White Hart Lane and the Importance of Frugality

The only objection I have against European club football is not having playoffs. As an American sports fan, this is a hard concept for me to grasp. Despite no postseason, relegation encompasses all the anxiety and excitement of a playoff. As the regular season winds down, the bottom of the table plays out like the BCS as teams desperately try to avoid relegation to the league below, which would cost a club millions in revenue.

Tottenham Hotspur currently find themselves at the bottom of the table with

White Hart Lane - home of Tottenham Hotspur FC
White Hart Lane - home of Tottenham Hotspur FC

just five points in nine games. The facts are ominous. This is Tottenham’s worst start since 1912. Only one team, Southampton, has avoided relegation with as few points as Tottenham after as many games (two points in eight games). Their manager, Juande Ramos, has been sacked after just eight games at the helm. His buyout will reportedly cost Spurs £12 million.

Every team has its ups and downs, but what is most frustrating for Tottenham fans is the poor results after two summers of record spending. In their outwardly desperate attempt to compete with the top four clubs in England (Manchester United, Arsenal, Liverpool, Chelsea), Spurs have squandered their funds.

A financial report from 2006/2007 season by accounting firm Deloitte stated that Tottenham was one of the richest clubs in the world. Apparently this meant nothing to those in charge at White Hart Lane. They see the glory in UEFA Champions League, which requires a top four finish in the Premier League. In a league where debt is commonplace (latest reports show a £3 billon debt for the English Premier League), Tottenham decided to join in on the fun and become a frugal farce.

How do they compete with the top four? Buy high quality players, apparently. Last summer saw Tottenham outspend (£54 million total) everyone except Liverpool. This past summer Spurs spent close to £60 million, while selling their top scorers from last season, Robbie Keane and Dimitar Berbatov.

Irishman Robbie Keane at Anfield - not a site many Spurs fans wanted
Irishman Robbie Keane at Anfield - not a site many Spurs fans wanted

Tottenham has spent more the past two summers than any other club in England. The only good news is they continue to have a halfway decent turnover despite other clubs getting hit hard. The bad news? They have nothing to show for it except a Carling Cup victory last season.

The idea of spending a lot of money in free agency in hopes of quickly putting together a winning franchise is not foreign to us American sports fans. In exploring expensive off-season spending and its capability to produce championships, I decided to examine North American sports leagues. I barely had to look outside of New York City.

I started with the New York Giants. In 2006, they had the eighth highest payroll in the NFL at $108.1 million. They finished 8-8 and were eliminated in the first round as a wild card. In the 2007 season, the eventual Super Bowl champions had the lowest payroll at $75.7 million. Who’d they beat in the Super Bowl? The team with the second highest payroll, the New England Patriots ($117.9 million). The Giants cut roughly $33 million, became the

new Cowboys Stadium
Epicenter of American sports greed: new Cowboys Stadium

cheapest team in the league, and walked away champions. Meanwhile, teams like the Redskins and Cowboys spent over $100 million in each of the last two seasons and have come away empty-handed.

In the actual city limits we have an obvious case study for inflated payrolls: The New York Knicks. It’s no secret that their record payroll has not paid off. Since the 2001-02 season, the Knicks have had at least the second highest payroll in the NBA, having the actual highest

Money not well spent
Money not well spent

for five of the last seven seasons. Since 2001, the Knicks have gone 256-356, a winning percentage of .418. Even worse, they have not made it out of the first round of the playoffs during this stretch. The NBA champion the past two seasons has spent an average $24.6 million less than the Knicks.

And of course we have to talk about the New York Yankees. The Yankees’ payroll and the correlation to championships becomes a little more complicated than its New York brethren, the Giants and Knicks. I’d like to emphasize the word excessive here. The Yankees have four championships in my lifetime, and for three of those championships they had the highest payroll in the majors – but not by much. Take a look at the last four championship seasons for the Yanks and how many dollars separated them from the next highest payroll:

– 1996: Highest payroll by $3.4 million
– 1998: Second highest payroll, behind Baltimore by $7.2 million
– 1999: Highest payroll by $6.8 million
– 2000: Highest payroll by $2.5 million

Excessive? Not really, especially when many people would say their best team was in 1998, when their payroll wasn’t the highest. But the championships ceased after 2000, and the real spending began. From 2002 on, they have had the highest payroll in the majors – by a lot. Here’s the dollar separation between the Yankees payroll and the second highest payroll in MLB since 2002 (World Series Champions and their MLB payroll rank in parentheses):

– 2002: $17.5 million (LA Angels – 15)
– 2003: $35.5 million (Florida Marlins – 25)
– 2004: $56.8 million (Boston Red Sox – 2)
– 2005: $84.8 million (Chicago White Sox – 13)
– 2006: $74.5 million (St. Louis Cardinals – 11)
– 2007: $46.6 million (Boston Red Sox – 2)
– 2008: $71.2 million (Tampa Bay Rays win AL pennant with the second lowest payroll at $43.8 million compared to Yankees’ $209 million)

"Maybe they'll pay us more money now!"
"Maybe they'll pay us more money now!"

It’s interesting to note that from 2004 to 2006, the second highest payroll dropped each year (a total of $7 million over the three seasons). In the Yankees’ championship years, the average separation of the two highest payrolls was close to $5 million. Since 2002, the Yankees average a whopping $55.2 million higher than the team with the second highest payroll. Frugal they are not. And how many championships has this excessive spending turned out? A big fat goose egg, capped off this year with no playoffs after a thirteen-year run.

"I guess not. These guys must want to win badly."
"Guess not. These guys must want to win badly."

There is no formula that could possibly prove some type of correlation between money spent and championships. Plenty of rich teams have won. But the sports deities frown upon excessive spending and vain attempts to “buy championships,” as we so often put it. Instead of mimicking the desperation of the Knicks and Yankees, Tottenham should take a page out of the Giants’ playbook. They stuck with Coughlin and Manning, made good draft picks (Jacobs) and played it out.

So as Spurs fans ponder the meaning of this season, a few things to me are for certain. First, they should not succumb to the temptations of spending money on just any players. Last season they tasted a little success with a Carling Cup and perhaps thought they were on to something. Figure out your identity, buy players who can fulfill that vision even if they are not necessarily the best at their position, and find a coaching staff that will carry this out. Oh – and this is very important – allow what you have put in place to run its course.

Secondly, don’t bury your club financially to be successful this instant. They were the only club ranked in the top twenty of the richest European clubs to have not played in the Champions League. That means they’ve figured out how to be profitable without it, so they could have afforded to be patient. Unfortunately, now they find themselves having to fight off relegation, which could reportedly cost the club more than £40 million in revenue.

They’ve done well by putting a new stadium on hold (a reported mortgage of over £300 million) and have avoided disaster with their bank investment owner. With a new coach in place who has proven himself more than capable of leading a club to success, Modric, Bentley and the other players are going to have to get themselves out of the bottom three. Then the powers that be at White Hart Lane can reevaluate their spending habits the past two seasons and perhaps see the benefits of frugality in these dangerous times.

This is sure to be an exciting relegation season with Tottenham and Newcastle United sitting at the bottom. To be sure they will start to scratch and claw their way out sometime soon.

4 Responses to "White Hart Lane and the Importance of Frugality"

  1. Casey   October 28, 2008 at 8:01 am

    Money and team chemistry – one of my favorite topics.

    Perhaps the Hot Spur are still deluded by Bill Simmons choosing them as his favorite EPL club.

    Maybe they feel a sense of entitlement given the Shakespearean inspiration of their name.

    When was the last time that Arsenal, Man Puke, Chelsea, and Liverpool did not all hold the top 4 spots?

  2. Rey   October 28, 2008 at 2:17 pm

    Casey –

    It’s kind of hard to determine. Our professional sports will give the overall payrolls for teams each year whereas soccer clubs report only their spending in a particular off-season, not the total payroll each year. So it’s common to see teams spend a lot of money in one off-season and then not for the next few. Sunderland, for example, was fourth in spending last season. But there is no way they had the payroll that the top four had.

  3. wallydomer   October 28, 2008 at 8:57 pm

    Casey —
    Good research on the MLB financials … interesting.

  4. Casey   October 28, 2008 at 9:07 pm

    Wally

    Gotta give credit where credit is due – this is Brother Reynell’s stuff. He’s been the one dutifully inking these articles week to week.

    Great stuff Rey.

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