The Guardian on Portmouth’s financial troubles:
It is understood the club initially agreed a combined fee with Spurs for Younes Kaboul and the promising Bosnian goalkeeper, but agreed to a clause promising that if Begovic went elsewhere they would pay Spurs a £1m fee in compensation. When the club subsequently agreed to sell Begovic to Stoke City following a protracted negotiation, the £1m fee kicked in and was due to be paid by the end of last month. It makes up part of the £17.3m owed in current and future instalments on players including Sulley Muntari, Mike Willliamson and Nadir Belhadj.
Portsmouth are obliged to pay the fee because of Premier League and Football League rules that protect football creditors, while unsecured creditors will be offered a settlement. Current and former players including David James, Peter Crouch and Glen Johnson are owed a total of £1.87m in unpaid wages and bonuses.
A list of more than 400 trade creditors, including St John Ambulance, schools, community sports clubs, kit suppliers and local businesses including florists and builders, are collectively owed £4.37m.
Emphasis mine. It’s nice that the FA has rules about this, but why should anybody else give a fuck about them? Surely there are laws about the order in which creditors get their money back in situations like this? It’s shitty to pay one million to Spurs but stiff your local, small business creditors who need the money much more.
UPDATE: from another Guardian article:
The list of “ordinary” creditors whose debts a new Portsmouth buyer can “compromise” runs to 15 closely typed pages. HMRC’s £17.1m is the largest debt; the tax authorities are particularly bitter about the football creditors’ rule because theirs is largely unpaid PAYE tax due on the millionaire players’ wages which have to be paid in full.
Does this really mean that the taxman doesn’t get first preference in settling debts? Unbelievable. Were a similar situation to happen year, you betcha the taxes would have to be paid in full before anybody else could get a go.