Spurs Daring To Dream

When Tottenham Hotspur were three-nil down to Young Boys Bern after only 30 minutes of their Champions League qualifying match in August, it looked for all the world as if their European adventure would be over as soon as it had started. With Michael Dawson and Sebastian Bassong doing passable imitations of Bambi on ice, the Swiss minnows were ripping the North Londoners a new one every time they attacked. After many years of waiting for a chance to have a crack at Europe’s elite, the hopes and dreams of the Spurs fans were disintegrating before their eyes on YB’s plastic pitch.

However, Spurs somehow reduced the deficit and predictably crushed their unheralded opponents in the return leg at White Hart Lane to secure their place in the Champions League group stage. Since that nervous start, Spurs have at times played some exhilarating football in Europe’s premier tournament, winning all three of their home games by wide margins, including an unexpected 3-1 demolition of the reigning champions Inter, leading to them already qualifying for the last 16 with a game in hand.

They are also riding high in the Premier League, currently sitting in fifth, just one place outside the qualifying positions for next season’s Champions League, so everything would appear to be rosy in Tottenham’s garden these days.

The news off the pitch also seems very good with the club’s press release for the 2010 financial results highlighting “record revenues of £119.8 million” and “profit from operations excluding football player trading of £22.7 million.” You have to look long and hard before you discover that Tottenham actually reported a pre-tax loss of £6.5 million, a decline of nearly £40 million from last year’s profit before tax of £33.4 million.

Of course, most companies will accentuate the positives in their results, but this is particularly misleading, not to mention absurd if you consider that “football player trading” is almost by definition a core part of a football club’s business, especially as it forms an essential element of the modus operandi at Spurs, and represents real income and expenses. Funnily enough, the 2009 annual report instead opted to focus on the “record profits before tax of £33.4 million”, rather than mention the “profit from operations excluding football player trading”, presumably because that actually fell last year from £27.5 million to £18.4 million. There’s so much spin in these statements that you almost expect to hear an Australian wicket-keeper cry, “Bowled, Warnie”, as the great man delivers another vicious leg-break.

To be fair, there are two ways to interpret these accounts. Taking a negative stance, I would point out that, despite reporting record turnover, the club still made a loss. They might argue that the cash profit (EBITDA) of £25.4 million, comprising the profit from operations excluding player trading of £22.7 million plus £2.8 million depreciation added back, is fairly impressive, but this is still not enough to cover interest payments of £5.0 million and net transfer spend of £27.5 million (£34.5 million of sales less £62.0 million of purchases).

"Tactics? Absolutely delicious"

On the other hand, more positively, almost all of the reduction in profits came from lower player sales with the £15m earned in 2010 (Darren Bent to Sunderland, Didier Zokora to Seville and Kevin-Prince Boateng to Portsmouth) nowhere near as much as 2009’s unprecedented £57 million (Dimitar Berbatov to Manchester United and Robbie Keane to Liverpool). Wages rose £7 million, but this was covered by higher TV money.

In fact, compared to the losses made at other leading clubs recently (Manchester City £121 million, Manchester United £80 million), Spurs’ modest loss of £7 million is quite encouraging, especially as their figures do not include any money from the Champions League. As Roy Kaitcer from stockbrokers Brewin Dolphin said, “The figures look very good. If I was a Spurs fan, I’d be pretty happy.”

That’s why the blatant attempt to “spin” the results is so disappointing, as there’s really no need to do so, with the figures indicating that the club is well run financially, all things considered. This should come as no surprise, given that this year’s loss is the first since 2004. For a club with Champions League aspirations on a relatively low turnover, that’s no mean feat and should be applauded.

Even with this year’s increase in revenue to £120 million, Spurs are still a long way behind the traditional Big Four clubs in England: Manchester United £286 million earn more than twice as much; Arsenal £223 million (football income only) earn over £100 million more; while Chelsea £206 million and Liverpool £185 million also have significantly higher turnover, even though those are last year’s figures. Manchester City have also overtaken Spurs with their revenue rising from £87 million to £125 million.

The problem for Spurs is that even though their revenue has grown at an imposing 69% over the last five years, this has been more than matched by other clubs, who have increased their revenue at an even faster rate. Both Manchester United 72% and, even more emphatically, Arsenal 94%, thanks to the Emirates effect, have outpaced Spurs. The 2010 accounts for Chelsea and Liverpool have not yet been published, so we don’t know their growth rate over the full period, but we can be fairly sure that the revenue gap in absolute terms will not have diminished.

However, Spurs’ 2009 revenue of £113 million was still enough to place them 15th in the Deloittes Money League for European clubs, so it’s not that shabby. To place that into context, it’s not far behind Lyon’s £119 million, which was sufficient to fund a team that reached the Champions League semi-final last season. Moreover, if the £40+ million revenue that Spurs can expect to gain this year, mainly from their run in the Champions League, were to be added to the current revenue of £119 million, they would then have turnover of around £160 million, which would not be too far behind Inter’s £167 million – and they actually won the trophy.

Partly as a result of the lack of Champions League broadcasting income, Spurs’ revenue mix is fairly well balanced, though the increasing influence of Sky TV money is evident, now accounting for 43% of the total turnover. Although this is obviously a key factor, Spurs are still far less reliant on TV income than most clubs in the Premier League, with only the Big Four having a lower percentage and other clubs dangerously dependent on TV with over 70% of their money coming from the Murdoch empire. The other obvious trend for Tottenham is the declining significance of gate receipts, which have fallen from 30% to 23% of the total income, hence the plans for a new stadium.

Media and broadcasting revenue increased this year by 15% (or £7 million) to £52 million, largely due to a higher central distribution of £49 million from the Premier League. This was attributable to a higher merit fee award based on the final league position of fourth compared to eighth the previous season (£4 million increase) and a rise in the facility fee, based on the number of times Spurs featured in live television games (£2 million increase).

The last time TV revenue rose by a similar amount was in 2008 (from £34 million to £40 million), which was as a result of the new Sky contract for 2008-2010. In the same way, the new three-year deal for 2010-13 will also deliver higher revenue to each Premier League club, thanks to the significantly higher money for overseas rights, which could be worth up to £10 million extra for Spurs.

In spite of these riches, Spurs’ TV income in 2010 is still much lower than the other top English clubs, who enjoyed the benefit of additional cash from the Champions League, which in 2009/10 was worth an average of £30 million for the English teams (Manchester United £39 million, Arsenal £28 million, Chelsea £27 million and Liverpool £24 million).

"Best player in the world"

The money that Spurs will receive from UEFA for the Champions League 2010/11 is primarily dependent on how far they progress, though there is also a sizeable chunk linked to the TV (market) pool.

Every team that qualifies for the Group Stage is awarded €3.9 million for participation plus another €550,000 per match played in the group phase, regardless of the result, so that’s a guaranteed €7.2 million. On top of that, there is also a performance bonus of €800,000 for every win and €400,000 for every draw in the group stage. To date, Spurs have won three matches, drawn one and lost one, giving an additional €2.8 million. If we assume that the final away game to Twente Enschede is a draw, that would increase to €3.2 million. Spurs will also pick up €3 million for advancing to the last 16. Even if they were to get eliminated at this stage, they would receive the princely sum of €13.4 million in prize money.

There is additional performance money for each further stage reached, so if Spurs were to hit the ball out of the park (sounds wrong, but you know what I mean), they would receive the following: quarter-final €3.3 million, semi-final €4.2 million, finalists €5.6 million and winners €9 million. So if Spurs went all the way and won the damn thing (miracles can happen), they would earn around €30 million, which is serious money in anybody’s book(s).

"Crouchie's having his nachos"

In addition to these fixed sums, Spurs will receive a share of the television money from the market pool. This is a variable amount, which is allocated depending on a number of factors: (a) the size/value of a country’s TV market, so the amount allocated to teams in England is more than that given to, say, Spain, as English television generates more revenue; (b) the number of representatives from your country, so an English team (with four representatives) might receive less than a German team (with only two representatives); (c) the position of a club in its domestic championship in the previous season, so if two teams from England both reach the quarter-final, the one that finished ahead of the other in the Premier League would get more money; (d) the number of matches played in the current season’s Champions League. This all makes it difficult to estimate but a reasonable figure for Spurs would be around €17 million, based on a small uplift to last year’s figures.

That would give Spurs a total of €30 million TV money from UEFA for the Champions League, which is equivalent to £25 million at current exchange rates. That’s a tidy sum, which on its own would increase Spurs’ turnover by over 20%. Given its potential impact, it’s easy to see why clubs strain every sinew (and spend to their limit and sometimes beyond) to reach the promised land of the Champions League. Of course, there are “only” four places available, so it’s still a gamble, but the size of the prize is striking.

"Razor sharp"

Spurs have received many plaudits for their commercial acumen, but this has not yet been reflected in the financials, as commercial revenue has actually been falling for the last two seasons from £38 million to £34 million. Much of this decrease comes from corporate hospitality, which has suffered both from the economic recession and the club not being in a European competition, though the latter cause should have been addressed this season. Merchandising rose slightly to £8 million this year, but is still below the peak of £10 million in 2008, which was boosted by shirt sales relating to the clubs 125th anniversary and new kit launches.

However, Spurs will benefit from two new shirt sponsors in what they describe as “a ground-breaking innovative split of the shirt sponsorship inventory”, with software company Autonomy becoming the sponsor for all Premier League matches (£10 million a season) and asset manager Investec taking on the sponsorship for all cup competitions (£2.5 million a season). Both agreements run from July 2010 for two years, with the Autonomy deal having an option to extend for a further five years, so will only be reflected in next year’s accounts.

"The only way is up"

The combined £12.5 million is worth £4 million more a season than the £8 million paid by previous sponsors Mansion and is the fourth highest in the Premier League, only behind Manchester United, Liverpool and Chelsea. It’s also a lot higher than the £5.5 million that Emirates pays Arsenal, though that is largely due to the upfront cash payments that were needed to help fund the Emirates construction. Nigel Currie of sponsorship consultancy Brand Rapport has praised the Spurs’ arrangement, “It seems if clubs can cut their sponsorship cloth a different way, they can extend their offer to more than one brand. I think that other clubs may now look at ways of increasing the value of their shirt sponsorship.”

The five-year kit deal with Puma worth a reported £5 million a season has been extended by a further year to run until the end of 2011/12. This is just one of a number of high quality partners, the list also including BT, Thomas Cook, MBNA, Sportingbet and Ladbrokes.

The other revenue stream, gate receipts, has also been decreasing: from £31 million in 2007 to £27 million in 2010, though this is heavily influenced by the number of cup matches. In the 2006/07 season, Spurs had three major cup runs, reaching the quarter-finals in both the FA Cup and UEFA Cup and the semi-finals in the Carling Cup, generating gate receipts of £13 million, compared to £7 million in 2010. This also explains the large jump in gate receipts in 2007, as the previous year included only £100,000 for cup competitions. In other words, qualifying for the Europa League can still be beneficial in terms of match day income (assuming the fans turn up), even though the prize money is considerably less than the Champions League.

"Huge talent"

Underlying gate receipts, i.e. those from league matches, have actually been steadily increasing every year, from £17 million in 2005 to £20 million in 2010, when the stadium was filled to its 36,500 capacity for every Premier League match, despite the season ticket prices being the third highest in the country (though prices were frozen for up to two years in 2009).

In the annual report, the club is keen to emphasise its focus on the cost side of the business. In 2007, it somewhat ostentatiously stated, “Whilst more and more money enters the game, primarily from the central FAPL TV deal, we endeavour to control our significant cost base”, while the 2009 accounts also mentioned “the club’s ongoing and prudent cost control policies.” I have little doubt that Spurs have indeed attempted to control costs, but the fact remains that (including player amortisation) these have grown by £66 million (94%) in the last five years, while revenue has only increased by £49 million (70%). Heaven knows what the cost growth would have looked like if they hadn’t adopted this frugal approach.

Obviously, what has been driving the cost growth, just like any other football club, is player costs, namely wages and amortisation. There is some evidence of the famed Redknapp effect with wages increasing £14 million since his arrival in 2008, but, truth be told, other managers have contributed just as much to the growth with wages also rising £20 million in the previous three season. It appears as if chairman Daniel Levy is keeping the old rogue on a tight leash – a case of an irresistible force meeting an immovable object. That said, Spurs’ salaries did grow by a worrying 11% last season, which is higher than Manchester United’s 7% and Arsenal’s 6%.

This lead to an increase in the important wages to turnover ratio to 56%, but this is still very good and is, in fact, the third best in the Premier League (only behind United and Arsenal), which is a notable achievement given the small turnover. This is because Levy’s negotiating skills have managed to keep the wage bill in check to date. He has refused to compromise the wage structure at Spurs, so in the summer they were unwilling to foot the bill for Joe Cole’s exorbitant wage demands and only took on William Gallas when he lowered his salary.

Moreover, the 2006 annual report intriguingly mentions, “The policy throughout the club is to reward performance based on the continued success of the club”, which raise the possibility that Spurs, unlike many other clubs, have actually got their bonus scheme right, though cynics might point out that there has been precious little success to reward.

I also wonder how much of an impact on the wage bill the decision to withdraw from the Reserve League has had. For example, the 2009 accounts stated that 19 players had gone on loan, which is a policy that clearly reduces the payroll.

Whatever the reasons, Tottenham’s wage bill of £67 million is by some distance the lowest of the “mini league” featuring the Big Four plus Spurs and Manchester City. It’s effectively half the size of Chelsea, City and United; £44 million less than Arsenal; and £23 million below Liverpool. Of course, at the same time, it’s higher than the other teams in the chasing pack like Everton and Aston Villa, leaving Spurs in an uncomfortable “piggy in the middle” position. If they want to consistently match the big boys, the chances are that they will have to push forward and spend more on wages, but they will also need to grow revenue season after season if they are to do that with confidence.

So Levy has done a fine job in keeping wages down, but he is equally adept at negotiating his own remuneration, which has increased from £250,000 in 2004 to £1.35 million in 2010, split evenly between fees and bonus. Similarly, the remuneration of the Finance Director, Matthew Collecott, has increased from £96,000 to £504,000 in the same period. All told, these two directors have received £5.5 million and £2.1 million respectively in the last seven years. In fairness, these are not outrageous sums when compared to the figures earned by their peers at the Big Four, though some might argue that they are bigger clubs (larger turnover, more success, higher profile), so there should be a premium.

There has also been a steep increase in player amortisation, namely the annual expense of writing down the purchase price of new players, which has more than tripled since 2005, rising from £13 million to £40 million. That’s a lot (it’s the same as Manchester United), though it’s still on the low side compared to clubs known for being big spenders in the transfer market: Manchester City £71 million, Chelsea £49 million.

The concept of amortisation confuses many people, but it is simply how accountants handle player transfers. Instead of booking 100% of the player’s transfer price as a cost in the year of purchase, accountants treat players as assets, so the cost is capitalised and written-down (amortised) over the length of his contract. At the end of the contract, he is considered to have no value, because he can then leave the club on a free transfer.

It’s probably easier to understand with the recent example of Rafael van der Vaart. Spurs bought the Dutch maestro for £8 million, so if we assume that his contract is for four years, then the annual amortisation is £2 million. After three years his net book value in the accounts will be £2 million (the original cost of £8 million less three years amortisation at £2 million per annum).

Spurs’ ever-rising amortisation therefore suggests that they are big spenders in the transfer market and that is indeed the case. The last time that Spurs had a net surplus on their transfer spend was ten years ago in 2000/01, while since then they have been the very definition of a buying club, leading to an aggregate net spend of almost £150 million in the decade (£320 million purchases less £170 million sales).

To place that into context, only Manchester City, fuelled by the Sheikh’s billions, have spent more than Tottenham in the last five years. With a net £91 million, Spurs have spent twice as much as Liverpool, four times as much as Chelsea, nine times as much as United, while Arsenal have actually generated a surplus from their transfer activities. In fairness, the frequent changes of manager (Martin Jol, Juande Ramos, Harry Redknapp) have made a high level of player turnover inevitable, leading to what the chairman described as “one of the largest squads in the Premier League.”

Levy would argue that the investment in the first team squad has been worthwhile in that it has meant qualification for the Champions League, which is clearly a valid point, though the impact on the club’s financials is not so palatable. Remember that this year the club made a profit before player trading of £22.7 million, but this became a £6.5 million loss after the impact of splashing the cash in the transfer market was taken into consideration. And there’s little sign of this abating, as the squad was “boosted” after the year-end with yet another £20 million of purchases, including van der Vaart, Gallas, Sandro and Stipe Pletikosa.

To be fair, the high level of player purchases has not put the club into debt. Yes, the club holds net debt of £64 million (excluding CRPS liabilities), but the vast majority of that is property specific. In 2006 the club was actually in a net cash position to the tune of £24 million, but since then the debt has been rising year after year: 2007 £2 million, 2008 £15 million, 2009 £46 million and 2010 £64 million. If the liability component of the Convertible Redeemable Preference Shares were classified as debt (as the accounts do in the analysis of Total Borrowings), then the net debt could be considered as £79 million.

The debt comprises £50 million of bank loans, including a £15 million short-term revolving loan from HSBC and a £33 million facility with the Bank of Scotland at a floating rate linked to LIBOR; plus £25 million of loan notes at an interest rate of 7.29% repayable in equal instalments by September 2023; less £11 million of cash. All the loans are secured on club assets.

Even though debt has been increasing, total liabilities actually fell £11 million to £218 million last year, largely due to a decrease in trade payables. In fact, the balance sheet is quite strong with net assets of £71 million, including tangible assets of £124 million, comprising White Hart Lane £39 million, new stadium project £72 million and the new training ground at Bulls Cross in Enfield £12 million, and intangible assets (players) of £116 million. Of course, the market value of the players in the real world is far higher than the carrying value in the accounts. Transfermarkt estimates a value of £258 million, but even that is under-stated, as they only ascribe an £18 million value to Gareth Bale, who is, of course, the eighth wonder of the world.

However, as the accounts say, “This huge investment over the years has been funded through equity contributions and long-term debt financing.” Although the club generates cash from its operating activities (£20 million in 2010), once it has made interest payments and invested in capital expenditure (players and property), it has a net cash outflow (£33 million in 2010). This has only been (partially) compensated by additional funding, which last year came via a combination of £10 million more debt and £15 million of new share capital. In fact, in the last four years, some £70 million of additional financing has been required to maintain the cash outflows at a manageable level.

This trend is likely to increase in the future, as Spurs will have to invest a great deal of money in the planned new 56,000 stadium. As Levy explained in a statement on the club’s website, “It is indisputable that we now need an increased capacity stadium in order to continue to move the club forward and compete at the highest levels.” White Hart Lane may be an atmospheric stadium, but its 36,500 capacity cannot provide the £100 million match day revenue enjoyed by clubs like Manchester United and Arsenal. To give a fair comparison, some corporate hospitality should be added to Spurs’ gate receipts of £27 million, but their revenue would only be around £40 million (per Deloittes Money League), which is still £60 million lower. Spurs’ enthusiasm for the project is even more understandable with 33,000 supporters on the (paid-for) season ticket waiting list.

The search for a new stadium has effectively come down to two viable options: (a) the Northumberland Development Project in the area around White Hart Lane; (b) relocation to the Olympic Stadium in Stratford. Up until a few months ago, it seemed that the NDP was the only game in town (2009 accounts: “as a club, we are proud of our roots in Haringey”), but there is now a distinct possibility that Spurs will move away from their spiritual home. Although the plans have now been approved by both the local council and the Mayor of London, revisions have added £50 million of costs, bringing the total budget required to an eye-watering £450 million.

In order to minimise the club’s exposure to debt, it hopes to subsidise the project costs with supporting developments, such as new homes, hotel and supermarket, and sell naming rights for the stadium. According to an article in the Daily Mail, the new commercial director, Charlie Wijeratna, has been tasked with securing an astonishing £300 million over 20 years for naming rights, which would go a long way towards solving the funding issues (though there may be some implications for shirt sponsorship). However, Levy has confirmed that additional financing would still be required, either through issuing new shares in the club or bank loans, which would not be cheap (Manchester United’s bond is 8.75%, while Arsenal’s is 5.75%).

"Grounds for optimism"

As well as the high cost, there are other issues with this project, namely the total lack of public money being made available for regeneration (in contrast to the stadium developments at Wembley and Arsenal) and the chronically poor transport infrastructure, so it is only prudent to consider other alternatives. However, if Spurs were to abandon the White Hart Lane solution, they would face some other financial issues. First, they would have to write-off the £20 million of planning and professional fees currently held on the balance sheet. Second, they would have to sell the £50 million of property that they have already purchased, which may prove difficult, as this is by no means prime real estate, though the accounts do state that they have gained “the critical mass to achieve a substantial site sale as a contribution to a relocation.”

Hence, the decision to keep the club’s options open by registering its interest in the Olympic Stadium site (along with AEG). Estimates of the costs required to convert this into a football stadium vary, ranging from £100 million to £200 million, but there’s no doubt that this would be a significantly cheaper opportunity, especially as there is apparently £35 million available in the Olympic legacy fund to help finance the conversion. Some of the costs would also be recouped by Tottenham selling their property around White Hart Lane.

"Appy 'Arry"

Many regard Spurs’ interest in the Olympic Stadium as simply a negotiating tactic, an act of brinkmanship designed to persuade Haringey council to contribute money towards the cost of the Northumberland Development, but Tottenham director Sir Keith Mills insists that the club is serious, “If the Olympic Park Legacy Company decides our bid is the preferred one, then we’ll put all our efforts behind trying to move there.” Indeed, Levy has pointed out that the Olympic site is only five miles from the current stadium with excellent transport links.

Obviously, the majority of Tottenham fans are nervous about this prospect, including local MP David Lammy, who complained, “Levy is willing to sacrifice the atmosphere of White Hart Lane to stuff the Olympic Stadium with corporate hospitality boxes. Tottenham Hotspur should be a club for everyone, not just the suits in the City.” That’s a bit harsh, given that the chairman has a responsibility to the financial stability of the club, but essentially that’s what the argument boils down to: history and tradition against financial benefits.

Of course, it may not be up to Spurs, as West Ham are still considered the favourites for the Olympic Stadium, not only because they are the local club, backed by Newham council, but they have also promised to retain the running track to preserve the commitment made as part of the London 2012 bid. That said, the authorities now seem relaxed over the idea of providing upgraded athletics facilities elsewhere, e.g. Crystal Palace. Furthermore, Spurs’ plan could be more commercially viable, especially if the Hammers are relegated.

Ironically, if and when these plans come to pass, Spurs’ business model would then closely resemble that of Arsenal, as they seek to emulate their fierce rivals’ success off the pitch as well as on it. At the moment, the finances are very different with Arsenal’s profits being £50 million higher: their revenue is £100 million higher, but Spurs’ expenses are £70 million lower. Arsenal also make more money from player sales, but pay more in interest for construction loans. However, in the future, you could envisage a scenario where the additional gate receipts from a new stadium would boost Spurs’ revenue, allowing them to loosen their tight wage structure, when the two clubs would be much more similar.

In the short-term, Tottenham’s revenue next season should already increase by around £45 million, comprising £10 million from the new Premier League TV contract, £30 million from the Champions League UEFA central distributions, £4 million from the new shirt sponsorship deal and £6 million gate receipts (4 Champions League matches at £1.5 million, though this depends on other cup matches). However, this extra money will not all go to the bottom line, as the wage bill and player amortisation will increase for new players, while there will be expenses for hosting European matches. That could easily add up to £20 million, but this would still leave a clear £25 million improvement.

"My name is Luka"

It therefore appears as if Spurs will be well placed to meet the impending UEFA Financial Fair Play Regulations. Indeed, the club’s finance director believes that these will “vindicate” their financial prudence, while also supporting their decision to go for a new stadium, as it is “now more important to drive revenues to the next level.” Given that the new rules are all about clubs operating within their means, it clearly makes sense to boost Spurs’ revenue in this way, especially as the stadium development costs are excluded from the break-even calculation.

However, they will still have the major challenge of consistently qualifying for the Champions League. Daniel Levy has insisted that he will not jeopardise the club’s finances by chasing qualification every year, but it’s a delicate balancing act. If they don’t succeed, potentially Spurs could end up with a squad being paid Champions League wages without the revenue to compensate. That would then present them with the eternal dilemma: would they be tempted to spend more money to win their place back? Or would they balance the books by selling players, which would make it more difficult to qualify?

That is why so much rests on the money from a new stadium, which would give them more room to manoeuvre financially and help create a virtuous circle: higher revenue, better players, regular Champions League qualification. Of course, building a new stadium is far from a straightforward task and the club will almost certainly end up with a lot of debt to service, which may well compromise their ability to invest in the first team squad, which has been the cornerstone of their recent strategy. There is also no guarantee that the crowds will turn up, even with that lengthy waiting list for season tickets.

"Daniel Levy - one smart cookie"

Spurs are in pretty good condition at the moment. The core business is clearly very healthy, for which the chairman Daniel Levy deserves a lot of credit, especially as he has one of the most spendthrift football managers around in Harry Redknapp. However, it feels as if the club is standing at a crossroads financially as they are confronted by some critically important investment decisions.

The club’s motto is famously, “To dare is to do”, but do they simply dare to remember? After all, the annual report concludes with a reminder that next year is the 50th anniversary of the last time Spurs won the league. Or will they risk a lot of money and dare to dream?