Tottenham Hotspur owner charged
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By Tony Attwood
Of course, if we were just making little anti-Tottenham comments as, I would admit, many Arsenal fans might slip into occasionally, (just as Tottenham fans might make comments about Arsenal – and indeed as a number of Manchester United fans made about Arsenal after we published Shocking revelations about Manchester United fouling against Arsenal in “friendly”) then really there wouldn’t be much of a story here.
But the Guardian’s headline that Tottenham Hotspur owner Joe Lewis has been charged with ‘brazen’ insider trading suggests there is more than that, and actually it is a bit of a whopper. Not just because what Mr Lewis has been charged with is an extremely serious crime, but because it raises the question, if he is found guilty, of whether a person with that sort of record a fit and proper person to own a Premier League club?
Now of course there is a big IF in there. Mr Lewis is charged. That doesn’t mean he is guilty, but of course in football much of the time there is speculation, and indeed 99% of football reporting is speculation.
But there are some facts, and Mr Lewis has been charged. Indeed according to the U.S. Securities and Exchange Commission “a conviction for insider trading [in the USA] can result in: fines of up to $5 million. Imprisonment of up to 20 years. Being banned from serving as an officer or director of a public company.”
In this case, the owner of the majority of Tottenham Hotspur shares “allegedly gave friends, employees and romantic partners information on companies in which he was investor.” He was charged with “orchestrating “brazen” insider trading by US federal prosecutors on Tuesday,” according to the Guardian. The case was brought in New York and involves “a 19-count indictment with 16 counts of securities fraud and three counts of conspiracy.”
Damian Williams the attorney for southern New York stated that, “We allege that for years Joe Lewis abused his access to corporate boardrooms and repeatedly provided inside information to his romantic partners, his personal assistants, his private pilots and his friends. Those folks then traded on that inside information and made millions of dollars in the stock market.”
He continued that the state further alleges that Lewis did this “to compensate his employees or shower gifts on his friends and lovers.” In the allegations it is stated that Mr Lewis even went so far as to lend money to some of the people involved so they could buy the shares that Mr Lewis knew would increase in value. Unfortunately one of the people he lent money to then texted a friend about it all, so the story got out.
So what might this mean for Tottenham Hotspur? As far as I know, and of course I am sure I will corrected if this is wrong (and I do admit from the start I am not an authority on the legal implications of the ownership of football clubs, and here I am only working from what is being said in other publications), Tottenham Hotspur is owned by English National Investment Company plc often known as ENIC.
On its website ENIC states “UK ENIC is a leading information service provider offering impartial, trusted judgement on international qualifications,” and if Mr Lewis were to be found guilty of the crimes he is now charged with, that would be something of an embarrassment since Mr Lewis owns ENIC. Certainly, even if he were to be found innocent, the charges against Mr Lewis are so incredibly serious in the financial world that they would be an embarrassment not least because there are so many of them.
Obviously, other clubs have had owners who are caught out doing naughty and illegal things, and the clubs have survived, but with Tottenham there is a particular problem, in that it is so much in debt.
The website Game of the People has an interesting analysis of Tottenham’s position and notes that Tottenham “generated an impressive £ 444 million in revenues for 2021-22”, the last for which figures are available. But despite this Tottenham made a pre-tax loss, £61.3 million.
The problem Tottenham have is that they not only have to pay the costs of building their new ground, but their depreciation expenses total £72 million, far higher than any other club in the Premier League.”
One other problem that might come along, is that in its article published five months ago, Game of the People considers the naming rights of the stadium saying, “Apparently, negotiations are in progress for a deal that could raise in excess of £ 200 million.”
Now naming rights of course involve being closely associated with the club, its “brand” and its ownership, and with Tottenham’s owner now charged with “classic corporate corruption” by the New York attorney, that brand is a little tarnished and it may not be a brand that a ground sponsor wants to spend £200m or more on. At least not until Mr Lewis is found innocent in court – if he is found innocent that is.
Thus perhaps the biggest problem for Tottenham is that this case will now drag on for many months, and it will leave a certain level of uncertainty hanging over the club which could affect those naming rights, and indeed even trasfers. If there is any more news on this we will of course try to disentangle it (we are after all not lawyers and just reporting what is said elsewhere and trying to draw reasoned conclusions) and present it in what I hope might be an informative fashion.
We know of course that when Chelsea was hit with a similar crisis it led to a period in which Chelsea could not sell any further tickets for matches, although season ticket holders could still get in. Tottenham don’t have that sort of problem, unless they default on their debt by not being able to pay the interest, but in terms of trying to rebuild their brand, they might have some passing difficulty.
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