief executive of Portsmouth Football Club that it was inevitable that criticism would come my way, the overall funding of the business was the responsibility of the owner. What I am not prepared to accept is the very personal level of abuse on websites, emails and local radio which I have received over the last couple of days.

"It is my intention to work with the administrator to help sell the business and I hope that will be quick as there is already interest in acquiring the club. I will also work with Avram Grant on the football side. Once the sale is complete, I will tender my notice to the new owners as set out under the terms of my contract. I find it somewhat ironic that a couple of months ago my name was being chanted by the fans at a time when I seriously considered my position at the club. Yet now, because I appear to be the last one left, they are calling for my head."

The reason for the club’s plight is simple: excessive spending on players – in transfer fees but especially wages – that could not possibly be sustained by the income generated by a medium-sized club, even with the financial assistance of the television revenue generated by the Premier League.

Avram Grant and the players are reported to be considering voluntary wage cuts aimed at preserving the jobs of some staff, but that, with respect, is a classic example of shutting the stable door well after the horse has disappeared over the horizon and shows precisely how divorced from reality it is possible for players to become.