PSL is bankrupt

Johannesburg - It's official! The Premier Soccer League (PSL), the elite league of South African football, is bankrupt.

This embarrassing fact emerged this week after the league failed to pay clubs their monthly grants.

In a bid to avert a crisis with potentially far-reaching consequences for the future of unsponsored smaller clubs, the PSL's finance committee has called for an emergency meeting on Tuesday to find a quick solution.

"Technically speaking, yes, the PSL is bankrupt because its current debt far exceeds its income," a worried member of the PSL's board of governors said yesterday.

"There is no money in the coffers of the league. If no immediate solution is found, it will not come as a surprise if the PSL is liquidated or placed under curatorship," he said.

City Press learnt yesterday that clubs were sent letters by the PSL's chairman, Professor Mandla Mchunu, "to inform you that the league is unable to effect the monthly grant for February 2002".

All 18 clubs receive a monthly grant from the league of R250 000, accrued from sponsorships and television rights. For most clubs, the grant is their only income.

The financial crisis is largely the result of FNB and MTN withdrawing their sponsorships from the PSL.

The cellphone company used to sponsor the first division, which currently has no sponsor. As a result, the PSL has been forced to cross-subsidise the ailing first division.

"The league cannot cope with carrying so many clubs who have no sponsors themselves and rely on the grants to pay players and keep the clubs alive," said the official.

A more worrying aspect of the PSL's financial woes is the league's own determined efforts to keep them under wraps. The PSL account is believed to be more than 50 percent overdrawn and its overdraft facility is exhausted, said our source.

Another shock awaits clubs when the chairman of the PSL's sponsorship committee, Orlando Pirates boss Irvin Khoza, announces his intention shortly to concentrate his energy on his duties with Fifa, soccer's world governing body, and the Confederation of African Football (Caf).

Khoza, who has been instrumental in securing lucrative sponsorships for the PSL, is set to lead the 2010 World Cup bid by SA.

The smaller clubs, who elected Khoza to the committee because of his sharp negotiating skills for sponsorships, are keen to see him retain that post.

As the PSL's financial troubles worsen, some club officials are complaining that the first division was a parasite which worsened the problems of premiership sides without sponsors.

"The first division must go to Safa (SA Football Association) and they must find a sponsor and run the whole thing. The league can't cope with 18 premiership clubs and a first division consisting of two streams," complained one club owner.

One of the many weaknesses of the PSL is its lack of a marketing arm and a professional, qualified accountant. The league also has no qualified marketing person and has not replaced its heads of public relations and safety.

"The reason companies are shying away from the PSL is because of its image. Without a spokesman and security chief, its image doesn't look good," said a member of the board of governors.

Mchunu admitted the PSL needed to be beefed up.

"We have identified certain loopholes in the organogram and we are thin on human resources. For a R130 million per season organisation, I feel the league is thin in both skill and ability to handle such a massive organisation."

He declined to say what the PSL's immediate solution would be. It is understood they may ask Safa for a loan.

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