Portsmouth to Sue Themselves and Other 19 Premier League Clubs

The financial troubles at Portsmouth rumble on, with the club now planning to sue the Premier League over the current transfer embargo preventing them from making any signings.

Of course, by suing the Premier League, they are in fact suing themselves and the other 19 clubs in the league who are the shareholders of the Premier League.

The Premier League as a whole has a financial problem with the over-reliance of debt in attempts to achieve success, and this has been highlighted recently by Portsmouth's reported £60m debt to a number of creditors including other clubs over unpaid transfer fees, HM Revenue & Customs (HMRC), and even local suppliers.

Pompey's debt to other clubs is reported to be around £10 million, with £3m to HMRC, and £28m to former owner Sacha Gaydamak.

Some of the English clubs owed fees include Chelsea, Spurs and Watford, while French clubs Rennes and Lens are also owed. The Chelsea money was for the purchase of Glen Johnson, who was subsequently sold to Liverpool for a significant profit.

Pompey claims they are up to date with payments to clubs, and that the Premier League should not hold their television money to cover future payments, and feels that the Premier League has no right to use television revenue to clear debts, but the move by the Premier League is the correct one.

If the money goes into the club, it will be swallowed up and probably not distributed to creditors.

For a club like Chelsea, and to some degree Spurs, a few million owed isn't too much of a big deal, they can survive, but for a club like Watford, who themselves are struggling financially, the overdue money will help them balance their own books.

Pompey chief executive Peter Storrie said, "We believe we've a very good case against them. They have absolutely no right to withhold TV money in advance of future payments or payments to foreign clubs."

Storrie's comments fails to mention the fact that £5m has been paid by the Premier League to clubs on behalf of Portsmouth, and that they are believed to be holding the remaining £2m should the next installments not be paid.

Given Pompey's late payments already this season, and failure to pay staff wages on time, this is likely to happen.

Surely to get the ban lifted, Pompey's board need the agreement of all club creditors to defer payments until the end of the season. Whether additional interest is accrued on monies owed is between the respective parties, but deferment would seem a reasonable way forward as club have no hope of repaying money anytime soon without a massive cash injection.

However Chelsea are reported to be holding out, Ligue 1 club Lens is already considering suing Pompey for monies outstanding, while the club's biggest threat comes from a winding-up petition issued by HMRC in December last year, which if granted, will see the club placed into administration, and the club deducted 10 league points.

Pompey boss Avram Grant is believed to be making pleas to his former paymaster Roman Abramovich to help him out to get the embargo lifted, but Grant, and more importantly the Pompey board will have to work harder than that.

Should the club fall into administration, clubs owed could lose out on monies and be paid only a fraction of what is actually owed. This could lead some of them to refuse to defer payments this season.

We have seen very little evidence to suggest that Pompey have actually made inroads into sorting out their problems other than a few vague statements from chief executives about securing bank loans.

It's not a wise move by Storrie and the Pompey board to try to sue the Premier League given their problems. If anything, they need to keep all 19 other clubs on their side, but this latest newspaper revelation further highlights how desperate the club is.

As I've said elsewhere, the Premier League is partly at fault over the Fit and Proper Person's Test they conduct on new owners.

When will they realise that they need to conduct checks into whether potential owners have the money they claim to have, and to find out where this money is coming from.

They also need to act in partnership with UEFA and FIFA to curb grossly inflated transfer fees, and more importantly ever-increasing wage bills. It is these fees which are crippling our football clubs and dragging them into further debt as they seek to achieve success, and it has to stop.