Portsmouth's debt is shown below. The bigger the number the worse the debt is.

The club accounts do not give an exact number for the debt for 2008, it has has been calculated from other figures in the accounts as £36m, if anyone has a definitive figure please contact us.

The lower graph shows the Net Liabilities of the club. This comes from  adding up the book value of the players, with the value of the ground and taking away all the people who are owed money. The people owed money are other clubs owed for transfer fees, banks owed for money borrowed, the Inland Revenue for Social Security and VAT.

 

Debts 

 

The huge, and increasing liabilities are a major worry. The £48m figure means that if absolutely everything was sold then the club/business would still owe this £48m.

The problem any business has when it hits this sort of position is that no one will lend them any more money. A bank would look at the assets and what the club owes elsewhere and either just say "no way" or would impose huge interest rates on their lending. In the accounts there are "other loans", so not to banks, and these come to a total of £13.7m. There is a note saying these loans have no fixed repayment date and are accruing interest at a rate of 15% !!

The bank loans are secured against land and buildings, and against future Premier League payments. This may be acceptable while the club are in the top division and relegation would cause serious problems.

Net Liabilities