Levy vs The Unknown, a further delve into Tottenham
Over the last nine years Tottenham have made £267 million from player sales which has aided the sound financial performance of the club. Has that weakened the playing side of the club, well yes and no, it's gone up and down.
You can find the first part of this article here: The future is bright, the future is Levy
Selling players is a fact of life in football, Berbatov and Bale for instance went on strike to force moves through, Modric went through the motions and then gave us an extra year. Players move, it's a fact of life, why play for Spurs when you can earn four times as much playing for Real Madrid?
It's only natural that a quality player will be interested in a move to a bigger club. Vlad Chiriches said when he joined us, or his agent did (can't remember which) that Tottenham was basically a stepping stone to Chelsea. That didn't work out but it shows players see us for what we are an in between club.
Until we increase our income that will remain the same, you can understand that or moan about it, whichever, it won't change. We have to wait for the stadium for the next growth spurt.
Our player sales profit of £104 million was the highest in the Premier League in 2013/14. Chelsea recorded £65 million and Everton £28 million.
The downside of the player trading coin is player depreciation. This transfer fee of purchased players is is written-off evenly over the length of the player’s contract and the annual cost of expensing this is depreciation. I used Roberto Soldado for an example in an earlier article so sticking with him, he was bought on a four-year contract for £26 million, thus the annual depreciation is £6.5 million.
This rose around £15 million to £40 million in 2013/14 as the playing squad was invested in, as we know now, badly. Add to this the £10 million cost for impairment and the figure climbs to £50 million.
*An Impairment cost must be included under expenses when the book value of a non-current asset exceeds the recoverable amount. Impairment of assets is the diminishing in quality, strength amount, or value of an asset. A player is an asset, a reduction in his value is impairment of an asset.
Forgetting player sales for a moment Tottenham are still profitable from our core business. This rose from £19 million in 2012/13 to £39 million in 2013/14. Compare this to our top four rivals though, Manchester United £130 million, Manchester City £75 million, Arsenal £62 million, Liverpool £53 million and Chelsea £51 million.
These clubs have much higher wage bills meaning they have to have greater income to sustain higher wage bills. The fact that they are all making more money from their business means Tottenham can only compete by raising money from player sales.
If we didn't then we wouldn't be able to afford the wages we are currently paying, thus we would fall back into the pack financially and the gap between ourselves and the top four would only grow. Thus we have to look to acquire players that we feel will increase in value, the more players we acquire who do not increase in value affects our ability to continue to pay wages better than all but the top five income generators in the Premier League, Manchester United, Chelsea, Manchester City, Arsenal and Liverpool.
And who wins all the trophies, yes, those with higher wage bills and greater income than us. Can the anti Levy brigade tell us how they propose paying the wahes we won't be able to afford without selling players and without building the club on a sound financial footing to be able to raise funds to build a new stadium. We have already established in a previous article that we can not rely on the guarantee of Champions League football because there is none, ask Leeds United.
Our revenue rose 22% from £147.4 million to £180.5 million, thanks almost entirely due to the Premier League TV deal income. Broadcasting revenue rose by 52% from £62.3 million to £94.8 million. Match day revenue also rose by 9% from £40.2 million to £43.9 million, however commercial income fell 7% from £44.9 million to £41.8 million.
To be where we are, above the pack but below the big boys we have to rely on TV money and player sales and that means producing better players than the rest of the Premier League below us, we have to be selling players for the best price we can get, not to just get rid of them. We need to develop Premier League players, keeping those that operate best within our system and selling the rest.
Fans complain about player sales but we are only able to sustain a position where we can at least challenge for the top four each season because we sell players. Selling players is not the problem, replacing them is, it's safe to say we haven't perfected that yet.
Our revenue has grown from £115 million in 2008 to £181 million in 2013/14, an increase of £66 million, 83% of that, £55 million, is the result of increased TV money. Commercial income has risen by £8 million to £42 million and match day income by £4 million to £44 million. Raising commercial and match gay income is essential, reducing all income by not being in Europe simply makes matters worse for us, not better.
You can find the first part of this article here: The future is bright, the future is Levy
Selling players is a fact of life in football, Berbatov and Bale for instance went on strike to force moves through, Modric went through the motions and then gave us an extra year. Players move, it's a fact of life, why play for Spurs when you can earn four times as much playing for Real Madrid?
It's only natural that a quality player will be interested in a move to a bigger club. Vlad Chiriches said when he joined us, or his agent did (can't remember which) that Tottenham was basically a stepping stone to Chelsea. That didn't work out but it shows players see us for what we are an in between club.
Until we increase our income that will remain the same, you can understand that or moan about it, whichever, it won't change. We have to wait for the stadium for the next growth spurt.
Our player sales profit of £104 million was the highest in the Premier League in 2013/14. Chelsea recorded £65 million and Everton £28 million.
The downside of the player trading coin is player depreciation. This transfer fee of purchased players is is written-off evenly over the length of the player’s contract and the annual cost of expensing this is depreciation. I used Roberto Soldado for an example in an earlier article so sticking with him, he was bought on a four-year contract for £26 million, thus the annual depreciation is £6.5 million.
This rose around £15 million to £40 million in 2013/14 as the playing squad was invested in, as we know now, badly. Add to this the £10 million cost for impairment and the figure climbs to £50 million.
*An Impairment cost must be included under expenses when the book value of a non-current asset exceeds the recoverable amount. Impairment of assets is the diminishing in quality, strength amount, or value of an asset. A player is an asset, a reduction in his value is impairment of an asset.
These clubs have much higher wage bills meaning they have to have greater income to sustain higher wage bills. The fact that they are all making more money from their business means Tottenham can only compete by raising money from player sales.
If we didn't then we wouldn't be able to afford the wages we are currently paying, thus we would fall back into the pack financially and the gap between ourselves and the top four would only grow. Thus we have to look to acquire players that we feel will increase in value, the more players we acquire who do not increase in value affects our ability to continue to pay wages better than all but the top five income generators in the Premier League, Manchester United, Chelsea, Manchester City, Arsenal and Liverpool.
And who wins all the trophies, yes, those with higher wage bills and greater income than us. Can the anti Levy brigade tell us how they propose paying the wahes we won't be able to afford without selling players and without building the club on a sound financial footing to be able to raise funds to build a new stadium. We have already established in a previous article that we can not rely on the guarantee of Champions League football because there is none, ask Leeds United.
Our revenue rose 22% from £147.4 million to £180.5 million, thanks almost entirely due to the Premier League TV deal income. Broadcasting revenue rose by 52% from £62.3 million to £94.8 million. Match day revenue also rose by 9% from £40.2 million to £43.9 million, however commercial income fell 7% from £44.9 million to £41.8 million.
To be where we are, above the pack but below the big boys we have to rely on TV money and player sales and that means producing better players than the rest of the Premier League below us, we have to be selling players for the best price we can get, not to just get rid of them. We need to develop Premier League players, keeping those that operate best within our system and selling the rest.
Fans complain about player sales but we are only able to sustain a position where we can at least challenge for the top four each season because we sell players. Selling players is not the problem, replacing them is, it's safe to say we haven't perfected that yet.
Our Champions League exploits raised £37 million in prize money and gate receipts. We tried in the summer of 2013 to buy a team to achieve it again, three proven quality players (Lamela, Soldado, Paulinho) with what we hoped was burgeoning talent (Capoue, Chiriches, Chadli, Eriksen). It didn't work so we returned to the successful model we had before that got us Champions League football in the first place.
Fans were crying out for investment in a quality striker, as if that was a guarantee of success, we bought one virtually all were happy with, he failed. Spurs can't just afford to say never mind, give that one away and spend big on another. That is a recipe for disaster, it is not a sustainable business model, without which we won't have the consistent success we seek.
Of course everyone is enjoying greater TV money and with the top clubs growing their commercial income as well, we can not stand still. As mentioned our revenue grew by £33 million in 2013/14, however Manchester City grew £76 million, Manchester United £70 million, Chelsea £60 million, Arsenal £55 million and Liverpool £50 million.
Even growing and being in a better position than the rest we are falling further behind the top clubs and thus can not compete for the top players financially. Why join Spurs on £70,000-a-week when Arsenal or Liverpool will pay you £140,000-a-week or Chelsea, Man Utd, Man City will pay you £250,000-a-week?
1. Manchester United £433 million
2. Manchester City £347 million
3. Chelsea £320 million
4. Arsenal £299 million
5. Liverpool £256 million
6. Tottenham Hotspur revenue £181 million
7. Newcastle United £130 million
8. Everton £121 million
We may be the 6th richest club in the Premier League but we are the poor relations and have to cut our cloth accordingly. Changing the huge financial disparity is the only method to success so I ask the anti Levy brigade who is best to do that, Levy or the unknown.
A new owner does not guarantee success but increasing our income gives us a chance. Remember the statistics, 44 of 49 trophies won by clubs with greater income than us. Just 4 won in total by the other 14 clubs with less income than us in the Premier League at any time.
Money is everything in football today.
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