Tuesday, March 9, 2010

The Storrie Of The Blues

Long-suffering Portsmouth fans finally had something to smile about this weekend when their team battled its way past Birmingham to reach the FA Cup semi-finals, but they are still rock bottom of the Premier League, even before the authorities deduct nine points for the club going into administration. However poor their performances have been so far this season, it is off the pitch where the situation has been absolutely desperate.

On 30 December Her Majesty’s Revenue and Customs (HMRC) issued a winding up order against Portsmouth in respect of unpaid taxes (VAT, PAYE and National Insurance contributions), which was debated in the High Court on 10 February when the club was given one week to draw up a statement of its financial affairs. Although they managed to produce this (big deal), it did not prevent the club announcing on 25 February that they would enter administration with debts of over £70m.

They still need to find £14m to operate through April, while they have been ordered to return to the High Court on 15 March, as doubts have been raised by HMRC over the independence of the administrator Andrew Andronikou, who they believe may have links with the current owner Balram Chainrai. Further evidence of Portsmouth’s financial incompetence, if any were needed, came with the players’ wages being paid late three times in four months and, most embarrassingly, the website being temporarily shut down after the bill was not paid.

"Leave in Silence"

In their own misguided version of musical chairs, Portsmouth have somehow had four owners already this season. They kicked-off the new campaign under Alexandre “Sacha” Gaydamak, son of the colourful Arcadi, who was accused of making money from illegal arms deals by the Sunday Times. Having spent money like it was going out of fashion, Sacha was apparently badly impacted by the credit crunch, so in August decided to sell the club to “Doctor” Sulaiman Al-Fahim, the self-proclaimed power broker behind Abu Dhabi United Group’s takeover of Manchester City, who faces an arrest warrant in the United Arab Emirates for an alleged dispute in a major real estate deal.

Just 40 days later, Al-Fahim gave up trying to find the money to complete the purchase and sold 90% of the shares to Ali al-Faraj, who has never been seen at Fratton Park. According to the Portsmouth hierarchy, he is some sort of commodity broker, but however he makes 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 seems 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.

The only constant throughout this nightmare period has been the Chief Executive, Peter Storrie, who has been with the club since early 2002. This is the man who managed to introduce just about the only penniless “billionaires” in the Middle East to his club and presided over a reign of staggering financial ineptitude. How could one of the highest paid CEOs in the Premier League with over 20 years experience not realise that signing shedloads of ordinary players on exorbitant wages was going to lead to ruin?

The only skill he has demonstrated has been his ability to manipulate the media into somehow believing that he is the good guy in this sorry tale. In fact, Storrie has plenty of previous with all of his former clubs going on to suffer from financial problems.

"Money for nothing"

He was the first paid Managing Director at West Ham in 1991, where the supporters staged a sit-down protest on the pitch against his bond scheme, which was subsequently withdrawn. Years later, his reverse Midas touch had its effect with West Ham forced to make a fire sale to the porn barons. After he was sacked in 1999, Storrie turned up as Southend United’s Chief Executive, where he came under fire for his whopping (at the time) salary of £120,000. Southend are, of course, currently facing a winding up order.

Storrie then took the role of Executive Deputy Chairman at Notts County, whose own shambolic saga of mysterious owners and unpaid debts has rivaled Portsmouth in the race to win basket case of the year. Obviously, Storrie’s connection to these troubled clubs is purely a coincidence in the same way that his old mucker Harry Redknapp is in no way responsible for the financial crises that have damaged all his former clubs (Bournemouth, West Ham, Southampton and, er, Portsmouth).

Storrie’s standard defence is the laughable assertion that he is only an employee of the club. Sounding like a spoiled child stamping his foot, he has produced this line time after time. Last month he stated, “People have got to appreciate that I am the Chief Executive of the club. I am an employee. I am not the owner and it’s the owners that make the decisions and run the club.” His version of events, namely that he was never involved, has been frequently repeated, “At the end of the day I am simply an employee of the club and I only carry out the instructions of the owner.” Only following orders? Heard that one somewhere before.

In recent weeks, he has been even more explicit about his lack of accountability: in January he told ESPN, “I am no longer involved in the finances. I am not involved in the transfer negotiations”; after the administration, “While accepting as Chief Executive of Portsmouth Football Club that it was inevitable that criticism would come my way (really?), the overall funding of the business was the responsibility of the owner.” Apart from covering his ample backside, this does rather beg the question: what the hell was he doing?

"Is the money over there?"

Despite the numerous denials, at other times Storrie has claimed to be running the club. He described Sacha Gaydamak as a hands-off owner, leaving Storrie to make the operational decisions. Similarly, Storrie said that Ali al-Faraj “doesn’t like publicity. He’ll let me run the club day to day.” His old “partner in crime” Harry Redknapp also dropped Storrie in it, magnificently proving the old adage “with friends like these, who needs enemies”, when he described Storrie’s responsibilities in his own inimitable style, “I don’t have anything to do with transfers. Peter Storrie handles all that.”

Indeed, Storrie has occasionally portrayed himself as the hero of the hour, the saviour of the club fighting off all and sundry. Last year, he gave The Mirror a lengthy interview explaining his pivotal role in securing the “deal that is set to revolutionise the Premier League club.”The article was entitled “Peter Storrie exclusive: how I sealed Portsmouth takeover deal with Sulaiman Al Fahim” and read like a thriller with Storrie as some sort of daring James Bond figure. When he had a difference of opinion with Southampton fans, he took out an onion, shed some tears, but then valiantly insisted that he could not abandon Portsmouth when he was so close to preventing the club from going under. Up, up and away, Superman!

"What's the Storrie, morning glory?"

His resolute protection of the club included a bizarre defence against those Match of the Day pundits who dared to raise questions about the whereabouts of the cash generated by the club, “The bulk of the money has gone to the players in wages. The cost of the players’ wages this year is £37m. Last season, when it was running at its height, it was £52m, and the year before it was £42m. The vast majority of the money over the last two to three years has gone on players’ wages and also on their transfer fees.” He says this as if it was an act of God and nothing to do with the executive management, i.e. him.

Of all people, the News of the World highlighted the fact that salaries were an obscene 91% of the club’s income in 2007. The 2008 accounts reported income of £71m, but this included £49m broadcasting income from Sky, which will significantly fall after the inevitable relegation to the Championship (after the parachute payments have ended). This would represent another downward spin in the club’s vicious circle, as it surely cannot survive on its paltry £12m gate income, which is severely limited due to Fratton Park’s meagre 20,000 capacity.

As Storrie so astutely says, the high salary bill is a result of the insane transfer policy. After making a loss of £23m in 2007, the club appeared to be intoxicated by winning the FA Cup in 2008 and went on a £53m spending spree (net £36m after sales), which was one reason for another large loss of £17m in 2008.

Speaking of salaries inevitably brings us on to John Utaka, the non-scoring forward, who cost the club a mere £7m, but is reported to be on £80,000 a week. Harry Redknapp leapt to the defence of his former club, “'People talk nonsense about wages, you see all this rubbish about John Utaka earning eighty grand a week, he's not. He's earning £28,000 a week. Peter Storrie told me that. Peter showed me his contract the other week.”

Leaving aside the issue of confidentiality with Storrie apparently happy to show private documents to the manager of another club, how stupid do they think we are? We know how footballers’ contracts are structured with numerous add-ons: appearance fees, bonuses for goals scored, trophies won, relegation avoided, etc. After all, this is the CEO who negotiated a bonus scheme which paid out far more than Portsmouth earned for their Wembley success.

"When Harry Met Storrie"

The accounts also reveal that the club has been charged £1.2m in late payment fines in the last four years, which is hardly a sign of financial expertise. We probably did not need Nick O’Reilly, a partner at Vantis business recovery services, to inform us that he was shocked at the poor financial management at Fratton Park after he had been given unlimited access to Pompey’s financial affairs, as his damning opinion only confirmed most fans’ worst fears. Storrie also moaned that he was “fed up with everyone highlighting the debts without bothering to look at the assets of this football club.”

Well, the administrator told us that the debts were north of £70m, while the assets probably only amount to £36m, based on the £15m fixed assets (essentially the ground) in the 2008 accounts and £21m for the players. Storrie had estimated a market value for the squad of £38m in the statement of affairs provided to the court, but HMRC went with the £21m valuation and I know who I would rather believe. Either way, the assets are clearly much lower than the debt, which is why the banks decided to pull the plug. The growing debt is the reason why interest payments doubled in 2007 and then tripled in 2008. Frightening stuff.

You might think that this calamitous performance would be reflected in Storrie’s remuneration. You would be wrong. His reported salary of £1.2m makes him one of the best-rewarded Chief Executives in the Premier League. Unbelievably, this represented a 30% increase over the previous year in spite of the collapse in the club’s finances.

In fact, the accounts that were filed showed that Portsmouth’s highest paid director (Storrie) was given a total of £2.0m in salary, bonuses and pension contributions, but the club even managed to cock this up and had to “clarify” the figure, correcting it to £1.2m. Storrie took umbrage at these revelations, “I am sick and tired of lies that have been written. I was unfairly criticised for earning vast amounts of money. I’ve seen £1.4m bandied around, but my basic salary is less than half of what’s reported.” You’re having a laugh - £700,000 for essentially destroying a football club? That seems well above the going rate to me.

"You're having a laugh"

Storrie’s argument actually raises another issue. His bonus is “in recognition of me keeping the club going by selling players.” In other words, he took a cut of each transfer fee, thus acting more like a player’s agent than a chief executive. Come to think of it, if the club were paying agents to arrange player sales, why on earth would you also need to give the chief executive a slice of the pie? Harry Redknapp was apparently remunerated in the same way, but that does not begin to justify this enormous conflict of interest.

The only reason I can think of that helps to explain Storrie’s vast package is his relentless optimism, though some might prefer to think of this as a string of false promises. Storrie has always looked on the bright side of life. Back in 2008, he announced plans for a grand new stadium overlooking Portsmouth Harbour, “We have moved into a new era with the backing of owner Alexandre Gaydamak and these are very exciting times for the club, both on and off the field."

A year ago, he reassured fans, “We’re financially sound now. The moves that we made in the transfer window (selling Jermain Defoe and Lassana Diarra) have made things stable.” After the Al-Fahim takeover was confirmed, “It was a difficult period which was not helped by ludicrous uninformed reports that the club was in complete financial meltdown.” The next owner was serenaded with, “It has been a very difficult year, but one thing you must believe is that Ali al-Faraj and his associates are doing their very best to refinance the club, so we can once again operate the business as we all want to.”

"Everything must go"

In December 2009, Storrie insisted that, “The club is not going into administration. If that were the case, it would have happened at the end of September or early October. Much is happening behind the scenes, but constant malicious rumours and speculation do not assist with the proposed major long-term funding that is currently being put in place.” He got that right – administration did not occur until, ooh, at least two months later.

Most brilliantly, when the club actually did go into administration, he came out with the barely credible, “This course of action has kept the club alive and given someone an exceptional opportunity to take this great club on with fresh investment.” Fifth time lucky, hey, Peter? If the fans had any doubts that prospective buyers would be beating down the door, “Jackanory” Storrie tried to comfort them, “We had a phone call last night and we also had an email from somebody else this morning.” Ye gods. Could he be any more insulting to the supporters?

To be fair, he’s also a master at the blame game, managing to blame everyone and everything (though possibly not the Boogie) for Pompey’s plight. His erstwhile friends, the fourth estate, felt his wrath, “I’ve heard the joke about how we have had more owners than wins this season, but the media have been putting the knife in all season, and no one is going to stop us now.” The banks are the soft target de nos jours and they did not escape, “Standard Bank and Barclays demanded total repayment of their overdrafts. Had that not been the case, we wouldn’t be in the situation that we are now.” Given Portsmouth’s business acumen, I can’t imagine why the banks wanted their money back.

The nasty taxman was also unreasonable enough to demand the money owed to him, but then again he probably lives in the real world. Even poor old Stoke City were lambasted when they pulled out of a loan deal for David James, but the biggest opprobrium was reserved for the Premier League, who issued a transfer embargo until Portsmouth had paid off their debts to other clubs, which they compounded by diverting Pompey’s broadcast payments. With no sense of irony, Portsmouth complained that they were being treated like “poor relations”, not fully appreciating that just maybe the League was concerned about them going further into debt.

"It's a funny old game"

He even took a pot shot at the club’s owners, “Our financial problems increased when we had a succession of owners who didn’t have the money to run the club, borrowed against the assets and put us in more debt”, conveniently forgetting to mention who brought them to Fratton Park. For example, when Storrie introduced al-Faraj, he gushed over his group, “They appear to have considerable assets and they’re immediately putting finance into the club. From everything I know about the guy, he seems very fit and proper.”

This is the major problem with Storrie’s “strategy”, which essentially relies on a friendly billionaire baling out the club’s profligacy. If the owner fails to come up with the dosh, then it’s all his fault. Storrie even attempted to put together his own consortium to buy the club, but managed to make a pig’s ear of that, amazingly being unaware of a competing group despite his privileged position, “We were under the impression that on Wednesday morning we were going to sign and complete the takeover. Unbeknown to us, I now discover that Sulaiman got involved again on the Tuesday.”

When his bid was snubbed, you might have expected Storrie to take his leave, but for some reason (possibly connected to the £20k a week he trousers) he keeps hanging on for dear life. In January, he admitted that his position at the cash-strapped club was “probably” untenable, not because of the unholy financial disaster he “managed”, but because some sales were carried out behind his back (wonder if he received a bonus for them?).

Having stated that he would tender his resignation, Storrie qualified this statement by stating that he was willing (threatening?) to work with the administrator, as “I believe he wants me to help him sell the club to the right person.” Well, of course he would after Storrie’s superlative record to date. By the way, I have yet to see him exhibit any signs of remorse for the many small creditors who will be royally screwed as a consequence of the club’s administration.

"The last owner went that way"

Storrie is, of course, no stranger to the legal system, having been arrested on suspicion of conspiracy to defraud and false accounting in November 2007 along with Harry Redknapp, former Portsmouth Chairman Milan Mandaric, football agent Willie McKay and footballer Amdy Faye. In November 2009, he had the dubious honour of being the first person to be charged in the ongoing investigation into corruption in football, when he was accused of cheating the public revenue during Faye’s transfer from Auxerre. Storrie described this as an “unwarranted and dishonest attack upon my character”, again playing his “not involved” card by claiming to be on honeymoon when negotiations with the Senegal international were concluded. His employer went further, “Mr. Storrie is known by his peers to be a man of impeccable repute.”

How trustworthy is Mr. Storrie? Well, there are lies, damned lies and Storrie-tistics. This is the man who told the world that there would be no fire sale after Portsmouth won the FA Cup, only to then dismantle the team. He slapped down players like Sol Campbell and Peter Crouch who expressed their concerns about the club’s direction with the patronising “sometimes they don’t understand and make these silly statements.”

I suppose that we could always seek out the opinion of Tony Adams, who Storrie admitted was “very, very unlucky” to be sacked as Pompey manager. Adams was almost certainly very, very surprised given that just eight days earlier, Storrie had said, “There's been no board meeting to discuss the manager's position and there isn't one planned. It's important we all get behind Tony: we're all in this together. From the board through to the coaching staff – we win and lose together.”

"Pocket money"

There’s an old saying that you can judge a man by the company he keeps and one of his best mates in football is our old friend Harry Redknapp, who has worked with Storrie at both Portsmouth and West Ham. Harry took time out from his bail to give Peter his full support, “It never entered my mind when I was there that there would be problems. The club was run well.” He must somehow have missed the significant losses, the growing debts and massive salary bill.

Former Portsmouth Chairman Milan Mandaric, coincidentally also on bail for the same charges, also praised Storrie, albeit in a wonderfully contradictory statement, “It's hard for me to comment on what happened now with the new owners. There have definitely been some mistakes there somewhere, but it would be unfair for me to blame Peter for that.” At least Storrie treats his family well, reputedly employing his nephew as a Players’ Liaison Officer (whatever that is) for a cool £60,000 a year.

Despite taking the Portsmouth fans for fools, up until recently they have astoundingly given Storrie their support, even chanting his name at a couple of games, though it’s difficult to know exactly what they were saying over the racket made by that idiotic bell ringer. He claimed that he had been abused by Southampton fans shoving bank notes in his face, though they were probably only trying to reward him for doing such a great job in ruining their local rivals.

Although Storrie was at pains to emphasise that these were not Portsmouth fans, the “Love Storrie” was well and truly over and shortly afterwards he complained, “What I am not prepared to accept is the very personal level of abuse on websites, emails and local radio which I have received over the last couple of days.”

"Alarm bells ringing"

When Storrie announced his forthcoming resignation, he lamented, “It is an extremely sad day for everyone connected with the club.” At the risk of straying into the world of pantomime, “oh no, it isn’t.” As Chief Executive, either he exerted influence and control, in which case he was responsible for the crisis; or he did not know what was going on, in which case you have to question his competence. Whatever. To resurrect an old newspaper headline after Bobby Robson's disastrous Euro 1988 campaign as England manager, “In the name of God, go.


  1. It's a tale of woe and no mistake. Legally, Storrie is talking cobblers about the owners running the club, not him. As a director he runs (or ran, to be accurate) the club for the shareholders and it is on that performance that he will be judged when the administrator (if it continues; the official receiver if it goes into liquidation) reports on the conduct of all directors to the Secretary of State for BIS within six months of his appointment. I wonder how well he'll do?

    One correction though - the club didn't put itself into administration. With the winding-up petition at court it couldn't, legally, do this. Rather it was Chanrai, as holder of a charge over the company that did. It is the validity of this charge, created in Jan this year, that the Revenue are challenging. If it isn't valid, the administration can't go ahead.

  2. Anonymous,

    Agreed. Thought I kept the comments about going into administration relatively neutral in terms of who did it, but you are, of course, absolutely correct.

  3. Excellent stuff mate. Great article. Luke, TFR.

  4. Good luck to Portsmouth FC who have just been taken over by the Portsmouth Supporters Trust a fan based organisation.

    Let's hope that all of the dodgy dealings of the past can be put to one side and the club can start it's long road, just been relegated to League 2, to recovery.


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