League One newcomers Portsmouth are still in grave danger of folding entirely, according to one of football's leading insolvency companies. Antony Fanshawe of Begbies Traynor believes the Hampshire side are living on borrowed time, and has told the Portsmouth News that they have around five weeks to sort matters out at Fratton Park.
Fanshawe is not entirely neutral in the situation - his company is acting as a financial advisor to Portsmouth Supporters Trust, who are one of two main parties attempting to buy the club from administrators PKF, who are acting on behalf of Pompey's creditors. Hence there's little doubt that there will be a degree of Mr Fanshawe seeking to push any prospective deal along as quickly as possible.
Of interest though are the eye-watering figures that come out of this. Pompey's current player wage bill is listed as £24.5m per year, propped up by £14.0m worth of parachute payments. That leaves Pompey needing to bring in around £10.5m of revenue per season to avoid racking up further losses, and clearly a Supporters Trust isn't going to be able to take that on.
Administrator Trevor Birch has recently revealed that one of Portsmouth's players is currently earning more money than an average League One club's entire wage bill - and no that's not a misprint! Unsurprisingly, the Supporters Trust wants to see some of the high earners sold off before they dare take on such commitments:
"We have always maintained that without a significant reduction in the annual wage bill it would be impossible for the trust to put together a sustainable bid. If the highest wage earning players are not removed soon the club is in very real danger."
Portsmouth's CVA meeting, where they will attempt to take the steps to exit administration, is on June 25th. At that point their creditors will vote on a package, and Fanshawe believes the critical date then becomes 28 days after that, whereupon any agreed CVA would become legally binding. Thus he sees July 23rd as D-Day for any high earners to be sold off for Portsmouth's future to be a stable one.
Pompey have to - by Football League rules - honour all football-related debts, including players wages. If they fail to do so, or do not set up a CVA in accordance with League rules, then in theory they can be expelled, although past situations involving the likes of Leeds United, Rotherham United and Luton Town have tended to result in a further points deduction.
Whilst Pompey's current problems sees them operating under a transfer embargo, Coventry City, who were also relegated from the Championship at the end of last season, are also in the same boat in terms of being able to sign players. The Sky Blues were put under special controls by the Football League after they failed to file their accounts at the end of February, and the situation has now dragged on for three and a half months, despite a club statement at the time saying that it would only be in place for the "next few weeks".
The problem appears to be that club owners SISU do not wish to continue paying out £100,000 in rent on a stadium that is jointly owned by Coventry City Council and the Alan Edwards Higgs Charity. Exactly how this will pan out isn't clear - there have been stories suggesting that SISU are looking to sell the club, others that claim that they are seeking to lower the rental payments, whilst others suggesting they are aiming to buy the stadium, either wholly or in part. It may be that all three options are being explored - one of the more recent reports is that they had an offer for a 50 percent stake in their stadium turned down. Exactly how this one will work out - and more importantly when - isn't clear.
Tomorrow morning, the Football League's 2012-13 Fixture Lists come out, pitching both clubs into third tier football. Given their summer problems, any club realistically will be hoping that they land early fixtures against the pair, before the fallen giants manage to get their finances and recruitment plans back on track.
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17 June 2012 : 
