Hope and fiction

Last week I was pleased to receive my membership pack from Tottenham Hotspur. As a season ticket holder, I am automatically registered as a member of the members' club, known as "One Hotspur". In the past the pack has been quite generously stocked, with all manner of team memorabilia, such as scarves and flags. This year the pack consists of a CD, with fluff for one's PC, and a DVD, with a review of last season, and a small cockerel badge. This is much the same as last season. Of course, there are also other, intangible members' benefits, including some merchandise discounts, but I have to wonder if it might not be better to simply reduce the price of the season ticket? I expect that it could be argued that the cost of reproducing a CD and DVD for season ticket holders would hardly offset the expense of a younger player's salary, so perhaps I am being churlish. However, I believe that the merchandise that comes with the Junior Spurs' Membership makes much more sense, both commercially and for generating long-term loyalty, as such tangible benefits enable the younger supporter to show their affiliation in a direct way. It provides for an open display of hope on the part of younger supporters, hope that their team will provide glory and trophies in the years to come!

Against this hope there is reality: like every other business, football is not immune from the credit crunch and recession. While much of the evidence suggests that the recession has already bottomed out, the ability to raise funds from the financial system remains more difficult than any time since the early 1990s. Interest rates may be at historic lows, but the drop in property prices over the past few years also means that football clubs have less collateral to put up against further loans. And with banks increasingly concerned over more risky loans, borrowed money to transfer in a player would seem particularly volatile. There can be few businesses with as volatile earnings as a top-flight football club. Indeed, there is some evidence to suggest that loans to football clubs could be seen as more toxic than some instruments in the derivatives markets.

With borrowed money in short supply, there can be no surprise that the football transfer market has been so quiet, apart from a small handful of "marquee" signings. These latter have not been financed in the more normal way, but are much more due to cash injections to (eg) Real Madrid and Manchester City from mega-wealthy new owners. Over the next few months I shall be investigating the debt position of clubs in the English Premier League to see if (i) there is any correlation to their League and Cup performances, and (ii) to see how sustainable their debt positions are. Past research on football has shown that there is a direct correlation between the "wage bill" of a club and its league performance. This evidence stands in stark contrast to the commonly-held view that it is transfer spending which is the key driver of success. Of course, there must be some degree of correlation between a player's wages and his transfer fee, but this is hardly direct nor monotonic.

As a fanatical supporter of Tottenham Hotspur, I have not been surprised that there have been very few transfers, the main exception being the transfer of Didier Zokora to Sevilla. Like many clubs, Spurs will need to sell before they can buy. And given Spurs' commitment to build a new stadium in the next few years, this financial pressure is probably more sever in N17 than elsewhere in the Premiership. Spurs had a miserable start to last season—the worst in the club's history—which was only turned around when Harry Redknapp was brought in as manager, ending with a creditable top-half Premiership finish and an appearance in the Carling Cup Final (lost to Manchester United on penalties). There is something of a consensus among Spurs' supporters that the current squad is essentially sound, requiring only some minor tweaking. Spurs need cover for centre-back, perhaps a better old-fashioned centre-forward, and most definitely a left-winger. In all other positions there is good competition for places. And yet, the transfer rumour mill has been busy with Spurs interested in central midfielders (Patrick Vieira!), right midfielders (David Beckham) and forwards from Real Madrid. These latter might make some sense if they are as replacements for outgoing forwards (Bent? Pavluychenko?), but other rumours make much less sense. On the one hand, Summer has often been regarded as the "silly season" in journalism; but on the other hand, sometimes truth is stranger than fiction!

Currently at Spurs there are several players competing for the right-back position: Vedran Corluka, Alan Hutton, Pascal Chimbonda being the top three. Now Spurs are apparently about to outbid Everton for TWO right-backs from Sheffield United. The cost of these two very young players (both named Kyle!): some £8m, a little more than the reported fee obtained from the sale of Zokora. Where is the logic? Unless two of these three are about to be sold—and there has been no reported interest in any of them—it is hard to determine why Spurs feel the need to add to their squad for this position. It is all the more insane when there are three positions (outlined above) in which Spurs do have a need. Is it any wonder that banks have problems in lending to football clubs which engage in such transfer practices?

And so the pre-season trundles along merrily. Last year, Spurs won all of their pre-season matches in style offering supporters a great hope for the season, which was soon dashed when the friendly matches ceased. So far, Spurs have beaten lowly Exeter City and tonight face the might of Bournemouth. While I recognise the main importance of such matches is much more about fitness and tactics than results, supporters do look to these public displays for omens of what is to come. These omens are more likely to be available when Spurs play in the Barclays Cup at Wembley at the end of July, and in the Asia Cup thereafter. For these games we might realistically begin to expect to see the manager begin to play his favoured formations and players, rather than just give almost everyone a game to improve their fitness. We hope that the expectations generated will not prove, like last season, to be a fiction.