Joe Lewis' Masterplan...or why Bale will not be sold

[nightgoat]

I'll believe in the FFP when they don't let Monaco and PSG in the CL.

And you only need look at Platini's response to their spending compared with his response when Shitty tried to buy Kaka to guess what will (or more specifically, won't) happen to PSG and Monaco.

 

[zoidy84]

Believe this falls within the masterplan ideology ... how much do we know about NBC's fondness towards us? Also, surprised NBC, if at all possible, didn't try and get us involved in the recent International Champions Cup, especially in place of Everton who are just shit.

 

[shelfmonkey]

Really? How can Chelsea possibly be compliant?

Coz the russian mafia bloke with the AK47 said they are

 

[sloth]

Do you think Daniel replied "with or without Bale?"More likely he sat down with Andre who they both trust and said Andre "what will it take money wise to challenge for the title? If we aim high we may make sure of CL qualification..

"lets look at it both ways With Bale say £100m, without him realistically say £150m.More importantly how do you replace him"

I honestly don't know what the real numbers are..... but I bet I'm probably pretty close (within 10%.)
He would also have told Daniel to make sure that he got the players he needed rather than losing out through excessive haggling!

With no 'arry and FFP coming in, the new stadium 2 years off, the all bar 2 of the TOP clubs with new managers, this is like the perfect storm...

I believe this type of conversation has taken place..... it explains our activity and the reasons behind it!

I don't believe you can quantify what it takes to win a title! There are simply too many variables. I don't believe the club management will think of it in those terms whatsoever.

I read a lot of people suggesting Lewis has suddenly loosened the purse strings, but I think they think it simply because of the transfer splurge this summer. There is absolutely no need to reach for some additional explanation to justify this summer's spending. It is completely affordable within our current budget. In fact we can splash out a fair-bit more and still not risk breaking the bank. As such why would Lewis donate us money? And why would he donate Levy money, who is a fellow investor in ENIC? In fact if he were going to put money into the company it would be through a Right's Issue. There has been no RI in which case there has been no donation from JL.

 

[Kendall]

I'll look forward to scouring the accounts next year for this mystery loan.

I don't believe it. Its been mentioned in multiple windows, but hasn't happened. I do think we're giving it a go, but I also think any spends now, we will be looking to offset with sales (Bale + others), either now or in the future.

 

[Kendall]

I don't believe you can quantify what it takes to win a title! There are simply too many variables. I don't believe the club management will think of it in those terms whatsoever.

I read a lot of people suggesting Lewis has suddenly loosened the purse strings, but I think they think it simply because of the transfer splurge this summer. There is absolutely no need to reach for some additional explanation to justify this summer's spending. It is completely affordable within our current budget. In fact we can splash out a fair-bit more and still not risk breaking the bank. As such why would Lewis donate us money? And why would he donate Levy money, who is a fellow investor in ENIC? In fact if he were going to put money into the company it would be through a Right's Issue. There has been no RI in which case there has been no donation from JL.

Not strictly true. If there was a rights issue, we wouldn't know about it these days.

 

[whitestreak]

I don't believe you can quantify what it takes to win a title! There are simply too many variables. I don't believe the club management will think of it in those terms whatsoever.

I read a lot of people suggesting Lewis has suddenly loosened the purse strings, but I think they think it simply because of the transfer splurge this summer. There is absolutely no need to reach for some additional explanation to justify this summer's spending. It is completely affordable within our current budget. In fact we can splash out a fair-bit more and still not risk breaking the bank. As such why would Lewis donate us money? And why would he donate Levy money, who is a fellow investor in ENIC? In fact if he were going to put money into the company it would be through a Right's Issue. There has been no RI in which case there has been no donation from JL.

Why would he bother to have a rights issue? It is a costly time consuming and cumbersome process, when he already through ENIC virtually owns the club outright approx 90%. By putting the cash in as a loan, it is quick tax efficient and achieves the result. It also means he can get his money back out, someday, without selling out.
A loan is different from a donation! Finally when it comes to spending £450m on the stadium, do you think that he will have a rights issue for the equity portion?
Or do you think that the cash will be put in as some for of loan or at best a convertible instrument? One would think that ENIC can take 100% control of Tottenham any time it wants..To my mind he has not done so for the reason he does not want to. The principal reason surely must be is that the remaining shareholders are there is it suits the purpose of ENIC to keep them there.
As for the rest of your post, obviously I don't agree! Whilst spending vast amounts of money does not necessarily guarantee success, ie Liverpool under Dalgliesh,....... they were dumb! There is an exception to every rule!
Lewis and Levy are not dumb, and for the most part the model works particularly when the investors are as savvy as ENIC

ENIC are now exempt from the takeover code provisions, The have sweeping up rights once their holding reaches 90% so they could force all shareholders to sell to them for the highest price ENIC have paid in the preceding 12 months to purchase any outstanding shares....

 

[sloth]

Not strictly true. If there was a rights issue, we wouldn't know about it these days.

yes we would there are still hundreds of minor shareholders, Spurs fans who kept hold of them when ENIC took us private. Even if it weren't the case something of that scale would/could not be kept quiet.

 

[sloth]

Why would he bother to have a rights issue? It is a costly time consuming and cumbersome process, when he already through ENIC virtually owns the club outright approx 90%. By putting the cash in as a loan, it is quick tax efficient and achieves the result. It also means he can get his money back out, someday, without selling out.
A loan is different from a donation! Finally when it comes to spending £450m on the stadium, do you think that he will have a rights issue for the equity portion?
Or do you think that the cash will be put in as some for of loan or at best a convertible instrument? One would think that ENIC can take 100% control of Tottenham any time it wants..To my mind he has not done so for the reason he does not want to. The principal reason surely must be is that the remaining shareholders are there is it suits the purpose of ENIC to keep them there.
As for the rest of your post, obviously I don't agree! Whilst spending vast amounts of money does not necessarily guarantee success, ie Liverpool under Dalgliesh,....... they were dumb! There is an exception to every rule!
Lewis and Levy are not dumb, and for the most part the model works particularly when the investors are as savvy as ENIC

He could make us a loan, in which case he's not splashing the cash, but we're borrowing to fund our investment. This is how I expect we'll get the stadium built. I'd be surprised if he's lending money for us to buy players, but it's possible, but I don't see why he would??

Let's estimate a £45m increase in revenue thanks to the TV deal, and we assume our costs have remained fixed (can't see where they'd have gone up??), that means we've got an extra £45m to invest in something. Then we've got our usual transfer budget on top of that.

An alternative way to look at it is this. Look at our highest net seasonal expenditure in recent years, which was in 07/08 when we forked out £34m, which at the time was third our turnover. A third our turnover today would be £61m. We didn't need to borrow money from big Joe back then, so why now?

The highest Seasonal gross we've spent on transfers was in 08/09 when we spent £87.2m on transfers. This season we've spent a gross of £50m, and a net £35.8m. If the sales of Hudd and Parker go through that will be down to £28m. If we sell a couple more it will decrease even further!

On every marker we're way within historic sensible spending limits as it stands, we can spend more and stay within sensible spending limits, there's no need whatsoever for Uncle Joe to get involved. If there's no need then surely he's got better stuff to invest his hard-earned moolah in?

 

[Kendall]

He could make us a loan, in which case he's not splashing the cash, but we're borrowing to fund our investment. This is how I expect we'll get the stadium built. I'd be surprised if he's lending money for us to buy players, but it's possible, but I don't see why he would??

Let's estimate a £45m increase in revenue thanks to the TV deal, and we assume our costs have remained fixed (can't see where they'd have gone up??), that means we've got an extra £45m to invest in something. Then we've got our usual transfer budget on top of that.

An alternative way to look at it is this. Look at our highest net seasonal expenditure in recent years, which was in 07/08 when we forked out £34m, which at the time was third our turnover. A third our turnover today would be £61m. We didn't need to borrow money from big Joe back then, so why now?

The highest Seasonal gross we've spent on transfers was in 08/09 when we spent £87.2m on transfers. This season we've spent a gross of £50m, and a net £41.8m. If the sales of Hudd and Parker go through that will be down to £34m. If we sell a couple more it will decrease even further!

On every marker we're way within historic sensible spending limits as it stands, we can spend more and stay within sensible spending limits, there's no need whatsoever for Uncle Joe to get involved. If there's no need then surely he's got better stuff to invest his hard-earned moolah in?

Good post, but disagree with the last bit.

 

[Lilbaz]

Really? How can Chelsea possibly be compliant?

Last year they got £30m from cl and £30m from el. This was just tv revenue not sponsorship/matchday/merchandise.
The year before they won the cl. At the moment they are in the top 5 biggest earners in the world.

They have spent huge amounts, but that doesn't tell the full story. Players under 21 are not counted and nor are their wages. Players signed before 2010 don't count for wages (cole,lampard,terry etc...) which probably counts for £40-50m a year.

If you want a full breakdown read swiss rambles blog on ffp or chelsea.

 

[eViL]

I think it's important to understand how the new training facility affects cost in the grand scheme of things.

Players come cheaper if they WANT to move to Tottenham - Player payroll affects costs massively.

 

[Lilbaz]

If we can keep bale we've got a great chance to do something this year.
If we bring in capoue then lb is the main concern for us but rose and benny are capable of doing a job.
Hopefully early next year we can get shovels in the ground for the new stadium. If ffp does kick out the likes of psg and 3rd party ownership is brought to heel then we are in a great position.

 

[yido4life]

This is not from Lewis directly, but based on what I heard yesterday it may help to make real sense of what is currently happening from a financial perspective!

The "value" in a successful club is plain for all to see. The stakes keep getting higher. Joe Lewis (ENIC) is the longest standing owner of a PL club which belies all the chat that he is in this to make a fast buck, especially as he made more than £1b in 1 day on ERM. He has demonstrated that he is shrewd and does not need to make money out of Spurs to get his next meal!
Notwithstanding that.......He is professional businessman and wishes to make his assets sweat.

I think the advent of Abramovic and Man C made him realise that he could still compete spending a fraction of their total spend.
I think AVB demonstrated last year finishing 6 points behind them and scoring the same amount of goals, the art of the possible.
I also believe he had absolutely no regard for 'arry, as he probably did not trust 'arry one inch with money, and even if Daniel was buying the players he could not be sure if our 'arry was getting some kind of commission, or if he really needed the player in question, Suarez no.......... Neville yes? that is f*cked up!

Lewis is not a young man therefore it probably does not hurt to look back in time a bit to understand his thought process today.

Historically
30+ years ago the old order of the "big 5" was in no particular ranking
Spurs Arsenal ManU Pool Everton, and it had been that way from the mid 50s if not before!

Success on the pitch over a prolonged period, no matter how achieved determined who the biggest clubs were and most if not all of them appeared to be on a level playing field.

I said "appeared" since for a long time the Moores family pumped considerably more money into Liverpool than most if not all of the competition...

Man u got Fergie after a period in the wilderness and then putting together a winning team built Organically under Edwards (father and son), and as success came they smashed transfer records in order to stay there Ferdinand, RVN, Veron, Rooney, Berbatov, RVP, all over £25m and sold Ronaldo for £80m
They became for a time the most valuable sports brand in the world and are still up there. worth C£2b

Arsenal, much as I hate to admit it have also generally gone about their business the right way. They are in their new stadium, and have a sustainable model as long as they continue to produce success on the pitch even moderately and are worth c£1b this figure could be higher but for some inexplicable reason Wenger wont spend....

Chelsea were always a small club historically really untill Abramovic came and spent a fortune and hey presto they are now a big club as with City and al Nayan.
By shrewd financial management Levy has taken us to the brink but not really got us over the line. This would normally be ok particularly if we had gone to the Olympic park stadium, which probably would have cost say £100m

Currently (with FFP coming in)
BUT we now have to take a mega punt on the new stadium. This is a £450m punt, in order to justify it as a success within a couple of years the Club must either be worth something in the billion pound range or a la Arsenal paid back most if not all of the investment and be throwing off sustainable cash flow in order to compete on a more level playing field. My father used to say that "business is the art of taking the risk out of gambling" (an MBA later I agree with him).

If we can follow that maxim then we can look at the effect of "leveraging" our current position, and postulate a theory that our squad now is younger, leaner than it has ever been before, and the gap on paper is such, that whereas Chelsea and City have had to spend £100s of millions to get them to the position where they are today and in both cases not an "organically stable" model ie if the Russian and Sheik naffed off, it would all come crumbling down, Chelsea like us don't have a stadium ....unlike us they have not identified one. City will still be the 2nd club in Manchester in terms of fanbase and achievement for the foreseeable future.

Surely Joe Lewis looks at this and thinks "how do I maximise my chances of a successful new stadium" ie how to make sure I dont pour £300-450m down a hole

The first and most important thing is, surely to deliver sustainable success on the pitch, this leads to much increased revenue, leading to quicker payback, and decreasing his risk and exposure long term. Man U & Arsenal are examples of this strategy working

Ok that seems like a good idea, the next question has to be "Daniel find out how much it is going to cost me to GUARANTEE on the pitch success on a Consistent basis?"

Do you think Daniel replied "with or without Bale?"More likely he sat down with Andre who they both trust and said Andre "what will it take money wise to challenge for the title? If we aim high we may make sure of CL qualification..

"lets look at it both ways With Bale say £100m, without him realistically say £150m.More importantly how do you replace him"

I honestly don't know what the real numbers are..... but I bet I'm probably pretty close (within 10%.)
He would also have told Daniel to make sure that he got the players he needed rather than losing out through excessive haggling!

With no 'arry and FFP coming in, the new stadium 2 years off, the all bar 2 of the TOP clubs with new managers, this is like the perfect storm...

I believe this type of conversation has taken place..... it explains our activity and the reasons behind it!

Truly one of the best posts I've ever read, thank you for taking the time to post this.

Lets hope it all comes to fruition.

COYS

 

[Ironskullll]

I agree too, though from one perspective it seems to turn the notion that to build a successful team you need to have a great stadium on its head. Are we now saying that to have a great stadium you first need to have a successful team? Chicken? Egg? I think this is where the specific reference to a unique set of events becomes highly relevant, the "perfect storm" someone else referred to. Great post OP.

 

[Kingstheman]

Carpe diem, Tottenham!

 

[sloth]

I agree too, though from one perspective it seems to turn the notion that to build a successful team you need to have a great stadium on its head. Are we now saying that to have a great stadium you first need to have a successful team? Chicken? Egg? I think this is where the specific reference to a unique set of events becomes highly relevant, the "perfect storm" someone else referred to. Great post OP.

To build a great team you need a good strategy. Through careful financial management of the club, we find ourselves in a situation where there's been a new influx of TV money, we have a wage bill at less than 50% of turnover, an already powerful team and about £25m - £30m in surplus player assets ready, available and able to be sold. In that context then of course we'll spend to equivalent levels that we have in the past. This is nothing new during the Levy era, we have spent more proportionate to our turnover in previous windows. It feels new because our income is now greater and thus we can target higher calibre players, and because our wage-bill is low, our squad strong, and our profile rising those high calibre players are willing to come. It feels like a paradigm shift in strategy to supporters, but it's actually just a continuation of the strategy.

[Edit] One thing I would say is that having a DoF that the coach believes in must make a difference. Whereas last summer, and in previous windows with Harry, the stories coming out were of disagreements over targets between the owner and his advisors, and the coach, this summer we have heard none of that. Putting two and two together I get Baldini, but perhaps it's also a season on and the owner and the coach have learned to trust each other more and are just in synch? Who knows the trut, but having a management team all pulling together must be a massive boost!!!

 

[vegassd]

It feels like a paradigm shift in strategy to supporters, but it's actually just a continuation of the strategy.

I totally agree. It seems to me like a lot of fans are attributing this Summer's spending to Lewis throwing some money into the pot, but it isn't too far off some of our previous spending.

Sometimes I think there is frustration because as fans we aren't privy to the strategies being played out. For example, when Berbatov is sold we wonder why the money isn't immediately spent on a new striker. But everything seems to run according to a long-term plan rather than a short-term face saving exercise.

 

[Chinaspur]

An interesting read which to some extent backs up the OP:

http://www.theguardian.com/football/blog/2013/aug/15/premier-league-preview-tottenham-hotspur

 

[kungfugrip]

I think we had to spend big to just to stay around 4th / 5th anyway. TBH I still don't think we will finish above Chelsea, United or City but it's a nice feeling going into the season feeling we have strength in depth again (we didn't last year). To dare is to do. Let's give it a crack.