Portsmouth Football Club is facing a new corporate insolvency battle after admitting that it has failed to pay its players in the last month.
Like any company, an organisation that is unable to find the cash to remunerate its employees is either acting in a very underhand way or in deep trouble. And there is no doubt that the latter applies, with HM Customs and Revenue having applied for a winding-up order.
The club has been in financial difficulties since over-investing in the transfer market in recent years. This brought on-field success when the club won the FA Cup in 2008. But it also ran into deep debt and was almost wound up over unpaid tax bills by HM Revenue and Customs in 2010 – the year the club was relegated from the Premier League and therefore lost the extra TV income that comes with such status.
With its main playing assets sold on, the club has struggled to get by since then and while it moved on from a foreign ownership period in which serious questions were asked of those in charge, the recent issues have arisen from its current owners going into administration.
A club statement this week said the freezing of its account was “the normal process” after a winding-up petition has been issued.
It added: “The club is now seeking a validation order from the court in order to have its bank accounts unfrozen so that staff wages and suppliers can be paid.”
While the club is confident this will happen in the coming days, the persistent difficulty of the company may bode ill. Speaking to the BBC, insolvency lawyer Guy Thomas said: “This is as bad as it can get for Portsmouth without the club ceasing to exist.”
And it may act as a reminder of the dangers facing troubled companies of all kinds if the club does go under – with the memories of a club parading one of sport’s most glamorous trophies just a few years ago still very fresh.