Debunking the Myth of a Salary 'cap' at Spurs

[PLTuck]

Stolen shamelessly from Devonian on COYS. Interesting read.


The continuing talk of a salary cap is a nonsense – there is no cap on individual salaries – it is controlled by a wage budget based on the whole footballing squads.

Levy can go to £51.5 million this year, without any sanction from Lewis, and as we currently stand at £43.8 million then that means we can afford to pay NEW players a total of £7.7 million (and that does not include players leaving) – that equates to an extra £148,000 per week on wages. That can be distributed any which way Levy wants and if it needs to pay out £70k pw on top class players then so be it.

If we really need to push the boat out then (with Lewis sanction) we can go to £56.65 million which gives us an extra £12.85 million on wages to play with or an extra £247,000 pw.

Just because we can spend that level of money does not mean that we will if Levy does not think they are worth the money – he busted the overall budget for Davids so all this talk about players not being able to come to us due to our not paying the necessary wages is nonsense.

The only time, since Tavistock Group has owned us, that we failed to match wages was when we went for Duff and Parker – we were already running at 57% of T/O on a much reduced T/O and Levy would have gone to 60% but both of those players were on ridiculous wages (as all Chelski players are) and so we passed.

I can assure everybody that EVERY Club in Europe (including Chelski) are trying to REDUCE wages and every Chairman is in agreement. The THFC business model is seen as the perfect model to adopt by most European Clubs.

If we do not get a player it will not be because we could not afford to pay the wages – we might not agree with their demands which is a totally different issue – that said I do not believe a word of what the Daily Mail says and if this Tiago guy is somebody that Ramos wants then Levy will get him.

There are so many postings on many threads which seem to make us out as cheapskates – we are second only to Chelski spending in the transfer market since Levy came in – 6th highest payers in the PL and trading at a profit – we have got the £20 million required for the new training centre already in the Accounts – we have record profits - oh and we gave £4 million to charity last year.

Do you think that we got that way by Levy giving in to mercenaries? Levy is the best negotiator I have ever known so have faith in the guy.

And for those who say that Levy is the highest paid man at THFC, you could not be more wrong if you tried to be – his exact wage is £18,269.23 per week.

And for those that think that Kemsley was robbing the Club when he was here – his last year salary was exactly £0 – some might say that he was overpaid at that but those are the facts.

 

[Real_madyidd]

I thought we gave 7M to charity?

 

[ShadyAftermath2k]

And for those who say that Levy is the highest paid man at THFC, you could not be more wrong if you tried to be – his exact wage is £18,269.23 per week.

Poor bastard, is that all? :duh:

 

[clint]

cool.. we'll be able to get d villa then when we release a striker

 

[Damian99]

I thought we gave 7M to charity?

Might aswell as fork that out on Woodgate, they`d get more use out of it.

 

[Bobishism]

Might aswell as fork that out on Woodgate, they`d get more use out of it.

True. He is rather spasticated.

 

[philbcn]

Thanks very much for all that information. Very interesting stuff.
Can I ask where you got it from and as it really shows the club in a positive light it isn't more readily available to everyone? Or have I missed some of this information being released?

Once again though, cheers for letting us know.

 

[Kendall]

Poor bastard, is that all? :duh:

Point missed

 

[PLTuck]

Thanks very much for all that information. Very interesting stuff.
Can I ask where you got it from and as it really shows the club in a positive light it isn't more readily available to everyone? Or have I missed some of this information being released?

Once again though, cheers for letting us know.

From the COYS forum. The guy who posted it is an investor so makes it his business to know.

All the info is apparently also in the Annual report on the official site, it's just that you probably have to wade through pages of business speak to get the little bits of interesting info.

 

[milkman]

Do you think that we got that way by Levy giving in to mercenaries? Levy is the best negotiator I have ever known so have faith in the guy.

he is also the only chairmen in England to have a top degree in Economics.

 

[whendayearendsin1]

Just been through the whole post on COYS very interesting

 

[SpurSince57]

B-C has posted most if not all of it in the ITK Discussion thread in Transfer Rumours.

 

[Bill_Oddie]

Very interesting stuff. Thanks (and to BC) for sharing.

*sits back and waits for the announcement of Ronaldinho and Puyol on the official site.

 

[spurs4europe]

thanks for posting. quite insightful

 

[bubble07]

Another point is how can Levy justify paying johnathan woodgate MORE then berbatov or king or keane.

Newcastle give out money like confeti to average shit new players and the stupid fat jobless toons keep questioning why they havn't won anything in years.

In simple terms your best players should be paid the most. Berbatov Keane and King (who are our 3 best players) should (and I believe are) be paid the most. Only way a new player who isn't as good as the three mentioned could be paid more is if he was a Bosman free transfer

Even then to subsidise the fact that the club havn't paid a transfer fee they should give some of that money as a signing on fee for every year a player stays at the club which would theorically keep his weekly wage relative to our top earners

If Woodgate was a free transfer we should offer 50,000 and give the bastard 1.5m at the start of every season of his 4 year contract but his not a free transfer. This should happen with Gilberto if reports are true that we have agreed a pre contract with the brazilian left back

 

[spurs4europe]

Another point is how can Levy justify paying johnathan woodgate MORE then berbatov or king or keane.

Newcastle give out money like confeti to average shit new players and the stupid fat jobless toons keep questioning why they havn't won anything in years.

In simple terms your best players should be paid the most. Berbatov Keane and King (who are our 3 best players) should (and I believe are) be paid the most. Only way a new player who isn't as good as the three mentioned could be paid more is if he was a Bosman free transfer

Even then to subsidise the fact that the club havn't paid a transfer fee they should give some of that money as a signing on fee for every year a player stays at the club which would theorically keep his weekly wage relative to our top earners

If Woodgate was a free transfer we should offer 50,000 and give the bastard 1.5m at the start of every season of his 4 year contract but his not a free transfer. This should happen with Gilberto if reports are true that we have agreed a pre contract with the brazilian left back

i wouldn't even do that. do you remember how berbatov got his wage increase after playing well; he was nowhere near the top earners at the start.
only proven performers should get the top wage - any player should come in and start at a lower wage and be guaranteed a wage increase if they earn it (that sounds quite subjective i know, but my point is clear)

 

[41john]

B-C has posted most if not all of it in the ITK Discussion thread in Transfer Rumours.

Yeah i noticed that yesterday too, but this thread is a few minutes newer than when it got put in the ITK discussion.

It makes more sense for it to be hear anyway so i will grab so of the extra bits from the itk discussion for further interesting reading

 

[41john]

And (seeing as it's a slow night) there's more from Devonian (COYS):

You are absolutely right in that it would be a monumental task to get a legally binding salary cap per se - however, UEFA are asking Clubs (via Vision Europe) to adhere to a limit of wages versus T/O ratio for the long term well being of European Football.

That desire, coupled with fiscal reality, will ensure a reduction wages versus T/O ratio. In the UK any PL Club with over 60% ratio will not be able to be profitable - there is a finite amount of money in the PL. Chelski are the biggest culprits (75%) but Ar5ena1 and United are already down to 51% - Roman will NOT keep subsiding that Club - I know exactly how much they are in debt for and even though they are about to announce record T/O they will still be losing tens of millions which Roman will not accept after 2009/10 season.

The point being it is the biggest Clubs that are bringing the wages down to a sensible level because they need to make a profit - shareholders demand profit - the Glazers, Gillett and Hicks etc are not in it for the love of football - all Clubs also have to adhere to UK Company Law.

The Clubs cannot go over 60% or they will be bankrupt - simple as that - if the smaller Clubs go out of business what good is that to the football world? What good is it to the bigger Clubs?

It is not such a big deal as market forces will drive the wage ratios down without the need for legislation.

And further on:

Levy knows the ONLY way for success is by having success on the pitch – this is not a game for him – his investment is in a trust for his family so he will move heaven and earth to get us to the top but you have to have financial stability in any Company to do that.

Levy wants total success which is why he has allowed transfer spending to be 2nd only to Chelski since he took over – and which is why he has invested in one of the top European Coaches (Ramos is hardly cheap).

In what way were Ar5ena1 down and out when Wenger took over? Financially? Position wise in the PL?

How many PL Clubs are profitable? How many are debt free? How much did PL Clubs give to Charity?

http://www.intelligentgiving.com/files/IG_...g_league_07.pdf

Our lack of success has nothing to do with lack of investment or due to any wage budgets.


And:

If you want to get an idea as to what UEFA are doing behind the scenes then may I suggest you look at "Vision Europe" (should be available from UEFA website as a download - I have it on my computer as well as hard copy) - the document sets out UEFA's strategic direction.

There are other documents that are working papers which define specific areas but Vision Europe should show you exactly the direction football is heading for.

And more interestingly:

If anybody has met Levy (and I have) then they will know just how much a fan he is and how much he wants us at the top.

What has to be remembered is that THFC is very much “small beer” for him commercially and the time and effort he puts into the Club bears no relevance to the T/O e.g. Levy head Rocks Investments which is a $1 BILLION Company.

Levy is highly thought of within the Tavistock Group (which has a total of over 170 Companies) and has fingers in many pies (I do know exactly how many Directorships he has) and THFC is very much a labour of love.

All of his other Companies take a back seat, time wise, to THFC which proves the effort he puts into it. He also has £33 million of his own money in the Club.

It would be absolute madness, and very poor business, if Levy was to invest all the money in transfers and then spoil it all for a few extra million in wages for top class players. It is just not true that we will not pay for the right people – it is the normal misinformed garbage coming from the media. Levy will not be held to ransom but he will pay top wages for the right people (e.g. Davids and Naybet).

This year is the first year that a Dividend has been paid so he is hardly milking the Company either – all the profits have been reinvested and we are so strong that we can pay for transfers out of cash flow. No need for borrowing money to pay for transfers.

Investors are also fans and want the best – I have seen us at the top and been to over 550 matches (including most of home and away matches in old 2nd Division) – I hate seeing us in mediocrity but I can assure you that without Levy we would have been in serious trouble.

I can remember why we had to sell Gazza and I sure as hell do not want to go back to those days.

Levy is no Saint but he sure as hell has the best interests of THFC at heart and will do his very best to get us back to the top.

With regards to Arsneal - the season before Wenger came in they took 5th place for a UEFA Cup place - there were problems with Rioch but they were not in a bad financial situation.

http://www.arseweb.com/history/faq/faq96.html

 

[41john]

And for desert:

You are more than welcome - all the financial details are available online and here is the link.

If you want to know the wage budget ratios then it is 50% (without Lewis sanction) and 55% (with Lewis sanction).

Transfer funds available are a maximum 25% of amortisation costs - for this figure please base all contracts on 5 year contracts (even though Bent's contract is for 6 years). This is an "available if necessary" fund and is not just an amount of money to spend.



http://www.tottenhamhotspur.com/docstore/tottenham_ar07.pdf

 

[Bus-Conductor]

For what it's worth, Devonian went on to talk about the stadium plans at length too. I'm not sure how accurate they were.

But I asked him the following question as he seemed to have a good grasp (or "possible" personal knowledge of the situation):

Me (BC):
I understand the figures, and understand the structure. We are all aware - pretty much - of the ENIC/Lewis/Levy split. That wasn't quite my question. On one hand you are claiming that this is a labour of love for Levy in another you say it's business and that we have been up for sale for a year or so (again, I don't think this is a shock to anyone). Then you say Lewis pulls the strings. So are you saying that Levy is a reluctant seller at the behest of Lewis ? That a part of the spurs fan in Levy would love to see the job through (knowing that the vehicle is always going to return a handsome profit - I'm not suggesting he's gone completely soft) but that he is being pressured by Lewis to raise funds by selling off his pet project (spurs) ?

If yes, Would Levy ever consider personally (or through another vehicle) buying out Lewis's stake in ENIC or ENIC's stake in THFC. Or will Levy always pretty much follow Lewis.

Devonian's reply:

The situation with Levy is that THFC is such a small part of his portfolio of Directorships and he is also a “big fish” within the Tavistock Group. It is clearly a labour of love and he has made no secret of the fact that he wants to see the job through i.e. competing at the top whilst being self financing.

Levy and Lewis are very close and they certainly would not fall out over the sale of THFC and as the green light was given for the Club to be touted for sale then Levy has obviously agreed and IMO Lewis would not have pulled rank on Levy.

With respect to Levy finding another partner to see the job through – that has been discussed before on a different forum and that would be a possibility if the right partner could be found (my personal favourite would be Sir Phillip Green).

The main issue would always be the time factor though as in Levy has much bigger Companies under his control that cannot be neglected purely for his love of THFC, so, although the romantic in me can see Levy staying with a new partner, my head tells me that particular scenario is a tad fanciful.

On a bit of a morbid side, Lewis is in his 70’s and one day somebody will have to takeover the reins of the Group and Levy could well be the anointed one so IMO Levy will always stick with the Tavistock Group.



Interesting reading.