We used to be called Magnolia Foods Inc. so we know lots about English football

As damning documents go relaying to the supposed business acumen of potential owners for Portsmouth FC, the legal document submitted to the U.S. Securities and Exchange Commission on behalf of Cala Corporation formerly Magnolia Foods Inc, this has to be one that any person would hope that the FA Fit and Persons Test wasn’t presented with. As legal documents go it’s a head on car collision waiting to happen, but given the past mistakes made in regards to the test, this document which is readily available in the public domain for anyone to find, will no doubt once again go unnoticed by the good people at the headquarters of the FA. The form relates to the desire to build an underworld resort. To dissect such a form in full would be a trifle dull and boring so I will try run through in short the key area’s that should highlight the most concern. If you wish to access the document in full you can find it at the following link;

http://www.faqs.org/sec-filings/100426/CALA-CORP_10-K/

This isn’t a fake document. It was as I say submitted to the US Securities and Exchange Commission and it does indeed read like a Dear Santa letter just with a few more legal jargon details contained within.

The document doesn’t just contain one or two alarm bells, it’s littered with them. I don’t want to belittle the average fan on the street by any shape or means but with all legal documents of any nature, it’s often easier to have someone break down the finer points rather than having to wade through the document in its entirety and lose interest totally. So I will try to break down the points that struck me the most in terms of the message the statement gave out.

Management believes that the project has a great chance of success however; there can be no assurance that (i) such individual unit or fractional ownership will be sold or significant revenue will be generated, and (ii) anticipated costs will not be significantly exceeded by actual costs incurred.

So in plain English Cala Corporation can give not one single guarantee that if permission is granted for such a venture that any of the units would be sold or a single dollar earned from it having been built. That’ll perk up the spirit of any potential investor then surely. Perhaps they can provide a copy of the tender to Stevie Wonder and kidnap his closest advisors and not let any Braille copies of this document enter circulation.

The Registrant owns no patents or trademarks, and has no employees.

So we have this wonderful idea but it’s so wonderful we didn’t seek any legal protection for it and we have no employees which means we have a team of no one capable of carrying out to fruition. What we really have is a picture drawn by a four year old Kindergarten kid that we really like and we’re hoping someone will be mad enough to give us the money to build it under the sea. Sure the plans look like they’re drawn in crayon but use your imagination folks. It can work honestly.

ITEM 1A RISK FACTORS

Risk Factors Connected with Plan of Operation.

(a) Limited Prior Operations, History of Operating Losses, and Accumulated Deficit May Affect Ability of Registrant to Survive.

The Registrant has had limited prior operations to date. Since the Registrant’s principal activities recently have been limited to seeking new business ventures, it has no recent record of any revenue-producing operations. Consequently, there is only a limited operating history upon which to base an assumption that the Registrant will be able to achieve its business plans. In addition, the Registrant has only limited assets. As a result, there can be no assurance that the Registrant will generate significant revenues in the future; and there can be no assurance that the Registrant will operate at a profitable level. Accordingly, the Registrant’s prospects must be considered in light of the risks, expenses and difficulties frequently encountered in connection with the establishment of a new business.

So we have no experience in this field whatsoever, we have a history of making no money and we’re lucky if we survive by the skin of our teeth every financial year. What better message to send to the board of the FA to let us take over a football club. But there’s more. We admit that we have no prior knowledge of the industry we seek to enter. That makes us perfect owners for Portsmouth FC because let’s face it you let the likes of CSI buy the club previously so there should be no problem in letting us buy it with no funds available. We also freely admit that we’ve done no business for ages and that we’ve been looking at new ways of making no money. But hey, we’ve been looking. That should count for something right? Oh and you got us there, we hold our hands up, we haven’t made a penny or a dollar from anything for ages. But what does that matter when it comes to owning a football club. It hasn’t meant much too any governing bodies when it came down to the crunch at Portsmouth FC so why should it make any difference now?

So we have no money and can give no assurance of any investment of any sorts but Juventus floated on the stock exchange. Let’s go down that route it’s bound to be a winner. Please take a chance and forget any risks, expenses or difficulties in making a picture from a four year old a reality. It’ll all be fine honestly. We just need someone rich and stupid enough to make it happen because we have no money or expertise in this field. What can go wrong?

The Registrant incurred General and Administrative expenses of $234,762 for the year ending 2008 and $694,705 for the year ending 2007. Stock for services consisted of zero and $332,000 of the total general and administrative expense for the years ending 2008 and 2007, respectively. Officers salary of $150,000 and legal and accounting of $46,235 were the major components of G&A during the year ended 2008 while consulting expense of $64,241 and legal and accounting of $62,932 were the other major components for the year ending 2007.

The Registrant has incurred net losses: $1,114,398 for the fiscal year ended December 31, 2008 and $721,403 for the fiscal year ended December 31, 2007. The Registrant’s current liabilities exceed its current assets by $320,590 as of December 31, 2008 and $184,366 as of December 31, 2007. At December 31, 2008, the Registrant had an aggregate accumulated deficit and accumulated deficit during the development stage of $13,722,590 ($11,886,789 and $1,835,801, respectively). This raises substantial doubt about the Registrant’s ability to continue as a going concern.

As a result of the fixed nature of many of the Registrant’s expenses, the Registrant may be unable to adjust spending in a timely manner to compensate for any unexpected delays in the development and marketing of the Registrant’s products or any capital raising or revenue shortfall. Any such delays or shortfalls will have an immediate adverse impact on the Registrants business, operations and financial condition.

Net losses of over One million dollars for a firm that has no staff and no experience of what we’re doing or guarantee’s of making any money. How can we explain this one away? Oh, I know, we’re huge fans of the Austin Powers films. You know the one’s where everyone laughs at the bad guy and the little finger when he says One Million Dollars and everyone laughs because it isn’t a large sum of money anymore. It’s fine. We can all laugh and see the joke can’t we? Come on everyone lets all laugh together “ha ha ha ha ha.”

At this juncture I’ve skipped down many legal passages that cause massive alarm bells to jump to this;

ITEM 2. PROPERTY. The Registrant maintains an office at 1314 Texas Street, Suite 400, Houston, TX 77002. It currently does not own any equipment at that location.

So you want to do business with us? Fantastic news. That’s really great. Oh, you want to come and see our operation first hand. Well, what can I say; perhaps we’d be better coming to see you at your offices. We wouldn’t want you to put you off by showing you such ground breaking offices such as ours. We like to do business on equal terms, honestly we do, we’d much rather come down to your level if that’s OK with you. When in Rome Del Boy my son, when in Rome!

OK so enough with the annihilation of this form already. It’s pitiful, skin crawling and as a legal document surpasses everything that I had managed to pull up on CSI and a certain Mr Antonov before he was able to gain control of Portsmouth FC and pass the so called Fit and Proper Persons Test. If you are curious then please read the document in full. If you don’t like Horror Movies in the form of legal documentation then give it a miss. I suspect it’s for best. I hope that AA has at the very least done once basic background check on the relevant parties who are supposedly vying to take over at Pompey. The egg on his face from last time is still very fresh especially when all the evidence of what was ultimately going to happen to the club was laid bare on the internet for all to see if only he’d taken the time to read just one fans forum or blog before letting the club into the hands of those that he did.

I trust he won’t be making the same mistake twice.

So in a short conclusion: That’s no to Cala then and we told you long before CSI took over what was going to happen. It was a tad obvious wasn’t it n’est pa? I’m still awaiting the e:mail that promised me the credentials on why CSI were the real deal. I always thought email was supposed to be faster than snail mail. I somehow think that email will never arrive.

PUP

Will football implode financially in the next three weeks or even three months?

Over the past couple of season’s finance in football has become an obsession of sorts for me - heightened I guess by the troubles that we saw off the pitch at Pompey not to long back. It’s one of the reasons that as a fan I’ve tried to give all the backing I can muster to the campaign to save Plymouth Argyle and spread the message of the fantastic job Fans Reunited are doing on their behalf as well. Reading the news today that their players have once again agreed to defer their wages really brings home how bad the situation is down there and the reality is that if a new owner doesn’t step up to the mark soon then it really could be curtains for the club. 124 years gone just like that? It surely cannot be allowed to happen? Apparently many parties have been interested. One ex-Pompey connection being that of our old owner Terry Venables. I hope that story for the sake of Plymouth Argyle is widely off the mark. The involvement of Peter Ridsdale must be mad enough given his track record at Leeds United and then Cardiff. Is it any surprise to Pompey fans that clubs who’ve employed our ex-CEO Peter Storrie have all had financial problems either with him involved or after his departure; Pompey, West Ham, Southend and Notts County. Not something you’d want people to remember about you surely?

For the past 12 months or more when writing about football finance I’ve held the view that the game of football believes it’s inside an insulated bubble which cannot be burst. I’ve talked about Arsenal, Wolverhampton and Bayern Munich as some who’ve bucked the trend. I’ve mentioned Portsmouth and Plymouth Argyle for obvious reasons. Glasgow Rangers will not be too far away when I’ve gotten to grips with that case. But voices from within side the game aren’t always that common. So I was interested to read the comments from Arsenal’s long serving manager Arsene Wenger when I opened the sports pages of the papers on Monday morning to see him starting to take the lead in the fact that the game isn’t as untouchable as it thinks. Whilst Plymouth Argyle continue to make the headlines in their search for a new owner, I found it refreshing to read the thoughts of a man who alongside the influx of money into the game, has been a revolutionary and a driving force behind making the EPL the league it is today – a worldwide force and phenomenon. Wenger’s arrival and his approach to diets etc for me is one of the reason’s the EPL went on to become so successful. Sure we still hear about antics from players such as Andy Carroll at the criticism from England Manager Fabio Capello that he needs to curb his drinking, but would Carroll have been able to have kept pace with the likes of Paul Gascoigne, Tony Adams, Paul Merson, Paul McGrath or Alan Knight and the entire Portsmouth team who ex-Manager John Gregory famously described as being like a pub team? I think Carroll wouldn’t have lasted much past 11pm.

“I believe that Europe overall, as a unit, is going towards a massive crisis, which nobody really expects now. I am convinced that Europe will go into a huge financial crisis within the next three weeks or three months and maybe that will put everything into perspective again.

Football is not untouchable. We live with people going to the stadiums as well and from advertising from people who buy products. All our income could be a little under threat in the next few months. Football is not only about money. We believe in ourselves that we can compete with them but it’s as simple as this.”

Arsene Wenger’s quotes taken before the Arsenal game against Borussia Dortmund in the Champions League this week.

Wenger had been talking about the dominance of two football clubs; Real Madrid and Barcelona and their power to negotiate their own TV rights away from the rest of the Spanish League. He threw in the names of Chelsea and Manchester City as part of a group whose spending power has separated them from the rest of Europe’s sides. For the Arsenal manager it’s created an uneven playing field where the rest of the clubs are unable to compete. In my previous blog I mentioned the affect of trying to keep up with the Jones’ and how spending big has become the norm in a bid to stay in the top league and compete. If prove of that was ever needed and how big a part players wages play in today’s modern game the recently released following financial breakdowns about wages show just how big a part they have to play and their impact on it’s possible collapse in the not too distant future;

For every pound earned by an EPL club in the 2009-10 season 68p was spent in wages. In Italy’s Serie A it was 69 cents in every Euro and in France’s Ligue 1 it was an even more staggering 75% of everything earned.

With this trend showing no signs of abating how long can the game worldwide sustain these levels of spending before everything starts to go horribly wrong?

One side in Europe who’ve bucked the trend and won on a comparatively small budget were Arsenal’s mid week opponents and current Bundesliga Champions Borussia Dortmund who assembled their Championship winning side at a cost of just £5 million pounds. This outlay was more than covered when Real Madrid purchased playmaker Nury Sahin for a reported fee of around £8.8 million this summer. Although I’m not suggesting that Dortmund are major contenders to go on and win this season’s Champions League, the revenues generated by reaching the group stages for a club already well run financially should be held up as a shining example to other clubs worldwide that success can be achieved on a sensible budget and that you don’t have to break the bank in order to achieve success. To have beaten a side like Bayern Munich with their financial clout in the German leagues is no mean achievement and shouldn’t be undervalued at all.

Spending big has never been a sure fire way to success although Pompey did manage won FA Cup win but we all know the financial implications of that. Interesting to see that or the last seven Champions league finals, six of them have featured and English side in them. The final between Internazionale and Bayern Munich was the only one to have not featured an English side. Of those seven finals there have been two English winners; Liverpool who famously came back from being 3-0 down to AC Milan to win and penalties and the other was Manchester United’s win over Chelsea which was also decided on penalties. So for all the financial power of the EPL spending big still doesn’t guarantee you success in Europe. 

The question remains though as to how long the levels of spending and big wages can be maintained. Scottish clubs forced to compete in wages with their richer neighbours over the border in England have seen current league leaders Glasgow Rangers in an apparent financial meltdown. Whilst Glasgow Rangers and Plymouth Argyle might be far removed from each other in terms of miles and balance sheets in terms of assets, it remains a fact that both sets of supporters will be sat looking at one another very worried at this moment in time. Will one go to the wall; will both go to the wall? If it happens will it be the message that starts the shock waves around the European game and forces them to start taking action. The next three weeks or three months could tell us the answer to that question.

Would you like to argue against Arsene Wenger on the subject?

Academy Round Up Part I (July 15th - August 9th)

August 9th - Gledhill called into Republic Under 19 squad

Congratulations go to goal keeper Matt Gledhill who has been called into the Republic of Ireland Under-19 squad to face Serbia this week.

August 7th – Portsmouth 3 Nike Academy 3

Pompey continue their impressive pre-season form with a hard fought draw against the Nike Academy who are made up of 19 and 20 year old’s that have been released by clubs. Despite fielding a side containing 16 year olds and coming against physically stronger players, the academy side left the game with a lot of credit to their names.

Pompey fell behind when George Colson inadvertently diverted the ball into his own net.
England Under 17 international Sam Magri continued his fine form from this summer’s Under 17 World Cup final where he scored against Germany and Argentina from the penalty spot and once more stepped up to convert from the spot after Jack Maloney had been fouled in the box to level the score line.

Pompey fell behind again before Lewis Stockford equalised for second time. Nike looked to have secured the win when they went ahead with five minutes before the end of the game, but a fine 25 yard strike from Colson made amends for his earlier error and save the game for Pompey.

August 5th - Portsmouth 2 Horndean 2

A young side saw themselves a goal down at Five Heads Park before an unnamed trialist found the equaliser after 33 minutes of the first half. James Jennings reversed the fortunes for Pompey shortly after from close range to make the score 2-1. Horndean equalised early on in the second half but despite plenty of chances neither side could take advantage to gain the win.

August 2nd - Portsmouth 4 Dorchester 2

The last pre-season fixture for Portsmouth saw the academy squad take the place of the full side and triumph in a 4-2 victory in a testimonial game for Dorchester’s Mark Jermyn.
First half goals from Lewis Stockford who’d returned from the full squad’s pre-season trip to the US and George Colson had given Pompey a comfortable half time lead. Also fresh back from the US; Ryan Williams got amongst the goals along with Andrew Higgins to put Pompey 4-0 up.

Despite conceding two goals in the second half, the academy side earned a great victory.

July 22nd – Portsmouth 2 Wycombe 1

Pompey recorded their third straight win of the pre-season saw Pompey condemned Wycombe to their first pre-season defeat in six matches. Wycombe struck the first blow in the first half to see them take a 1-0 lead into half time.

Pompey made ten changes at half time and came out as side transformed. Ashley Harris once again showed his pedigree and desire to score the academy goal of the season as he rifled an unstoppable 30 yard effort past the Wycombe goal keeper. Four minutes later Jack Maloney headed in the winning goal.

July 19th Portsmouth 3 Aldershot 2

Pompey took an early lead through Aaron Kinchen after just four minutes. A lack of experience saw Pompey take their foot of the gas and find themselves trailing 2-1 with four minutes to go. A bit of fortune from an own goal saw Pompey equalise before James Jennings secured an unlikely late win.

July 15th - Portsmouth 1 Brighton 0

Pompey won their opening game of pre-season 1-0 over neighbours Brighton thanks to a goal from Carl Walshe.