ENIC...

[Donki]

It's too easy just to label people like that. You've actually got people here who can see both sides of the argument and can acknowledge that the owners are trying to do their best, but have made mistakes along the way. It's a shame you can't do the same.

This, this, this. I have never seen anyone say that Levy hasn't made a fair amount of mistakes. I've said this before but the BSoDL thing was made up as a joke but its used by Levy's detractors usually when they cannot form a reasonable debate.

 

[markiespurs]

Revenues up but profits down is what I am expecting. As for all those on social media telling Levy to spend how about Ndombele, Sessegnon, Clarke, Lo Celso and Bergwijn plus a Fernandes loan fee in the last 7 months.

This

And before people mention our CL revenue, i’d imagine that a large chunk of that will have gone on player and coaches bonuses

 

[Donki]

This is a good post nailsy.

The recent signings have been the CL money so I'd be interested to see what happens in the coming windows.

But mate what happened your ambition you said I didn't have? Where has your AMBITION gone? I posted basially the same thing and you disagreed lol.

 

[soflapaul]

I think they were interested in challenging for silverware, but they weren't interested in doing in it just in the short term. When they came in they took a look at where we were as a football club and decided that we couldn't compete with the big clubs as we didn't have the financial muscle to pay the wages that teams like Chelsea, Manchester United, Liverpool and Arsenal were able to pay. We might have been able to pay a big transfer fee or two to get the odd star, who might help us win something, but we were never going to be able to pay them enough to keep them here and build a team that could challenge for silverware every season. I suspect there was also a fear that we'd end up as another club destined for the championship like Sheffield Wednesday, Forrest or West Ham if we didn't change. The only way to bridge that gap was to build the stadium which should give us the financial power to compete with most of the biggest clubs in Europe. We're just getting to that point now. We couldn't spend loads of money on transfers while the stadium was being planned and built and I know that was extremely frustrating, but I'm going to judge them on what we do now that we're in the stadium. We've already broken our transfer record twice since we moved into the stadium and that was with us only being there for a couple of months at the end of the season, although the Champions League run probably added to the money available. I'm not expecting us to buy world class players in every position next summer, but I do expect us to solve the problem positions and improve the squad with quality additions who can come straight into the first team. If that doesn't happen I think a lot of people will start asking big questions about the ambition of the owners.

Great post. I''d also guess that perhaps 15 or so years ago, Joe and DL realized that they had the possibility of creating a global brand because they had a historic club in the largest market in the most watched league in the world. And if they could do that, they would generate far more revenue by selling it rather than operating as a selling club. Hence, they came up with a long term business plan which i suspected started with the thought that developing youth from within, was the most frugal way to create players. Hence, the practice facility first. ABout the same time, they overthought it and sputtered about with the Olympic Stadium debacle. Once that didn't work, the business plan changed to building a stadium in North London where the development around it could mitigate the risk. As businessmen first and not profligate spenders, they took a more cautious approach which led them to be more cautious in the transfer market while looking for angles and innovative ways to create more money out of the same plot of land.

The jury is still out on whether it was a good business strategy or not. It will take years to figure that out. As fans, it has been a mixed bag along the route but thanks to the players, 'Arry, Poch and hopefully Jose, the ride has been entertaining even with the bumps we have had. In the end, if that is their strategy and it works, it will be great being a Spurs fan. If it doesn't, it will seem like the good ole days.

 

[ardyes]

https://play.acast.com/s/The-Ornstein-and-Chapman-Podcast/d1bf7638-f179-49bc-9d31-0b566bb73f08
Interesting Interview. Spurs stuff starts about 37:00.

 

[spursfan77]

https://play.acast.com/s/The-Ornstein-and-Chapman-Podcast/d1bf7638-f179-49bc-9d31-0b566bb73f08
Interesting Interview. Spurs stuff starts about 37:00.

Interesting from Commolli that him and Levy are still friendly with one another. I wouldn't be surprised if Levy uses him like he uses Pleat as asks him about players.

 

[littlewilly]

https://play.acast.com/s/The-Ornstein-and-Chapman-Podcast/d1bf7638-f179-49bc-9d31-0b566bb73f08
Interesting Interview. Spurs stuff starts about 37:00.

I was about to post this - it’s excellent. Love the bit about erecting a statue of Levy.

 

[davidmatzdorf]

You're right that the market has gone crazy, but moving into the new stadium means that we can afford to pay the higher fees now.

It's a good post, but we have never had any problem paying high transfer fees. It's always been an illusion, camouflaging the real issue, which has been about salaries as a percentage of turnover. Players with very high transfer fees generally demand very high salaries and we were unable to increase our wage bill past a certain point (broadly, 55% of turnover) in a 36k stadium.

As someone posted just above, but trying to make the opposite point, we have repeatedly broken our transfer fee record over the past 10 years, but it has generally been for players who are at that point where they are in demand, but not yet proven enough to demand astronomical salaries. Where an established player could demand six figures per annum, we would not deal and people would wrongly blame our unwillingness to pay the transfer fee.

We did brilliantly signing Modric and Berbatov, but I don't think either was being chased by the biggest clubs at the time?

These two were perfect examples. Modric in particular was considered to be a major talent and was under consideration by the really big clubs, but he was 22 and very small, so we were able to nip in and do a deal before the richer clubs had stopped stroking their chins and fretting about his physique. Berbatov, similarly, was obviously hugely talented, but was a very "different" character and came from a less well-known footballing country. We were able to pull off these coups because we were willing to take risks in order to compete.

We took other similar risks that failed, but people quote them as "bad signings", rather than seeing that they were part of the same strategy that brought us Modric and Berbatov. What most people do not grasp is that when you take risks, you expect failures. That is what "risk" is.

It's a little bit unfair to say that we've had to wait 20 years to see their strategy pay off. We've been close to winning things so many times, we've made the step up to the Champions League and even made the final.

It's only "unfair" in that it's been 17 years, not 20! The fallacy in the argument you are opposing is that there is something disappointing in it taking 17 or 20 years to get from where we were to a Champions League final. Fuck no! It's been an impressive achievement, in the context of the financial doping of our direct rivals and the dizzying inflation in both transfer fees and salaries over that period.

 

[davidmatzdorf]

Our record profits were heavily influenced by zero transfer dealings for 18 months.

I don't think that is correct. We would have included apportioned and amortised depreciation of our signings for the 4-5 previous years in those accounts. If the period of non-signings is going to be reflected in any accounts, it would be about now and for next year or two.

 

[davidmatzdorf]

This is a good post nailsy.

The recent signings have been the CL money so I'd be interested to see what happens in the coming windows.

The recent signings have been based more on the increased turnover from the new stadium. The transfer fees have never been a problem.Now we can afford the salaries.

 

[davidmatzdorf]

About the same time, they overthought it and sputtered about with the Olympic Stadium debacle. Once that didn't work, the business plan changed to building a stadium in North London where the development around it could mitigate the risk.

Your otherwise excellent post contains this, which is historically incorrect.

The interest in the Olympic Stadium came well after the preparation of the first detailed plan for a new stadium at WHL. It was in response to the financial crash. For reasons I went into in excessive detail at the time, on the stadium thread, the stadium had become impossible to finance after the banking crisis. For a couple of years, it appeared that the only option to get out of WHL was the Olympic Stadium.

The Olympic committee was desperate for a second bidder to compete with West Ham and they attracted ENIC into the bidding process under false pretences (Levy later considered a lawsuit). ENIC duly prepared a bid involving the demolition and rebuilding of the OS and the provision of athletics facilities at Crystal Palace and, in order to strengthen its chances, Levy made noises that the WHL plan was dead, but this was bullshit - it just wasn't viable in the market conditions.

Then in Summer 2011 the Tottenham riots occurred. Suddenly it was politically necessary for the government to be seen to invest in Tottenham and they needed a major private sector development to serve as a focus for the regeneration scheme. There was only one option - the new Spurs stadium - and Levy played the situation well, leading to the local council making major compromises on the planning consent and central government making capital investment available for the immediate neighbourhood. That made the N17 stadium viable again and the result was the revised scheme by Populous and the development going full steam ahead.

The Olympic Stadium was a diversion born from desperation. It was only first choice during the period when it appeared to be the only choice.

 

[soflapaul]

t

Your otherwise excellent post contains this, which is historically incorrect.

The interest in the Olympic Stadium came well after the preparation of the first detailed plan for a new stadium at WHL. It was in response to the financial crash. For reasons I went into in excessive detail at the time on the stadium thread, the stadium had become impossible to finance after the banking crisis. For a couple of years, it appeared that the only option to get out of WHL was the Olympic Stadium.

The Olympic Stadium was a diversion born from desperation. It was only first choice during the period when it appeared to be the only choice.

Thanks for the correction. So is this correct? Enic's original plan goes back further than 15 years when it comes to WHL but that plan fell apart with the financial crash. They came up with an alternate plan, the Olympic Stadium plan, which fell apart. Finally, when the riots occurred, they took advantage of a new variable and leveraged it to use government money to build the stadium, being development, etc? If that is the case, it sounds to me that from a business perspective, they've actually handled it quite well. Unfortunately, the improvement in football wasn't commensurate with the improvement of the club's profitability.

For some reason, i have this vision as Daniel Levy, King of Swamp Castle.... "When I first came here, this was all swamp. Everyone said I was daft to build a castle on a swamp, but I built in all the same, just to show them. It sank into the swamp. So I built a second one. And that one sank into the swamp. So I built a third. That burned down, fell over, and then sank into the swamp. But the fourth one stayed up. And that’s what you’re going to get, Son, the strongest castle in all of England." (Strange that the movie foreshadowed the arrival of Heung-Min. )

 

[daryl hannah]

The recent signings have been based more on the increased turnover from the new stadium. The transfer fees have never been a problem.Now we can afford the salaries.

The new stadium is the reason we can afford the salaries. When it opened, Kane was given his bumper new contract.

The CL is money that can't be counted on, so you don't base salaries off of that unless you're mad.

The CL money should absolutely be used for transfers to improve the team.

 

[davidmatzdorf]

Unfortunately, the improvement in football wasn't commensurate with the improvement of the club's profitability.

How long have you been following Spurs? Did you see the trundlers, mediocrities and token, superannuated ex-stars whom the club was putting onto the pitch in the 90s? Were you there when we were finishing in the bottom half of table and had a negative goal difference nearly every season? When we thought beating West Ham was the highlight of our season ... because we couldn't compete with any of the other London clubs, never mind the English "top 4" and the other major European clubs?

We're a serious, major footballing club now, regulars on the highest international stage. In 2001, we were a fucking joke. Taken over the relevant period of 16-17 years, the quality of the football has increased ten times as much as the profitability of the club.

The club has been mildly profitable since shortly after ENIC acquired it, because first they stopped running it into the ground and then they implemented a gradually-developed long-term plan. But it's a fallacy that the "English National Investment Company" is obsessed with profitability. They don't take dividends out of the club. They are a long-term investment vehicle with a business plan that is all about increasing asset value, not profitability. They acquire under-exploited assets, invest to increase their value and eventually sell them for a huge capital gain.

 

[davidmatzdorf]

The new stadium is the reason we can afford the salaries. When it opened, Kane was given his bumper new contract.

The CL is money that can't be counted on, so you don't base salaries off of that unless you're mad.

The CL money should absolutely be used for transfers to improve the team.

Yes, that was part of my point. Some of the CL money will undoubtedly figure in the club's assessment of what it can afford in transfer fees, but it hasn't ever been a problem finding transfer fees anyway.

As I wrote just above, established players with big transfer fees come with big salaries and we couldn't afford those. When we paid a hefty transfer fee, it was generally for a younger player of 20-22 who, though they were in demand, couldn't yet demand a massive salary.

 

[soflapaul]

How long have you been following Spurs? Did you see the trundlers, mediocrities and token, superannuated ex-stars whom the club was putting onto the pitch in the 90s? Were you there when we were finishing in the bottom half of table and had a negative goal difference nearly every season? When we thought beating West Ham was the highlight of our season ... because we couldn't compete with any of the other London clubs, never mind the English "top 4" and the other major European clubs?

We're a serious, major footballing club now, regulars on the highest international stage. In 2001, we were a fucking joke. Taken over the relevant period of 16-17 years, the quality of the football has increased ten times as much as the profitability of the club.

The club has been mildly profitable since shortly after ENIC acquired it, because first they stopped running it into the ground and then they implemented a gradually-developed long-term plan. But it's a fallacy that the "English National Investment Company" is obsessed with profitability. They don't take dividends out of the club. They are a long-term investment vehicle with a business plan that is all about increasing asset value, not profitability. They acquire under-exploited assets, invest to increase their value and eventually sell them for a huge capital gain.

You are like my dad with all the corrections. thanks once again. I suffer from living in the US. my original venture into Spurs were in the mid 70s when i was playing in England representing a US side. i saw a few games and was hooked, read the glory game, etc. Saw a few games at pubs in the States over the next 20 year then saw a game live at WHL in 2001. after that, it was hit or miss until 2010 or so so i missed the whole show you've referred to. since then, my impression, probably through the posters on SC, Enic was re-investing in the club but taking significant sums out. perhaps it is in the form of salary rather than dividends. But on the whole, as a business person and someone who appreciates the strategic part of the business, i have been impressed with Enic's approach as it seems to be a far more self sustaining approach to the business. And your ultimate point that they acquire under exploited assets and increase value to sell for a huge capital gain fits in with the whole global brand narrative. and if that is the case, the future is quite bright despite the recent bumps. thanks once again for the correction

 

[nickspurs]

Your otherwise excellent post contains this, which is historically incorrect.

The interest in the Olympic Stadium came well after the preparation of the first detailed plan for a new stadium at WHL. It was in response to the financial crash. For reasons I went into in excessive detail about at the time on the stadium thread, the stadium had become impossible to finance after the banking crisis. For a couple of years, it appeared that the only option to get out of WHL was the Olympic Stadium.

The Olympic committee was desperate for a second bidder to compete with West Ham and they attracted ENIC into the bidding process under false pretences (Levy later considered a lawsuit). ENIC duly prepared a bid involving the demolition and rebuilding of the OS and the provision of athletics facilities at Crystal Palace and, in order to strengthen its chances, Levy made noises that the WHL plan was dead, but this was bullshit - it just wasn't viable in the market conditions.

Then in Summer 2011 the Tottenham riots occurred. Suddenly it was politically necessary for the government to be seen to invest in Tottenham and they needed a major private sector development to serve as a focus for the regeneration scheme. There was only one option - the new Spurs stadium - and Levy played the situation well, leading to the local council making major compromises on the planning consent and central government making capital investment available for the immediate neighbourhood. That made the N17 stadium viable again and the result was the revised scheme by Populous and the development going full steam ahead.

The Olympic Stadium was a diversion born from desperation. It was only first choice during the period when it appeared to be the only choice.

Great post David - as ever. I inevitably learn something from what you share. These posts that come with a sound understanding of the commercial world are a shining beacon here.

 

[ToDarrenIsToDo]

Thats incorrect. The next set of accounts will have the majority of that in, as they are the 12 months to 30 June 2019.

With this being the case, as all of our signings this summer and onwards were made after 30 June 2019 then surely that goes into next years numbers right? If so I fully expect world record profits to get smashed again if that's how it works (unless Ndombele was signed before 30 June 2019)

 

[davidmatzdorf]

Great post David - as ever. I inevitably learn something from what you share. These posts that come with a sound understanding of the commercial world are a shining beacon here.

Thanks, I appreciate that. I have a good memory for facts, it helps.

My work is a bit odd, in the sense that I need to understand the commercial development world in order to do my job, but I'm outside it - my area is affordable housing - and I'm highly cynical about the development business. This puts me in a slightly unique position of being able to tell the unvarnished truth about it, including the seriously dodgy bits where developers would bullshit or blow smoke, but with a good degree of understanding of the mechanisms at work, instead of just bleating out sentimental outrage, as so many others on the left do.

Sometimes my private sector clients don't like what I have to say... I know a lot of developers who want me to tell them what they want to hear, instead of what is true. I've lost a few clients that way. Some of them eventually came back after the bullshit wore thin.

 

[davidmatzdorf]

With this being the case, as all of our signings this summer and onwards were made after 30 June 2019 then surely that goes into next years numbers right? If so I fully expect world record profits to get smashed again if that's how it works (unless Ndombele was signed before 30 June 2019)

No, that's not how transfer fees are accounted for.

If you sign a player on a 5 year contract for a fee of £20,000,000, then you write off £4,000,000 in each of the next 5 years of accounts. It's called "amortisation".

That's why fees for players signed in (say) 2016 are still affecting the current year's accounts and why the hiatus of 18 months when we didn't sign anyone won't have an abrupt, short-term effect on one or two sets of accounts.