It has taken 12 years, two administrations and three points deductions, but Portsmouth will be back in the Championship next season after clinching the League One title under the impressive young coach John Mousinho, who replaced Danny Cowley in January 2023.
Up until 2010, Pompey had enjoyed seven seasons in the
Premier League, winning the FA Cup in 2008, then playing in the UEFA Cup,
before suffering three relegations in just four seasons, ending up in League
Two. They spent four seasons in England’s fourth tier, before securing
promotion to League One in 2017, while it took them another seven years to get
back to the Championship.
It has taken 12 years, two administrations and three points
deductions, but Portsmouth will be back in the Championship next season after
clinching the League One title under the impressive young coach John Mousinho,
who replaced Danny Cowley in January 2023.
Up until 2010, Pompey had enjoyed seven seasons in the
Premier League, winning the FA Cup in 2008, then playing in the UEFA Cup,
before suffering three relegations in just four seasons, ending up in League
Two. They spent four seasons in England’s fourth tier, before securing
promotion to League One in 2017, while it took them another seven years to get
back to the Championship.
Portsmouth’s rise to the top flight had been bankrolled by
Serbian-American businessman Milan Mandaric, but the club really started to
spend money like it was going out of fashion after it was acquired by
French-Israeli business man Sacha Gaydamak in 2006
Things looked good for a while, but they took a major turn
for the worse in the 2009/10 season, when Portsmouth somehow went through four
different owners. They kicked-off the new campaign under Gaydamak, son of the
colourful Arcadi, who was accused of making money from illegal arms deals.
Having apparently been badly impacted by the credit crunch,
in August 2009 Gaydamak decided to sell the club to Sulaiman Al-Fahim, the
self-proclaimed power broker behind Abu Dhabi United Group’s takeover of
Manchester City.
However, just 40 days later Al-Fahim gave up trying to find
the money to complete the purchase and sold his shares to Ali al-Faraj, who was
actually never seen at Fratton Park. According to reports at the time, he was
some sort of commodity broker, but however he made his money, precious little
of it found its way to the South coast.
The resultant financial difficulties meant that Balram
Chainrai took ownership, but this seemed to be more a case of an exasperated
creditor attempting to protect himself and/or pick up Portsmouth’s major asset
(the ground) on the cheap.
Either way, Chainrai put the club into administration, thus
triggering a nine-point penalty, which effectively confirmed the club’s
relegation from the Premier League (though they did manage to reach the FA Cup
final, where they lost 1-0 to Chelsea).
A year later, the club was sold yet again, this time to a
Russian businessman, Vladimir Antonov, though he ended up being convicted of
fraud in his home country. Meanwhile, the club went into administration for the
second time in two years, leading to a 10-point deduction and relegation to
League One.
The club’s financial issues led to another 10-point penalty,
confirming another relegation, this time to League Two.
It’s not overly dramatic to say that at this point
Portsmouth were close to going out of existence, but they were saved by the
fans, as the Supporters Trust took ownership of the club in April 2013.
They inherited a club with no training ground, no kit deal,
no commercial agreements and indeed no players, so it’s been a long way back.
However, the Trust managed to steady the ship, before Portsmouth began the slow
road to recovery. This was a great example of a club doing well under fan
ownership.
However, in August 2017 the Trust approved the sale of the
club to Tornante, an American company headed by former Disney chief executive
Michael Eisner, as it felt that Portsmouth needed an owner with deeper pockets.
Tornante paid around £6m and invested £10m in equity.
2022/23 accounts
Portsmouth’s loss slightly widened from £2.9m to £3.1m,
despite revenue rising £0.6m (5%) from £11.9m to £12.5m and a £0.9m improvement
in player sales, which swung from a £0.2m loss to £0.7m profit. However, this
was offset by a steep increase in operating expenses, which rose £1.6m (11%)
from £14.8m to £16.4m.
Portsmouth saw revenue growth in both match day, up £0.5m
(8%) from £5.3m to £5.8m, and commercial, up £0.4m (14%) from £3.4m to £3.8m.
On the other hand, broadcasting fell £0.4m (11%) from £3.3m to £2.9m.
Portsmouth’s £3.1m loss was mid-table in League One,
significantly lower than Derby County £30.4m, Ipswich Town £18.2m and Charlton
Athletic £9.6m. Only one club managed to generate a profit last season, namely
Exeter City – and that was just £0.3m.
Portsmouth’s £12.5m revenue is the highest since the club
returned from administration and is up £3.6m (41%) compared to their first
season after promotion to League One in 2017/18. Since then, there has been
good growth in all three revenue streams: commercial rose 75% (£1.6m),
broadcasting 37% (£0.8m) and ticket sales 26% (£1.2m).
In contrast to England’s top two divisions, broadcasting has
the lowest revenue share at just 23%, while match day leads the way with 46%,
followed by commercial 31%.
Revenue will obviously increase next season following
promotion to the Championship, mainly thanks to the higher TV deal, but also
from likely increases in gate receipts and sponsorships. However, Portsmouth will still find themselves
a long way below leading clubs in the Championship. Clubs recently relegated
from the Premier League earned at least £65m in 2022/23, i.e. more than three
times as much as Pompey’s likely income in the higher division.
TV money will shoot up to at least £8m in the Championship
next season. There is also a new 5-year deal with Sky starting in 2024/25,
which represents a 50% increase on the current agreement.
Crowds have grown to just under 19,000 this season, driven
by the team’s success, so they are at their highest since the last time that
Pompey were in the Premier League back in 2009/10.
Wages
Portsmouth’s wages rose £0.4m from £7.9m to £8.3m, just
ahead of the club’s previous League One peak of £8.1m in 2019/20. In fact, they
have held wages at around the £8m level for the past four years. As a result of this restraint, Portsmouth’s
£8.3m wage bill was only eighth highest in League One, a long way behind
Ipswich Town £19.8m, Derby County £17.2m and Sheffield Wednesday £15.8m, though
two of those were inflated by promotion bonuses.
Of course, Portsmouth will have to spend a lot more on wages
in the Championship if they hope to be competitive. In 2022/23 clubs receiving
parachute payments averaged over £50m, while the non-parachute clubs paid an
average of £23m.
Portsmouth spent £1.5m on player purchases in 2022/23, which
was not a massive outlay, but was twice as much as the previous season and
actually the second highest outlay since promotion to League One (only behind
the £2.3m in 2019/20).
Debt and funding
Portsmouth are essentially debt-free with only £15k of
finance leases. The club had inherited £10.5m debt as part of the
administration process, but this was very largely repaid in 2014, two years
ahead of schedule, as a result of negotiating significant savings. In stark contrast some of the clubs in League
One carried a lot of debt, particularly Sheffield Wednesday £57m, Derby County
£36m, Fleetwood Town £33m, Charlton Athletic £28m and Oxford United £27m.
The £9m funding in 2022/23 took the amount that the current
owners have put in to the club to £28m, while a further £9m was provided after
these accounts, so the total is now up to £35m. They have averaged annual
contributions of more than £7m over the last four seasons.
It is true that their owners have put in a lot of money, but
the vast majority has been used to invest in the club’s infrastructure to
repair years of neglect with very little spent on the squad.
No club has a divine right to play at a certain level, but
most would think that Pompey belong in the Championship (at least). This
season’s promotion should be savoured, but Portsmouth will now face the
challenge of competing against clubs with much higher budgets.
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