Premier League boss Richard Scudamore has admitted that any top-flight club which went out of business would be guilty of "rank bad management."
Portsmouth have struggled to pay their players three times already this season and currently are banned from transfers, with the January tranche of their broadcast revenue having been withheld and used to pay clubs who are owed money. Scudamore insisted the club's transfer embargo will stay in place until they have no outstanding liabilities.
On whether a top-flight club could go to the wall, Scudamore said: "You can't say it is impossible to imagine a Premier League club going out of business, that would be foolish. Given the amount of central income that is generated by the Premier League, it would be down to absolutely rank bad management if a club itself was actually to go into administration."
Portsmouth claim they have settled their debts with other clubs and want the remaining £2m withheld from their television money by the Premier League paid up.
But Scudamore insisted Portsmouth still had to convince the Premier League that their responsibilities had been fulfilled.
He said: "Portsmouth know the score. We need documentation at the Premier League which is as watertight and as strong as the original contract on which the players were signed.
"The minute we've got absolute proof that any contractual amendments they've made with other clubs are as robust as the original contract that was signed, then obviously that money gets released."
The transfer ban also stays.
Scudamore added: "At the point when we as a Premier League determine there are no outstanding liabilities, absolutely nailed down, absolutely clear, absolutely concise then of course the transfer ban will be lifted, but at the moment it is still it place."
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