Danny Cowley’s Portsmouth FC had an impressive second half of the season, picking up 37 points from the start of January 2022 to the campaign’s end.
Ultimately finishing in tenth place in EFL League One due to a less successful spell in late 2021, there’s still plenty of cause for optimism among the Pompey faithful.
A peek into the club’s finances and infrastructure makes it clear that the outlook is positive as they prepare to do business over the summer. We talked to Christina Phillipou - Principal Lecturer at the University of Portsmouth and an expert in football finance - for an insight into how the club stands in the current League One landscape.
Despite finishing two places lower than in the 2020/21 season, Portsmouth fans are in a far more secure position than their turbulent history might have allowed them to predict. As most football fans know, the period between 2005 and 2011 saw the club brought to the edge of financial ruin via a series of economic disasters.
According to Phillipou, "Portsmouth have got some less-than-savoury history which they’d probably rather forget. They are the only club to go into administration while in the Premier League and they’ve also gone into administration multiple times. They’ve also had a couple of previous owners with financial concerns convicted of various things - so not a great history of ownership."
Wages to turnover
The club’s fall from grace saw them drop from the top tier of English football to the fourth tier - and that’s when fans stepped in to sort out the mess, with the Portsmouth Supporters Club giving their own funds to save their team from nose-diving into obscurity. Since then, popular Chairman Michael Eisner has taken the helm from 2017 and the port city’s ship has steadied considerably as a result.
"Lately Portsmouth are generally one of the few clubs who’ve been looking pretty strong in terms of finances, says Phillipou.
"Their last set of accounts in 2021 included the pandemic which had an effect across the board, but before that situation their wages to turnover ratios were in the 60s to 70s - which is pretty good."
With the pandemic seeing the wages to turnover figure hitting over 100%, the ownership took action and showed a clear financial commitment to the club.
"In terms of liquidity - how much cash is available to them when they need it - it’s looking good. After November ‘21, the parent company has subscribed to further shares. Effectively, they’ve pumped in more money that can’t easily be taken out. A club would much rather ownership puts money in through shares because then it’s more difficult for them to get out than if they had loaned the club the money. They’re in a much more secure position."
In addition to that commitment from the Chairman, Phillipou notes that investment in the club’s property is further proof of Eisner’s stable ownership.
"They’ve developed the stadium and that means there’s more money coming in. There was an upgrade announced in 2021 - and they’ve also acquired the freehold for the training ground and surrounding area. That’s in the accounts as well, so that’s a reduction in outgoings and also a sign of investment in the club and the development side."
Going into the summer transfer window, with EFL League One clubs preparing their war chests ahead of its opening on Friday June 10th, Portsmouth are likely to continue with a strategy that’s proven its worth so far. It makes sense then that Portsmouth have had such an involvement in the player loans market.
"Their focus is moving towards signing and developing rather than being dependent on the top divisions. The issue with that is that the cost goes up when you’ve got training compensation to pay for U23s or academy signings… and the costs of developing rather than using loans."
It’s this commitment to younger players that has seen the likes of Blackburn’s Hayden Carter thrive on loan at Portsmouth.
But whilst loans can help bolster a squad, Danny Cowley has made it clear that this can’t be the basis of their summer business.
"Loans can’t be the core – and hopefully that won’t be the case again,’ he said this week. ‘We want our loans to be the icing and cherry on the cake. If we want sustained success we are going to have a core who are your own players. They can then give us a platform to then recruit from."
Despite their turbulent history and after the chaos of the pandemic, with a committed owner and a manager determined to develop youth, it could be high time for Portsmouth’s ship to sail to victory.