Liam Lawrence has joined Cardiff on loan tonight for the rest of the season. He must have a been a big earner now off the books.
This is another example of where the loan market is a complete fraud . The transfer window is closed but 'loans' can still go ahead. Portsmouth are skint and desperate to offload expensive players. Cardiff City (once again) is looking for a late promotion run and is able, through admittedly legitimate current rules, to sign a decent player for nothing, wages excluded. Cardiff did this last year with Bellamy. I hope they don't make the play offs since Cardiff is another club that reneged on big debts a few years back yet is still apparantly loaded with cash . I'll say AGAIN. Managers should have the courage of their convictions. If Mackay fancied Lawrence he should have paid a big fee for him in the proper transfer market and not be able to swoop like a vulture to pick the juicy bits from a club that is in serious financial trouble.
Makes me sad as they are proper club with good support and were (and maybe still are, the club we have played more than any other?). Also together with the first game back and my mate supporting them and myself going to a few matches down there, I have some good memories.
If however you run your business like that, what do you expect, just a shame the scummers down the road did well out of i
£58m and counting according to the administrators. Said on the local news tonight that the creditors run to literally 100's of small business like florists and caterers, etc as well as the big boys like HMRC and the local authority.
The Administrators that did the deal in 2010 should be looked into too. Surely thay had an obligitation to check that the company was at least viable before taking them out of Administration. Now they owe c. £20m more! And the new Administrators have racked up a further half million.
"The report also shows that they have so far spent 1,652 hours dealing with the administration, at a cost of £525,000, which they have not yet been paid. " £300+p/h not a bad gig if you can get it.
"The report also shows that they have so far spent 1,652 hours dealing with the administration, at a cost of £525,000, which they have not yet been paid. " £300+p/h not a bad gig if you can get it.
Especially when many of those hours will have been spend photocopying!
"The report also shows that they have so far spent 1,652 hours dealing with the administration, at a cost of £525,000, which they have not yet been paid. " £300+p/h not a bad gig if you can get it.
"The report also shows that they have so far spent 1,652 hours dealing with the administration, at a cost of £525,000, which they have not yet been paid. " £300+p/h not a bad gig if you can get it.
More than one person will be working on the case.
If they have 1or 10 people working on the case it is still the same huge hourly rate, £300+p/h. Or is that the going rate for raking over failed companies? I know most of us don't work for love but that fee does sound, (to me anyway), a bit steep even if it is a companies and not an individuals charge out rate. Maybe its me that has lost touch I wonder where the administrators place in line for payment is?
It is standard that they charge fees in that range. Normally it is broken down for the creditors. This is where a lot of the photocopying comes from. There are normally higher rates for the accountants and lower rates for the admin staff, who normally earn ess than 10% of what the firm bill them out for.
As r where are hey in the line for payment. They are first. If the money runs out they walk away and the company is, presumably, liquidated.
The problem is that there are too few companies big enough to undertake an administration of this size so they can charge just about what ever they like.
We are becoming more and more like America where those in the top professions earn fantastic sums of money. You no longer need to be a successful businessman to be outrageously wealthy compared to the average man in the street. Doctors, Solicitors, Accountants at the top of their profession in an employed (partner etc.) position can earn massive salaries.
What makes your comment interesting is that entry into those occupations is not closed. If one has the inclination for one of those occupations then working hard enough at school (and University etc.) does make it possible to achieve those heights.
I throw this is a little off topic, but I've just send the last week trying to get my 7 year old to knuckle down and do his Easter homework and he will do anything else to avoid it.
Hard on the small businesses but the fact is that you trade with a football club at your peril. They got burned before by Pompous and could have learned a lesson. I'd never work for a footy club without sight of the bangers (unless it was the Addicks). Everyone including HMRC needs to be a lot harder and quicker in preventing arrears from arising because the insolvency law in this country provides no protection from charlatans.
And there, in a nutshell, is the problem illustrated. You say you'd never work for a football club 'unless it was the Addicks'. I suspect that the vast majority of 'local' business done with football clubs is done by firms with people who have supporters of the club either on their board or in positions of influence. Peoples' judgement is naturally clouded when it comes to something they love. That's what makes the way football is allowed to conduct its business affairs such an utter disgrace.
As an example, we laugh at the spectacle of 50000 Geordies buying almost identical replica shirts every year and even have a nickname for the phenomenon - but it isn't really funny that a c*** like Ashley is allowed to exploit it as part of a massive vanity exercise/midlife crisis, any more than it's acceptable for a series of moody 'businessmen' to rake over the coals of Portsmouth FC and use it as they see fit in full knowledge that, at any time, they can just f*** off and leave the club, it's creditors and it's fans up shit creek without a paddle.
Surely Ashley doesn't belong in that bracket. Although he's looked like a joke at times, he's ended up with a club that is not only financially stronger, but also considerably stronger from a playing perspective. Was probably behind the best signings in the two most recent transfer windows.
Completely agree with your first paragraph Leroy, but I would say that you can't entirely divorce the fans from responsiblity. Whenever a rich owner pops onto the scene and promises to lavish huge sums of cash on unlikely marquee signings the fans rarely engage their brains and question how this will effect the long term, they're generally delighted to have a day in the sun. I don't recall an outcry from Pompey's support when Arry was wheeling and dealing them towards some silverware. You only have to look at the mini wave of hysteria from our supporters when there was the prospect of us being acquired by a shadowy foreign corporation.
You're right - it was a pretty simplistic view, and certainly the fans are partly culpable as well. God knows we have more than our fair share of mugs following us (highlighted by the idiotic recent posts finding something to moan about despite being on the verge of promotion, a record points total and having the best side we've had in years)
The problem with football clubs is the commitment to the 'football debts' namely footballers' salaries.
I have no idea if it's true, but I read somewhere that Benjani was on £37k a week this season at a club that was in huge debt and running at a loss. When they went into Administration they still have to pay all of his remaining £37k a week. That equates to £1.924m for the year. If the clubs were not forced to keep these players for the term of their contacts they would have been able to shed most of their costs initially. Note what happened in Scotland, with Rangers, where the football creditors rule does not apply in the same format.
It's just too easy for these managers, like Redknapp, to sign players on £60k a week (and from what I read he signed a few of those) and then walk away when it all goes horribly wrong. Portsmouth signed players that they could never afford, some that were too old for the length of their contracts, in order to compete at a level they just were not rich enough to. They won the FA Cup with players whose wages have been paid, almost entirely, from the creditors that were knocked in 2010.
McLovin is right, the fans don't care who pays for it if they get success. It can be investors, the TV companies, the local community anyone - just as long as someone keeps footing the bill for it. Well sometimes people don't actually want to throw all their money away for nothing. Some of the owners have been criticised for wanting their money back, but I think it is unrealistic to expect someone that has never been a Portsmouth (or any other club) supporter, never been in the City and never watched the club play to put in millions of pounds without some sort of exit strategy. None (or very, very few) investors buy a club they wasn't their boyhood team without looking to get something out of it. Watching the club grow might be enough; selling it on for a profit might be enough; winning some silverware and/or enjoying life in the echelons of the Premier League might be enough. However, in most cases the investment that these men (or women) can justify for such things is substantially less that Portsmouth spent.
I don't know who is ultimately to blame for the situation they got themselves into pre 2010, but the administrators and the creditors from then are, at least partially, responsible for the situation they are in now. It is clear now (as I said at the time) that they were not going to be able to service the levels of debt they came out of Administration with. They were relying on the Sky TV money (including the parachute payments) to bank roll the club but forgot to consider the huge debts and the excessive players wages (which have been added to since 2010).
The current Administrators (presumably firing a shot across the bow) made a statement a few months back stating that the football club was more than able to cover it's running costs if it didn't have to service (or, I assume pay back) the debts it has. This comes across as a rallying cry to the fans to build up momentum to scare the creditors into being shafted again to save their club. It's not a million miles away from Palace fans marching on the RBS HO in the City to demand that the bank sell the ground to the new consortium for half it's current value to save their club.
Ultimately the power of the fans movements scare the creditors, and the clubs get saved. I fully expect a deal to be put together to save Portsmouth and Rangers, for that matter (who had their own march this week). It is disgraceful and despicable, but It will continue to happen because the creditors will always agree to something rather than nothing and the Chairman of football clubs will continue to spend someone else's money all the time they seem to get away with it.
Leroy is right, in the end all football clubs will be starved of all lines of credit (save for those offered by love struck fans) and those that have 'got away with it' twice in Portsmouth's case will be to blame for substantial hardship in the lower leagues.
In France they have a system that each year clubs must submit a balanced budget and show they have paid all their taxes. If they don't they are relegated. Harsh but it brings stability.
Platini tried to bring something similar to European football and was pilloried in the UK press as anti=English for daring to say that English clubs were operating unrealistic financial models. Of course the UK press were briefed by the same English clubs who don't want limits on their spending or any regulation.
CAFC runs at a loss. It is subsidised by it's owners (some of whom are unknown). That subsidy means we can sign more and better players than would have been the case otherwise. Is that wrong?
I think clubs should not be permitted to spend more than their genuine turnover taking any two years together. A points deduction might work as a sanction if it was breached. You could allow a one season rollover to make up a deficit.
Of course vested interests will ensure that never happens.
I'm sorry to read some of the comments aimed at Pompey on here, I have never supported them but was born there and therefore take an interest. One thing that I do know is that their supporters are amongst the best and most loyal you will find, just like us folks. The damage to the Club has been done by various Directors/Owners they have attracted, aided and abetted by the game's ruling authorities who should have put a stop to it a long time ago. Sorry KHA, but if you want to take away Pompey's trophy, I would like to take away any trophies won by Chelsea and to be won by Man City only because ridiculous sums of money have been thrown to them totalling ignoring any pretence of operating profitably. I feel desperately sorry for these and other supporters whose love for their Club has been spoilt by rich egomaniacs and the like.
CAFC runs at a loss. It is subsidised by it's owners (some of whom are unknown). That subsidy means we can sign more and better players than would have been the case otherwise. Is that wrong?
Good point Henry, and yes it is wrong. However we wouldn't be in this loss making situation if the other clubs also had to break even, we pay higher wages because our rivals pay higher wages, who pay higher wages because we pay higher wages etc
Henry - is it wrong? Th honest answer is we don't know. If they are building up huge debts which they can walk away from and leave the club in the shit, then it is.
. Some of the owners have been criticised for wanting their money back, but I think it is unrealistic to expect someone that has never been a Portsmouth (or any other club) supporter, never been in the City and never watched the club play to put in millions of pounds without some sort of exit strategy.
If the clubs were not forced to keep these players for the term of their contacts they would have been able to shed most of their costs initially. Note what happened in Scotland, with Rangers, where the football creditors rule does not apply in the same format.
substantial hardship in the lower leagues.
KHA- agree with most of what you say. However 1. I don't agree with the point about the owner losing money - investing in a footbal club should be means of "equity" and take the risk of equity. I believe the FA's fit and prper persons test should include a Fit and proper financing structure which is mainly equity based. 2. I have never understood the football creditors rule. I always understood the distribution is governed by law - is there actually a law passed in parliament that defines this - if not how do football clubs get round it?
It's just not the same. Chelsea and Man City bought the trophies they won, but they did it with money that the owner's had. Portsmouth did it with money they borrowed and failed to pay back. Many people have suffered as they are not going to get the money they are owed. I don't know if you've ever been knocked a substantial sum of money, but my wife and I have and Administration and a CVA is not a victimless process. We lost in excess of £25k that we didn't have spare, we are still carrying debt many years later as a result of it. You just cannot compare the actions of a rich benefactor with those of someone that is borrowing money they will never be able to pay back.
Redman,
1. The point here is that the owner makes his decision to invest based on the current rules. If owners were not allowed to lend their clubs money they would not have put it in in the first place. I know that we have done this, and written much of it off. If the FA had banned directors loans Portsmouth wouldn't have been able to run us as much debt as they would, almost certainly, have been liquidated long ago. However, my point was aimed at the fans that are keen for the directors to spend millions (and this is not limited to Portsmouth) but then complain when the bills have to be paid. If you asked the average Portsmouth fan would you have rather not had the Premier League years and the FA Cup Finals but never been in this mess they would probably say they would rather have stayed in the second division the whole time. They can't sell those times for the £200m or what ever it is (two Administrations added together) they have overspent. But if you'd asked them twenty or so years ago if they wanted someone to come in and spend millions and win promotion to the Premier League and have two FA Cup finals they would have ripped your hand off. In many cases the debt is not limited to the directors investment. If the owner has no more money they are willing to invest they will go and borrow it. All they do is lend it to the club themselves as no one else will do so. It's a catch 22.
2. The football creditors rule is very clever. Basically fail to pay those commitments and the Football League take away what they refer to as the 'Golden Ticket'. This means that the club fails to be in the Football League. This forces the club into liquidation as with no League status they have no fixtures and they cannot generate an income. No agreement with creditors can be honoured on that basis so the creditors have to accept it unless they think that liquidation will generate a better percentage of debt recovery than the club continuing to trade. There is also an issue with the football players contracts being held by the Football League and/or FA. If a club fails to pay a player the player has the right to a free transfer, thus removing the players' transfer value from the balance sheet. Also the Golden Ticket rule applies so if you have a player earning more than any one else will pay him he will hang around and wait for full payment of his contract, or the club will be sanctioned by the league, and might be expelled.
HMRC has challenged the football creditors rule as they are, normally, the creditor that has the first call on the money. This is going through the High Court (I believe) and if they win it will make significant changes to the process in the event of Administration.
We should remember, though, that the rule that protects players wages is a very good initiative by the PFA for the vast majority of players that do not earns thousands per week. It also protects transfer fees, and other debts from one club to another. The FA/FL claim that if the football creditors rule didn't exist one Administration would likley cause many others as smaller clubs in particular could have a huge sum of money (relative to their turnover) due to them. If Spurs had gone bust after they'd signed Darren Bent and not paid us the £15m transfer fee we could have been in a bit of a sticky spot, for example.
Henry,
I don't know if your question was aimed at my ramblings. If it was then I would say that the club can do what ever it wants within the rules. The owners are no longer answerable to the fans as we don't have any shareholding. Their moral responsibility to run the club sensibly aside, I would say that we all need to be careful what we wish for. I am more than happy with our season, and this division was always going to be a grave yard for us if we didn't get out sooner or later, but I wouldn't have demanded spending would have gambled with our long term future, especially as we are in the best position for a long term future now, following the writing off of the debts by the previous board. I don't know where the line is. We have run at a loss for a few seasons now, but we have always had a realistic plan - all be it we were close to Administration. What Portsmouth ended up doing, and Rangers even more so, was to go beyond the point where Administration (or at least knocking debt) was inevitable. I believe there are other clubs in this position. Bolton have close to £100m debt, West Ham have been close to £100m debt, even Man Utd, who are a massive club, have debts that can't, realistically, be cleared, so they need to keep being successful to service the debt.
There issue here is that the fans need to be more realistic as well. It's ok calling for more investment etc. but if the money is not available then it can't be spent. In the end the players will need to earn less, but even if all the players in the world took a similar pay cut there would still be limitations on how many players of quality each side can have. If the cuts were completely uniform then all clubs would have the same players and the same chance of success yet all the players would earn less and all the clubs would have less debt. It just doesn't work that way. All the time there is someone that is willing to gamble a little more than others there will be successes and failures. If the rules are to become so strict that all spending has to be be directly based on turnover then you might as well just draw up the divisions based on home attendances. It does need to be more cautious, but there does need to be some flexibility, otherwise the super rich clubs will just find a way 'round the rules and 'cheat'.
KHA, I did not disagree with the bulk of your posting, I just thought that the idea of saying ' give us our trophy back ' seemed a rather futile gesture which ,if anyone, might punish the innocent supporters instead of the real villains of the piece. I have lost smaller amounts in business myself ,over the years so i can sympathise with your situation, and wish you well.
KHA - thanks for the explanation of the "Golden Ticket". Althouh I can see it does have some benefits for football it does seem morally wrong. My other point was more to do with what I think rules should be not so much the current regulations. Whichever way you look at I think most agree the current system needs some overhaul although there is little consensus at to what new process should be set up.
Incidentally I dont think its clear with Chelsea how the financing is structured and what would happen if Abramovich got fed up and said i want my money back
Comments
If however you run your business like that,
what do you expect, just a shame the scummers down the road did well out of i
£58m and counting according to the administrators. Said on the local news tonight that the creditors run to literally 100's of small business like florists and caterers, etc as well as the big boys like HMRC and the local authority.
It's shameless!
£300+p/h not a bad gig if you can get it.
I wonder where the administrators place in line for payment is?
As r where are hey in the line for payment. They are first. If the money runs out they walk away and the company is, presumably, liquidated.
The problem is that there are too few companies big enough to undertake an administration of this size so they can charge just about what ever they like.
What makes your comment interesting is that entry into those occupations is not closed. If one has the inclination for one of those occupations then working hard enough at school (and University etc.) does make it possible to achieve those heights.
I throw this is a little off topic, but I've just send the last week trying to get my 7 year old to knuckle down and do his Easter homework and he will do anything else to avoid it.
As an example, we laugh at the spectacle of 50000 Geordies buying almost identical replica shirts every year and even have a nickname for the phenomenon - but it isn't really funny that a c*** like Ashley is allowed to exploit it as part of a massive vanity exercise/midlife crisis, any more than it's acceptable for a series of moody 'businessmen' to rake over the coals of Portsmouth FC and use it as they see fit in full knowledge that, at any time, they can just f*** off and leave the club, it's creditors and it's fans up shit creek without a paddle.
Completely agree with your first paragraph Leroy, but I would say that you can't entirely divorce the fans from responsiblity. Whenever a rich owner pops onto the scene and promises to lavish huge sums of cash on unlikely marquee signings the fans rarely engage their brains and question how this will effect the long term, they're generally delighted to have a day in the sun. I don't recall an outcry from Pompey's support when Arry was wheeling and dealing them towards some silverware. You only have to look at the mini wave of hysteria from our supporters when there was the prospect of us being acquired by a shadowy foreign corporation.
Ashley's an arsehole, fullstop.
I have no idea if it's true, but I read somewhere that Benjani was on £37k a week this season at a club that was in huge debt and running at a loss. When they went into Administration they still have to pay all of his remaining £37k a week. That equates to £1.924m for the year. If the clubs were not forced to keep these players for the term of their contacts they would have been able to shed most of their costs initially. Note what happened in Scotland, with Rangers, where the football creditors rule does not apply in the same format.
It's just too easy for these managers, like Redknapp, to sign players on £60k a week (and from what I read he signed a few of those) and then walk away when it all goes horribly wrong. Portsmouth signed players that they could never afford, some that were too old for the length of their contracts, in order to compete at a level they just were not rich enough to. They won the FA Cup with players whose wages have been paid, almost entirely, from the creditors that were knocked in 2010.
McLovin is right, the fans don't care who pays for it if they get success. It can be investors, the TV companies, the local community anyone - just as long as someone keeps footing the bill for it. Well sometimes people don't actually want to throw all their money away for nothing. Some of the owners have been criticised for wanting their money back, but I think it is unrealistic to expect someone that has never been a Portsmouth (or any other club) supporter, never been in the City and never watched the club play to put in millions of pounds without some sort of exit strategy. None (or very, very few) investors buy a club they wasn't their boyhood team without looking to get something out of it. Watching the club grow might be enough; selling it on for a profit might be enough; winning some silverware and/or enjoying life in the echelons of the Premier League might be enough. However, in most cases the investment that these men (or women) can justify for such things is substantially less that Portsmouth spent.
I don't know who is ultimately to blame for the situation they got themselves into pre 2010, but the administrators and the creditors from then are, at least partially, responsible for the situation they are in now. It is clear now (as I said at the time) that they were not going to be able to service the levels of debt they came out of Administration with. They were relying on the Sky TV money (including the parachute payments) to bank roll the club but forgot to consider the huge debts and the excessive players wages (which have been added to since 2010).
The current Administrators (presumably firing a shot across the bow) made a statement a few months back stating that the football club was more than able to cover it's running costs if it didn't have to service (or, I assume pay back) the debts it has. This comes across as a rallying cry to the fans to build up momentum to scare the creditors into being shafted again to save their club. It's not a million miles away from Palace fans marching on the RBS HO in the City to demand that the bank sell the ground to the new consortium for half it's current value to save their club.
Ultimately the power of the fans movements scare the creditors, and the clubs get saved. I fully expect a deal to be put together to save Portsmouth and Rangers, for that matter (who had their own march this week). It is disgraceful and despicable, but It will continue to happen because the creditors will always agree to something rather than nothing and the Chairman of football clubs will continue to spend someone else's money all the time they seem to get away with it.
Leroy is right, in the end all football clubs will be starved of all lines of credit (save for those offered by love struck fans) and those that have 'got away with it' twice in Portsmouth's case will be to blame for substantial hardship in the lower leagues.
Platini tried to bring something similar to European football and was pilloried in the UK press as anti=English for daring to say that English clubs were operating unrealistic financial models. Of course the UK press were briefed by the same English clubs who don't want limits on their spending or any regulation.
CAFC runs at a loss. It is subsidised by it's owners (some of whom are unknown). That subsidy means we can sign more and better players than would have been the case otherwise. Is that wrong?
I think clubs should not be permitted to spend more than their genuine turnover taking any two years together. A points deduction might work as a sanction if it was breached. You could allow a one season rollover to make up a deficit.
Of course vested interests will ensure that never happens.
Sorry KHA, but if you want to take away Pompey's trophy, I would like to take away any trophies won by Chelsea and to be won by Man City only because ridiculous sums of money have been thrown to them totalling ignoring any pretence of operating profitably. I feel desperately sorry for these and other supporters whose love for their Club has been spoilt by rich egomaniacs and the like.
1. I don't agree with the point about the owner losing money - investing in a footbal club should be means of "equity" and take the risk of equity. I believe the FA's fit and prper persons test should include a Fit and proper financing structure which is mainly equity based.
2. I have never understood the football creditors rule. I always understood the distribution is governed by law - is there actually a law passed in parliament that defines this - if not how do football clubs get round it?
It's just not the same. Chelsea and Man City bought the trophies they won, but they did it with money that the owner's had. Portsmouth did it with money they borrowed and failed to pay back. Many people have suffered as they are not going to get the money they are owed. I don't know if you've ever been knocked a substantial sum of money, but my wife and I have and Administration and a CVA is not a victimless process. We lost in excess of £25k that we didn't have spare, we are still carrying debt many years later as a result of it. You just cannot compare the actions of a rich benefactor with those of someone that is borrowing money they will never be able to pay back.
Redman,
1. The point here is that the owner makes his decision to invest based on the current rules. If owners were not allowed to lend their clubs money they would not have put it in in the first place. I know that we have done this, and written much of it off. If the FA had banned directors loans Portsmouth wouldn't have been able to run us as much debt as they would, almost certainly, have been liquidated long ago. However, my point was aimed at the fans that are keen for the directors to spend millions (and this is not limited to Portsmouth) but then complain when the bills have to be paid. If you asked the average Portsmouth fan would you have rather not had the Premier League years and the FA Cup Finals but never been in this mess they would probably say they would rather have stayed in the second division the whole time. They can't sell those times for the £200m or what ever it is (two Administrations added together) they have overspent. But if you'd asked them twenty or so years ago if they wanted someone to come in and spend millions and win promotion to the Premier League and have two FA Cup finals they would have ripped your hand off. In many cases the debt is not limited to the directors investment. If the owner has no more money they are willing to invest they will go and borrow it. All they do is lend it to the club themselves as no one else will do so. It's a catch 22.
2. The football creditors rule is very clever. Basically fail to pay those commitments and the Football League take away what they refer to as the 'Golden Ticket'. This means that the club fails to be in the Football League. This forces the club into liquidation as with no League status they have no fixtures and they cannot generate an income. No agreement with creditors can be honoured on that basis so the creditors have to accept it unless they think that liquidation will generate a better percentage of debt recovery than the club continuing to trade. There is also an issue with the football players contracts being held by the Football League and/or FA. If a club fails to pay a player the player has the right to a free transfer, thus removing the players' transfer value from the balance sheet. Also the Golden Ticket rule applies so if you have a player earning more than any one else will pay him he will hang around and wait for full payment of his contract, or the club will be sanctioned by the league, and might be expelled.
HMRC has challenged the football creditors rule as they are, normally, the creditor that has the first call on the money. This is going through the High Court (I believe) and if they win it will make significant changes to the process in the event of Administration.
We should remember, though, that the rule that protects players wages is a very good initiative by the PFA for the vast majority of players that do not earns thousands per week. It also protects transfer fees, and other debts from one club to another. The FA/FL claim that if the football creditors rule didn't exist one Administration would likley cause many others as smaller clubs in particular could have a huge sum of money (relative to their turnover) due to them. If Spurs had gone bust after they'd signed Darren Bent and not paid us the £15m transfer fee we could have been in a bit of a sticky spot, for example.
Henry,
I don't know if your question was aimed at my ramblings. If it was then I would say that the club can do what ever it wants within the rules. The owners are no longer answerable to the fans as we don't have any shareholding. Their moral responsibility to run the club sensibly aside, I would say that we all need to be careful what we wish for. I am more than happy with our season, and this division was always going to be a grave yard for us if we didn't get out sooner or later, but I wouldn't have demanded spending would have gambled with our long term future, especially as we are in the best position for a long term future now, following the writing off of the debts by the previous board. I don't know where the line is. We have run at a loss for a few seasons now, but we have always had a realistic plan - all be it we were close to Administration. What Portsmouth ended up doing, and Rangers even more so, was to go beyond the point where Administration (or at least knocking debt) was inevitable. I believe there are other clubs in this position. Bolton have close to £100m debt, West Ham have been close to £100m debt, even Man Utd, who are a massive club, have debts that can't, realistically, be cleared, so they need to keep being successful to service the debt.
There issue here is that the fans need to be more realistic as well. It's ok calling for more investment etc. but if the money is not available then it can't be spent. In the end the players will need to earn less, but even if all the players in the world took a similar pay cut there would still be limitations on how many players of quality each side can have. If the cuts were completely uniform then all clubs would have the same players and the same chance of success yet all the players would earn less and all the clubs would have less debt. It just doesn't work that way. All the time there is someone that is willing to gamble a little more than others there will be successes and failures. If the rules are to become so strict that all spending has to be be directly based on turnover then you might as well just draw up the divisions based on home attendances. It does need to be more cautious, but there does need to be some flexibility, otherwise the super rich clubs will just find a way 'round the rules and 'cheat'.
Incidentally I dont think its clear with Chelsea how the financing is structured and what would happen if Abramovich got fed up and said i want my money back