Thank you for joining us for this evening’s Sky Bet League One fixture against Bolton Wanderers.
This is the third meeting contest the two clubs in just seven weeks and much has changed since our last meeting. Bolton have gone on a fabulous run since then and are in touching distance of the automatic promotion places, while we congratulate them for reaching the final of the Papa Johns Trophy to be played at Wembley in April.
Meanwhile, we appointed John Mousinho the following week and on Saturday welcomed Jon Harley to his first Fratton Park fixture as assistant head coach. We are delighted by the encouraging start that John has made and helping to build the renewed belief and confidence that is exuding throughout the club. That was underlined by a comprehensive victory over Cheltenham and a performance appreciated by everyone in blue throughout the stadium. As I noted then, we remain determined to give everything possible over these next few weeks with big fixtures immediately coming up, starting this evening and then continuing against both Barnsley and Sheffield Wednesday.
Last Thursday saw the government publish its White Paper in response to the proposals put forward from last year’s fan led review into football, with the majority of the core proposals included. The major highlights are the proposed introduction of an independent regulator and measures designed to promote better sustainability among all clubs through a licensing system. This, along with many other licence requirements, will mandate clubs to submit long-term detailed business plans and show proof of liquidity to demonstrate how they might cope with events such as relegation or withdrawal of owner funding.
The latter issues have caused much distress to many clubs in recent years and remains a big problem. The threat is particularly significant in the Championship, with Derby being the most recent example, although the problem has been especially traumatic for supporters at Bury and Macclesfield. Elsewhere, there are other clubs currently operating under real financial stress. Bolton themselves have recently experienced uncertainty and, of course, we must never forget that Pompey were close to oblivion before supporters came together to galvanise and save their club.
We must always remember that football clubs are hugely significant to the communities they serve. We mean so much more than simply a venue hosting matches on a Saturday afternoon or a Tuesday evening. Clubs have a huge responsibility and that local impact was recently made abundantly clear in the independently researched EFL Community Impact Study published in January. This report showed that collectively, EFL clubs and their community organisations, such as Pompey in the Community, collectively contribute more than £865 million of social value to towns and cities across the country.
Yet we see a concerning vulnerability in the current financial fabric of the game, none more so than in the Championship, where clubs are desperately attempting to compete against those benefitting from parachute payments awarded to those relegated from the Premier League. The EFL estimates that the value of parachute payments awarded to just a few clubs represents 30 per cent of total Championship turnover.
More worryingly, total net debt in the Championship amounted to £1.8 billion in 2020/21, with £1.1 billion of this indebted to club owners. Total pre-tax losses of Championship clubs in 2020/21 stood at £290 million, with wages in the same season incredibly representing 125 per cent of turnover. All of this insane trading cannot continue or there will be more club fatalities, especially anywhere where the owner becomes unable to continue their support.
The EFL call, which we fully support, is for wealth to be distributed more evenly throughout the pyramid, but we must see stronger financial control to protect clubs and provide greater protection to all stakeholders – not just owners, but supporters and the communities clubs represent. The government, through the publication of the White Paper, has the opportunity to play a key role in resolving the existential crisis and support a more sustainable financial model, overseeing and regulating the delivery of a brighter future for the footballing pyramid and the entire game.
Finally, I would like to welcome Mark Judges, our new director of sales, who joined us yesterday following a 10-year spell as commercial director at Sussex County Cricket Club. We have split the roles and responsibilities of our previous chief commercial officer into two, with some extra areas added. Mark will have oversight of ticketing, sponsorships, partnerships, hospitality and development of our non-matchday business. He will also work on the business development aspects of our partnerships with Piglets Pantry and also Mosaic, who we have appointed to manage the operation of the Pompey Health and Fitness Club. Our marketing, retail, lottery, media and social media functions will be overseen by Matt Barker, who has stepped up to the new position of head of marketing and communications. We wish Mark and Matt every success in their new and exciting roles.
On Saturday we travel to Cambridge United with yet another sold out away following. Thank you once again for such outstanding support and we hope you see another enjoyable and top Pompey performance this evening. Enjoy the game and PUP!
Andrew Cullen
CEO