THE stock market dreams of potential Pompey owner Joseph Cala may not solve the club’s problems, a financial expert has warned.
Yesterday The News reported the 50-year-old businessman’s claim that if he takes over Portsmouth FC he will launch an ambitious bid to float the company on the New York stock exchange within three weeks.
This would allow people to buy and sell shares in the private business and could open it up to new investors.
But professor of business history at the University of Leicester, Tony Arnold, said of the 25 football clubs which he knew had gone public in the UK since 1997, only one had been successful.
He said: ‘The question is, why would investors want to put their money into a club like Portsmouth?
‘The biggest problem with football clubs is that their income goes up and down year on year.
‘They are high-risk businesses that become even more risky when you finance them with debt, as many owners do.
‘In that situation even a club like Manchester United can run into trouble.
‘Thankfully that’s not what Mr Cala is talking about doing, he wants people to buy equity shares and invest in the club in the long term.
‘But since 1997 I only know of one club that has ended up with a share price above its float price, which is Arsenal.
‘He talks about Juventus, but the two clubs are not the same.
‘Pompey’s only big asset is its incredibly strong support, and that is not what investors want to hear.
‘The club has millions of pounds of debt and a stadium which it can’t redevelop because someone else owns the surrounding land.
‘The only reason I can think of to invest is because you love football and want to own a club: Portsmouth FC’s value at the moment is quite low.
‘Mr Cala is making a big pitch but there are still so many questions about what sort of plan he will have.’
The Sicilian businessman – who said he has a personal wealth of 100m euros – has offices in Italy and the USA, but abandoned a previous bid to build underwater hotels on huge boats because they proved too expensive to build.
He told The News he has experience floating companies on the stock market and was confident the idea would work.