Sky Sports and the problem with Spurs

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Ten minutes after the final whistle on Sunday — with Spurs sealing 2nd place for the first time in the Premier League era and completing an unbeaten home campaign, four dozen footballing legends ready to lead a grand farewell to one of the English football’s most famous old stages, and thousands of fans invading the pitch behind them — the conversation in the Sky Sports studio turned, inevitably, to the summer transfer window and whether Spurs would be able to keep stars such as Dele Alli.

Did it not cross the mind of the Sky host, Dave Jones, that this may not be the most relevant debate to be having, right now? Did it not cross his mind that, just maybe, tens of thousands of Spurs fans not fortunate enough to be at White Hart Lane on this historic occasion may be tuning in to soak in the atmosphere, celebrate a superb season, and bid goodbye to an old friend? Sure, it is perfectly reasonable to discuss the future of this Spurs team, the year away at Wembley, and the context of the success, achieved on a vastly smaller budget than the other occupants of the Premier League’s top six. But could it not wait, at least, for one sodding hour?

Even the best of TV hosts, which Dave Jones certainly isn’t, would struggle to wring a coherent thought on Spurs — or really anything — from Thierry Henry, while Jamie Redknapp is a malign and charmless presence, who cannot make it through two sentences without undermining Spurs.

“But can they keep hold of their players? But what if a big, big club comes calling? They should be smashing down the chairman’s door demanding a pay rise!”

Only Graeme Souness, a former Spurs apprentice who has fallen hard for Dele Alli and the strong, tough team Mauricio Pochettino has crafted, offered any semblance of a Spurs perspective on this huge day, But throw Souey a bloodied conversational rag — Spurs in the transfer market — and he’ll dive in two footed. Fortunately, the diggers were waiting to move in and Mauricio Pochettino was standing by in the tunnel, so this segment of the debate eventually came to a conclusion.

Sky’s coverage of Spurs has, to put it mildly, started to grate.

It wasn’t all that good to begin with, and hit a particular low in the run-in last season, with Cesc Fabregas of Chelsea and formerly of Arsenal being granted an undeserved platform to goad his upcoming opponents during one of Tottenham’s string of Monday night matches. But against West Ham, when both lead commentator Martin Tyler and presenter Rachel Riley (who is she?) took it upon themselves to suggest Spurs were bottlers as a nine-match winning streak came to an end during a fourth London derby in three weeks, what little patience was left evaporated.

The problem Sky have, or more accurately the problem we have with Sky, is that their roster of pundits and commentators isn’t built for Spurs being good.

For one season of fluke competence, Spurs being good was fine: a Leicester-lite surprise, who didn’t warrant further attention. But with Spurs showing all the signs of a sustained period of competence, Sky’s lack of a Spurs “voice” has become overwhelmingly apparent. Sending Thierry Henry, of all people, to the White Hart Lane finale was preposterous.

Spurs were selected for live TV coverage 18 times in 2014/15 and 21 times in 2015/16. This season, the final number will be 25. Of these, Sky will show 19 — so exactly half of Tottenham’s total games are being broadcast by Sky. Unless performances drop off significantly at Wembley, a similar number of Spurs games will be shown by Sky next season, in particularly given the lack of the Jose vs Pep narrative that drove a lot of live match selections in the first quarter of this season.

As the number of appearances has increased, the role of Spurs has changed. Spurs, up until now, were shown home and away against Sky’s chosen elite — a handy yardstick and almost certainly an entertaining game. Throw in a couple of London derbies, a goal-fest or two against Everton, something embarrassing against Newcastle and a whipping of Aston Villa, and that was Spurs on TV: repeat for 25 years. It didn’t require any thought, and certainly didn’t require any special treatment.

But now, Sky are aware that the situation is changing and they aren’t equipped to deal with it. Sky have some fine pundits such as Gary Neville and Jamie Carragher, while Frank Lampard is as smart and articulate an ex footballer as there is. But there simply isn’t a Spurs voice in the building — someone capable of offering a counter-opinion when the conversation gets tedious, someone who understands the spirit of the club, and can explain to viewers the transformation that Pochettino is leading.

Excruciatingly, the solution has been to play up the Spurs credentials of Jamie Redknapp. Ahead of the North London derby, Martin Tyler grandly welcomed “former Spurs captain Jamie Redknapp” to the coverage. Once I’d finished vomiting, I had to look it up. Redknapp was indeed selected as captain in 2003/04 by Glenn Hoddle, but played only 17 games that season — and made just 49 appearances for the club in total. That’s five more than Edgar Davids made, but Redknapp wasn’t invited to the legends parade while the Pitbull was: at least Jamie could get a lift home with his dad.

Redknapp, as Tyler himself said on commentary earlier in the season, is a Liverpool fan — and there is nothing wrong with that after making more than 200 appearances for the Anfield club. Just don’t pretend to be something you aren’t: give me honest admissions of bias over false claims of balance, any day of the week.

Does any of this matter? Most of the time, not at all. At half-time, most viewers do the washing up or take the dog out; at full-time, most of us finish watching at the final whistle and do something else. But just occasionally, like on Sunday, as a fan you want to savour every moment, drink in the atmosphere as though you were there. And this is when you realise just how abysmal Sky’s coverage of Spurs is.

It seems that Sky — and many other media outlets — are stuck on repeat. After every victory, the question is whether Spurs can keep hold of our star players; after every dropped point, the question is whether Spurs lack mental fortitude. We won nine goddam games in a row, and Martin Tyler — the most experienced commentator and the voice of the Premier League — was accusing us of throwing away the title.

Is it any wonder Spurs fans feel we’re not getting the credit we deserve? Spurs are playing magnificent football, setting club records and keeping title races alive long after all the other “big” clubs have given up; we’ve got a vibrant young squad that is providing more players for the England team than anyone else; we’re doing it on a tight budget, using homegrown players, while building a world-class stadium with virtually no support from the public purse. Spurs should be a model, lauded for doing things “the right way”; instead, after every fucking game, we’re treated to Jamie Redknapp diminishing our achievements and trying to break us up.

I’m no Sky basher, as those who follow me on Twitter know. I think Sky’s sporting coverage is world class, and its football coverage is far better than BT Sport’s dumbed down approach. It’s just unlucky, really, that Sky are so shit when it comes to covering Spurs.

I know Sky don’t care. Liverpool and Man United are all that matters, in terms of the subscription model. We all regret the decision to give Thierry Henry such a prominent role, Sky Sports management included — only four years and £16m left on his contract, lads.

But, as they plan for the new season, I desperately hope Sky at least consider adding one Spurs voice to their line-up. If Crouchy or Robbo hang up their boots this summer, they’d be a welcome addition, or perhaps Matt Le Tissier, Saints legend and boyhood Spurs fan, could be given be a more prominent role.

To be honest, though, empty chairs and a couple more betting adverts would provide more insight into Spurs than Henry and Redknapp Jnr.

Thanks for reading. Please follow me on Twitter for more Spurs chat.

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The Spurs Report wrap-up — links and articles

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A quick post with links to articles written since the start of 2017.

As usual, it’s been a mix of stadium/money articles and pieces on the football itself.

Thanks to those who shared these articles and made comments, there is always some fascinating stuff below the line, particularly on stadium pieces. If you’ve not yet read any of the articles yet, please dig in.

I don’t have anything particular in the pipeline, and I’m currently focusing on some non-Spurs writing. Mostly though, I just want to enjoy the end of this superb season, whatever happens.

I’ll be tweeting away as ever, please follow me on @spurs_report

Charles

Stadium and money stuff

Building a brighter future, on and off the pitch: Analysis of THFC’s accounts for the 2016 financial year

Examining the rising costs of Tottenham’s £800m stadium

Can Spurs afford to finish 5th?

Spurs, Chelsea and two very different stadiums

Football stuff

Super Jan takes it to the next level

Spurs need to rediscover transfer mojo

Tom Carroll, the last of the loan rangers

A new generation of Spurs fans craves FA Cup glory

Building a brighter future, on and off the pitch: Analysis of THFC’s accounts for the 2016 financial year

By Charles Richards / @spurs_report

(Update 21/04: Per ESPNFC, the £10m figure identified in this piece as a potential upfront NFL contribution to the stadium project has been confirmed. The mysterious £45m in accruals and deferred income remains in question. Answers on a postcard!)

Tottenham Hotspur’s newly published accounts for the 2016 financial year show a club in transition, still hamstrung by the constraints of White Hart Lane but moving clearly towards the altogether grander future that beckons.

Spurs chairman Daniel Levy has described the club, in its current state, as essentially two businesses — a football club, and a stadium development. This appears to be a useful mechanism for digesting the swathes of information contained in this annual insight into Tottenham’s finances.

In this analysis, I’ll focus on the football first, and then talk about the stadium. I’ll also talk about the NFL partnership — and ask whether the financial terms have finally been revealed.

For those new to this blog, I wrote a similar analysis last year. You can read my recent piece on stadium costs here, and my analysis of club spending through the construction phase here.

The club’s statement with the key figures is here, and you can find the full accounts in the Investor Relations section of the club website. Bear in mind, the accounts cover the 2015/16 season only — they end on June 30, 2016 and anything that has happened since then will be included in next year’s edition.

ON THE PITCH

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Cost controls

Spurs achieved something rare in 2015/16, particularly in the inflationary environment of the Premier League: the club lowered football costs and improved on-field performance.

However, if Spurs were hoping for any credit for finishing third in the Premier League on a budget dwarfed by the five wealthier clubs, this was dashed by Leicester’s remarkable title win and the limp finish.

What Spurs achieved in 2015/16 was highly impressive. While Leicester have fallen back to earth and mounted a title defence even limper than Chelsea’s in the previous season, Spurs have kicked on another gear since. There is a sustainability to what Mauricio Pochettino, Daniel Levy and others in the Spurs brainstrust have built, and that’s why the mood among Spurs fans is so positive. We see it, even if others don’t.

Once again, these accounts show Daniel Levy’s tight grip on the club’s finances. Net profit increased from £9.4m to £33.0m.

Spurs managed to reduce wages slightly, from £100.8m to £100.04m. Revenue, meanwhile, increased from £196.4m to £209.8m, an increase of 6.8%. As a result, wage to turnover ratio dropped from 51.4% to 47.4%. This continues the sharp downward trend — in FY 2014 it stood at 55.6%.

How did Spurs achieve this? A look at transfer activity and new contracts in the period shows how:

PLAYERS OUT: Paulinho, Holtby, Capoue, Kaboul, Stambouli, Chirches, Soldado, Lennon, Adebayor

PLAYERS IN: Wimmer, Trippier, N’Jie, Alderweireld, Son

NEW CONTRACTS: Dembele, Onomah (x2), Winks (x2), Alli, Dier, CCV, McGee, Pritchard, Bentaleb

Spurs managed to get rid of a lot of high earners — including a lot of flotsam from the failed Bale money splurge — while of the new signings, only Alderweireld and Son commanded “big” wages.

Meanwhile, Dembele was the only senior player to sign a new deal in the period — the rest were part of the “contract escalator” Spurs have in place for young players to increase their earnings as their role grows. Both Alli and Dier, for example, have signed new contracts in the current financial year, and will soon join the very top earners.

Crucially, with the old Premier League deal in its final season, Spurs were able to hold off on pay rises for all other senior players. This prevented “double dipping” — players seeking new contracts, then demanding another new one the next year citing soaring revenues.

Here are the players who have signed new contracts in FY 2017 so far: Lloris, Kane, Dier, Eriksen, Rose, Walker, Alli, Vertonghen, Winks, CCV, Wimmer, Carroll and Vorm.

That’s a lot of new deals — probably in the region of £15-20m of additional salary, by my estimates. But with Premier League TV income jumping by around £40m next season, it’s the perfect time to do it.

Looking at the ins and outs, you may be wondering why wages didn’t decrease further. Without transparency on player contracts, it’s hard to know — there may well have been some Champions League-related bonuses that kicked in.

Meanwhile, transfer spending ticked down. The “net spend” picture is confusing from accounts: the accounts reported a £27.1m profit from the “disposal of intangible assets”, but this isn’t a true picture of player trading.

I prefer to look at amortisation, the measure of the cost of new signings spread over the length of their contracts and reported on annual basis. A full explanation is in the notes of this story, but in the simplest way: If Spurs sign a player for £10m on a five-year contract, that equals £2m in annual amortisation cost.

For Spurs, amortisation dropped from from £38.6m to £31.8m, thanks to a large number of expensive failures leaving the club and mostly cheap replacements coming in.

If you combine wages and amortisation, you get a good measure of “real football spend” — how much clubs are actually investing in their playing squads. For Spurs, this decreased from £139.4m to £131.8m.

Here’s how Spurs compare with selected other clubs:

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As you can see, not only is the gap between Spurs and the wealthier five clubs growing, the gap between Spurs and the clubs below is narrowing. Spurs, simply put, are defying gravity — and no club better demonstrates the value of homegrown talent.

Revenue roadblocks

Revenue was a mixed picture, and further underscored what by now barely needs stating — Spurs need a bigger stadium and new sponsorship deals.

Matchday revenue was essentially flat, down from £41.2m to £40.8m, while commercial revenue dipped from £59.9m to £58.6m. If there is one area that will disappoint, it is the latter.

Spurs are stuck in the tail-end of the Under Armour kit deal (expiring at the end of the 2016/17 season) and are midway through the AIA deal, which ends in 2018/19. With each year, these deals grow less competitive. But success on the pitch failed to boost merchandise sales (which declined slightly from £12.3m to £12.0m). Lack of Cup success also hit commercial and matchday income.

As far as I can tell, Spurs did not sign any major new sponsorship deals in FY 2016. The partnership with Kumho Tyres started in FY 2017, and certainly, just comparing the “Partners” section of the club website compared with similar sections for other clubs, and you can see that Spurs are far less active.

Does it matter, given how tacky this stuff gets? Ultimately, if Subway want to offer £2.5m a year to be official sandwich partner, that’s the easiest money a football club will ever make. There’s significant room for growth in this area.

The bulk of the revenue growth came thanks to the increase in Europa League prize money. Previously an irritation, the Europa League is far more valuable now. Prize money increased from £4.7m to £15.5m due to the largesse of BT Sport. That’s a lot of money for not very many viewers, but Spurs aren’t complaining.

Premier League revenue also increased thanks to improved on-field performance. 21 games were selected for UK broadcast, compared with 18 in the previous season — under the old TV deal, each extra selection above the minimum 10 was worth around £750,000, while performance-based prize money jumped by around £2.5m for finishing 3rd compared with 5th.

In a previous piece, I noted a development whereby revenue and spending, previously moving in concert, were starting to diverge.

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As you can see, this divergence was amplified in FY 2016. I like this chart as I think it tells a story, of Spurs shifting from the “wheeler dealer” mentality to a more sustainable approach as the club enters the stadium build phase.

In the coming three years, this trend is only going to increase. Next year, Premier League revenue should increase to around £140m, while the brief Champions League campaign should bring in around £35m. In the following year, pending the official announcement, Spurs will have much higher gate receipts due to playing home games at Wembley. The financial year after that, we’ll be into the new stadium.

These are exciting times for Spurs: it feels like things are falling into place. We’ve got the right manager, the best core of players in years, and a boardroom focused — almost to the point of obsession — with delivering a world-class stadium. It’s going to be fascinating to see how we manage to screw this up.

OFF THE PITCH

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Stadium developments

Arguably the most important disclosure in the annual report concerned the stadium: the borrowing has officially started.

The first £200m portion of the bank finance Spurs have sought is in place, £100m of which was drawn as of June 2016. Interestingly, this facility was entered into on December 10 — six days before Spurs secured planning permission for the new stadium from Haringey council.

This is the “bridge” portion of the £350m loan Spurs will seek to cover a chunk of the construction costs. There has been public posturing over the finance of the project amid negotiations on public sector contributions and infrastructure delivery, but the annual report shows that financing is moving forward broadly as the club said it would in the planning process.

This £200m facility cost £855,000 in arrangement fees, but we don’t yet know the annual finance cost. The first £100m is repayable in December 2017 — or to put it another way, in December this year it will be refinanced into a bigger and longer-term facility. It may be that Spurs are able to borrow more than the planned £350m, given the increasing revenue and rising construction costs.

Overall, spending on the project has increased from £59m to £115.3m, per the club.

Meanwhile, two other unusual items, a long way down the accounts, caught my eye.

The first was a payment of exactly £10m, received from “a company, which is not a related party, as a contribution towards future construction expenses related to the Northumberland Development Project.”

Who is this money from? Public sector contributions have been a matter of contention, and do not extend to the stadium itself — certainly no agreement was reached before June 2016. If it were Tavistock Group — Uncle Joe — injecting money, it would be listed as a related party contribution.

The second, found in the non-current liabilities section, was a disclosure of £45m, again an exact amount, in “accruals and deferred income”. In 2015, the club recorded £0 in the same category, likewise in 2013 and 2014.

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Deferred income is income received for services that will take place beyond the period covered in the balance sheet. Season ticket income and payments received for commercial deals that stretch beyond the reporting period are listed in the current liabilities section.

While it has been reported that Spurs have agreed a deal with Nike as the next kit supplier, this has yet to be officially announced, and certainly wasn’t announced during the previous accounting period.

So what is it?

While no major new sponsorship deals were announced during the period, there was one major new commercial partnership: the 10-year, 20-game NFL deal. If there was a payment, it would be reported in these accounts — with stadium completion date yet to be confirmed, it would be deferred income.

No financial terms were announced, but it seems likely that Spurs would seek money “up front” from the NFL to at the very least cover the additional costs of installing NFL facilities within the stadium. Likewise, expect Spurs to see at least a portion of naming rights income up front to help with cash flow when a deal is agreed, and advance ticket sales income.

A concern has grown among some Spurs fans that the NFL may be “using” Spurs, in the same way the organisation brazenly exploits local taxpayers in the USA. But, in reality, trying to gauge the additional costs incurred by the NFL elements is hard.

Once the project stalled amid the legal dispute with Archway, the stadium design was always going to be tweaked so that Spurs could get as much into the site as possible. To make it a true NFL stadium, additional work had to be carried out to basement areas, plus there was the need to reconfigure the interior to allow for enlarged locker rooms and media facilities. The sliding pitch sums up how tricky it is to put a value on the NFL additions: it is a new and expensive piece of technology that, while useful to Spurs when hosting concerts and other sporting events, feels like an extravagance too far if there were no NFL contribution.

So can we now put a price on this partnership? A one-off £10m payment, plus a 10-year, £45m hosting arrangement that has been paid up front. In total, a £55m ($69m) contribution to the £800m or so total cost.

It certainly sounds reasonable, and realistic. For the NFL, it gives them the stadium they desire in London for future growth plans. For Spurs it is money that can be used to turn the stadium into the world-class venue the club has always hankered to build.

I can’t confirm this — any journalists looking for a story could do worse than run this up the flagpole — but it certainly seems possible. Certainly, there have been suggestions that the NFL is putting money into the stadium — including recently by MMQB journalist Albert Breer.

I welcome any other suggestions on where this £10m construction cost and £45m in deferred income may have come from. But my hunch says NFL.

Other business

Away from the stadium, Spurs are continuing to invest in the training centre with construction of a new player accommodation facility. The £16m loan facility for the training centre was expanded to £25m, at a cost of £265,000.

Spurs being Spurs, there is a commercial element to this. In addition to providing accommodation for the first team and youth teams, and players visiting for medicals ahead of signing, the facility will also be used by other teams. An agreement is in place with England to use it before games at Wembley — all those times England train at Hotspur Way isn’t an ad hoc arrangement — while it is also available to European sides ahead of midweek matches against other London sides. Both Barcelona and AC Milan even provided letters of support in the planning process.

The planning agreement makes clear this isn’t a hotel, but no doubt visiting teams and England will pay handsomely for the privilege. Speculation that NFL teams may use the facility is wide of the mark — at 45-rooms, it is simply too small.

There are a couple of other lines of note.

The first is exceptional items of £9.6m in “commercial and employment contract costs”. In the previous year, £6.5m was reported in “redundancy costs and onerous employment contracts”.

My assumption was that at least a part of last year’s exceptional items referred to Emmanuel Adebayor, who at some stage stopped being a footballer. More likely any payoff was included in this set of accounts. But as for commercial costs, it is hard to understand what that may be. £9.6m out of £209.8m total revenue is not an inconsiderable sum, and I’d welcome any suggestions. If there is an inference from the new description, I’m missing it.

Second is £500,000 paid by Spurs to Melix Financial Services, another Tavistock Group company, for “commercial advice on global sponsorship opportunities”. Melix, like much of Tavistock (the investment umbrella for Joe Lewis of which Spurs is just one part), is Bahamas registered — but beyond that, there is no public profile. If you Google the name, you’ll get a few links to a late 2000s Romanian property scandal, and that’s about it.

There may be a perfectly reasonable explanation, but it beats me. Answers on a postcard – preferably with a nice picture of the Bahamas on it.

Thanks for reading. Please follow me on Twitter for more Spurs chat. Comments welcome, either below or to spursreport at gmx.co.uk.

Super Jan takes it to the next level

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When Spurs threatened to come apart at the seams in the dismal 2013/14 campaign, few players’ reputations suffered as much among fans as Jan Vertonghen’s.

Hugo Lloris was a picture of quiet misery, emerging every now and then to pick the ball out of the back of the net before disappearing back behind his sad puppy eyes to daydreams of life in Paris, Madrid, or wherever he could be sure Tim Sherwood wouldn’t be managing next.

But stuck in central defence in a team with no shape or cohesion, and sometimes shunted out to left back due to the shortcomings in the squad that had been assembled out of the wreckage of the Gareth Bale transfer, Vertonghen was more exposed.

Vertonghen’s form, excellent in his first campaign after joining from Ajax, declined. In the 4-0 rout at Stamford Bridge — the fifth time Spurs had conceded three or more goals in a game that season — an atrocious error from Vertonghen was the spark that lit the collapse.

Vertonghen is no stoic, and as the season unravelled, the Belgian was unable to contain his unhappiness: the legend of “Grumpy Jan” was born.

There is a prickliness to the Belgian, and an impression grew that he was someone who saw himself as a man apart. Vertonghen has the misfortune of being an intelligent man in an environment where intelligence — and it truly is a fucking mystery why English football is so shit — is treated with suspicion.

Despite a tradition of ball-playing centrebacks, and more patience with the odd defensive slip than most fanbases, a view developed among the Spurs faithful that Jan may not quite be the fighter that Spurs needed at the back. Too quick to moan, too many aerial challenges lost, too easily brushed aside; beautiful with the ball, but not quite to be trusted. He was a quality player stooping to the level of those around him, rather than a leader who would singlehandledly pick the others up.

Utter bollocks, of course.

It turns out, the problem with Vertonghen wasn’t so much him as it was all the other defenders he was forced to play with, as well as the midfielders in front of him, and the squad-wide absence of discipline, unity and tactics.

In hindsight, it’s hardly surprising that Vertonghen’s form should improve when he went from playing alongside Younes Kaboul and Federico Fazio, and behind Ryan Mason and Nabil Bentaleb, to playing alongside Toby Alderweireld in a defence protected by Eric Dier and then Victor Wanyama.

Unfortunately for Jan, his connection with the past robbed him of much of the credit he was due in Tottenham’s excellent 2015/16 campaign. There wasn’t a mention of Vertonghen in any season reviews, despite him being a core part of the league’s joint-stingiest (and comfortably most improved) defence.

For Spurs fans, Vertonghen’s performances weren’t a surprise, rather a reaffirmation of a longstanding belief — that Vertonghen, when in form, is a superb footballer and one of the best defenders in the Premier League. This was the level expected of Vertonghen when he joined from Ajax, which he initially delivered before being caught up in the ebbs and flows to come.

The surprise with Vertonghen came this season. Already looking like a defender in his prime, at the age of 29 and with a new contract in hand, Vertonghen has found another level to go up.

This improvement coincided with Mauricio Pochettino’s switch to three at a back — and in Vertonghen there is one of the purest fits of player to system you will ever see. Vertonghen fits the left-sided centreback role like leather trousers on a WAG — it’s like he was born into it. The role accentuates all of his skills — his ability to carry and play the ball, his ability to read the play — while minimising his aerial and physical short-comings. Already one of the best defenders in the Premier League, this season Jan has stepped up to being one of the best in Europe — try to name a better left-sided defender than Vertonghen, right now. It’s very hard to think of any.

From Grumpy Jan, we now have Happy Jan — a player in the perfect tactical situation, with best mate Mousa Dembele on hand for marathon games of Monopoly between matches.

Does this mean any credit is coming Vertonghen’s way? Unlikely. Praise for Tottenham’s sustained defensive excellence must be divided up among the whole unit — defenders, midfielders and manager — and understandably much of the credit will go to the jaw-droppingly good Alderweireld. When the clickbaitists write their Top Tens and the ex-pros have their Teams of the Week ghost-written, Vertonghen’s name won’t be seen. When the transfer rumours are made up to fill click quotas when international games are on, it’ll be Toby, or Kyle, or Hugo who are linked with “big-money moves” elsewhere.

But at this point, that’s just the way it is for Jan.

Much more important than what the pundits and the elite Twitterati think, Spurs fans understand the step that Vertonghen has taken this season. The reception for Jan is one of the warmest in the stadium before matches, and everyone watching knows how utterly integral he is. The crowd lifts when he is on the ball, and the team clicks.

And that’s all I wanted to say: Jan, we noticed how good you’ve been. And we love it. If you think the noise for Vincent Janssen’s open-play goal was loud, just you wait til you score. The roof will come off — so best do it this season otherwise it’ll be really bloody expensive when we’re at Wembley or New White Hart Lane.

Thanks for reading. Please follow me on Twitter for more Spurs chat.

Examining the rising costs of Tottenham’s £800m stadium

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“Brexit to blame as Spurs stadium costs double”, screamed the headlines this week, as it emerged the cost of the club’s new home has increased to an estimated £800m.

The eye-watering figure sparked concern among fans over the impact of the project on the club’s long-term financial future. In this piece, I will look at the £800m figure and the reasons why costs have increased so sharply.

Revised cost estimates

First the background: the new £800m estimate was revealed by chairman Daniel Levy in board-to-board minutes published by the THST, always one of the best sources of information on the project:

DL stated that the funds would come from different sources and that the cost of the stadium was now estimated circa £800m

In an email response to a question from a fan about why the stadium cost had seemingly doubled from the initial £400m estimate, chief executive Donna-Maria Cullen expanded further.

It is worth remembering that the original cost quoted for the stadium was some 7 years ago. This new ‘estimated’ figure relates predominantly to the stadium with some elements of substructure for the other builds particularly the Tottenham Experience. Brexit has added a straight 20% on costs for foreign goods due to the exchange rate, overtime working and increased construction costs similarly. Revised basement works also added to the cost. We are constantly managing costs and will continue to do so throughout the process along with funding plans to ensure the viability of the scheme.

Credit must go to Cullen for communicating directly with fans and attempting to ease concerns over the stadium’s viability.

As Cullen notes, this stadium project has been a long time in coming. A new stadium was first mooted in 2007, and planning permission for the old, 56,000 capacity design was gained in September 2010. The project then drifted for five years amid CPO litigation and interest in the Olympic Stadium site, before enhanced plans were approved in December 2015.

Understandably, the project cost has increased sharply over this period — it has become a bigger, and higher specification, stadium.

The first public estimate for the current version of the stadium came in December 2015. At a fan forum, Levy estimated the cost at £500m. This was in line with the financial Viability Report, which put the estimated bill for the whole scheme — this includes the housing and hotel component — at between £675m and £750m.

This £500m figure is a reasonable baseline — so if and when stadium costs hit £1bn, then we can talk about it doubling.

Explaining the jump

That said, £500m to £800m remains one heck of a jump — £300m is an awful lot of money: it is ten Moussa Sissokos, or 20 times the amount West Ham contributed to the Olympic Stadium rebuild.

In her email, Cullen outlined four key factors beyond the cost increase: the weakening of the pound due to Brexit, overtime working, increased construction costs and revised basement works.

Overtime costs are easily explained — go on the live webcams, and you’ll see workers on site for 18 hours a day, seven days a week. The timeline is phenomenally tight, with Spurs needing to complete work to a sufficient degree to ensure only one season is played at a reduced capacity WHL, and only one season at Wembley. Very soon, the club is going to have to make the decision on whether to knock down White Hart Lane — understandably, both club and contractors Mace will be want to be as far ahead at possible before crossing this point of no return.

On construction costs, the story of the club purchasing cranes is a good example of how costs can rise when the clock is ticking. The club couldn’t afford to wait for leased cranes, so instead bought new ones and will seek to recoup some money after work is finished.

Revised basement works appear to refer to changes to the design that were approved in 2015, prior to full planning permission being granted. The revised plans include more car parking and storage space, seemingly with the NFL groundshare in mind.

The final issue is the weakening of the pound, forcing up the price of imported equipment and goods.

A look at the five-year £/euro exchange rate highlights the problem Spurs have had. In early 2015, just as Spurs were at the peak stage of modelling stadium finances and cost planning, the pound strengthened considerably. For about a year, it hung there, and pretty much as the stadium was approved in December, it started to fall.

Screenshot 2017-03-07 at 6.53.42 PM

Cullen blamed Brexit — and without doubt, Brexit gave the pound a kicking. But the pound was already falling well beforehand — and if you look at the 10-year trend, we’re kind of back where we were for much of 2009 to 2013. The timing is unfortunate — Spursy? — but the club is far from alone in being caught unawares by Brexit.

In terms of magnitude of impact and the 20 percent cost increase on imported goods, it’s hard to gauge without knowing more about where materials for the scheme are coming from. We could be talking millions, or tens of millions. But either way, currency fluctuations have impacted the budget: on the plus side, the weak pound should help exports of crap squad players to the eurozone and China this summer.

Nice things cost money

Does this add up to £300m? In all probability, no. There’s one other factor that — inevitability — has led to an increase in the final costs of the stadium: the fit-out.

When the £500m project figure was first estimated, there was inevitably going to be a lot of uncertainty about internal fittings — how much do tunnel clubs, cheese rooms, sky lounges and state-of-the-art beer bumps actually cost? There is bound to be guesswork for these bespoke elements — it’s not like Levy is heading down to Ikea armed with a pre-budgeted shopping list and club credit card.

Through the build phase, Spurs have been tweaking plans for the internals of the stadium. In responses to questions I posed in the summer, it was clear that issues like in-stadium technology were very much a work in progress. It was reported that Levy was travelling around London skyscrapers inspecting lift fittings to ensure the right specification for the stadium.

This story about the Minnesota Vikings and their spectacular new stadium illustrates how costs can shift. It was decided, during construction, that another 400 in-stadium screens were required (and money was duly extracted from taxpayers), while expensive-sounding network infrastructure had to be developed to cater for increasing demands for stadium wifi. Meanwhile, stadium builders are continuously learning — during the build of the US Bank Stadium, it became clear that the new 49ers home, the Levi’s Stadium, was not sufficiently catering to fan demands for instant replay — so the Vikings increased the number and quality of in-house cameras. You can imagine Spurs doing something similar — the introduction of video-refereeing will mean fans will need to see more to understand the game. These changes are part of the future proofing of the stadium design, but potentially cost a lot of money.

Shifting financial situation

While costs have been rising, so too have club revenues.

In the 2015 financial year, club revenues stood at £196m. Figures for for FY 2016 will be released soon — they should show revenues climbing to around £210-215m, per my estimates. But from here, the increase will be sharp — FY 2017 will see the new Premier League TV deal accounted for, and should send revenues close to £275m. In the following year, revenues could potentially increase further if Spurs are able to play in front of a sold-out Wembley week-in, week-out. You get the picture.

The amount Spurs can borrow is tied to income. Initially, it was reported Spurs would borrow £350m from banks — in reality, there may be the potential now to borrow more.

In an email lambasting lack of action by local authorities that *mysteriously* found its way onto the front page of the Evening Standard, Levy mentioned the financing had not yet been finalized — in all reality, at least some portion must be in place given the scale of construction so far. It was reported that of the initial funding package, the first £200m would be loaned up front — it may be that this “bridge” part is in place, but Spurs are looking to tap more than £150m in the second phase. This is speculation, but rising costs and income, combined with recent public comments, suggests this may be a potential scenario.

In addition to Spurs earning more, as the project has progressed, the club will have gained greater clarity on feasibility of generating additional revenue. While two of the 16 non-Spurs major events are locked out by the NFL, no doubt conversations are underway in terms of other events, given the stadium is due to open in just 18 months. I have previously speculated that AEG may be involved in organising these events — a Twitter exchange with the head of AEG’s new rugby division did little to deter me from this view.

With greater clarity on how the stadium is going to be used, Spurs may be more confident in pushing the boat out on internal fit-out — more expensive sound systems, better resolution screens, or whatever it is.

In terms of other financing sources, nothing is yet confirmed on naming rights, while advanced premium ticket sales have begun — the club reported about 50 percent of premium packages are now sold. Pinches of salt no doubt required. There is some indication that Joe Lewis recently put a certain amount of money into the club — £20m or so — but this can’t be confirmed. I’m personally dying to know if the NFL is putting money in up front. But either way, with more than £100m spent on property/site prep/design and legal costs, at least £350m coming from banks, and naming rights/advance sales to roll in, Spurs are well on the way to £800m regardless.

Final thought

Given the context of the £800m figure — revealed while relations with authorities over the White Hart Lane station development are strained and amid ongoing dialogue on affordable housing — some caution is advised.

But taking the £800m figure at face value, it doesn’t appear an unrealistic amount for Spurs to spend. The club will have a lot of debt, but increasing revenues to service it. If you look at costs of recent stadiums in the US, £800m is still quite modest — the Vikings stadium cost $1.2bn, while the new Falcons stadium in Atlanta will cost around $1.6bn.

The next few weeks promises to be the most stressful of the entire project.

Brent Council’s decision on Wembley, due March 23, has a multi-million pound impact on Spurs — being able to play in front of 90,000 rather than 51,000 next season will make a huge difference to the club’s bottom line.

Meanwhile, the club has to make the agonizing decision on whether to knock down White Hart Lane. Any delays after this happens — for example during the demolition and excavation of the old ground — could leave Spurs homeless and at the mercy of the FA, who have another tenant — with a lot more money — lined up to take Wembley once we’ve moved out.

Just because costs are increasingly sharply, doesn’t mean they are spiraling out of control. It’s a high-wire act — but if Spurs can pull it off, the rewards are huge.

Thanks for reading. Please follow me on Twitter for more Spurs chat.

 

Can Spurs afford to finish 5th?

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With 13 games to go in the 2016/17 Premier League season, just four points separate second place and sixth.

Only Chelsea have managed to pull away from this almighty scrap: eight points clear and with no European distractions, John Terry can surely start dusting off his full kit and boots in preparation for the trophy celebration.

Two of Spurs, Arsenal, Liverpool and the Manchester clubs are going to miss out on Champions League football next season — who it will be, however, is anyone’s guess.

An air of manufactured perma-crisis has haunted the top of the table, with one manager continually forced to be “the one under pressure”. Jurgen Klopp felt the heat in January, but in February the spotlight appears to have shifted to North London and Arsene Wenger.

After a dip of form since the hammering of West Brom on January 14, and the ongoing inability of his Spurs team to perform well in Europe even against modest opposition, Mauricio Pochettino has also experienced a frustrating month. But averaging two points a game over 25 matches and into the quarterfinals of the FA Cup, this hasn’t been a campaign where the bad moments have lasted long.

Thanks to the excellent work of Pochettino, Spurs are defying Premier League gravity in terms of the resources they can bring to bear. But in a long, attritional campaign where no team is showing signs of relenting, this may be a season where depth is more important than ever. When Man City lose Gabriel Jesus, they have Sergio Aguero and Kelechi Iheanacho able to come in; when Spurs lose Harry Kane, it’s either an out-of-position Son Heung-min or Vincent Janssen, who has yet to score for the club from open play.

Combining a club’s wage bill and annualized transfer costs (amortisation, FY 2015) gives an idea of the “real football spend” at the top six clubs, and how hard it is for Spurs to compete:

Man Utd — £302.3m
Chelsea — £285m
Man City — £264m
Arsenal — £244.1m
Liverpool — £227m
Tottenham — £139.4m

Spurs, quite simply, are in a different league to the other five in terms of the amount invested in football. While disappointing, it therefore shouldn’t be a surprise if Spurs were one of the the two teams that eventually slipped down into the Europa League spots. This isn’t trying to create an excuse for failure, but rather establishing context: when Pochettino talks about the limitations he faces, it’s all true.

Leicester have shown money doesn’t always equal success, but most of the time it does. Per analysis by Michael Caley, 80 percent of top four places from 2000/01 to 2014/15 were secured by teams with the top four wage bills at the time.

With a £750m stadium project to finance, can Spurs afford to miss out on UEFA’s Champions League millions at this crucial juncture in the club’s history?

With Premier League TV income soaring to unimaginable levels and Europa League income increasing, Champions League football is no longer quite the silver bullet that it once was.

Last season, Spurs earned £95.2m from the Premier League TV deal, while the club’s share of UEFA’s revenue distribution — the governing body’s mechanism for dishing out TV money — was £17.7m. In 2014, Spurs took in £88.8m of PL money, and just £5.5m in UEFA revenue — that’s a jump of £12.2m year-on-year under the BT Sport deal.

This season, Spurs should bring in around £140m from the new Premier League TV deal, while UEFA revenues will be approximately £36m. The exact numbers will be known at the end of the season — the UEFA number is based on what Manchester United earned last season, after crashing out of the Champions League in the group stage, and then making an early exit from the Europa League knockout stages. Spurs are on course for a similar performance — but the 3rd place Premier League finish in the prior season may mean a little more.

As a percentage of club revenue, here’s how UEFA revenue distribution income has varied in recent seasons:

spurs-uefa-rev

(Note: Currency conversion throughout this piece is at current rates)

As you can see, Champions League remains a huge financial incentive. However, while in previous season the Europa League has been an irritation with marginal financial benefit, under the current deal, participation is much more lucrative.

By way of contrast, when Spurs were forced out of the 2012/13 Champions League by Chelsea, this was a crushing blow. Spurs took in just £4.6m in UEFA revenue in the following season, while Chelsea scooped £26m for finishing 3rd in their group (and another £9m for going on and winning the Europa League).

Of course, UEFA revenue distribution is just one part of the picture. Matchday income is much higher for Champions League than Europa League — Spurs sold out Wembley for the three home Champions League ties, while Europa League matches are less of a crowd draw — plus there is the potential commercial uplift that comes with appearing in the more prestigious of the European competitions.

As regards the new stadium, this project is not contingent on Champions League football — in fact, the aim of the new stadium is to enable Spurs to put out a sufficiently strong team to qualify for the competition on a regular basis.

In the Viability Report for the project, “better than estimated on-field performance” is listed among potential factors that may increase return on investment in the scheme — alongside reduced construction costs, player costs dipping below 45 percent of revenues and the club securing an NFL franchise (eyes passim).

Spurs have been prudently run for years, and budgets are based on the expectation of Europa League football, not the hope of Champions League football. This refusal to gamble frustrates some segments of the fanbase, and pleases others — but as long as Daniel Levy is controlling the purse strings, this approach won’t change. There’s no gamble being made about Spurs being able to overachieve on the pitch through the stadium construction phase — two seasons of CL football in a row would be a tremendous bonus.

But this doesn’t mean there isn’t a price to be paid were Spurs to miss out on Champions League football next season.

For fans, it will mean missing out on Europe’s elite competition yet again. This year’s campaign never caught alight, starting with an extremely boring draw that meant no “big” team coming to Wembley in the group stages. Gareth Bale’s heroics against Inter Milan were six and a half years ago — even the most patient of fans need fresh inspiration to feed the soul.

For the players, the Europa League represents a step back. Pochettino has nurtured a hungry group with a solid core of Champions League calibre players. With so many key players signing new deals and a palpable sense of excitement at the club as the new stadium takes shape, there’s little danger of losing players this summer. But footballers who make the top level are by nature ambitious, and Champions League is the benchmark.

However, for both fans and players, there are other ways to square this circle — the FA Cup would give fans a moment to savour, and demonstrate to the players that it’s possible to win trophies at Spurs. Judging by the performance at Fulham, the team is focused on the competition, and lifting the trophy in May would represent an important yardstick for this group.

That’s not to say the FA Cup is a panacea — for the team, there’s still a development cost to missing out on the Champions League. In three years under Pochettino, Spurs have been consistently poor in Europe. It’s hard to put a finger on why: Squad limitations? Focus on the Premier League? Tactical issues? The only way Spurs are going to get better is by playing quality European opposition on a regular basis, and figuring it out. It took Manchester City several seasons to find their way in the Champions League after the club struck oil, but they reached the semifinals last season and it’s not impossible to see them going a step further this time.

Then there’s the cost of one of the other teams sneaking into the Champions League at Spurs’ expense. At every other club, a far greater sense of crisis will be felt if they miss out — another season of failure at, say, Manchester United, has the potential to have repercussions that could open doors to Spurs in years to come. Maybe that’s getting a bit tangential, but to put it another way, it sure is enjoyable making Jose Mourinho squirm.

Hopefully, this is all moot: Tottenham’s run since the West Brom win is simply just a dip in form, an inevitability in a long old slog of a campaign, and the team starts purring like the fine-tuned machine we’ve resembled at times this season. The performance at Craven Cottage suggests as much.

However, if Spurs do end up missing out on Champions League football next season, it’ll be disappointing, but not disastrous.

Thanks for reading. Please follow me on Twitter for more Spurs chat.

Spurs need to rediscover transfer mojo

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In January 2016, Spurs were linked with three promising youngsters: Moussa Dembele of Fulham, Ademola Lookman of Charlton, and James Maddison of Coventry City.

The assumption at the time was that at least one would be signed before the transfer window closed. It seemed a trademark Spurs transfer approach: identify talented English youngsters at lower division clubs and bring them to White Hart Lane where they can develop and, hopefully, rise in value.

Dembele even reportedly travelled to Hotspur Way for a medical before the deal collapsed. Fulham, battling relegation from the Championship, demanded the player, whose contract was due to expire over the summer, remain at Craven Cottage on loan.

In the end, the transfer window closed, without Spurs making a signing.

The fate of the three players linked in January shows the opportunity cost that Spurs have paid for their prevarication, and underscores the problems Spurs have in the recruitment department at the moment.

Dembele has blossomed into a star at Celtic, banging in 20 goals in 38 appearances. He looked at home on the Champions League stage, and doesn’t appear likely to stay at Celtic for long. A £40m move to Chelsea was mooted in January, albeit with a strong clickbait element. In hindsight — and it was complicated with Spurs being asked to pay for a player on an expiring deal to return on loan – that £5 million not spent must haunt the club.

Lookman, meanwhile, joined Everton this January for £11m. He scored on his debut, and has impressed sufficiently to earn a start against Bournemouth on Saturday. It’s very early days, but he looks lively, pacey and technically good — similar to Alex Oxlade-Chamberlain before he moved to Arsenal and his career started to drift. Time will tell, but the early signs are promising.

Maddison, a creative midfielder with a hint of Ross Barkley about him, isn’t fairing so well. Norwich City scooped him up for £2m on deadline day — to the outrage of Coventry City fans who considered him a far more valuable asset — but allowed him to stay at Coventry. This season, he was loaned out to Aberdeen, where he played 14 times in the SPL, scoring twice and assisting seven times, and now finds himself back at Norwich, where he hasn’t made the matchday squad for a Championship match. He’s only 20, and there’s still time, but it doesn’t feel the trajectory of a star.

This January, the transfer window came and went without Spurs making any serious moves for anyone. A 1% percent chance of a deal turned into a 0.01% chance of a deal, but even that seemed to be overstating it. In fact, the only significant stories to emerge were about the dysfunction in the club’s recruitment department — Paul Mitchell, the head of recruitment, resigned, while Ian Broomfield, the international scout, left the club after his contract was not renewed.

Mitchell remains at the club, working out an 18-month notice period. This is an utterly ludicrous situation given the total lack of incentive for Mitchell to do his job properly. If Spurs were so keen to keep him from the clutches of rival clubs, then the club should have insisted on an 18-month period of gardening leave.

Mitchell has largely escaped criticism from the fans, painted as yet another victim of Daniel Levy’s control-freak approach. The exact breaking point isn’t known, but is normally pinpointed as the failure to sign Michy Batshuayi.

But this is far too kind on Mitchell. Before joining Spurs, Mitchell surely did his due diligence: He must have known that a) Spurs have a limited budget compared to top six rivals, especially with the stadium to finance, b) Even without these constraints, as a club run on rational lines, Spurs can’t win bidding wars with plaything clubs like Chelsea, and c) Levy is a hands on chairman who drives a hard bargain and is unafraid of falling out with people.

At the moment, it appears Spurs are going backwards in the transfer market, with Pochettino and Levy calling the shots in the absence of specialist recruitment staff. James Yorke summed it up in an article on Statsbomb:

If there are concerns about the direction the club is moving in, the structure of any transfer committee appears uneasy. Paul Mitchell continues to work his leave and the late summer transfers of Georges-Kevin N’Koudou and Moussa Sissoko looked like headscratchers at the time (with little or no statistical basis to either of them), and the lack of impact made by both players implies that Tottenham may need to apply greater care to their recruitment in future. Talk of Wilfried Zaha is hopefully wide of the mark as his apparently improved contributions for a struggling Crystal Palace carry a huge red flag based on little change in his shooting or creative numbers year on year, implying he’s running on little more than a warm streak of form.

You can see how a mistake like Moussa Sissoko happens given the void created by the departures of key recruitment staff. Pochettino says he wants a powerful, ball-carrying player to add a threat from wide positions, and Sissoko ticks that box. Levy looks at his spreadsheet, and sees room in the budget for a £30m player, paid for in £6m annual instalments. So boom, in Sissoko comes on deadline day. At no point does someone who has actually spent months assessing him say, “Hold on, this guy can’t pass, shoot or control the ball, he’s not up to the technical standard required for this Spurs team”

It’s simple logic, but while Pochettino is in a position to state what his squad is lacking, he isn’t in a position to scout players. There simply isn’t enough time in the day for him to do this and manage the team. Likewise Levy: his in-tray includes building and funding a stadium, contract negotiations, commercial deals, property development and representing Spurs at a Premier League level (think negotiations over TV money, etc). And anyway, neither of them are professional scouts or analysts.

Spurs have already paid the price for the missteps this summer. In October and November, with Champions League in full flow and the squad suffering injuries, a bad run of form allowed Chelsea to bolt clear in the league and saw Spurs crash down into the Europa League. Sissoko was signed as a box-ready product, yet was publicly called out by Pochettino and considered unselectable during this run. Vincent Janssen failed to score from open play while covering from Kane, while GK Nkoudou has barely featured beyond the odd cameo. In particular, he has struggled in his rare starts.

Pochettino has exhausted his old boys brigade with the signing of VIctor Wanyama, so new ideas are sorely needed. Instead of waiting until the summer, Spurs need to move fast to fill the recruitment void. There have been reports of various sporting directors being approached — former Roma honcho Walter Sabatini and Bayern’s Michael Reschke — if this is true, this should happen now or Spurs will miss a valuable half season of scouting time.

However, despite the money wasted on Sissoko and the whole N’Jie-Nkoudou boondoggle (personally, I’m giving Janssen a bit more time before dismissing him as a flop as there is a good technical player there), it’s the deals not done that will haunt Spurs more.

Dembele would have been the latest in a long line of successful acquisitions from lower divisions: Dele, Bale, Walker, Dawson, and so forth. No club does it better — identifying talent from English clubs and developing the hell out of them. For every Walker, say, there is a Kyle Naughton — but the beauty of signing young players is you normally get some return on them, and the value of the ones that make the grade far outweigh the money spent on the ones who don’t. Sure, there are serious talents emerging from the academy, but not in every position.

It’s time for Spurs to get back to what they do best in the transfer market. The beauty of football is, the next big thing is never far away.

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