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Pannu assures Birmingham fans Portsmouth repeat will never happen

Birmingham City chief Peter Pannu has assured fans the club will never go the same way as Portsmouth.

Brum owner Carsen Yeung has promised to spend big sums on players like never before in Blues' history - but not in such a way it leads down a road to ruin.

Pannu, Blues' vice chairman executive and finance, has a beady eye on the cashflow for Yeung at St Andrew's.

"If you look at the clubs who have gone into administration, you would note the problem usually starts when they go beyond the advised figure of 60 per cent of turnover-to-wages ratio," he told the Birmingham Mail.

"Many clubs who, in pursuit of glory, would pre-emptively spend. For instance, they would leverage next season's broadcasting money and season ticket money in advance. They go to a financier, leverage the money, at an extraordinary amount of interest, to get a big pot of money. But in this equation you then have an investment in players and to succeed you must remain in the Premiership.

"The problem starts when you pre-spend but you don't remain in the Premiership. Therefore that's when the finance company comes and knocks on your door because you don't get the money you are expecting to get.

"You have already spent it. So that will then kick-start a vicious cycle of problems over problems and it all crumbles down. This is where we emphasise that we have to spend carefully. We have to build our kids to take over because it is a long-term venture.

"We're not going to spend £75 million to bring Ronaldo in from Real Madrid. It would be stupid to do this. Having said that, we will spend prudently, we will bring in players who have got potential, but not in the region of £30 million, £40 million £50 million each.

"We are responsible to make sure that the heritage of our club continues. We never want to be in the position the club was in [in 1992, when the Kumars went into administration]. This is where going to the Far East, getting big sponsors, will give us the push we need, and that will go back into the pot.

"We have got some very good staff, please trust us."

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