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By Tony Attwood
Intro and background…
In May this year newspapers reported that Mr H Redknapp was to face new charges of tax evasion along with former Portsmouth directors Milan Mandaric and Peter Storrie. The charges are to be tax evasion.
At the time of that May hearing Mr Mandaric, along with Tiny Tott manager Henry Redknapp, already faced two counts of cheating the public revenue. Mr Storrie was already charged over tax evasion in relation to another point of detail.
All three men are booked for a possible trial next spring. Mandaric and Henry Redknapp are also charged with evading tax and National Insurance contributions due between April 1, 2002 and November 28, 2007. That’s another trial then.
(I am saying Henry because the accused was listed as Henry Redknapp in the court documents, leading to a chant by several leading barristers of “Are you Appy Arry in disguise?”)
And now the new news
The very tiny totts always make a profit. No one knows how but they do. Or they did, until the Arry Effect popped up, and they made a rather careless £6.6m loss after tax for the year ending 30 June 2010. It is the price you pay for fourth.
Turnover was up to an all time record of £119.8m (about a third of that achieved by Arsenal).
So where did it all go wrong?
The answer is of course Henry. He buys players. Lots of them. Not for him the nurturing of the existing playing staff. Not for him the reserve league (Tottenham are not in it). It is buy buy buy buy buy, and then bye-bye profits. Sébastien Bassong, Peter Crouch and Younes Kaboul. Profits before player trading were £22.7m. Buy them guys, and woops, down it goes.
Of course the tinies are in the Champions League and that will help in this financial year, were it not for the fact that the tinies still have Henry, and he is still buying players. William Gallas, Stipe Pletikosa, Sandro and Rafael van der Vaart cost around £20m, and then there’s that pesky business of salary.
Just imagine (difficult though it is) if the Tiny Totts don’t get into Europe next year. All those expensive players suddenly worth less and less. And no Champs League dosh. Ooops again.
The strange smell that emanates from that end of Seven Sisters has had its effect too. Corporate hospitality income went down in the last accounts to £25.8m from £27.4m, and money from ticket sales went down as well. Strange because they also say that all 19 EPL matches were sold out to the capacity of 36,310 in the dear old ground. Bless!
Here’s a good comment…
“European and cup competitions remain an important part of our progression, particularly as we head off on a Champions League adventure which will test players and staff alike.” That was the Tiny Finance Director Matthew Collett. Who also said, “Our successful approach to nurturing both homegrown talent and acquisitions through the transfer market will help the team to secure future success on the pitch.”
But you see there is a problem. The Tiny Totts always made money by buying players, writing down the valuation, and then selling them on for a bit more. They buy in Hardly Anyone for say £20m, and write down his value so that two years later he is worth £10m. Universal Gibberish FC then buy Hardly Anyone for £11m, and Tottenham declare a £1m profit.
But with Arry-Trade (the new approach to Life in the Dead Lane) you buy all-nonsense players and then when you come to flog them they are not worth so much, so you make a loss.
Oooops, woops, and what a bugger!
And meanwhile…
So what is a decent football club to do these days as it gets harder to make an honest buck?
Get taken over by a chicken and egg producer, that’s what. Just as is happening to Blackburn. The proposed new owners of Blackburn Hatcheries as the new club will be known is willing to splash £25m in order to raise the profile of the chicken and egg corporation based in India. Apparently the name of Blackburn is big in south east Asia.
For me, if ever there was an honourable benefactor in football it was Mr Walker the man who made the modern club. He came from Blackburn, built a proper business, sold it, and then spent lots of his cash improving the Blackburn and once even winning the EPL. He also trotted off to Jersey to live tax free – something that doesn’t quite fit with my concept of honour but certainly not something illegal. My point is that this was his home club, he supported it, and he gave them money. Why not?
Blackburn is now owned by a trust fund in Jersey who have been trying to flog the thing for years. Quite a bit of those wonderful new stands Mr Walker built are almost permanently closed, and the trust doesn’t like giving the club money for transfers. Which is perhaps why the chicken and egg men will fit in. They don’t expect to be giving money for transfers either.
And that is the problem with benefactors – the pass away. In accordance with the essence of the wishes of Mr Walker, the Trust Fund in Jersey wrote off all its loans to the club (about £100m) in 2007, and put the club up for sale. But no one wanted to buy.
In the last three years the Trust has also put in a loan (a loan mark you) of £5m just to keep it afloat – while doing everything they can to sell the club.
So could it be that when you are next in India or south east Asia everyone will be in the colours of Blackburn Chicken and Egg?
I am not sure – not least because of this quote from Anuradha Desai who is in charge of all those chickens – and Blackburn soon. “We won’t need to buy expensive players,” Desai said. “We can always lease them.”
Errrrr?
Yes, I have just checked. That quote was in the Guardian. “We can always lease them.” Great idea.
Here’s another thing.
We know that Manchester IOU is big in Asia. The biggest perhaps. Year on year they get £6m from overseas rights. So how much will the chickens get? 60p? Maybe.
Conclusion
I leave you with this thought. What is more amusing: Henry Redknappppp laying low the Tinies finances or Anuradha Desai saying “We won’t need to buy expensive players, we can always lease them.”
Tough one.
Life, the Universe, and Arsenal’s past as described in Making the Arsenal It’s not like anything you have read before. A Christmas present beyond anything imaginable. Buy it direct and I will sign it.
It is time to stop clubs using administration law as a way of funding their gambling
Careful now …the Totts might just go on & win the Champions League..stranger things have happened.
Some time ago Arsene Wenger commented on the fact that most if not all of the clubs who are very publically looking for new stadia are actually talking themselves up in order to be sold.
The implication being that as soon as planning permission is granted the current owners will be off like a shot, pocketing anything they can get their hands on and leaving the new owners with the task of raising the cash to build the new stadium and taking the risk that revenues will meet the cost of those loans.
If Spurs can’t make a profit now (and certainly not without selling players) how are they going to find the money to pay ‘Champions League level’ wages in the years to come?
And as for that stuff about developing their own players! I can think of only three players in the last 40 years (Hoddle, Campbell and King) that have genuinely come up through the ranks at Tottenham and who have played at the highest level. They are going to have to be a very differently run club to achieve their goals in the next decade and I just can’t see that happening.
And while we’re on the subject of debt – I had no idea that Bolton were in quite the mess that they are.
You just have to look at the Arry efect track record
Southampton Administration
Portsmouth Administration
Tiny tots Administration 2012
Tony
Our matchday income went down in 2010, due to fewer home games in cups. Did you check out the Spurs cup position the past two seasons? Basic due diligence……bless…………
So Spurs spent £30m to get into the Champions League. They’ll get £20m+ back this year in increased gates, ECL media money and presumably extra corporates. Go look at Arsenal 2002 and 2003. Made whacking loss winning the League, didn’t we? Let he who not once made a loss in the Club’s history cast the first aspersion………we made a humungeous profit in 2004, didn’t we?
I understand there were dodgy rumours about our erstwhile CEO before he was fired. Would you like to comment on that? Also on unfounded allegations that Henry threw the Champions League final. I thought they were bollocks meself………but no doubt Mr Henry Redknapp owes HMRC >£1m. Any statement in the court docket the nature of the discrepancies……….?
Rhys, the word “Bless” in any article I write means I have no idea what I am talking about and just made it up.
Except for the fact that IF Tottenham fail to enter the Champs League next season, then they will do so with a heavily increased wage bill and carried forward debt on the purchases – because what we see in the current losses only gives us the purchase cost and bit of the wage bill of the new players brought in to deliver the Champions League.
The sub-plot is that they are putting so much into surviving in Europe that the league form slips.
I’m with Tony. Spurs aren’t in a bad situation at the moment, but they could be. They’ve built up a squad for the Champions League, with the wage bill to match but are unlikely to get those revenue streams next season.
Their core business is sound, as shown by the good operating profit figures. But if they don’t restrain wages in line with Europa League revenues they are going to struggle to maintain operating profits.
The “lease” quote brought me quite some comic relief!
This is the very reason that the Champions League is not the golden chalice that many commentators make it out to be. You have to spend a lot to get there, and by the time you are there the increased revenue you earn just covers the expenditures you had to make to get there. But then comes the increased salary demands of players who suddenly can say they are among Europe’s “elite” and your wage bill whacks up again (see Modric, L. and soon Bale G.) and you are suddenly still just trying to break even even with that increased revenue. Then you are in that precarious situation where Champions League qualification just pays the existing bills and without it you are stuffed (see Liverpool Red Sox). The only way out of the death spiral is to build yourself a new stadium that dramatically increases revenue. The problem with that is funding and the risk that results could suffer while you build the stadium, leading to reduced revenue and increased debt while all the money the club has is being used to build a stadium.
We should never underestimate how much of an achievement it was for Arsenal to retain Champions League Football from 2005-09. It is disengenuous to say “we havent won anything for 5 years”. In fact we won the Championship in 2006, 2007, 2008, and 2009. We won “our” Championship, the only one that mattered, retention of Champions League football while on a dramatically reduced wage bill and without big money to spend on transfers.
History may eventually show that the years from 2005-09 were in fact the most successful years in Arsenal Football Club’s history.
Well said Paul C. I’d like to see someone else repeat that feat with a bunch of youngsters.
I am from India and i know women in India don’t know anything about football… so Blackburn will be relegated… If Anuradha tries to ‘LEASE” players… it would be good because i hate the Sam character… and as far as the tiny totts are concerned… lets hope for the best, i.e. they get relegated sooner or later
By the way, anyone who hasnt seen it yet go to arsenal.com, look up JET in player profiles and they have a free video of his recent gaol in the reserves against Everton. Well worth a look, brilliant piece of skill.
The kid is too good for reserve football. But his fitness levels are nowhere near 1st team levels yet. He needs to get himself in far better shape and then his talent will be unstoppable.
Brilliant comment Paul C.
These past few years have seen Arsenal take some giant steps forward, all the while maintaining their place at the very top of the football food chain. It’s a phenomenal achievement, yet the club is deemed a failure for its “X years without a trophy” by ignorant pundits and fans suffering from debilitating trophy-blindness.
But this period will soon be seen as the making of the club, the time where Wenger transformed Arsenal from a big club to a GIANT club.
The danger for Spurs will be when they don’t qualify for CL next season. Then they will have to gamble even more than they did now: spend more money and hope they can win their place back or sell more players to lower the wages.
Brilliant stuff Mr Untold. I love your blogs. They cheer up the dark days of home defeats to minnows (well, you know what I mean) and prejudiced pundits. Now please can you arrange for us to beat Chelsea, ManIOU [great nickname] and – of course the Tiny Totts.
Is it just me or is no one else excited about the prospects of the tiny’s moving out of N. London? Seems from this week’s news their plans to upgrade WHL has become cost prohibitive (cost of trying to keep up with the Arse I suppose) and now they are competing with the Porn Merchants for the Olympic Stadium… I don’t know what would be better: chase them out of town or watch them fall on their own sword trying to keep up with us…Any comments?
Paul C,
saw the JET goal and amazing piece of skill that had it been Rooney or Messi the press would still be creaming themselves
The managers I’ve noticed have prudency to run a football club properly in terms of success, financial and development in England are Arsene Wenger, David Moyes and Tony Pulis(If only he wasnt such a c**t)… Hoping Gerard Houliuer will join this list soon in the future… Now everyone will soon understand the importance of financial aspect of club management… Liverpool was saved by an unknown businessman whom I will always sceptic with… Man IOU is still down the black hole… Ancelotti is always a puppet… Now, mid-table clubs (that includes Tiny Totts) are feeling it… Is this the moment of cold, hard truth…? WILL THE CLUBS SURVIVE WITH JUST THE EPL CASH…? What do you think, Tony…? Hoping to learn from you on this…
Guys, this might not be related to the article, but I cant help it and its the right time…
Untold slipped at the blog list, but out of sudden WhoAteAllPies is on top… You wanna know what type of shit articles they have…?
Read this: http://www.whoateallthepies.tv/arsenal/44171/arsene-wenger-is-no-alchemist.html
And for nostalgic sake, this: http://www.whoateallthepies.tv/la_liga/53611/the-fateful-life-of-jose-antonio-reyes.html
Both these articles brought the best and worse emotions in me…
GoonerTerry – as far as Spurs’ future goes Arsenal are in a no-lose situation.
If Spurs move to Stratford they become the ‘nomads’ that they accuse us of being and they officially stop being a North London Club. They will play in a very hostile environment – it’s very West Ham down that way and they hate Spurs more than we do. If there is any desire to support ‘my local team’ in the years to come the whole of North London will be Arsenal territory.
If they stay and develop WHL they will be in redeveoplment chaos for several years and will be saddled with a debt to pay off for the next 25 years with no guarantee that the crowds will turn up and pay top dollar to help them do it.
If they stay at WHL and leave things as they are they will continue in Arsenals financial shadow. The days of hoping for someone to come along and ‘do a Chelsea’ are now over; UEFA have made sure of that.
I reckon the most likely outcome will be that Spurs and West Ham ground share at Stratford. It will be hated by both sets of supporters but it’s the only deal that maximises financial sense. And in the end it’s all about money.