Article Taxonomy: Football Finance

Manchester United chief executive David Gill has launched a fierce attack on the Red Knights consortium interested in launching a bid for the club, in particular describe their leading spokesman Keith Harris as a publicity seeker with a modest track record.  Harris may be no shrinking violet, but the description of his track record seems a bit harsh.  While staying economics at Bradford University he pl

Portsmouth have been ordered back into court in under a fortnight on March 15th.  Doubts have been raised about the independence of the administrator from the club’s fourth owner, Balram Chainrai.  The club will have to provide details of all transactions between his club, Portpin, and the club. 

Revenue and Customs have complained in the High Court that the financial affairs of Portsmouth are ‘shrouded in mystery‘.  They are not convinced that administration is the right route for the club and are dissatisfied with the independence of the administrator.   It was also revealed that the club will need £14m to keep going just until the end of April.  The case continues.

The group of businessman known as the Red Knights are gearing up for a bid for Manchester United  They are led by Keith Harris, a former HSBC Investment Bank chief executive, who became a well-lnown figure in football after his involvement  in takeovers at West Ham, Manchester City and Aston Villa.   Goldman Sachs chief executive Jim O’Neill grew up in Manchester and is a lifelong United fan.  Goldman Sachs backed the United bond issue.  Mark Rawlin

West Ham co-owner David Sullivan has claimed that three Premiership have turned to a wealthy individual to lend them money after the banks refused to continue bankrolling them.  Sullivan did not name the clubs but made it clear that they were not the top clubs and one could also exclude smaller benefactor clubs like Wigan and Fulham as well as clubs that have recently acquired new owners such as Sunderland.

Portsmouth have been ordered back into court after HM Revenue and Customs expressed unhappiness about unspecified aspects of the voluntary administration process.  The tax authorities remained tight lipped about the exact nature of their challenge, but it can be seen as part of their tougher line with football clubs.  Against a background of falling tax revenues, Revenue and Customs are unhappy about the failure of many clubs to meet their tax obligations.

The rule that gives football creditors such as players and other clubs priority in any administration has been challenged.   Some analysts think they are not consistent with the law.  Others say that in any event the rule should be abolished.  Football economist Stefan Szymanski took this view and not just because it favours wealthy footballers over the likes of the St.John Ambulance.  He told the Financial Times, ‘It undermines the incentive of the league to put in place some self-regulatory mechanism to control the finances of the club.’