We are starting a new segment at Footy Finance! Every Wednesday ‘The Numbers’ will highlight one figure that has relevance for the crossroads of Football/Soccer and Business.
Our number today is £209,869.42. This is the accrued cost of the ongoing administration proceedings at Portsmouth, as disclosed in the Administrator’s Report to Creditors released last week (1). The sum applies to the period between February 26 and April 12, and includes billable hours by the administrator and his firm, supply reimbursements, and travel costs. Billable hours represent 95% of the sum. As Portsmouth clearly has not exited administration, the cost continues to grow.
Administration is viewed by many supporters as a way to ‘wipe clear’ a club’s debts and essentially give it a fresh start. This number should be a stark reminder that there is a large and very real cost of financial instability. To put the figure in perspective, consider that Portsmouth’s total Matchday Revenues for 2009 (draft figures) were approximately £11.4m, the administration costs currently represent 1.8% of that figure after only 45 days. Just to re-emphasize again, this money is not building club facilities, paying players, or the cost of pies; it is money going out of the club door just to find someone to buy the club or, if it comes to it, to determine how much that door is worth in a liquidation.
The longer it goes on the smaller the pie gets for everyone, and considering the long list of creditors looking for a slice the pie is already far too small.
The only reason that the cost of administration has been ignored is that they are glossed over as soon as a newly minted millionaire comes in to rescue a club. All things are forgiven and the cycle begins again.