Championship faces financial ‘catastrophe’ warns Portsmouth owner Eisner

Portsmouth chairman Michael Eisner has warned of a looming financial catastrophe in the Championship after Pompey became the latest second-tier club to post losses.

While the £4.36m loss for the 2024-25 financial year is relatively modest compared to rivals Hull City, who reported a £41.7m loss in December, and Coventry City, who last month posted a £21.6m loss, it follows the same uncomfortable trend.

Eisner, 84, the former CEO of Disney, fears English football has become dangerously imbalanced with the wealth of the Premier League masking the problems below.

“There are dark clouds hovering over the English football pyramid and it seems to me there could be a real collapse where only the Premier League survives,” said Eisner.

“Every single club in the Championship lost money last year. The combined operating loss of the 24 teams for the last full set of published results in 2023-24 was £411m.

“No club can survive for the long-term in this system and if that continues, catastrophe will happen.

“If the forces that control the pyramid from the top tiers to the bottom tiers do not make football more sustainable and do it quickly, those dark clouds will deliver more soaking red ink beyond what one can imagine.

“We need effective player salary cost controls, real attention to fairer distribution of media revenues and for English football to join the rest of the sports world in more advanced commercialisation of the broadcast and streaming product.

While Portsmouth almost doubled turnover to £24.5m in their latest set of accounts, that revenue was largely swallowed up in increased squad costs after their promotion to the Championship.

As they fight to maintain their spot in the second tier this season, they remain heavily reliant on the Eisner family’s backing. They have put £54m into the club since buying it in 2017.

“It’s a crazy division to be in and one that becomes increasingly reliant on owners that continue to fund the operations,” Portsmouth CEO Andrew Cullen told BBC Radio Solent.

“The accounts show that we have required £9m already in the first half of the season from the owners to increase the player budget in the 2025-26 season.

Having previously funded the club via share equity, the switch to loans – which began last year with an £8m arrangement – is one which has raised eyebrows amongst some Pompey fans but Cullen says there is no cause for alarm.

“I want to give a number of reassurances to supporters that no repayments have been made on these loans and there is no intention for the owners to seek any repayment on these loans for some time,” he said.

“Every other Championship club has carried debt and in Portsmouth’s case, these new loans form part of the ownership’s long-term succession strategy to ensure the long-term security of the club.”

Championship clubs are due to vote on new salary cost rules for next season which would restrict a club’s spending on players, managers and agents’ fees to 85 per cent of its revenue.

There is also a proposal to limit owners to £33m investment over three seasons with a ceiling of £15m in any one season.

Andrew Moon, BBC Radio Solent commentator

Portsmouth had for many years been debt free, a rare thing for any football club.

That is no longer the case however, Michael Eisner opting to loan the club money rather than inject it as equity is understood to be about reducing the inheritance tax burden on his son’s in the future rather than anything sinister.

All the loans are from him and are unsecured. It won’t make any material difference to the running of the club in the short, medium or long term.

Portsmouth had one of the Championship’s lowest playing budget’s last season but still lost over £4m.

Eisner’s comments on the state of English football were strong. It’s hard to disagree but will anything change?