Swiss Ramble Article on our finances

[Spursidol]

We're talking about finances. At the beginning of Sugar's tenure, there was demonstrably no yawning financial chasm between Spurs and the likes of Man Utd, Arsenal and Liverpool. We were one of the "Big Five". Our income was pretty much on a par with all of theirs. Case in point: in the early 90's, Spurs made more from merchandising than any other English club - 50% more than Man Utd even. Unfortunately, Sugar pissed off Spurs' brilliant and visionary merchandising guru, Edward Freedman, and sent him into the thankful arms of the Old Trafford club. Doh!

So yes, the top clubs were indeed financially well within our reach when Sugar first took over Spurs. It was Sugar who oversaw us falling out of the race. There can be no argument about that.

All true but Sugar inherited a basket case from Irving Scholar's time - so Sugar had big debts to clear.

The way he cleared the debts however was to sell players and cut back on anything not essential in the short term - which included the academy hence very few young players coming through for a decade.

Good news is that he cleared the debt (and without Maxwell being involved - otherwise there would be no Spurs) , bad news was the timing, Spurs needed to rebuild the team at the start of the sky money years, so whilst most others had a decent squad, Spurs squad was wafer thin in numbers and quality. So Sugar started with a deficit - both moneywise and (until FA had to backtrack) a points deficit.

So, an opportunity missed, but it would only have been realised if Sugar/other investors had put lots of money into the club - but everybody under estimated the potential growth in the TV market £m's, and cut costs rather than invest.

 

[yankspurs]

Well I did my part. Gave the club £34 for the 3rd shirt. Did you do yours?

Really though, I love threads like these for multiple reasons. Bsodls have a field day praising levy and saying "the grass isnt always greener" and the "look at what happened with sugar" stuff.

Oh and as for this. Revenue's, shmevenue's. Let's look at debt, and other factors. Chelsea's £1bn in debt(and thats not counting any long term debt). City's about to implode. We have no debt(but have £30m in long term debt). We've had multiple chances in the past 6 years to progress as a club and become that perrenial CL contender but only made CL once(levy blew it that summer too). Harry blew a GOLDEN opportunity to not only get CL, but be 2nd or maybe even 1st with the team we had. Christ, that was a great team. Instead we got 4th and chelsea knocked us out by winning CL. Levy blew it by not signing a fucking striker in January of Andre's first year. Poch blew a great chance this year by not playing his best X1 for the last 2 months.

We've had so many chances. Levy's blown it by being a stingy, non risk taking twat. We've had managers blow it.

The new stadium's going to help, but we also need new ownership that isnt afraid to spend money on the club. And no, that doesnt mean i want a fucking oligarch, so you pro levy'ites can quit using that argument.

 

[van_Pommel]

The stadium won't give an overnight boost, of course. What it will do is mean that when we invest in marketing and branding to recruit new fans, those fans will actually be able to go to a game. While they're at the game they'll buy a shirt, buy a pie, buy a beer etc increasing our match day income. They'll also hopefully become lifelong fans meaning that repeats itself. The stadium will also be an attractive venue for events which brings in additional income. The Emirates is regularly used for lots of different types of exhibitions and conferences, not to mention X factor auditions. Brazil also play their friendlies there now. All of which bring in considerable income. A stadium should be a big financial asset for a football team, ours currently is not.

 

[Lilbaz]

Well I did my part. Gave the club £34 for the 3rd shirt. Did you do yours?

Really though, I love threads like these for multiple reasons. Bsodls have a field day praising levy and saying "the grass isnt always greener" and the "look at what happened with sugar" stuff.

Oh and as for this. Revenue's, shmevenue's. Let's look at debt, and other factors. Chelsea's £1bn in debt(and thats not counting any long term debt). City's about to implode. We have no debt(but have £30m in long term debt). We've had multiple chances in the past 6 years to progress as a club and become that perrenial CL contender but only made CL once(levy blew it that summer too). Harry blew a GOLDEN opportunity to not only get CL, but be 2nd or maybe even 1st with the team we had. Christ, that was a great team. Instead we got 4th and chelsea knocked us out by winning CL. Levy blew it by not signing a fucking striker in January of Andre's first year. Poch blew a great chance this year by not playing his best X1 for the last 2 months.

We've had so many chances. Levy's blown it by being a stingy, non risk taking twat. We've had managers blow it.

The new stadium's going to help, but we also need new ownership that isnt afraid to spend money on the club. And no, that doesnt mean i want a fucking oligarch, so you pro levy'ites can quit using that argument.

FFS. He invested the money in the new stadium and training ground. You might not like that or the players that we did buy. But that hardly makes him a stingy, non risk taking twat. He only own 15% of the club. It is not his money.
If you are going to slag him off at least get the facts right. That is what is so annoying. Fair enough you want new owners, many of us would agree with you. You don't need to make up bull shit though.

 

[dk-yid]

Oh . I see. Everything must be compared to the Sugar years then. Forget everything that happened before in our long and illustrious history. So long as we finish top 7 and secure record profits all is OK.
What a passionate supporter you must be.

Your name is spot on .... Except the Cornelius part.

 

[jambreck]

All true but Sugar inherited a basket case from Irving Scholar's time - so Sugar had big debts to clear.

The way he cleared the debts however was to sell players and cut back on anything not essential in the short term - which included the academy hence very few young players coming through for a decade.

Good news is that he cleared the debt (and without Maxwell being involved - otherwise there would be no Spurs) , bad news was the timing, Spurs needed to rebuild the team at the start of the sky money years, so whilst most others had a decent squad, Spurs squad was wafer thin in numbers and quality. So Sugar started with a deficit - both moneywise and (until FA had to backtrack) a points deficit.

So, an opportunity missed, but it would only have been realised if Sugar/other investors had put lots of money into the club - but everybody under estimated the potential growth in the TV market £m's, and cut costs rather than invest.

Spurs' debt at the time of the Sugar takeover was £20m. Of that, £5.5m was paid off by the sale of Paul Gascoigne and £7m was paid off by a rights issue in December 1991.

So from very early on in Sugar's time at the club, Spurs' debt was £7.5m and steadily declining. Relatively, a trifling amount _ Sugar could have paid it off with his petty cash. It really wasn't the millstone around the neck that it is so often claimed to have been.

 

[Greenspur]

I think we wasted an awful lot of money and had some bad managers. Think we spent more on players than Arsenal and Liverpool. It arguably would have been easier in the 90's to get into the CL. From there who knows?

This is essentially correct. Prior to 1992, the top four regularly changed. When the premiership started and Sky became involved, they tended (and still do) to show more matches from the top 4 - therefore making them richer than other teams. So, whoever was fortunate enough to be around the top four at that time went from strength to strength, as more money pored in.

Had it started a year earlier, the top 4 (and presumably those receiving more TV money) would have been:

Leeds
Manchester United
Sheffield Wednesday
Arsenal

The year before that:

Arse
Liverpool
Crystal Palace
Leeds United

And the year before that again:

Liverpool
Aston Villa
Tottenham Hotspur
Arsenal

None of this takes into account the disgusting quantities of money since thrown at Chelsea and Manchester City

 

[Spursidol]

Spurs' debt at the time of the Sugar takeover was £20m. Of that, £5.5m was paid off by the sale of Paul Gascoigne and £7m was paid off by a rights issue in December 1991.

So from very early on in Sugar's time at the club, Spurs' debt was £7.5m and steadily declining. Relatively, a trifling amount _ Sugar could have paid it off with his petty cash. It really wasn't the millstone around the neck that it is so often claimed to have been.

£20m debt is a relatively trifling sum in today's money.

But to put it into context Paul Gascoigne's record transfer fee was £5.5m - so almost 4 times a record transfer fee.

Now with increased tv money, and using Bale's transfer fee as a comparison it would be equivalent to over £300m.

If you looked at the price of many goods, they woud have probably doubled betwen 1991 and now - and housing more so (with London house prices multifold) - so the £20m debt is probably closer to £40m or £50m in today's money, albeit in football money its more like £300m.

However Sugar made (with 20/20 hindsight) the mistake of refinancing the debt by sale of a player and cutting costs rather than investing to pay off the debts. My point in OP was that had he realised the increase in value of tv rights would increase over time as much as they have, he would have been better to put money in rather than sell Gascoigne and make cost cuts which have had the effect of damaging the football club.

Sugar's assumption was that he could make cuts and sell players to pay off the debt - and then grow the club (a strategy which might have worked in many businesses) . The problem was that when he was ready to grow Spurs, the market had moved on (with increased transfer fees to buy players Spurs needed) and Sugar did not want to put money in to a business he didn't really understand. Hence he was open to offers from ENIC.

 

[dk-yid]

Well I did my part. Gave the club £34 for the 3rd shirt. Did you do yours?

Really though, I love threads like these for multiple reasons. Bsodls have a field day praising levy and saying "the grass isnt always greener" and the "look at what happened with sugar" stuff.

Oh and as for this. Revenue's, shmevenue's. Let's look at debt, and other factors. Chelsea's £1bn in debt(and thats not counting any long term debt). City's about to implode. We have no debt(but have £30m in long term debt). We've had multiple chances in the past 6 years to progress as a club and become that perrenial CL contender but only made CL once(levy blew it that summer too). Harry blew a GOLDEN opportunity to not only get CL, but be 2nd or maybe even 1st with the team we had. Christ, that was a great team. Instead we got 4th and chelsea knocked us out by winning CL. Levy blew it by not signing a fucking striker in January of Andre's first year. Poch blew a great chance this year by not playing his best X1 for the last 2 months.

We've had so many chances. Levy's blown it by being a stingy, non risk taking twat. We've had managers blow it.

The new stadium's going to help, but we also need new ownership that isnt afraid to spend money on the club. And no, that doesnt mean i want a fucking oligarch, so you pro levy'ites can quit using that argument.

I am not pro levy.

You are ignoring the amount of investment that has gone in to the Northumberland project, the new training center, and the clubs general financial architecture including ensuring our debt free status.

So while you don't want an oligarch and don't want to hear that argument this is effectively what you are saying. You are asking for someone to come and throw funds at players in fees and wages on the hope/assumption that this will somehow make us a "perennial CL contender", and thereby in turn grant us access to greater commercial success. This is the City and Chelsea model.

Even if we had won the league THAT year (highly unlikely but I'll play) do you honestly think that we could have sustained that against clubs who outplay us financially every step of the way. Not bloody likely. Levy's has failed on occasions in my opinion, and I still have nightmares about the Keane/Berbs Frazier/Pav swap as well as the Chelsea CL fluke, but nothing is linear in the world of football.

The only ways we will ever close the gap and stay among the big money clubs is through 1) long term building of financial clout, 2) a cash heavy oligarch, sheik, african dictator 3) a time machine that will take us back to the year before the CL started and then investing heavily in the squad to get our foot in the door.



.

 

[Grapo2001]

Which is why Modric annoyed me so much. It wasn't like we showed a lack of ambition or under achieved, we were surely on the precipice of something special then.

Modric and Redknapp - the hangmen of our PL pinnacle.

No one will give up an opportunity to go to Real Madrid and you can't blame them.

 

[jambreck]

£20m debt is a relatively trifling sum in today's money.

But to put it into context Paul Gascoigne's record transfer fee was £5.5m - so almost 4 times a record transfer fee.

Now with increased tv money, and using Bale's transfer fee as a comparison it would be equivalent to over £300m.

If you looked at the price of many goods, they woud have probably doubled betwen 1991 and now - and housing more so (with London house prices multifold) - so the £20m debt is probably closer to £40m or £50m in today's money, albeit in football money its more like £300m.

However Sugar made (with 20/20 hindsight) the mistake of refinancing the debt by sale of a player and cutting costs rather than investing to pay off the debts. My point in OP was that had he realised the increase in value of tv rights would increase over time as much as they have, he would have been better to put money in rather than sell Gascoigne and make cost cuts which have had the effect of damaging the football club.

Sugar's assumption was that he could make cuts and sell players to pay off the debt - and then grow the club (a strategy which might have worked in many businesses) . The problem was that when he was ready to grow Spurs, the market had moved on (with increased transfer fees to buy players Spurs needed) and Sugar did not want to put money in to a business he didn't really understand. Hence he was open to offers from ENIC.

Gascoigne was already sold before Sugar bought the club. So, in his defence, he can't be blamed for that.

But for pretty much everything else that happened during his time at the club, he can be blamed.

Certainly £7.5m (the remaining debt within a year of Sugar taking over) was a lot more in football terms back in 1991 than it is now. But it was nevertheless a comparatively trifling amount in the wider business world - the kind that Sugar could comfortably have wiped out in exchange for equity without missing a beat. It certainly wasn't a figure that either necessitated or justified his subsequent cautious, visionless mismanagement of the club.

The point is that the club that Sugar inherited from Scholar wasn't really a "basket case" at all. It had only got into trouble because of a haplessly mismanaged Shelf side redevelopment and because of an ill judged foray by the previous board into industries that it didn't understand - clothing, electronic systems etc. The core football business was actually perfectly sound. And Spurs was one of the leading brands in the industry and more than capable of competing financially with any other English club of the time.

Sugar squandered that position. And it's very possible that we will never regain it.

 

[225]

No one will give up an opportunity to go to Real Madrid and you can't blame them.

Not on a personal level, but on a Spurs Supporter level I can.


Mwahahahaha

 

[225]

We've had so many chances. Levy's blown it by being a stingy, non risk taking twat. We've had managers blow it.

The new stadium's going to help, but we also need new ownership that isnt afraid to spend money on the club. And no, that doesnt mean i want a fucking oligarch, so you pro levy'ites can quit using that argument.

Whilst I agree with 90% of what you're saying, I think sometimes we have to understand that Levy can't buy players the manager doesn't want. In last year's January window, Sherwood admitted Levy was trying to sign players but he refused, even going as far as saying he wouldn't play them if he signed anyone.

AVB, in his first season, seemed to be adamant he didn't need a striker, too. We don't know fully what goes on behind the scenes, but in the event that the manager says "No, I don't want that/another player" then can the chairman really go behind his back? Would that player want to join in those circumstances?

 

[leffe186]

The stadium won't give an overnight boost, of course. What it will do is mean that when we invest in marketing and branding to recruit new fans, those fans will actually be able to go to a game. While they're at the game they'll buy a shirt, buy a pie, buy a beer etc increasing our match day income. They'll also hopefully become lifelong fans meaning that repeats itself. The stadium will also be an attractive venue for events which brings in additional income. The Emirates is regularly used for lots of different types of exhibitions and conferences, not to mention X factor auditions. Brazil also play their friendlies there now. All of which bring in considerable income. A stadium should be a big financial asset for a football team, ours currently is not.

This. We need to learn from the way Arsenal market and execute matchdays, and we need to find a way to make travel to the ground less painful. There are plenty of opportunities to improve some of the commercial stuff (programmes etc, and what the fuck do we have to do to get all U21 games broadcast on Spurs TV - it's a no-brainer?) Thanks to the academy and the progress on the stadium, this is the first time I have read the figures and not been worried about what's going on behind the scenes. The single main concern I have about Spurs right now is what's going on on the pitch, and that's how it should be.

Lloris is the only player I actively worry we might lose - everyone else is either young and locked in or not good enough. Although the figures show that player trading is still important, they also show that we will not actually need to sell players to keep ticking over. We can get money for our deadwood which will reduce amortisation considerably, without our best 17 or so players being affected. That should allow us to pick up a couple of really good players who Poch actually wants. It's riding on him, for better or worse.

 

[spursfan77]

It's not ENIC that's the issue now, it's FFP.

I'm sure we can only increase our wage bill by £4m/season, so even with a 'sugar daddy' we'd be massively breaking rules.

As wage bills are linked to team quality (in terms of attracting/retaining better players generally equals higher wages)

1) £215m - Man Utd
2) £205m - Man City
3) £193m - Chelsea
4) £166m - Arsenal
5) £144m - Liverpool
6) £100m - Tottenham

Even if we increased by the maximum £4m/season, and the other clubs stayed stagnant, we'd only just be overtaking Chelsea in 24 years time.

So unless I've got mixed up somewhere, the FA are essentially 'preserving' the elite's place in the table by suffocating the growth of those teams below them. It's like we're being punished for not "buying" the game before FFP.

That being said, I noticed our wages went up 50% from the start of Redknapp's reign to the end! (some £60m in 2009 to £90m in 2012)

Yep, ffp will be a disaster for 90% of clubs.

 

[225]

Yep, ffp will be a disaster for 90% of clubs.

I can see what they were trying to do, but it'll backfire and create the same paradigm that La Liga has.

 

[spursfan77]

I can see what they were trying to do, but it'll backfire and create the same paradigm that La Liga has.

Yep. It will be even worse in countries like Germany where no other club will be able to win the league except bayern Munich. I expect that league to suffer a massive decline over the next 5 years because it will be so uncompetitive players won't want to stay and ply their trade there.

For Germany see Turkey where it's galatasary, Swiss league where it's Basel, Greek league where its olympiakos. Clubs that always win their league because of the CL money which will be worse now because of ffp. I'm sure theirs more examples.

 

[Lilbaz]

I think that FFP will only be the start. UEFA are looking at the long term future of the game. They have now introduced FFP. Got rid of third party ownership. Have got more money into the Europa league. They will have to look at the CL. But that will come later. The first step was to stop clubs going to the wall. Governments and FA's are already seeing the problems with big team monopolising the game. Spain are bringing in new laws that will see a more equal share of tv rights. Italy has already done so. The game is slowly changing for the better. I will bet that the EU may be asked to help. This will stop the big teams from breaking off and starting a super league.

 

[225]

Yep. It will be even worse in countries like Germany where no other club will be able to win the league except bayern Munich. I expect that league to suffer a massive decline over the next 5 years because it will be so uncompetitive players won't want to stay and ply their trade there.

For Germany see Turkey where it's galatasary, Swiss league where it's Basel, Greek league where its olympiakos. Clubs that always win their league because of the CL money which will be worse now because of ffp. I'm sure theirs more examples.

The New Saints of Oswestry Town & Llansantffraid Football Club. No?

 

[225]

I think that FFP will only be the start. UEFA are looking at the long term future of the game. They have now introduced FFP. Got rid of third party ownership. Have got more money into the Europa league. They will have to look at the CL. But that will come later. The first step was to stop clubs going to the wall. Governments and FA's are already seeing the problems with big team monopolising the game. Spain are bringing in new laws that will see a more equal share of tv rights. Italy has already done so. The game is slowly changing for the better. I will bet that the EU may be asked to help. This will stop the big teams from breaking off and starting a super league.

In a way, they are increasing the risk of clubs being annihilated.

"Hi Mr FA, we're going through bad times and losing money, can you help?"

"No, here's a big fine"

"We can't afford that fine. We'll have to go into administration"

"Will you? That's another fine then. And we'll take those points, thank you - don't want you staying in our dictatorsh... erm, league"