Sustain The Game: “No silver bullet” says Pompey chief exec

On Friday we launched our Sustain The Game! campaign and since then it has been endorsed by supporters and high-profile figures across the game – here Portsmouth chief executive Mark Catlin argues that regulation must be strengthened but there are no easy answers or “one size fits all” solutions…

Definition of ‘self-sustaining’; adjective;

“a self-sustaining process or system is able to continue by itself without anyone or anything else becoming involved.”

As per the pure definition, when talking about the future of football being self-sustaining, is this really the vision we all share? Or, as I am sure will be the case, this will mean different things to different clubs, supporters, and their respective owners.

Owners investing tens, even hundreds of millions of pounds into clubs would argue that because of their own personal wealth they fit perfectly well into the definition of ‘self-sustaining’, where the pure meaning clearly runs contrary to that principle; the entity (the club) is actually reliant on an exterior person or entity to survive.

Over time my own views on this subject have evolved.

When first arriving at Portsmouth I became a ‘self-sustaining’ purist, and still at heart believe that there is and should be a ‘natural order’ of a club’s standing based upon its size, fanbase and revenue generating capabilities.

Owners injecting millions, even at League One or Two level, is in my opinion a perversion of this natural order. However, having listened to the polar opposite argument put forward by many wealthy, decent owners, and witnessed first-hand the great things many of them have done at their clubs and local communities, I have arrived at my own personal thoughts on a pragmatic and sustainable solution for clubs, and one to this day we employ at Portsmouth FC.

In 2012 I joined Portsmouth in the middle of its administration process, teetering on the brink of going out of existence, and worked with the Pompey Supporters Trust and a group of what we called ‘High Net Worth’s in trying to save the club.

I witnessed first-hand the damage done to a club by previous owners who overspent way beyond their means. Following the fans successfully saving the club, I became radicalised to the purist self-sustaining cause, and we literally spent on players what we generated, or to quote from our Chairman at the time Iain McInnes: “We eat what we kill’.

Our budgets were set using a simple accountancy method; accounting mid-range for our projected income, minus projected expenditure (but excluding the playing budget), and the balance was what we set as our playing budget for that season. The result? Seven years of operating profit and loss (P&L) neutrality.

You may think this is a perfect solution, but I have learnt that it’s not for two major reasons;

1. Under the current football culture of allowing owner ‘investment’ to cover huge operating P&L losses, it has been tough convincing supporters to stick with us when often having player budgets far less than clubs that have attendances a tenth of our own. Losing players to clubs a fraction of our size is a tough pill to swallow. As an example, a League One club recently posted losses of almost £6m in its latest set of accounts. This is being funded by the owner and under the current rules is perfectly within the regulations, but what happens generally to these clubs if the owners’ ‘own’ businesses are not able to continue to fund such losses, or he/she becomes disenfranchised and unwilling to further support such deficits and debts, as we have seen over recent seasons at (for example) Blackpool, Sunderland or Bolton? It’s not been easy remaining true to our values when the expectation level and demands of our supporters, given our size, history and support, are out of sync with being a League One or Two club and more aligned with the Championship.
2. Stadiums, mid to long-term money generating enterprises, and training facilities require constant capital investment and to try and self-fund these through normal club revenue would not be possible, so in all cases a degree of owner investment is required.

Every club Chairman, CEO, and supporter generally will have their own view on how the future of football should be shaped; as they all have differing models, structures, expectations, and ultimately are businesses in their own right. It’s not easy.

Having the experience of working with both fan and billionaire owners, witnessing first-hand the ‘pros and cons’ of a variety of differing football business models, and in the spirit of striking a balance between club size and owner investment, here are my underlying thoughts on the principles that I believe (and we will all have differing opinions) should underpin any discussions regarding the future of sustainability in football;

• Whilst the aim of achieving pure self-sustainability may not be achievable, we should strive for clubs to be sustainable and processes put in place to ensure that any owner investment, debt, or loan mechanism is underwritten by a bond or equivalent to protect the club. Clubs cannot be allowed to budget for huge losses via an owner simply writing a letter saying he or she will cover these losses, as a minimum there needs to be substantial guarantees, ideally a cash bond, to cover such projected and actual losses.
• Robust mechanisms need to be in place to ensure that clubs ‘cheating’ or breaking governing body sustainability rules are dealt with severely and rapidly. There needs to be confidence in clubs that those not abiding by regulations are going to suffer the consequences and not be allowed to benefit ‘on the pitch’ via their actions.
• Operating P&L should be used as the base mechanism to dictate a club’s player budget. If an owner is willing to increase this budget via a bond then he/she should be allowed to do this, but to cover the exposure of the length of the players contract, and always up to a percentage limit versus the operating P&L.
• Owners should be allowed to fund club capital expenditure projects and logically any profits from these enterprises (new stadiums/stands etc.) be allowed as part of the operating P&L and subsequent player budget.
• Greater investment should be made by governing bodies into the accounting and policing of sustainability regulations.

Unfortunately, in life generally, the minority can taint and spoil the reputation of the majority, and that equally applies when talking about football club owners. Clubs are not just businesses; they are community assets and need protecting from the minority of owners that we all know can force them into oblivion.

I often use the phrase at Portsmouth that ‘we may not be community owned, but we remain a community club’, and whilst I believe there to be no ‘silver bullet’, one size fits all solution, I do believe that the implementation of at least some of the points I have raised are fundamental if we are to seriously tackle the protection of OUR clubs.

• Sustain The Game! Find out more about our campaign here…