A President's View on the Takeover

I have been planning to write a blog to explain my thoughts on the proposed takeover of Pompey. Having just read Peter Lee's views, I have decided to post a copy of his thoughts instead as they are pretty much identical to mine:

1.    WHO ARE YOU?
I’m one of the Presidents, Peter Lee, currently living in Colorado in the USA. My family history can be traced back 6 generations to West Street in Old Portsmouth about 50 yards from the Still and West. My great grandparents used to board Pompey players at their house in Fratton in the club’s early days, my grandmother was at the 1929 cup final, so I have a bit of Pompey history in my blood.

I was brought up, ‘up north,’ as they say in Stockport (this will become relevant later) and have been a member of the Northern Blues since its initial meeting organized by Derek Kilburn in a pub in Manchester in 1989. Despite being based in the USA these days, I try to make it back for 15 to 20 games a season.

Below are my views on the bid and items related to it:

MICHAEL EISNER & TORNANTE
I’m going to start with the disclosure that I have met Michael in person a couple of months back, along with Andy Redman who is the President & COO of Tornante. Andy’s knowledge of English and European football was impressive and, sadly I have to admit, probably greater than mine. Both Andy and Michael have obviously invested a lot of time looking into our club and city and they had a lot of thoughts around things like improving the academy, and immediate things that need doing around Fratton Park.

While I will leave the specifics of those things for Michael to talk about later in the week, I think it is worth us taking a second to dwell upon some facts about Michael’s background:

1 - Business Track Record

o   Took the ABC TV network from third place to the top rated network

o   Turned Paramount Pictures into the number one studio in box office and profitability with movies like “Raiders of the Lost Ark,” “Saturday Night Fever,” “Grease,” etc.

o   Took over a struggling Walt Disney company and turned it into the global giant it is today, increasing revenue from $1.5B to $30.8B--a staggering 2000% increase!

It’s pretty hard to find anyone else with that track record in business anywhere else in the world, Bill Gates would be a good comparison.

Considering this, I think it’s easy to say we are getting one of the very top tier business people in the world, which can only be good for Portsmouth Football Club.

2 - Philanthropy / Charitable giving - http://eisnerfoundation.org/

The Eisner foundation gives about $7M annually to charities. (That’s more per year than we raised to buy the club!)

That high commitment level to giving is a pretty decent thing for any person to do, and there are certainly synergies that Pompey in the Community should benefit from should the takeover go through. In fact, despite our designation as a community club, our community arm will probably do better under the proposed ownership than it does under the current model - food for thought.

3 - How the football world views Michael Eisner

A leading figure in the football world recently told me that when seeking to find a new owner for a championship club, he received expressions of interest from around 50 different parties. He said not one of them even came close to Michael Eisner in terms of ‘business credibility.’

I've heard similar views about the integrity of Michael Eisner from other people in football; many in the football world can’t believe how lucky we are to have this interest from Tornante.

Okay, enough about Michael Eisner, now let’s talk about fan ownership.

IS FAN OWNERSHIP GOOD OR BAD?
Views on fan ownership differ widely by club. While most people in Portsmouth would say it’s been a good thing (which it has been to this point), if you were to ask the same question at Stockport, they would rate fan ownership somewhere similar to how our fans rate the Chanrai ownership...a bad thing.

Does this mean that the Stockport Trust were bad people? Not at all, they simply ran out of money, which precipitated their fall out of the football league to a level currently similar to Gosport Borough.

At the end of the day, the football league is driven by money: those that have it prosper, those that don’t flounder in divisions 3 and 4.

While we’re talking about money, perhaps it’s now a good time to talk about our stadium.

FRATTON PARK
We all know and love Fratton Park, but let’s be honest, it’s getting on in age, and as custodians of the club, safety of everyone who walks through the turnstyle should be our first priority.

Over the past year, the club has engaged Richard Gee, one of the foremost stadium experts in the country. His report on the health and safety of the North, South and Milton stands is, quite simply, shocking. Both the PST board and the PAB board have heard from Richard first hand, let’s be clear, this isn’t project ‘fear,’ it’s project ‘let’s do the right thing and ensure the safety of our supporters.’

There seems to be agreement that fixing up the current H&S issues will cost around 5M. Once the remaining Tesco funds are gone, we will be left with a shortfall of 4.1M.

Seems like it’s time to talk about fundraising.

FUNDRAISING
Four years ago, fans old and young, rich and poor, pulled together in an incredible effort to raise the money to save the club. Every fan involved can forever feel equally proud of their effort in this.

Since then, we have been propped up by both the Tesco money and 3 million in football fortune income...money we can’t rely on going forward.

The big question now is: how many more times can you go to the well? Also, will people be as keen to pay for H&S work as they were to save the club?

Perhaps an even more important question to ask is, should the vote be NO, how many of the “YES voters” would be prepared to reach their hands into their pockets to pay for H&S work? I am guessing that it will be close to zero. I know I wouldn't be, and in good faith I couldn’t ask my friends or family to put money in moving forward either, knowing that all we are doing is kicking the can down the road for a period of time.

In that case, the task would then be to raise 100 percent of the money from 51 percent of the fanbase (assuming a 51% NO vote). How many PST members will be prepared to put at least 2k in for repairs to Fratton Park? (NOTE: we are talking repairs only here, rebuilding stands might as well be on another planet given where we are right now).

In my opinion, the first serious offer for the club would always seriously test, if not break our current model for fundraising. Let's talk about that offer some more.

THE BID
By nature bid documents are cold, so I wasn’t too surprised by the nature of it as were some others with perhaps less experience in this area.

Overall, I personally think it’s a good bid for the club. Surely we want Tornante to put the maximum spend into the club to move it forward and not into our pockets to give us profit. I have heard talk that there should be a higher payment so the PST can keep a fighting fund for the future. Personally, I’d rather the H&S issues got fixed sooner. And I think the HNW’s would have got slaughtered if we had profited from the deal.

That’s not to say there aren’t one or two areas in the bid that would benefit from tightening up, but I think when Tornante gets to explain the reasoning behind some of their positions on Thursday most people will see where they are coming from. For example, the 15-mile issue, which has been a bone of contention for many, is intended to give people re-assurance we won’t get Milton Keyne’d, not as a way to move us to a SO postcode.

Like many I’ll be interested to hear more on Thursday night, especially about their ambitions for the club.

AMBITION
Talking ambitions, like many I grew up watching Pompey play in 80’s and have always thought of us as a top 2 division team, not a lower league team. Our ambition moving forward should be to compete in the Championship at least. If we can’t provide the finances necessary to do that, then are we the right owners for the club moving forward?

CONCLUSION
I’ll start my conclusion by reverting back to something a leading football figure said: ‘The next prospective buyer through for Portsmouth would likely be a no-name Russian or Chinese investor, not someone even close in caliber to Michael Eisner.’

Make no mistake, the current model has an expiry date, we will run out of money at some point sending us looking for a major investor. You can’t cheat gravity forever!

The choice we have right now ISN’T:

o   YES to Michael Eisner or NO to stay with Fan ownership

The real choice IS:

o   YES to Michael Eisner or NO for a less reputable owner down the line

(Unless of course one of you reading this is related to Bill Gates).

I’ll finish by reflecting on the fantastic achievement, we fans have had over the past 4 years. That includes everyone from shareholders, to people who have turned up to support the team on a windy Tuesday night in Morecambe, to those sat at home, who hurt whenever we lost on a Saturday afternoon.

We have the dream ending to our ownership with promotion (and hopefully a L2 title on Saturday evening!). Let’s not turn it into a nightmare, by holding onto something we can’t afford in the long run.

In my opinion, Michael Eisner and Tornante are the right next step for this great club.

PUP - Peter

P.S - I don’t believe there is a credible plan B for the club right now

My Resignation

On 14th March 2015, the PST released a statement which included a quote from me explaining that I had resigned on a 'matter of principle'. 

I now feel compelled to expand on my original statement, partly because it has generated uninformed speculation which is potentially damaging to innocent parties. I must confess that I am also struggling to reconcile my natural desire to protect reputations and relationships with my professional and personal commitment to honesty, transparency and accountability. In the end, the latter won.

Having read the PST Statement of Clarification, I have to say that it has not clarified a lot, so it falls to me to provide a fuller explanation of my decision. 

Much has been said about the circumstances of the advancing of money to Micah Hall. This money was specifically raised by fans to help Micah in the event that a substantial legal bill had to be paid and was in the keeping of PST since November 2013.  My admiration for the work that Micah did during the clubs darkest days remains undiminished, but this does not temper my disquiet regarding the absence of proper process around that transaction, nor did it reduce the concern I had regarding the length of time before the board were made aware of it. I must admit that the recent explanation by the Trust has confused me even more as much of what is in that statement was news to me. 

However, whether or not that money should have been advanced to Micah and whether or not the correct procedures were followed was NOT the issue for me.

I strongly disagreed with the refusal of the board to give honest and transparent answers to the questions that were raised at the time it became known. Subsequent conjecture, comments and statements from board members served to give the issue a higher profile than it needed. A simple statement was all that was needed then or at any time over the subsequent weeks.

Nevertheless that transaction was only the opening act in a steady diminution of my confidence in the financial stewardship of trust funds over the following months.

In my judgement, during the second half of 2014 and early 2015, Steve Tovey did not bring to his job the degree of focus, energy, judgement or timely diligence that the trust members had a right to expect.

The PST board was told by Steve at 1.28pm on the actual day of the AGM that audited accounts would not be presented to the AGM. At that stage, the auditors, despite repeated requests, had received no information whatsoever.

On the 11th December I offered to help Steve Tovey to finish the accounts and get them to the auditor. He told me that this was not necessary and promised to get the accounts to them on Monday 15th December. That did not happen.

He then told me on many occasions that the figures would be delivered to the auditors soon, all of which did not happen. The audit actually started in mid January which was far too late to call an SGM (14 days notice) and still achieve the FCA January 31st deadline, which may have meant a substantial fine.  We advised the FCA that we were unable to reach the deadline and assured them that the relevant paperwork would be with them by 28th February which we did achieve.

Earlier this year, I made my view clear to the board that as a result of this long series of unsatisfactory events, I had lost confidence in Steve’s ability to deliver the services required, and I suggested that he be invited to resign from the board. After some discussion, during which a number of board members stated that they would not have a problem with continuing to work with Steve, it was eventually agreed that the chairman would ask for his resignation.

On 16th February, the board was informed by the chairman that Steve Tovey had resigned, both as treasurer and from the PST board. This was the correct thing to do, in my opinion. 

Subsequently, his resignation from the board was withdrawn. The board accepted the withdrawal and under such circumstances I saw no honourable alternative but to resign myself.

I formally resigned on February 27th.

I should make it clear that I consider Steve Tovey to be an honest man, a true Pompey fan, and that I believe he came to his role in PST with the very best of intentions. However, good intentions are not enough in such a role. I have never held the view that being a volunteer excused anyone from the requirement to deliver their very best regardless of their unpaid status.

I should also make it clear that I am making no allegations of financial impropriety whatsoever, and no such construction should be put on my statement. I do not believe that any trust funds have been lost, stolen or put to improper use. I just didn’t think that Steve did a very good job, and that it was my responsibility as an elected board member of the trust to say so.

I believe that the fans who make up the membership of the trust deserve much higher standards:

• in terms of the financial management itself
• in the determination of the board to hold colleagues to account 
• in upholding the principles of honesty and transparency. 

If such standards are not to be maintained, then my only option is to distance myself from such an unsatisfactory situation via resignation.

I remain a supportive member of the trust, a willing volunteer and dedicated believer in fan ownership. Let us not forget that this is the same PST that spearheaded the saving of our club, but its reason for being must evolve now. I have been involved in planning meetings to establish the Trust's role for the future and some of those plans are already coming to fruition e.g. the PST Youth Committee.

Despite the fact that I clearly believe mistakes have been made, lessons will have been learnt over the last few months and I have confidence in the current PST board, if not every single board member, under the chairmanship of Ken Malley. Ken is a good man and I feel sorry for him as he has had a tough time since he became chair - it must be remembered that most of this happened before he became chairman.

Finally, I would like to thank everyone who worked so hard to save our club, and to offer my heartfelt appreciation to all those who have contacted me in the last week or so to voice their support.

PUP.