Let me introduce you to a piece well worth reading here from Stuart James, Laurie Whitwell, David Ornstein and Adam Crafton, which fascinatingly includes some insight from the world of football agents.
In a nutshell, this cursed Coronavirus disruption is merely the start of a chain of events that look set to keep Premier League football tipped upside down for a good while to come.
The bitter divide at clubs between players and their respective boards is only going to get frostier in many instances. Daniel Levy is certainly going to have his hands full.
Bear in mind that when things were ‘going well’ and Spurs were tipped for greatness, Kyle Walker bailed at the first opportunity. Danny Rose never recovered from missing the same boat. So good luck selling pay cuts and deferrals at Hotspur Way.
But there’s more to the situation than players clinging on to their existing levels of compensation like grim death. The fall out from players being gently and perhaps in some instances, not so gently moved on from their current clubs will inevitably create a blunter market of ‘haves’ and ‘have nots’ in top-flight football.
Will Tottenham be one of these predatory clubs? It seems unlikely. Unlike most of his immediate CEO rivals, Daniel Levy has recently hocked the family jewels in order to inflict a shopping centre compound the robust nature of the business’ infrastructure.
So when the hoovering up of talent begins in earnest, Spurs fans are likely to get the old “double down” and told to enjoy the palatial surroundings and once again – think about the future. Or their children’s future – or maybe their… you get the idea.
Price drop on Aisle 5
The Athletic piece warns that players like Ryan Sessegnon, that cost Tottenham £25million, might well be available next season at nearer the £5million mark.
A dystopian future awaits for ENIC. Of course, nobody bar a science fiction author could have predicted all this, but the undeniable truth is this, any club that has no credible form for winning silverwear, that takes out a £600million loan on ‘infrastructure’ leaves itself exposed and incredibly weak as far as agility is concerned.
Little wonder that Mr. Levy didn’t let shame slow him down in getting state aid for his 550 non-playing staffers.
As for the current squad, it looks highly likely that the only new faces José Mourinho is likely to see next summer are if he and his family get to holiday abroad.
A million to one shot
There is one other possible outcome. That ENIC review their situation and decide that the odds are now horribly stacked against them – and sell up. The economic crash that is building like a volcano on acid will change every businesses’ landscape for at least a generation. For those currently embracing a generational debt, things don’t look well.
Monster!
Excellent piece Finn,well done.
Superb Finn . Well executed piece and absolutely spot on .
Whilst not an accountant, prior to the shutdown, I have really seen no instance of the THFC financial model being flawed. Revenues were higher and generation of revenue was set to increase from retail, gate receipts, TV, sponsorships (and of course naming rights) plus bonus income from NFL, boxing, concerts etc. the structure of debt repayment took into account inflation of land/property prices (what might be a billion quid today could well be 2 billion in 10 years’ time). With revenues set to increase in the same way the relative costs would have proved out as less and less, as each year passed.
I’m sure the “Generational Debt” could be cleared in a much shorter period of time, but it serves to offset and reduce tax liability, whilst being a capital expenditure and as such not assessable on the regular P&L (Profit and Loss) spreadsheets. As an accountant, Levy does an outstanding job – indeed he would be the best CFO you could possibly ask for!
However, accountants don’t create businesses, they count the successes (or failures) of those who do. The death of a business, whether by dissolution or simply lacking any of he vitality it once had, is generally when the entrepreneur who had that enthusiasm and vitality for the product, is forced out by some form of gang rape by MBAs (the accountants – tho’ not sure the spelling should include the ‘o’)
The real issue with the THFC business is that the accountant has taken over the business and as part owner runs the business on financials rather than what a real businessman would, opportunity, risk/reward, innovation and the spice and verve that a true leader brings to nurture the core business: football.
The mutation of our motto into, “to do is too dear” pretty much sums this up. Levy will not risk beyond a line he has drawn, which represents his threshold for safety. He hires good people, but stifles the leadership qualities listed above. THFC is not a vibrant and dynamic business; it is a corporate entity; we should really go all in and adopt new kit which is a dull uniform grey.
But despite this, there seem to be so many obsessed by attacking Levy and ENIC based upon the financials – forget it, they are squeaky
clean: attacking them for destroying the life, which is the footballing part
of the football club by questioning their financial credentials, is pointless and somewhat absurd. They are guilty of not drawing the risk/reward line far enough from assured safety; this is deliberate and ensures them the best return on investment. But this is where their vulnerability lies.
They will not change, neither Levy nor Lewis have the capacity to understand that what they are doing is wrong. To them they are doing great, meeting and exceeding targets with little to no risk of loss. They are expanding the portfolio in the area and diversifying their business opportunity/risk exposure – they are not wining trophies but they don’t care: they don’t count trophies as their core success metric.
As long as ENIC and Levy are there, they will continue in this vein ad naseum – not so much a cockerel as a golden goose!
Given the wealth of the club and the track record of its owners, the total asset base and the projections of revenue and profitability going forward, the opportunity described for ManU, Cheatski and Citeh is also there for Levy & Enic. However whilst cheap players might appeal, there are also other opportunities and I suspect struggling local businesses and for new “For Sale” signs in the Tottenham area might be of interest.
As for PR, in a year or 18 months’ time, the scandal of what Levy has done with the 550 employees will have passed and it’ll get rolled into his hard man ethos – a myth other small, egotistical men have likewise sought to perpetuate.
The time to make real money they say, is when blood runs in the streets, but you have to have the wherewithal and THFC does. Levy will broadly
maintain his targets of staying in the top 4; he’ll miss out every now and again and probably smile at the chance to be able to ‘not sign’ top players who want CL football…. Aw shucks, but he tried ……right up to the last minute!!!!! Honestly he did!!
The fact is the club is and will, continue to be infected by Levid19: a pernicious, viral parasite that feeds on the club, never killing it, but never releasing the stranglehold on its full potential.
It has gone under the radar but the Premier League have advanced payments of twenty million pounds to each PL club and have plans to make another payment drawing on money that is expected to be paid as part of next season’s TV money.
Totally agree.
Except he doesn’t view them as mistakes. Player money is wasted money in his eyes.
I dunno Harry, ‘perfectly fine’ is stretching it a bit – we needed a new stadium, 35k capacity is not big time enough for a CL team – but I will concede that our man at the top did not need to spend a billion clams on it!
ENIC sale is wishful thinking, the price will not be good enough. As is a fire sale of Europe’s best talent I think. Sure, middle of the road journeymen previously (obscenely) valued north of £50m will get a dose of reality, but I can’t see too many of the elite selling the family jewels when things will be business as usual this time next year. Desperation is the only caveat, and the rest of the TV money should see that off in most cases.
But your text in the top blue box could not be more spot on – if I were being bullied into taking a significant pay cut when the fat cats all around me are laughing into their bottles of Cristal then I would also be inclined to tell them to go eff themselves.
The new stadium is and has only ever been about one thing, ENIC adding value to their investment.
As far as they’re concerned the football team being better as a result isn’t in their business plan…
Ar5ena1 finished their stadium over 12 years ago and they’re further away than ever from the expectations they had at their old place.
The world moves on and you have to keep pace and remain competitive. There’s currently no evidence anywhere in the world that bigger, fancy new stadiums bring any greater success at all. Especially without decent, clever investment in the team and good management.
Think you’re right on Football being on its feet quicker than most. Once the distancing has been lifted to enable fans in grounds (possibly at lower capacities with a temporary ticket/seating system to space fans out) the coffers start rolling back in.
The infrastructure is all still there and the revenues are so massive. Even if match day revenues are down, the global tv/streaming viewing revenues should be largely unaffected. South East Asia and China will be out of this sooner than us and hungry for Premier League games sooner than we will even be ready.
Levy is an expert at making everyone else look like they’re the problem so that people might not notice his endless penny pinching $hite.
No wonder the players are turning round and saying; “we are happy to do something to help even though our careers are short we are wealthy men. But hang on a minute, so is our chairman and our owner worth 6bn with his feet up in the Bahamas.”
This all just follows the same Levy/ENIC pattern of behaviour we have seen for over two decades. Bored to £uck with it…
ENIC OUT
The term of the debt on the stadium runs until 2043 and at roughly £650 million will be well within the means of Tottenham to repay, assuming there is no long term collapse in the Sky / BT TV deal. Even a reduced naming rights deal will help pay off the debt. The appetite for the Premier League both in the UK and worldwide shows no signs of slowing. There is even a chance that other entrants to the market like Amazon or Disney could increase the size of the TV money. Allowing for a two year hiatus I still think football will rebound, its the world’s favourite sport for a reason.
That final year at the lane we were unbeaten at home. If only that 340 mil was spent on 2 or 3 world class players, and also wages… Now we have to spend that or maybe more to get back where we were.. After 20 years in the game and being the leagues longest chairman, one would think that humpty dumpty would learn from his mistakes.
Interesting stuff. We are entering the realm of the unknown.. After this whole 💩house goes up in flames, my moneys on scrooge staying put.. It wouldn’t be financialy wise to sell now, unless it was a ridiculously high offer.. Anyone who wants to buy it would be looking for a low price, especially with the debt and the current climate .. Football will bounce back before most other businesses I would have thought. The money in the game was astronomical before covid 19.
Every team has their place in the spending hierarchy and as a result can only afford a certain type of player. Utd, City and Chelsea have been ahead of us for a while now irrespective of financial markets, therefore the better youngsters and established players will invariably go there ahead of us. We were ahead of Liverpool for a few years but they have always paid more wages, like Arsenal, but their recent spending in the market pushed them above us (Mane, Salah, Fabinho, Allison, VVD). Everton are looking to break this cycle though by taking risks in transfers and wages, but it is not helping so far! How long can they sustain failure? As far as I am aware Spurs need to pay £50m a year to repay the stadium loan, if this is incorrect. At the moment this is a good player in the transfer market. What will £50m get us in 10 years though? Therefore, is £50m that big of a game changer if Spurs are recouping more in stadium revenue, especially in 10 years time? Who am I kidding, course it is. We’re doomed in the short term!
Levy has left Enic in a vulnerable position. If they wanted to sell now, not only is the timing horrendous because of the virus but the brand is badly tarnished down to Levy’s furloughing tactics. The players obviously don’t trust him either. The naming rights have evaporated in a puff of smoke, also down to Levy. THFC is a toxic mess. Instead of picking up good players at half prices to invest in a great team for the future like the properly managed football clubs will be doing, we will have no money to invest. Enic should bite the bullet and sack Levy to right a rotten ship.
Sadly, there is no money to play with. The whole miser routine has been a tragic waste of time.
We did have a perfectly fine stadium and £340m tucked under the mattress, they blew it on a shopping centre.
Businesses will be going bust by the truckload in the next few months. I wish there was a positive.
Can’t see ENIC selling at the bottom of the market. Depends on how long this crisis lasts. If the bottom falls out of the transfer market and Spurs can pick up so called targets like QPRs Eze or Norwich’s Arrons or Atal for £5 million I think Levy could invest. It’s buy cheap and sell dear which is exactly his favourite way