Earlier this week I received formal notification that Tottenham Hotspur PLC is proposing to de-list its shares and become a private company again. As a shareholder, I’ve been kept fully informed even though the postage on the thick wad of legalese cost twice as much as the value of my holding. I have one share, literally a share holder, so that’s very sweet of them, although as a responsible shareholder I feel disappointed and concerned that the board have wasted this expense on schmucks like me for whom it makes no difference. Add up the postage, labour and paper, it’s enough to pay Manu’s wages for at least 12 hours.
Frankly I have no idea what it means for the club’s finances. Daniel Levy says the listing “restricts our ability to secure funding for its future development.” That is, the new ground is easier to fund this way and if that means we are a step closer to the NDP, I’m delighted. Levy is a master of his world, finance, and has always looked after the club in this respect. Even with our low capacity we made an operating profit of £32m, a rise of 42%, boosted by the Champions League pot of gold.
Management Today(what do you mean, you don’t read it daily?) takes a more cynical view, wondering
if the furore over the Olympic Stadium has lead Spurs to prefer life without the added scrutiny of external shareholders. Then there’s Redknapp’s forthcoming court case which is scheduled for January, the same time as the de-listing. Pure coincidence, but the assuredly bad publicity can now have no affect on the share price. It doesn’t mention suspicions that the ‘I’ in ENIC means they have half an eye on a future sale.
What I do know is that this is the end of an era. Nowadays it’s commonplace for football clubs to be listed companies but Spurs were the first and it wasn’t that long ago. In 1983 an ambitious businessman called Irving Scholar was determined to make his mark as our new chairman. Before then, the club had for many years been run as a private company by the Wale family but by applying the same business principles that had made him a wealthy man, Scholar aimed to drag football finances into the twentieth century even though it was almost over. In the process, Spurs would become the richest team in the land.
As well as going public and raising money on the Stock Exchange, Scholar took over two clothing and sportswear companies, including Hummel, fondly remembered for providing Alan Ball’s revolutionary white boots. The ground was empty save for one or two days a month, so use it for alternatives at no extra fixed cost. The space under the Park Lane became a factory. The income was to be ploughed back into the club, a secure stream unaffected by the uncertainties of league position.
Scholar shrewdly assessed the zeitgeist. Leaving aside the rights and wrongs (not easy for me to do but anyway..), we were in the midst of Thatcher’s property-owning democracy where the public could buy pieces of the de-nationalised industries, make some easy money and feel part of things. To borrow from contemporary politics, we were all in this together, except that times were good.
On top of that, Spurs fans were offered the unique chance to be a part of the club. Long excluded, unlike like any other fans we could now have our say and influence the future. It proved popular. I don’t have any statistics to back this up but I reckon the number one Christmas present for Spurs fans that year was a share certificate. There’s no doubt that the share offer caught the prevailing mood.
I was given a hundred shares by my then girlfriend. It was worth about £160 but to me it was a priceless token, sealing my attachment to her and to the club. These were the only shares I have ever owned and I kept an eye on their progress, all the while thinking that like the family heirloom on the Antiques Roadshow, I will be delighted to be told it’s worth a fortune but I would never sell. Many fans of different clubs have their certificate framed on display, proving it means something.
At one point they were valued at over £500 but soon they plummeted, as did the relationship. By the time I was kicked out and the shares sold to get rid of a painful reminder of happier days, they raised less than £100. Spurs’ romance with the new ways faded just as brutally. We sold our finest players Waddle and Gascoigne to stave off financial ruin and the businesses failed. Maxwell was a telephone call away from taking over the club so perhaps we should be grateful for Alan Sugar sorting out the mess Scholar left behind. Actually, perhaps not, but again, that’s a story for another time.
It was then that the true nature of the new era became clear. Thatcher’s meritocracy was nothing of the sort. Power and wealth became concentrated in the hands of the few and the gap between rich and poor widened. As with society, so it was with football. The advent of the Premiership and the Champions League meant that the top clubs and Sky TV held sway. Rocketing admission prices transformed the fan experience with many alienated for good, never to come back, and others priced out of the game they loved. Kick-off times were at the whim of television. PLC not F.C. Far from being part of things, football fans had never been more helpless.
Now we’re all experts on football finance. We have to be because it’s all over the back pages and otherwise we can’t keep up with events at our clubs. Never mind 4-4-2 or 4-3-3, it’s the income to salaries gearing that holds the key to success. False 9 or false accounts? Ask some of the clubs that have gone down the tube. Despite the sterling efforts of fans’ organisations and protest groups, the legacy of football shareholding is that many of us feel more distant from the game, our game, than at any point in living memory.
I’m still in play, mind, thanks to the gift a few years ago from my daughter of a single Spurs share. It came in a fancy tin box (safety deposit, just in case?) with some blurb about the club. Now that’s a juicy business to be in – buy the share for next to nothing, add cheap packaging and charge £19.99. Football fans are nothing if not loyal and gullible.
So what to do about the de-listing? I don’t know where the certificate is but I recently found my last dividend cheque, £0.04, proudly un-cashed. The PLC tell me my share is worth 33p and I have until 11th January to decide. I could sell, and use the results of my foray into the murky world of high finance to buy, say, a 6th of a cup of instant tea or coffee on matchday, or two gulps of water. I expect that I won’t be bothered, however, and will keep it as a souvenir of the days when the club couldn’t be bothered about me either.
8 thoughts on “End Of An Era”
Not being as much as a financial whizz as I used to be, I don’t understand how it is “easier” to raise funds as a secret private business than it is as a PLC with open accounts that show the business…
Can only be the next step to selling IMHO.
I think (and I’m no expert either), that as it’s to be a private company, it won’t require any notification to the London Stock Exchange before transactions take place. Currently the LSE have to be informed of anything (including transfers) financially related and need to give it’s assent before the said deal can do through (transparency in modern terms). As for selling, you could be right, however, when offered the chance to sell to Abramovic ENIC declined to even meet him, let alone sell, but in any event we as a club have certainly benefited from ENIC’s involvement and are on the precipice of becoming a great club despite our current financial limitations. Clubs such as Everton, Newcastle and Aston Villa all must look at Spurs and ask how did they do it?
The fact that I don’t know the answer either is obvious from the article! I can only assume that Spurs intend to borrow and that lenders will lend on the basis of the return they will get and Spurs’ security, neither of which depends on their being a public company.
In fact, I’d imagine Levy has the finance lined up already, knowing him.
Strange indeed. Might it be easier then to sell the club to any wealthy middle eastern parties? With regards to the future you could always have a manager share with us when Harry is away on his holiday 😉
The feeling is that the owners of the club, ENIC, have a long term plan to sell and extract a huge profit compared with their original investment. Under this scenario, building the stadium without an undue burden of debt means the club is an attractive prospect – more seats equals more income in the long term. Add the CL and we look very good in the proverbial shop window.
And thanks for the offer but HR is a very, very nice man and upright taxpayer who would not dream of putting anything in his foreign tax-free account other than the fruits of his honest toil. So we’ll be fine.
I bought my brother a share in Tottenham for Christmas. At least now I can stop stressing about how I’m ever going to top such a fantastic gift I suppose…
I much prefer the idea of allowing fans to be shareholders than being a private company, although I’m no financial expert so I could be a fool for feeling like this. I guess I just have to trust that Levy and the powers that be know what they’re doing with regards to the best interests of the club…
I don’t understand the idea that, after the Olympic Stadium saga, ENIC want to decrease the scrutiny they are subjected to. Did the shareholders opposed to the move have any more impact than non-shareholding supporters who opposed the move? Interesting article Alan, I am of the view this is all leading up to a sale as well.
Thanks. I think ENIC are in it for a while yet but like any good business are keeping their options open for as long as possible.