Supporters Direct Self-destruct?

In a piece of news which left most Pompey supporters bemused, and some outraged, Supporters Direct has appointed David Lampitt as their new CEO.  Supporters Direct is the body which aims “to create the conditions in which supporters can secure influence and ownership of their clubs”. SD is “the UK’s leading body working to ensure that clubs are run responsibly and are financially sustainable.”

Supporters Direct is an umbrella body for the growing numbers of supporters’ trusts in football and rugby league (another game which has abandoned its roots in the interests of mammon) and ice hockey.  It played a big part in helping the Pompey Supporters’ Trust get off the ground and brings together a great many people who volunteer time and expertise right across the game.  It has been a force for good in helping some clubs recapture control for the fans, and if the aims of a Trust succeed at Portsmouth it would arguably be the greatest achievement for mutualisation in football to date.

It was in Spring 2010, when we were preparing to leave the top flight (but planning to do so noisily at Wembley), that David Lampitt was appointed CEO at Pompey.  He arrived from the Football Association where he had been Head of Integrity.  In some ways it was an unexpected departure from that job, because Lampitt still had plenty of major concerns at the FA to get his teeth into and he departed with a high reputation.  Few of us in Portsmouth knew much about him, but his name had already started cropping up in stories in the papers during his time at the FA.  He was responsible for negotiations with agents on new regulations in the light of the Quest inquiry into transfer market rule breaches.

However it was felt by agents that the FA’s response was confused, and that such confusion could only weaken still further public trust in the governance of the game.  The low point came at an event in 2007 at which Lampitt had been scheduled to speak, but pulled out at the last minute.  The chairman of the meeting replaced Lampitt by putting a banana on his seat.

After that the wrangling dragged on for many months, with the initial implementation of new regulations delayed for reasons that aren’t clear, but seem to relate to internal disagreement at the FA.

In the event, a set of regulations were devised which lasted just over a year before the agents went back to Lord Triesman, head of the FA, and demanded further changes, which it fell to Lampitt to announce for the start of the January 2009 transfer window.

Since that time there have been occasional explosions, but for all the time and money expended on the enquiry, and despite the involvement of a senior FA figure like Lampitt, it has never been felt in the game that the authorities have got to the bottom of the issue.  By the time Lampitt left the FA, the Association had been sat on Quest’s dossier for over 2 years without any charges being brought.

With the new agency regulations in place Lampitt enjoyed a fairly trouble-free time of it at the FA, since the fiasco at Fratton Park during 2009 was policed (supposedly) by the Premier League.  Lampitt moved on to work at UEFA level on the FFP framework which might eventually bring some order to the chaos of European football.

And so we end up back in April 2010 while the club was still in administration and in the hands of UHY Hacker Young and the inimitable Andrew Andronikou.

The task of steering the club through that close season while trying to secure agreement of the CVA was tough but confidence was high that with a top man from the FA in charge, all would be well.  There was even a bizarre conspiracy theory in some quarters that Lampitt had been “parachuted in” by the authorities to ensure that there was no repeat of the al Faraj fiasco, with non-existent owners, shadowy foreign directors, obscure flows of money, and spiralling debts.  However it was obvious that there were some massive salary commitments which would have to be dealt with, players like Tal Ben Haim (reportedly on £36k p/w), Aaron Mokoena (reportedly £32k) and an assortment of other players who had been signed in the Peter Storrie era without relegation wage-cut clauses.

The disastrous pre-season tour of the US came and went, and after some knife-edge stuff, the CVA was eventually passed by the court early in August 2010.  But the uncertainty dragged on in the absence of a buyer, although Balram Chainrai was hovering in the wings.  That uncertainty flared up in a bizarre way in October 2010 when the club, still ownerless, claimed they were “likely” to be wound up.

On the Friday night before an away game at Hull, a statement appeared on the official website (since taken down) claiming Sacha Gaydamak was demanding payment of a sum outstanding to him under the terms of the CVA or else he would veto the club’s exit from administration and drive it into liquidation.  This sparked complete alarm around the city, with many people worrying en route to Hull while the situation unfolded.  But Gaydamak moved quickly to dispel the panic, and it would seem the “likely to be wound up” statement was a dreadfully clumsy tactic to try to bring Gaydamak to an agreement to exiting administration immediately.

I would love to have been a fly on the wall in the office at Fratton Park on that Friday night in order to learn who ordered that statement to go up.  Andronikou was as baffled by its appearance as Gaydamak.  In that there was no such need for panic, as Gaydamak and Andronikou explained, whoever put the statement up was playing with the emotions and trust of the club’s supporters in a grossly irresponsible manner.

After that last teeter on the brink, agreement was reached and the sale of the club to Balram Chainrai proceeded.  David Lampitt told Express FM around that time that the club was more-or-less operating at break-even.  Despite operating with a small squad, things went steadily.  There was loose talk of the play-offs, but there were also pledges not to exceed the club’s “natural resources” financially.

As the season wore on, it was clear that there wouldn’t be promotion but there were plenty of rumours about the sale of the club.  Keith Harris of the investment house Seymour Pierce had been scouting potential buyers and by April the name of to a Russian-backed group Convers Sports Initiatives was in the public domain.  Being naturally as sceptical as they are stoical, Portsmouth fans started to do some background checks on the potential new owners and soon found evidence of colourful backgrounds with Messrs Antonov and Dubov.

Vladimir Antonov had applied for permission to operate a branch of his bank, Bankas Snoras, in the UK and been sent packing by the Financial Services Authority after an investigation.  The FSA said Snoras repeatedly gave “misleading and incomplete” answers to questions asked of it.  Antonov announced an appeal, but after doing nothing withdrew in 2009 to concentrate on other opportunities.

I won’t go into the murky world of Russian finance here, but given the FSA’s concerns about Antonov’s financing there should have been far stiffer questioning of his involvement in CSI by the Football League when the Portsmouth takeover was being scrutinized.  You have to wonder what the “native” board members of the club, Lampitt and Finance Director John Redgate, made of all this.  The FL have given weak excuses, such as saying they don’t have the strength to conduct “forensic investigation” of people applying to take the FPPT.  Quite why the FL think they would require any forensic capability when the FSA had already in effect carried out their investigation for them is beyond me.  Quite how the FL expect anyone to trust them or their FPPT given such an abject admission of weakness is a mystery.

While the sale of the club dragged on from April to June there was a crisis over season tickets for 2011-12.  With Chainrai still in control at the point season ticket prices were set in March, supporters were naturally dubious in case he tried to screw too much money out of them; but the attitude of the club’s management, and some unrealistic payment terms, combined with price increases of above 20%, was even more disappointing than most had feared.

There followed a certain amount of wrangling and negotiation between PST and David Lampitt which ended up with some compromise.  However the damage done to the credibility of the club’s management that Spring was immense.

Keeping up tradition, there was another chaotic tour of the US but as the season got underway, there was talk of investment and new players after the CSI takeover.  Set against that, as the same team were in day-to-day control of Fratton Park a fair number of supporters decided they’d had enough, and average attendances were appreciably lower than the previous season.

It soon became fair to question the investment CSI planned, as there was no motion on securing the land Sacha Gaydamak owns around the ground, and only cosmetic updates to Fratton Park itself.  However money was spent freely on players, and any notion of operating to a budget was abandoned.  The club soon required injections of cash from CSI to support that.  The honeymoon period lasted just over 5 months, until it became clear that Antonov’s main business, Bankas Snoras, was in dire straits; and the situation became worse when the Lithuanian authorities accused him and another business associate of fraud.

The whole CSI business collapsed before everyone’s eyes, into administration as big creditor Chainrai initiated legal proceedings.  Old friends UHY Hacker Young were installed as CSI’s administrators. All of this was pretty much as expected given the FSA judgment on Antonov’s business.  Pompey’s cashflow gap became a black hole.  But David Lampitt, left having to deal with Andronikou in charge of CSI, vowed to battle on over Christmas although he seemed to have little ammunition at his disposal.  Staff were once more not getting paid and there were limited cash funds available to make advances to staff in lieu of BACS transfers.

There was talk of a quick Chainrai takeover of the club again but nothing came of it at that point, and it was assumed there would be a January sale of players to keep the club going while a buyer was sought.  And there were bids for players, but for whatever reasons they did not leave, and so the money wasn’t raised.  Andronikou blamed Lampitt, partly unfairly as the players involved failed to agree personal terms with purchasers.  But with the closure of the January window, the door shut on any hope of staying out of administration. David Lampitt took to Express FM again on January 23rd to warn of the trouble ahead.  While sounding very downcast, he justified CSI’s spending splurge as trying to keep up with “fans’ expectations”, as if we fans were somehow to blame for the bloody mess we were again left in.  It wasn’t an edifying bit of radio, but at least that time he hadn’t forgotten to turn up because he was playing 5-a-side at Roko.

Administration inevitably followed in mid-February, PKF and Trevor Birch took over, and Lampitt was made redundant along with John Redgate, the Finance Director, and Nick Byrom the Commercial Director.

Since that time, it has emerged that the club has again ended up with charities on its list of creditors.  This is especially disgusting as there was a £2 surcharge levied on tickets bought on a match-day with the proceeds supposedly destined for those charities.  Why it was not possible to tot up the amount due after each game and pay it quickly isn’t clear.  Compared to the large outflows going elsewhere on a weekly basis, it should have been possible to divert the few thousand pounds per game to their rightful desitnation. As happened last time, the fans have rallied round to make up this shortfall.

In an especially unfortunate position were Pompey Sport & Education Foundation, who have both David Lampitt and John Redgate as Trustees, but have been left high and dry.  It isn’t clear whether the two men will remain at PSEF, I imagine they will do so no longer than is necessary to maintain a quorum and find replacements.  Nobody is suggesting that there is any personal impropriety in the handling of the charity monies, the charities are creditors along with lots of other people and businesses who have been left in the lurch.  But it is the sort of shameful embarassment the club and its supporters can do without.  Those charities will get however many pence in the Pound in any CVA.

The three departed directors have, according to the Daily Mail lodged claims as football creditors so that they are paid in full.  This has sparked outrage in Portsmouth – why should three non-footballing employees receive this status?

It remains to be seen whether Portsmouth have the cash to survive into June, or if the League will allow the club to compete in League 1 next season given plausible doubts about its ability to complete fixtures in the continued uncertainty as to whether Balram Chainrai is actually going to buy the club.  He has been saying he intends to do this since January, perhaps his failure to do so is an indicator that he hasn’t got the money.  He never managed to pay the small creditors and if you have a read of this link you’ll see that none of the people involved in the saga have the slightest idea what is going on.

Let’s leave this sorry tale here for the moment, with the club swirling round the plughole.  In the next update we’ll look at the appointment of David Lampitt at Supporters Direct, and how it came about.  Remarkably, as PST Chairman Ashley Brown confirmed to me in a tweet, they were not consulted by SD for their views.  I am not trying to drag PST into a brawl with SD, in the next few weeks it needs SD’s help in launching the bid to buy the club.  However, leading football writers and irate supporters found it a surprising appointment too.  There are reports that other trusts have misgivings.

We’ll look at their views in the next piece and set out some of the implications for Sporting Direct’s aim to be “the UK’s leading body working to ensure that clubs are run responsibly and are financially sustainable.”

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One Response to Supporters Direct Self-destruct?

  1. Pingback: Supporters Direct Self-destruct Part II | @Lord_Palmerston

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