Just how rich is Tottenham Hotspur, really? Not very.

Daniel Levy

With the virus having suspended football, this seems like a good moment to finally sit down and look at exactly how “rich” Tottenham Hotspur is as a football club, and therefore think about the question of how much we can afford to spend.

The Swiss Ramble recently performed its annual analysis of Spurs’ finances, and it is an exercise I like and admire very much since it attempts to put into perspective the club’s performance and context amongst the elite. Yet it has a major limitation, which is that it focuses almost exclusively on “profitability”, as this excerpt shows:

Swiss Ramble

Source: Swiss Ramble twitter account

The problem, of course, is that profitability tells us very little about cash available, since the items on the P&L (including the profits after taxes) are mostly not real cash items. Instead they are filled with such concepts as depreciation and the gains recognized on the sale of players as assets. Essentially, these are accounting items. And I find it a dangerous way to look at a football club because it raises false expectations about how “rich” we are and therefore how much we should be able to pay for transfers.

I prefer to apply a financial perspective by looking at football clubs as one would any other business, through the company’s balance sheet and cashflow statements. The balance sheet gives us a sense of how indebted the company might be. But more importantly I like to look at the cashflow statement for a few reasons:

  1. Real cash items – the cashflow statement gets rid of non-cash items such as depreciation and replaces it with real cash such as capex
  2. Transfers – it more accurately captures the actual money going in and out on transfers including all hidden costs as well as payments spread over time – a £60m fee paid over three years should be seen as such and not lumped into one number
  3. Stadium investment – it captures all hidden costs but also allows for financing raised against the project, ending the “the stadium pays for itself” speculation.

Helpfully most financial accounts break down transfer spending in quite some detail, which in turn allows for me to get to my core concept: the pre-transfer free cashflow (“PTFCF”). For this I take the net cash inflow / outflow, and add back transfer spending which I assume to be discretionary. This brings us to a calculation which tells us how much “spare” money we would have available to spend in a given year, if we had wanted to.

Taking the June 2019 figures, this metric then allows us to judge – somewhat – our performance in the transfer window.

Pre-Transfer Free Cashflow by club for year ended June 2019 (£m)

PTFCF 2019

We can see from this analysis that Tottenham came a fair way off Man Utd, Chelsea and Liverpool (and one assumes Man City, who do not publish a cashflow statement or give any notes to their Intangible Fixed Asset investments). Arsenal were the big losers of last year given their Europa League participation, and Chelsea show themselves as doing well despite not qualifying for the Champions’ League. To be clear, generating a negative cashflow (just like generating a loss) does not mean you have no money to spend; only that you must do so unsustainably out of your “savings”, which will show up on the net debt (which we will get to).

If we look at the year prior, this becomes even more stark, and highlights the fact that Tottenham, contrary to some assertions, was under real financial pressure during the stadium building process starting in 2017.

Pre-Transfer Free Cashflow by club for year ended June 2018 vs net transfer investment for the following year (£m)

PTFCF 2018

Note: Since transfer spending runs July-June and mostly occurs during the summer transfer window, a June 2018 year ending is best contrasted with the June 2019 transfer spending.

At this point, Spurs were actually incurring a substantial negative PTFCF due to stadium costs, not least since much expenditure for large capital projects is paid up-front, for land acquisition and so on. Man Utd and Chelsea spent far more than they were generating – one might say generously, “investing for the future”; Liverpool were spending about as much as they might expect; and only Arsenal were spending significantly below their capacity, buoyed no doubt by the knowledge that they were not in the Champions’ League. Indeed Tottenham’s tiny net expenditure of ~£3m was quite flattering under the circumstances.

In fact, if we look at how Tottenham have performed on average against the rest of the Top Six (excluding Man City), we have had a tenuous few years.

Three-year rolling average Pre-Transfer Free Cashflow (£m)

PTFCF 2015-2019

On a rolling three-year average, the other clubs have managed a PTFCF of around £80m per year over the last five years, whereas Tottenham, having clawed our way into contention by 2016, have actually seen the gap widen again in the subsequent years. In other words, we really are not that well-off, are some way behind the other Big Six teams, and cannot spend the money on transfers that some fans seem to believe we now should. The stadium remains a massive gamble and has to succeed as a standalone business for us to begin making up the difference with the other clubs.

To cap things off, let us just look at the “savings”. A net debt position is typical of most companies and football clubs are no exception. Furthermore, the ratio of that debt to net assets or ‘shareholders’ funds” shows the relative indebtedness of a business.

Top Six clubs net debt (£m) and gearing for year ended June 2019

Gearing and net debt

On both measures, Tottenham are more precarious than our peers. Not only is net debt larger in absolute terms, carrying with it the funding for the stadium; but alone amongst the Big Six, our gearing is at more than 100%. No doubt much of the stadium borrowing is ring-fenced to a degree, and probably operates on a project finance basis; nonetheless the cost of the debt will weigh Spurs down through interest payments for some time – and the analysis gives a sense of how much better off Man Utd really are than us, for instance. Daniel Levy, who is no stranger to this situation, will clearly not be minded to let spending get out of hand.

Some of this will be well-known and obvious to observers. The reason I raise it is the danger of football fans demanding spending beyond what is possible – and Spurs have been particularly under the microscope for this. The Swiss Ramble’s analysis – whilst perfectly legitimate and technically correct – conveys a very misleading impression over our financial clout. Headlines about record revenues and profits on the P&L, lead to questions (from those who should know better) of “where has all that money gone?”. In the end, Spurs just are not yet that big a club, and whilst I am confident that we will reach our goals, it will still take some time before we can splash out.

 

**************************************

Browsing the internet after posting, I came across the University of Liverpool’s football finances website, which has recently just posted about Premier League club values for 2018-2019, which, whilst doing some equally interesting things,  has rather fallen rather into the same trap. Their proprietary “Markham Multivariate Model” is based on net profit adjusted for one-off items, but unadjusted for non-cash items. The formula is quite off-the-wall in other aspects too but I will let that lie for now.

Nonetheless it leads to what I think is just as unhelpful an output (below), saying:

Spurs overtook both Manchester clubs at the top of the table on the back of reaching the Champions League final, a fourth-place finish in the Premier League and a wage bill barely half that of Manchester United.

UoL club valuations

Even from the eyes of a purely financial investor, this cannot be true. Spurs’ true hidden value, if you want to see it this way, is the stadium value and its future earnings but as far as I can see this has not been captured by Markham. If you strip that out, however well managed our wage bill is, a DCF of Tottenham vs the other clubs would not come to this conclusion. My opinion: head in hands.

Pochettino, Rationalism and St John the Baptist

“There was a man sent from God, whose name was John. The same came for a witness, to bear witness of the Light, that all men through him might believe. He was not that Light, but was sent to bear witness of that Light. That was the true Light, which lighteth every man that cometh into the world.”

John 1:6-13

The news of Pochettino being “relieved of his duties” was one of those events which, while an enormous shock at the time, with every passing day become more and more comprehensible; such that having had a couple of weeks to digest, it now seems the most natural thing in the world. Then Mourinho arrived so quickly that, as the Taoist saying goes, “if you use a sharp enough knife, the cow does not even know it is dead”.

The reason that a certain section of the fans – the majority, I suspect – were so saddened at Poch’s departure was because of how much we had all bought into “the Project”. Almost five and a half years is a life time in football today, and for parts of that, it really did seem that he was the one who had come to lead us to the Promised Land: a new stature, a new stadium, and an end to the trophy drought. Yet it had been clear for a long time that Pochettino also had limitations – limitations which, frankly, may yet prevent him from really becoming a top class manager anywhere else, even if he were to have more resources.

First amongst them was that he never really displayed tactical nous, and was instead a system manager. He belonged, in his way, to a tradition which places the system above all else, a tradition which can be traced from Guardiola, Bielsa and Wenger, all the way through Poch down to the likes of Eddie Howe and Ralph Hasenhüttl. System managers – perhaps we can call them “Rationalists” – when they are right, are irrepressible: their teams play throughout the season as a single unbroken line, constantly possessing, attacking and scoring, not punctuated by the mere whistle of referees starting and ending matches. The end of one game and the beginning of the next is seamless. This is what makes them so resilient and machine-like – scoring against them does not really achieve anything more than insects hitting the windscreen of an onrushing car. When it works, individual moments of adversity make no impact on a team’s mentality or emotion.

Against these Rationalists are the Empiricists, the school of management which takes each match as it comes and deals with them one at a time, often with tailored tactics for specific parts of the pitch or even windows of time. In this tradition belongs Mourinho above all others, the man who makes double substitutions at half-time and who famously defeated Pep’s Barcelona in 2010 with ten men. But there are others: Ancelotti, Allegri and Conte for instance; Marco Silva and, I would guess, even Big Sam. Italy was always the home of tactical men such as Lippi and Trap, with little acceptance of outsider Rationalists such as Sacchi. With them, the moment and the match are everything: these teams win cup semi-finals and finals, derbies, and top-of-the-table clashes. By and large, a siege mentality is useful; but so, too, is the ability to discard players when needed. In a sense, it favours a little bit of the under-dog.

The problem for the Rationalists is that when trying to make the system work, there is a fine line. Success is magnified by compounded success; but loss is likewise exaggerated. There is no “middle”. For an Empiricist, your last game can prove you right; for the Rationalist, only success over a long period can justify the seemingly rigid adherence to the system. Poch did not make substitutions. He did not, until near the end, introduce formational changes. He remained loyal to players at all times. More than anything, he was not good at incorporating new players and needed the constancy of his core group, pressing them repeatedly to come up with the same goods, game after game, season after season.

And this would have been fine, if players had rotated. But the iron law is that either the players have to be freshened up … or the manager does. But there was a further dichotomy with Poch which was that he was so dogmatic that he struggled to bring in new players at all. I believe there is every truth to the claim that he rejected new signings during the summer of 2018, because he did not feel they would fit. Additionally, he did not have a great track record of new signings anyway after the departure of Paul Mitchell in 2016. His teams were always thrown by resets such as summer breaks and even normal international breaks – form was always randomised after such events like the dice in a game of Boggle. Yet at the same time he refused to introduce new talent, meaning the squad was tired out. It was intensity without any possibility to refresh.

Which brings us to what Pochettino should be seen as: not as the Saviour, but as St John the Baptist, crying out in the wilderness before the coming of the real thing. Poch understood that for a few seasons he had to ignore the noise of fans and media and demands for silverware, and just concentrate on stature. The rest would come. He was specifically the right man for bringing Tottenham out of being a probable-top-six club to a regular-top-four one – a role he may be destined to repeat, since if he were to join either Man Utd or Arsenal, they would rightly want this particular trick repeated. His five years at Spurs were a necessary time and place, and he leaves a platform ideal for the next step, whether that be under Mourinho or anyone else. He fit that stage of Levy’s development plan perfectly, and in retrospect, it was never likely to be anything more. Much like Bielsa, he may be destined to never achieve true greatness; and much like St John, he may not himself be the True Light, but rather be destined for undignified decapitation.

Pochettino

Nonetheless St John has his retinue of true followers and believers, and good luck to them. There are those who might want the Rationalist system despite the tactical rigidity and squad management. These are perhaps the purists, though they are destined to be as tangential as the Mandaeans. For myself, despite the initial shock, I am all for the man who may well turn out to be the True Light.

In nomine Domini, Amen

In defense of football managers

Mourinho Pochettino

Last night was one of those glorious Spurs nights which, under Pochettino’s reign, rank alongside last season’s win at Stamford Bridge in terms of “announcement”. Therefore I would love to dwell on it – but I will not. Instead I want to make a different point in support of Jose Mourinho, a manager I have not much liked over time but who I perceive to be somewhat victimized.

A lot is leveled against the Manchester United manager these days: bullying of his players, attention seeking, shortness with the media, finding excuses about the talent in his team and directing criticism onto the Board. Yet amongst all this analysis, I often find that there is a disjuncture between commentators and fans, with commentators – the typical “chattering classes” as it were – frequently focusing on the coach a lot more than supporters.

Take last night. I woke up to the news that Mourinho had walked over to the Stretford End stand in what appeared like a valedictory farewell with a few hardcore fans. This turned out to be fake news – as Gary Neville pointed out on Monday Night Football in listening to Mourinho’s post-match interview, one can tell he simply wanted to applaud some fans who had remained to the end. Of course, to media commentators, who have been aiming for Mourinho for some months now, it seemed obvious that the fans should be fed-up. After all, who else is there to blame, when the manager has spent more than £300 million net on transfers since his arrival? In their view, those in the stands must be onboard with the media agenda too, of laying the blame squarely at the feet of The Special One.

But football fans are much more likely to blame the players, who they sometimes see as not pulling their weight or trying hard enough to bleed for the team, and always see as overpaid; or direct their ire to the club ownership who they feel are not investing enough or only there for the profits. Yes, there are certain managers who get up the nose of their own support, such as the way Alan Pardew consistently did. Sometimes this is because of “playing style” such as during Sam Allardyce’s short-lived sojourn at Everton; other times there are much overt clashes such as Mick McCarthy’s fiery relationship with the terraces at Ipswich. But as witnessed with Arsenal fans for the last two seasons or with Moyes’ brief stint in charge of Man Utd, tolerance for managers is actually quite high. They are not paid as much as players usually, and are reckoned as having a bit of a tough job treading between preening athletes and cynical club executives.

So why this disjuncture? As usual, the blame lies in with the media being limited, insular and lazy. First, they rarely think outside the box – listening to Henry Winter, the much-lauded Times football correspondent (five times Football Journalist of the Year, no less) offering up his analysis was painful – “he has lost his touch” was the stumbling insight offered on Radio 5Live. Secondly, they are being played as part of a game they seem to have no idea about. These days few players and even fewer owners speak to the press freely. Post-match player interviews are generic and pointless, to the extent that even I have to laugh at the BBC’s Dead Ringers when the mimic my beloved Harry Kane. From an early age, professionals have been coached to say as little as the public announcements of a listed company. Meanwhile, getting words from clubs owners is rarer than seeing ketchup in canteen of a Premier League training facility – when David Sullivan gave an interview in 2017 on the back of poor results for West Ham, journalists did not seem to know what to make of it.

Managers, by contrast, are the only figures who are both obligated to speak to the outside world (Premier League post match press conferences are obligatory at the risk of fining), and often have something interesting to say. Therefore football commentators focus incessantly on the managers of clubs and to an extent allow managers to define club identities in a way that real fans do not see it. Media talking mainly about managers is nothing short of navel-gazing. For the outside observer, it is actually players who embody a club, and who have the agency to change a team’s fortunes. This may not actually be true in this age of advanced tactics and hyper preparation, but it is what is felt. Since journalists are lazy though, they rely on these moments of managerial interaction for almost every reading of the tea-leaves.

Consequently when the media, in their one-dimensional world, get the bit between their teeth about a manager, they are often surprised to see – and then usually ignore outright the fact – that fans do not follow suit. When Moyes was at his nadir, a banner flown from a plane was met with at best mixed reaction from fans, much to the media’s bemusement since they assumed all supporters must agree with them. Even Wenger for years had higher levels of support and trust from those in the ground than he did from outside, even until the bitter end.

Last night as the numbers at the Stretford End began to be revised upwards, it seems like maybe a couple of thousand Manchester United supporters stayed to the end to support and chant for Mourinho. The manager, in turn, recognized this. Supposedly, around the director’s box, a good sliding tackle from Spurs defender Toby Alderweireld in the first half caused fans around them to look up to Woodward and make the point that a lack of these signings were the cause of problems – in stark contrast to the coach. In the end, the planned (and once again inept) plane banner for next week is targeted at Woodward, not at Mourinho. When Mourinho failed in his second stint at Chelsea, the fans directed their anger at those perceived as not trying hard, such as Hazard, Diego Costa and Fabregas. The fans do not like prima donnas.

I would make the cheap and obvious political point here about how the chattering classes miss what people are really thinking and arrogantly assume that the view being disseminated are the ones which encapsulated public opinion. But with Tottenham having won a magnificent victory last night, no need for that at this point …

Why the Tottenham penalties were correct – and why Liverpool fans are whingers

Kane Klopp

Liverpool fans have always been rather an irritating lot. The combination of hubris and inconsistency, as well as constant bleating about “heritage” and history as though somehow this renders the modern success of rivals such as the Manchester clubs less worthy, lead to popular conceptions of this group as probably the fan base other fans most love to hate – “football supporters think you are either tiresome, cringeworthy or both.

So it has been particularly enjoyable not only to watch the draw that Spurs battled to in front of the Kop last weekend, but also the whingeing that poured through social media in its aftermath from fans, players and manager alike. Other than maybe Barcelona, few football supporters come at things from such a moral high horse and, as with Barcelona it is great to see them get their comeuppance once in a while. Come to think of it, maybe that’s why all their players end up moving there.

Therefore let us examine forensically the two controversial incidents from the match, through some of the most common refrained heard from excitable Liverpool fans in the few days since.

1. “Kane was offside the moment Dele passed the ball”

The implication of this is that the moment the ball left Dele’s foot, the referee should have blown for an offside against Tottenham. This is simply factually wrong and demonstrates a lack of understanding about the offside rule and even Klopp was guilty of this mischief in his post-match press conference where he said:

… there is a new rule, I don’t know exactly? I don’t know who played the pass but in the moment the ball left the foot of the Tottenham player, Harry Kane is offside.

It is true that Kane was in an offside position when the ball was passed, but this is not the same as actually being offside. For the latter to be the case, Kane actually has to play the ball – in other words, had the ball not come off a Liverpool player, Kane would only be offside at the point when he received the pass and played. There is absolutely no requirement of the referee to call an offside before this point and it would be wrong to do so – players are constantly in offside positions through the match, which is why the rule was clarified to only include situations where a player in an offside position is “interfering with play”, and why today players who are in an offside position but not anywhere near the ball are not called for offside.

Kane offside

(Incidentally Klopp should know better and actually gets away with murder in a lot of his post-match comments, but let’s leave that for another day.)

Case for Liverpool: 1/10

2. “Kane was interfering with play at the point when the pass was made”

This charge has slightly more legs, but only slightly. Clearly, Kane is in an offside position but the referee deemed him not interfering with play. These are the situations which come down to referee’s opinions and it seems questionable to assume that Lovren necessarily struck the ball because of an awareness of Kane being behind his shoulder. If you look at the replay, Lovren seems to be all over the place and there is more than enough space for the referee’s opinion to be that Lovren played the ball purely because that was his instinct, not because of any perceived goal-side threat. In such situations one assumes that a seasoned referee’s opinion and read is as good as anyone’s – certainly VAR would not have resolved this question one way or another.

Case for Liverpool: 4/10

3. “Lovren was not playing the ball on purpose”

 At this point we have to accept that after the pass commenced from Dele, it ended up being (mis)played by Lovren and quite possibly by another Liverpool player also, first. Therefore the question is whether Lovren played the ball on purpose as per the official rules on exemptions for offside, which state:

A player in an offside position receiving the ball from an opponent who deliberately plays the ball (except from a deliberate save by an opponent) is not considered to have gained an advantage.

First, let us be clear that the purpose of this wording is designed to make sure that this exemption does not apply to completely accidental deflections and rebounds, the kinds of things where a ball hits the back of someone’s head inadvertently and so on. It is not supposed to cause a nuanced consideration of how professional footballers at the top level play.

In this situation Lovren clearly went to strike the ball and, due to being a simply terrible footballer (as we saw at Wembley earlier in the season), mis-kicked it. It was not an inadvertent deflection, just a crap piece of play. As such, it takes quite contorted logic to try and make the case that the exemption does not apply. Yes, it does not fall under the initially intended rule designed to exempt offsides from back-passes, but yes it falls under the strict laws of the game – the ball did not continue towards the Liverpool goal due to an accident.

Leaving this to the Professional Game Match Officials Limited (PGMOL) in their official statement, it seems pretty clear:

The interpretation of “deliberately” kicking a ball considers whether a player has intentionally tried to kick a ball – it does not consider whether the ball ends up where a player may have wanted to kick it.

Case for Liverpool: 3/10

 4. “Kane dived for the penalty”

Now onto the meat and drink of the incidents. Subsequent to the event, Kane has both admitted that he drew the contact, whilst Karius – and this is quite important – admitted that contact was made. In these circumstances, under the current refereeing environment, any challenge which a goalkeeper makes where they fail to get the ball is a poor challenge. To be clear, any time where a goalkeeper comes for a ball and fails to do so properly, leaves them exposed by definition to having committed a bad challenge – the very definition of a foul.

As that well-known Tottenham fan Jamie Carragher said on Monday Night Football (focusing principally on a similar incident involving Delafeu and Courtois):

When goalkeepers come out like a train, like he has – like Karius has – I’ve got no sympathy whatsoever. If he’s complaining about it, don’t come out like a lunatic … It was a poor decision to come out; Karius’ was as well. If there is a problem with attackers leaving their legs in there, then goalkeepers need to do something different.

My mind harks back to last season’s FA Cup semi-final between Tottenham and Chelsea, when Son’s mistimed sliding tackle gave away a penalty in much the same situation. A goalkeeper who, in missing the ball when coming out for it, makes contact with an attacking player, has committed a foul as per the rules. End of.

Case for Liverpool: 2/10

5. “Jon Moss was not sure about the decision”

This charge is linked in part to the slightly bizarre moment when the referee appeared to ask the fourth official for extra information, then did not bother to pursue this line of enquiry. The BBC’s transcript of the conversation with the linesman did seem to indicate some confusion, but the PGMOL statement also seems to put this to rest, noting that the conversation over whether Lovren had touched the ball was misrepresented:

Eddie Smart, having identified that Kane was in an offside position, correctly sought clarification on whether Dejan Lovren had deliberately played the ball. His question created some momentary confusion when Eddie asked if ‘Lovren’ had touched the ball. Moss knew a Liverpool player had touched the ball but not that it was Lovren.

There was also some manufactured controversy over why Moss had asked the fourth official for anything when he was not entitled to do so since VAR was not in action, but this is quite a sideshow which Moss has in any case admitted was “misguided”. Importantly though, he followed through on his own original opinion, as he is supposed to do.

I hate to break the news to Liverpool fans but the vast majority of refereeing decisions in a match are matters of opinion. They are not only entitled to act on such opinions but are indeed paid to do so. It is perfectly obvious that in complicated situations, referees are not going to be 100% sure of what happened but their job is to go with their instinct and the point of a seasoned professional referee is that they get these things right most of the time – as they did in this case.

Case for Liverpool: does not even justify a response

6. “Lamela dived for the penalty”

More meat and drink. To be honest this incident has barely been even controversial amongst the commentariat and much of the initial reaction seemed to be due to poor camera angles about what had happened, possibly informed by lingering bias against “latin players” and their record in this. But a closer inspection, as was done on the BBC’s MOTD2, shows it was actually a pretty hefty kick up the backside by Van Dijk on Lamela, and as Mark Lawrenson (another well-known Tottenham fan) put it clearly there:

Don’t get me wrong, Erik Lamela does extremely well and he’s very very clever. He just gets himself into a position where as Van Dijk is going to kick the ball he kicks the back of his leg, and yes that’s a penalty. Is that not a foul anywhere else on the pitch? So it’s a pen.

The threshold Lawrenson describes is of course important: the rules a are specific in saying that there should be no higher or lower threshold for what constitutes a foul within the penalty box as outwith. Again, however clever Lamela has been in positioning, if Van Dijk had undertaken such a piece of contact on the half way line, it would have been given as a foul and a free kick. A poor challenge is a poor challenge anywhere. Not being intentional is not an excuse; nor is the fact that Lamela appeared to go down heavily (although again from certain angles the kick seems more substantial that it did at first anyway).

Frankly, if the first penalty had not caused so much furore it is doubtful that the second incident would really cause any controversy whatsoever. ESPN’s Ali Moreno was one of many commentators who felt it was bizarre that it was even being talked about; whilst on The Football Ramble’s Luke Moore noted that:

… if Liverpool fans want to complain about that, I suggest they complain as well in turn about the VAR penalty they were awarded when Salah hit the ground like a ton of bricks with minimal contact, and that was overturned and awarded as a penalty.

I am not fan of whataboutery, but glasshouses and stones comes to mind. The foul component of the kick on Lamela is pretty indisputable.

Case for Liverpool: 2/10

7. “Lamela was offside when Llorente played the ball”

Now we get to the least discussed point of the whole episode, but ironically the one with the most grounds for questioning. Looking at the evidence, Lamela is probably offside by the width of a human foot, so I will not argue otherwise. However in the overall scheme of things, this kind of decision is well within the typical margin of error in football matches at the highest level and the very fact that people have barely mentioned it speaks in part to an acceptance that small errors like this are not abnormal and typically even themselves out over the course of a season. If Liverpool fans really want to moan though, this is the part they have most grounds to.

Lamela offside

 Case for Liverpool: 5/10

******************

So much for the technical analysis. Now, far be it for me to let popular support influence how one views decisions, but it is worth looking at the professional commentators and punters, and their opinions of what went on. Clearly, the PGMOL has given its own opinion that Jon Moss was correct – although Liverpool fans have been heard to allege that “of course they will protect their own!”, cue much eye-rolling. But Dermott Gallagher, seasoned referee and watching in the Sky TV studios, said the same thing:

In the debrief after the game, they’ll be told that they made the big, match-changing decisions correct on the day.

I will be fair and note that Mark Clattenburg, another pundit through his column, disagreed. Let’s see what everyone else thinks – the “court of public opinion” as Harriet Harman would call it:

Picture1

Note: “LOTG” refers to the opinion that the decision was technically correct as per the laws of the game, but that the strict application of the laws in this case made a mockery of the spirit of the rules.

Overall, a case of all is fair in love and war …

The three things Tottenham really need

Battle of Stamford Bridge

Usually my football postings try at least nominally to make the link with economics. But with the transfer deadline approaching, I feel like offering up a more qualitative analysis of where Pochettino needs to improve the squad. These are not specifics, but rather some broad principles.

So what is it that Spurs need?

1. A first XV (not a first XI)

I find it staggering the number of commentators who still get caught up on the idea that it is difficult for us to recruit because we cannot improve much on our supposed “first team”. As I have written before, whatever the level of your club and corresponding objectives, there is a basic threshold for quality. In our case, as potential title challengers, that is of the very highest level. Once that level has been determined, any squad will need at least 15 or so players who are of the required standard. They must all be “first team” players, even though only 11 play on the day. This is so basic that I just do not understand why it is still discussed.

For Tottenham in their current tactical style, this means:

  • 2 strikers
  • 3-4 attacking midfielders
  • 3 central / defensive midfielders
  • 3-4 central defenders

Only the goalkeeper can be expected to be a single regular and an understudy. Full-backs and wing-backs (the latter becoming one of the most high profile and specialized role across Europe) are perhaps also forgiven due to their relatively specialist nature, though the Kyle Walker / Kieran Trippier combination was really the very least we needed in terms of quality.

Some flexibility helps alleviate this, for instance Eric Dier’s switching between midfield and defence. But if you add it all up, we are talking about a “first team” of between 14 – 16 players, ideally a few more. I would say that we currently have about 11, excluding Davies and Trippier but including Son and Lamela. That is not enough for a title challenge.

2. Game changers

In the two recent defeats against Chelsea, much was made of the strength of the respective squads, which is true as far as it goes. But I have noticed that Poch also does not really have players who can really change things against the run of play “out of nothing”. Dele is the possible exception, Eriksen inconsistent. The point is that these players can all play well – but only if the team plays well. A game changer is a player who, like Hazard or the much-underestimated Willian at Chelsea, can pull things out when the team is playing poorly.

Our lack of this ability is why we seem to win relatively few games when we are not playing well – Crystal Palace away was one of the few occasions last season that I can remember. But the problem is: game changers are typically not great team players. The whole point is that they are egotistical prima donnas who pull something out of the bag precisely because at that moment, they are ignoring their team mates’ performances and just doing what they want. If the team is functioning, that’s wasteful selfishness; if the team is not functioning, it can be a life-saver. But game-changers are not Poch players.

3. Bastards

Lastly, we have the ongoing issue of our relative naivety at controlling matches (something which has reared its head this season against Burnley and arguably against Chelsea too). There is a valid accusation that Poch demonstrates a lack of stylistic flexibility, namely sticking at all times to the pressing style, but at this point last season he was also accused of tactical rigidity and ended up coming up with the 3-4-2-1 as a “Plan B”, so perhaps he just needs time to work on a more Mourinho-esque counter-attacking style.

But what he lacks in the squad are real bastards. People with experience and the skills to wind opponents up in big games. Chelsea is once again a great example of a squad almost any of whom would be bottled round the back of the pub just because they are annoying. Spurs, on the other hand, are not only too naïve, but too “nice”. There are glimpses of something more edgy from Rose and Dembele on occasion, and Dele is beginning to learn how to wind people up. But really, we have not had a really aggressive little bastard since Edgar Davids – it is the very definition of our historic “soft underbelly”.

Again, though, I suspect that bastards really are not considered suitable for Poch’s teams. One reason our squad is so nice is that they are so young, and have been growing up as Poch’s children effectively. How do you generate a Roy Keane or John Terry in that situation? Almost all the great “nearly” sides, from Newcastle in 1995 to Liverpool in 2013 have shown this weakness. We look set to join them.

*******

So with two days left, what are some answers? Well strengthening the wing-backs will be crucial – Aurier and possibly Sessignon would be good news (or eventually a Rose for Shaw swap). Adding more creative firepower would be great. But really we also need a gritty central man who has a bit of a temper. I have said it before and will say it again: perhaps it is time to reinvent Sissoko as that man. He showed a great elbow last year at Bournemouth!

Why Barcelona are still not learning their lesson

Messi sad

Ousmane Dembele has just arrived at Barcelona for a “club record fee” of €105m plus add-ons which could take the total paid to around €140m, far eclipsing even the official updated €86m paid for Neymar that the club had to admit to two years afterwards (although the real cost may still be somewhat higher, and we may never know). Whether Dembele can emulate his predecessor in footballing terms is anyone’s guess; but more intriguing is the fact that he may emulate the superstar as a future exit – curiously, Barcelona seem not to have learned their lesson and set a buyout clause of only €400m.

€400m may seem a lot, but this summer has shown that numbers we could barely believe have a habit of becoming reality; if TV revenues increase, the figure will not seem excessive. But in any case, and more importantly, it is already not very high in the world of preventative buyout clauses. If any proof be needed that Real Madrid are better run than Barça at the moment, it can be seen in the buyout clauses currently in place. Not only is Dembele’s price, their newest signing, still way below the sums set by their arch-rivals, but so are all the rest of the squad – by some distance, too. Eight of Real’s stars have clauses higher than Lionel Messi, the best player in the world. Suarez and Busquets look at snip at just €200m.

Real Barca transfers

Source: Gab Marcotti via ESPNFC.com, updated for Asensio, Isco and Dembele

Why have Barça been so remiss and what explains this imbalance? Well first, to be fair, the Barça squad is just that much worse than Real’s. Other than the MSN, most of the others have passed their Pique (lol) and their clauses were signed in another era. Having said that, Cristiano Ronaldo’s €1bn clause was set as long ago as 2015, a full year before Neymar (Barcelona’s youngest and most marketable star) was set at only €200m rising to €250m over three years. Is it perhaps that Barcelona do not have the pull to get players to agree to prohibitive buyout numbers? Or is the board still arrogant enough to believe that players go to Barcelona for its “philosophy”? Either way, it is a failing of their fiduciary duties which would be prosecutable under UK company law.

Furthermore, Barcelona really have encountered a perfect storm. The inflation in this year’s transfer window has hit them just as an irreplaceable star has gone. To be clear, buyout clauses work very differently from normal transfer fees in terms of distorting the market. This is because a normal fee is, these days, usually paid out over a number of years; so that a transfer fee of €222m might only be about €55m per year. The rest of the market (though not the idiot fans) will “know” that the extra money available to the club who has just sold their star asset is only €55m at that point. But with a buyout, the money arrives instantly, meaning that the market is aware of both an entire €222m overhang, as well as the necessity to frantically spend most of it on a replacement. Furthermore, buyout clauses are by their very nature “supernormal”, higher than market valuations. This means that in turn they are causing inflation above normal market values when the money is spent in turn. In other words, it is not just usual “football inflation” (see my previous) but a buyout-driven super inflation. Barcelona this summer have become a footballing version of Mansa Musa I.

Of course in today’s world, only a few clubs are true “buyers”: Real Madrid, who do so from their own resources, and then PSG and Man City, who do not. Barcelona have ultimately been left on the heap as just another “selling club”, the dreadful epithet that even Man Utd had to understand when they lost Ronaldo to Real all those years ago. Barça just have not learned their lesson.

Are transfer fees really exploding?

camp_nou_coreografia_mes_que_un_club

With Neymar’s transfer to PSG, the football media has moved from just excitable to the swooning and fainting associated with young Victorian debutantes laying eyes on returning officers of the Household Cavalry. The “world record” (we will get to this in a moment) has seen the football experts go into overdrive in trying to explain how it is that so much has been paid, and how it can be justified.

Among the more interesting commentators were the crew on last week’s Guardian Football podcast, specifically award-winning Jonathan Wilson who made a couple of insightful points. The first was the likening of the football transfer market not to the clichéd and overused Dutch tulipmania of the 17th century, but to a more subtle historical event that I had not heard of before, the Indian horse market of the same period. Although Wilson does not spell it out, the point here is not that best-in-class assets become expensive (Neymar for €222m is comprehensible); it is rather what Mourinho has been warning about, that mediocre asset prices get dragged up too and that is where things become unsustainable. In other words, the Man Utd’s of this world will always spend top dollar; the real danger is when Middlesbrough are doing the same.

The second intriguing point surrounds the role of Qatar in the Neymar move. Barcelona have for many years irritated a majority of neutral fans with their holier-than-thou attitude about all matters football. It does not take a hard-core royalist like myself to be sickened by the constant nonsense about being “mes que un club”, or the self-indulgent refusal to have a shirt sponsor for so many years. But recently, the club have taken to criticizing Qatar over the forthcoming World Cup – the very people they finally took their blood money from when the caved into for money. Was this criticism a result of failing to agree a new sponsorship deal? Was PSG’s bid for Neymar driven by a Qatari government keen to demonstrate they still had retaliatory power? Both, it seems, may be a firm “yes”. Well, it couldn’t have happened to nicer people …

But really, how big a transfer fee is Neymar, anyway? Clearly a direct comparison of nominal fees is useless; so is a basic use of inflation to recalculate them. Only one analysis I have seen attempts to bring fees into historical perspective, the excellent Paul Tomkins’ blog. For the purposes of analyzing which transfers have had what impact, Tomkins and his team have used a form of “football inflation” based on average transfer prices from year to year, and inflating the nominal figures this way. Since football inflation has far outstripped CPI, this produces a top ten looking something like this:

Tomkins table

Source: https://tomkinstimes.com/2017/07/shock-transfers-now-cost-more-plus-top-100-signings-after-inflation/

Now, I like this approach. It has much to recommend it. However I believe it understates the impact of TV money on the psyche of football clubs – Tomkins’ analysis looks at correlation between the two but does not integrate them. I believe that – for the Premier League at least – another interesting way of looking at transfer prices is rebasing nominal transfer fees against the growth in TV deals. In my model, “inflation” is based entirely on the growth of TV deals struck over time (which have grown at an impressive 17.2% CAGR since 1992). In particular, I think this better reflects the thinking behind those headline-grabbing, record transfer deals as opposed to the median ones. The thesis being, that record transfers experience inflation different to normal transfers.

When this principle is applied – the Pang Index – the following numbers are generated:

Transfer records re-based to Premier League TV deal sizes

Football transfers

The blue bars represent record transfer fees paid by English clubs since the Premier League came into effect in today’s money. The grey bars were record transfers out of England (as it happens, all to Real Madrid). In this context, I have thrown in the Neymar transfer for fun. Of course this is not a perfect comparison – European clubs have very different TV deal structures and have not earned as much as English clubs have anyway; moreover the likes of PSG are barely “commercial” clubs at all these days, throwing the numbers out. Nonetheless, it makes some sense: Neymar’s fee is probably the same as a proportion of the kinds of TV money sloshing around as Veron’s transfer to Man Utd was all those years ago. No-one old enough to remember, can really be in doubt that Shearer’s £15m fee shocked us rather more than Neymar’s (let’s perhaps forget Stan Collymore for a moment).

The basic lesson is: money is here to stay; it is growing at a pace; but it makes surprises more and more difficult. Already this summer, there have been several moves rumoured to be in the same ballpark (£131m for a 31-year old Ronaldo, for instance). Actually, for the bigger clubs, it seems superstars are getting cheaper, not more expensive.

A squad of two halves – the drag from Tottenham’s wage structure

Tottenham NY Post

Frustrations are beginning to appear around my beloved Tottenham Hotspur. Obviously, we have yet to make any new signings, even as all around us in the top six have done so – including from us with Kyle Walker’s move to Man City. It is well known that we have a shortage of money compared with our rivals – the subject of a neat video produced by Joe Devine last year. But, there has also been much commentary about how Tottenham are struggling to find the right kind of players to fit into the squad – especially as “understudies” to key players like Harry Kane and Dele.

The reality is that Tottenham faces structural problems of its own making. First, the wage cap in place is enforcing a concept of a First XI vs secondary players. Most clubs have some sort of wage structure in place, of course, but rarely at the top level is such a fuss made about it or is it so well known. A look at the figures as last season commenced (below) demonstrate this clearly: Lloris and Kane were the top earners but the whole first team plateau out before a sudden drop off as one reaches Trippier and Davies (both now ironically effectively first team players).

Tottenham wages

Source: sillyseason.com (http://sillyseason.com/salary/tottenham-hotspur-players-salaries-69471/)

Compare this with the three biggest paying clubs in the Premier League and the contrast is stark. It is not just the absolute amounts that are different; it is the distribution, and with it an entire philosophy of creating star players with a large pool of players below them. A new arrival at Spurs would question how inelastic the first team appears to be; a new arrival at Man Utd may know he won’t oust Paul Pogba, but the rest is up for grabs. Tottenham have allowed themselves to create too rigid a playing structure.

This leads onto the second structural point: no other team has quite such a disparity between the quality of our First XI and the bench. Title winning teams do not have a set first team; asking “who is willing to sit on the bench?” is to ask the wrong question altogether. The real measure is the quality of the first team squad – the 18 or so players who should be interchangeable in quality terms. This is more difficult for the striker position, since there is only one match day position available. But for the attacking midfield positions, where we play at least two (in the 3-4-2-1 formation) or three (in the 4-2-3-1), we should have at least n + 2 players of comparable quality competing.

So what is the answer? Well, one or two rumours have emerged which are of real interest: Iheanacho from Man City for instance, or Kovacic from Real Madrid (incidentally Ross Barkley is not the answer). But it seems like under the financial constraints we have, and under the wage structure we enforce, Pochettino is going to have to further rely on coaching youth players. It’s not a bad way to do it – Josh Onomah has had an excellent summer with the England U-20s, as has Kyle Walker-Peters; Harry Winks and Cameron Carter-Vickers already made their appearances last season too. I also believe that some players can be reinvented – Moussa Sissoko into a deep-lying central midfielder for instance.

Ultimately though, Spurs are going to have to rejig the way they pay their team even if they do not raise the total amounts being spent, and even to keep existing squad members happy. The current system reflects something static, sacrificing flexibility on the altar of stability. It might serve for another season, but what happens when our ambitions expand?