Fans of Tottenham have taken to Twitter by the thousands to debate the merits of Daniel Levy's transfer policy as of late. Our Club boasts one of the lowest net transfer spends of any Premier League side in recent years. Those who feel that the Club lacks the talent to challenge for the top 4 point to this as the chief reason why. While I feel that fans are right to criticize the lack of investment from ownership in the transfer market I think many have taken it way too far. These fans forget that the transfer market is only one way that ownership can invest in the Club.
It's easy to look at just the net transfer spend and become irate at the Club's ownership. In the current window we all have a great deal of frustration at the lack of incoming players at the moment that makes us look hard at ENIC's dealings. Add in the failings of the "Baldini Era" and there is plenty of blame to go around and precious few to criticize. However, if we want to judge Tottenham's progress during this low net spend we have to dig deeper. We have to follow the money. For most of our competitors the whole story is in the Transfer market. For Tottenham it goes deeper.
There are two giant expenditures that have to be considered when evaluating this period of time. The first is the construction of our state of the art training centre. The top notch facility reportedly cost the Club somewhere around $45m. That's the price of one hell of a central midfielder. Instead of using those funds to make a splashy purchase that may or may not have worked out, Tottemham chose to invest in its youth system. Was this the right play? I think so, but it's certainly open for debate. Would an expensive signing have pushed us into the top 4 and opened up a huge Champions League revenue stream? I am inclined to say yes, ENIC made the wrong choice here.
While I think it was the wrong choice, it is certainly a defensible one. The building of the training centre has begun to pay dividends with better youth player purchase and development. It's hard to quantify those benefits financially but it doesn't mean they don't exist. Our current young core of Kane, Mason, Bentaleb, et al might not have signed or stayed with the Club without its construction. Perhaps Dele Alli's head was turned by the impressive facility and eased his acquisition. Maybe the right move was to clinch Champions League qualification with the right player purchase (assuming we bought the right player which history shows us is far from a sure thing) but instead the choice was made to build the you system up and hope that paid long term dividends. We will continue to see better youth players coming through our system as a product of this large cash out lay. We will be evaluating this debate years into the future.
The second expenditure is obviously the construction of a new stadium. Once built, it will allow us to produce ticket and sponsorship revenue at much higher levels than we enjoy currently. We hope this will put us on equal footing with all of our Premier League rivals. In that sense, it's s long term investment that I think all of us agree will pay off (how long it will take to pay for itself is debatable).
The stadium cost comes into play with our transfer policy because there will be some initial cash payment to begin construction. None of us outside the Club have a real idea of what the payment structure will be. I believe it is a reasonably safe assumption to say that the Club will pay some sort of down payment followed by debt service over some measure of years. The initial cash infusion is a huge piece of this. Just as when you buy a car, the down payment goes a long way when determining your interest rate and payment amount. While much more complex, stadium financing shares the same principles. The more money we can spend up front, the better our cash flow will be in future years. No matter what payment ownership envisions paying to defray the borrowed amount, that money has to come from somewhere. You have to think the lack of cash infused in the transfer market has helped increase that down payment. Again, you may think increases cash in the transfer market would have caused revenues to explode and you might be right. I'd be inclined to agree. We must acknowledge the fact that lowering stadium debt will allow us greater financial freedom sooner than financing it all.
This piece isn't intended to be "happy clappy" or pro-Levy. I don't think I am either to be quite honest. What I do want this piece to do is to shed more light on where the Club has spent money as of late. Maybe ENIC botched it, maybe not. Just don't sum up the Club's financial history with just one small piece of the puzzle. Follow the money and evaluate the whole picture.
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