Pay Your Staff!
Some people will need to read only the title of this article to decide that they have no desire to read further. Others might try to give it a fair hearing but soon be put off by either the point of view or the sheer length. Or both. And that’s fine. But for those who do care to read to the end, I ask only this: that you do so with an open mind. Because there is already far too much by way of entrenchment among Spurs fans – to the extent that no conversation can be started at all now without the hive mind summarily shutting it down. It seems that, with utmost finality, the whole world has determined Spurs’ decision to furlough some of its non playing staff to be the most iniquitous of acts. So it is that, within the toxic echo chamber of social media, anyone not adding their voices to the strident “Pay Your Staff!” chorus will have felt themselves to be pariahs.
The tide of outrage is understandable, of course. On the face of it, we have one of the richest football clubs on the planet – which is mostly owned by one of the richest men in the UK (well, the Cayman Islands) and which employs some of the highest paid players in all of sport – cutting costs at the expense of their lower paid staff. If that wasn’t enough, the club exacerbated its crime by cynically attempting to exploit a government scheme that was designed to help the little guys in business. It’s a bad look, right?
Certainly, it was a PR disaster. A bona fide, Hall of Infamy own goal. Hence why Spurs eventually performed a humiliating U-turn. But is there another side to the story – one which might not entirely justify Spurs’ decision in the eyes of the most judgemental but which might at least shine a light on mitigating circumstances? The truth is that none of us (beyond Daniel Levy and one or two others) knows precisely what financial pressure Spurs is currently under. In which case, shouldn’t we at least make some attempt to understand the impact of global events from the club’s perspective before rushing to judgement? In the scramble to occupy the moral high ground, no one has thought to check out the view from the boardroom at Spurs central. It’s high time that they did. So please, with an open mind….bear with me.
Football Catches The Flu
When reports of a new virus first began to leak out of China around the turn of the year, the world paid little heed (The Times). The common perception was that, as with SARS and Swine flu before it, there would be a flurry of foreboding headlines over a few weeks and then we’d forget all about it. Football was no less complacent, blithely wending its way toward season’s end. A transfer window came and went; games were won and lost; and fans online carried on bickering and complaining about the trivial things that fans online are wont to bicker and complain about.
Fast forward some four months and football, like everything and everyone else in this country, is into its sixth week of effective lockdown. The last round of Premier League games was on the weekend of 7th March. We are in a different world now. Scarily different.
But listening to most fans and journalists on the subject of Spurs and Daniel Levy, you would hardly know it. To them, Spurs is still as much a super rich Premier League club as ever it was. After all, less than a week before the UK went into lockdown and two weeks before furloughing staff, the club reported revenues of £460m and post tax profits of £69m for the financial year ended June 30th 2019 (Spurs official). Therefore, so the logic goes, Spurs can easily afford to “do the right thing” for as long as is necessary.
But therein lies the rub……the previous financial year is now ancient history. It belongs to another time – before the world became scarily different. What happened in the near past is no longer a reliable indicator of what will happen in the near future. People need to get to grips with that new reality. And quickly. The wrecking ball that is COVID19 has changed everything.
For football clubs, it means that they can no longer earn from ticket or corporate sales; the TV money has dried up; sponsorship money too in all likelihood. Revenues are now a tiny fraction of what they were before coronavirus. Costs, by contrast, remain to a large extent unchanged. Something has to give if clubs are to keep their heads above water. And the cocksure assertion that the bigger the club, the safer it is….? Yet another outdated notion in this new world. The big clubs no longer have their big revenues. But they do still have their big costs. So it is very possible that some of them are in more trouble now than the little guys.
From the economic perspective, the worst thing of all is the uncertainty. No one knows how long this stasis will last. No one knows how it will play out. This is a new and unpredictable virus. We don’t know how long it will take to find, test, develop and universally administer an effective vaccine. We don’t know if a vaccine can be found at all. We don’t even know whether having had and recovered from COVID19 confers immunity. At every turn, there are unknowns. To the extent that any long term planning is possible, it will have to make allowance for the entire spectrum of potential scenarios.
Make no mistake, there is no guarantee that football as we knew it will return within the year. It might not even do so within two years. Or three. Lockdown will eventually be lifted of course – but only by baby steps. And if a vaccine cannot be found and if having had the virus confers no immunity (both eminently possible), what then? Even in the best case scenario, you can bank on the fact that 60,000 people packed into a stadium – having packed into public transport to get there – will be among the very last ways in which life, and football, does eventually return to normal.
That is a realisation that should scare the living daylights out of any right thinking professional football club.
Secure Your Own Mask
Time to debunk a myth. With regard to Spurs’ decision to furlough staff, one of the most oft-repeated, outraged assertions on social media and elsewhere has been that the furlough scheme was specifically designed to help the little guys in business to survive lockdown; and that for a comparatively big company like Spurs to use it would be a scandalous abuse…
The government’s furlough scheme is specifically designed to protect jobs, regardless the size of the company that provides them. If a company, like Spurs, can no longer earn from its core business (or can only do so at a greatly reduced level) and if it has no certainty as to when it can start to earn again, then it either has to slash costs or face the likelihood of being unable to continue trading. It is stating the obvious to say that either outcome would result in widespread job losses. And with regard to the economy, company failures and job losses are what the government is most desperate to avoid. The furlough scheme is therefore designed to protect the tens of thousands of jobs within the biggest companies every bit as much as it is designed to protect the two or three jobs in the Greasy Spoon down the road.
Hence why some of the biggest companies operating in the UK are availing themselves of the scheme, among them: British Airways, Arcadia, Nissan, McDonalds, KFC, Primark, Greggs, Costa, Greene King, Pizza Express, Virgin Atlantic, Pret A Manger……..the list goes on (Daily Mail). There has been no universal explosion of anger directed at each of these companies. Yet we are all expected to add our voices to the howls of outrage directed at Spurs (a considerably smaller company than most of the aforementioned) for having furloughed their staff? Why the double standards?
For those determined to cling to their sense of indignation, perhaps an analogy might be useful. Pretty much all of us, I guess, are familiar with the standard pre flight advice as to what to do in the event that a sudden loss of cabin pressure causes oxygen masks to drop down: Secure your own mask before helping others. The advice is aimed at everyone but is most particularly designed to ensure that parents are competent to act before helping their young children. What few people realise is that, in the event of a sudden loss of cabin pressure, passengers at an altitude of 40,000 feet likely have little more than 20 seconds of useful consciousness without the help of their masks. If a parent tries to help their child first but, in the panic and unfamiliarity, fumbles and fails, then both the parent and the child will quickly fall into a state of unconsciousness followed, eventually, by death. The two of them have a far better chance if the parent takes care of him or herself first.
Thus it is with the furlough scheme, companies, and employees.
A White Elephant
But why Spurs? Why should they furlough staff when the likes of Arsenal, Chelsea and even West Ham didn’t? Spurs fans on social media are sure that they have the answer, of course….Daniel Levy. It was just typical of him, wasn’t it? All about the bottom line. Profit. Greed. No surprise that he and Mike Ashley at Newcastle were the first to go for the scheme.
Thus went the narrative.
To be fair, there is a degree of accidental truth in such a superficial reading of the situation. Daniel Levy is more cautious and thorough than most. If it becomes critical that costs be cut, he will utilise whatever means available. He is also thicker skinned than most. He will not shy away from making an unpopular decision if he feels it to be vital to the long term wellbeing of the club. I’d wager that the great majority of Premier League club chairmen would have furloughed staff had they the courage to do so. Liverpool tried but quickly lost their nerve.
The substantive truth however is that, contrary to common misconception, there is no one-size-fits-all strategy for Premier League clubs to survive lockdown. It would be absurd to argue otherwise. Each club faces unique circumstances. For Spurs’ part, it’s no exaggeration to say that they currently have far greater outside financial pressure to withstand than any other Premier League club. It’s not hard to see why. You can’t miss it if you happen to walk along Tottenham High Road. The new Tottenham Hotspur stadium looms massively over the terraced housing around it. And the £637m of debt that helped to fund its construction looms massively over the club’s balance sheet (Spurs official).
I have never taken on debt of £637m……and I’m going to take a wild guess that most people reading this article, or indiscriminately hurling brickbats at Spurs and Daniel Levy, haven’t either. But we can surely all imagine that taking on that level of debt comes with many strings attached. And then some. It’s safe to say that Spurs are not currently free to spend whatever they have in whichever way they please. They are obligated to meet certain conditions first. Which was fine so long as the money was still coming in….
And it was flooding in. Despite eye-watering ticket prices and the greatly increased capacity, pretty much every game was a sell-out. Furthermore, with its outstanding and extensive facilities, the new stadium was earning unprecedented (unimagined, even) levels of match day food and drink revenues. The icing on the cake was that the stadium’s quality and versatility had made it a highly sought after venue for non footballing events – with blue chip event after blue chip event confirmed in the schedule. Spurs were coining it in….
But, like the white elephants of southeast Asia that were considered so sacred that they could not be put to work yet nevertheless had to be lavishly looked after – the Tottenham Hotspur Stadium is now a burdensome extravagance. Spurs must continue to service, and eventually repay, the vast debt. Yet the very thing with which they proposed to do so cannot now, or for the foreseeable future, do what it was built for. Worse still, given the new stadium’s technological wizardry and high level of finish, its maintenance will, by necessity, be considerably more onerous and expensive than the maintenance of the Premier League’s other, largely basic and functional stadiums.
So, yes………it is fair to say that the challenges that Spurs face in the coming months – and maybe years – are very different to those of any other club. The measures that they have to take will inevitably be more extreme than most. And those measures might well include trying to save even a comparatively trivial sum of…..back of a beermat alert….up to £10m per annum by furloughing non playing staff.
That being the case, it is fair to ask why Spurs haven’t forced the players to take a pay cut too. To which the only response can be that Daniel Levy will be desperate for the players to do exactly that. Only, it’s not quite as simple as forcing the issue.
Players (and more particularly their agents) know that they currently have the upper hand. Unlike non playing staff, players aren’t just employees. As distasteful as it might seem, they are also intangible assets. They have real, monetary value to their clubs. Harry Kane alone could be worth as much as £200m to Spurs (The Times). If the club was to enforce a salary reduction on the players, it could be deemed to be a fundamental breach of contract. And that would free players to seek employment elsewhere, if they so chose – thus potentially losing the club hundreds of millions of pounds. Clearly, that is not an outcome that Daniel Levy can risk.
So there has to be a negotiation. And, thus far, it seems that the players haven’t fully grasped what is at stake. Their argument is that they are very happy to give a sizeable chunk of their salary to good causes but that they want to control where it goes. That, they say, is why they are resisting a pay cut. Admirable sentiments, perhaps, but they completely miss the point. The issue at stake is not funding for the NHS. The issue at stake is the survival of football clubs. Players continuing to take full pay, but gifting a good amount of it to the NHS, won’t help to prevent their clubs from going under.
Given that the clubs have been dealt such a weak hand on this issue and given Daniel Levy’s notoriety as a brutal negotiator, it’s not inconceivable that the furloughing of non playing staff was a calculated attempt on his part to gain at least some leverage in the discussion – i.e. if the players would agree to knock another percentage point or two off their salaries, the club would be able to pay the non playing staff in full. A tug on the heartstrings, perhaps; a sneaky guilt trip….? We’ll never know now because, so great was the tide of rage that followed the furlough decision and so damaging the PR fallout that it forced Levy into a climbdown. Whatever he is eventually able to negotiate with the players will have to be achieved without that particular bargaining chip.
The Evil Mastermind
There is something of the quintessential Bond villain about Daniel Levy. You can perfectly picture him sitting emotionless before a big desk, with a fluffy, white cat softly purring on his lap as he sends some hapless, unsuspecting underling to a grizzly doom with the mere press of a button. So it is very easy to imagine that he doesn’t care about the fans; or his employees; or Spurs in general, save for its value as a capital asset. But it doesn’t follow that we should necessarily allow such facile imaginings to hold sway.
For what it’s worth, I get the impression that beneath the quietly spoken, shy and somewhat distant persona lies someone who actually cares very deeply; who is acutely aware of his responsibilities to his employees, to the fans and to society in general. To be clear, I’m not arguing that, behind the facade, Levy is actually a soft and cuddly teddy bear at heart. Nothing so saccharine. It’s just that I don’t buy the lazy depiction of him as heartless and motivated solely by greed. Such a caricature doesn’t bear scrutiny. Not if you have closely followed how Spurs has changed since he took over stewardship of the club. As an employer; as a doer of good deeds; and as a local community stakeholder of huge influence, Spurs has grown and improved immeasurably in his time. In these respects, the club is now among the very best in the country.
All of which is a somewhat circuitous way of saying that Daniel Levy will not have been indifferent to the human cost of deciding to furlough staff. It will have been a decision that he took most reluctantly, and only for what he believed to be the long term good of both the club and its employees. And, sure, I get that whatever is for the good of the club is for the good of its shareholders too. After all, Levy is a businessman first and foremost….not a cuddly teddy bear.
I Know That I Know Nothing
….I have an admission to make. It was at this point in the writing process that I got completely stuck. In trying to consolidate my thoughts and tie the loose ends together, I ran into a brick wall. Possibly because there were too many loose ends; or possibly because my thoughts were too scattered. I couldn’t say. But I found myself doing everything – including tweaking and rewriting everything else over and over – to avoid tackling the closing paragraphs. Which is why, as a last resort, this article has turned suddenly, jarringly meta – like Charlie Kaufman’s screenplay for Adaptation……only without the genius and wit.
The problem is that, like everyone else, I don’t know nearly enough – about pandemics generally; about this virus in particular; about Spurs’ ability to ride out the storm; about how we will all get through to the other side of it..…..or when. The best I have is informed guesswork. It’s messy. And especially when it comes to writing, I hate mess. When I set out on this marathon, I wanted the finish line to provide resolution; to be a vindication of my preconceptions. Instead, it has only thrown up more questions.
But maybe that’s the point? That none of us have the answers; that we are all fumbling in the dark; that we should refrain from moral certainty when our knowledge and understanding is so sketchy. Yes……I think that that is what I originally set out to say before getting lost.
It is the moral certainty that I object to – especially when it is as harshly and relentlessly expressed as it has been, and continues to be even now, nigh on two weeks after Spurs reversed the decision to furlough staff. It’s not that I believe the critics to be categorically wrong. It’s that I cannot agree that they are categorically right, as they clearly believe themselves to be. And I especially cannot agree that they have the right to sit in judgement over Spurs and Daniel Levy without having anything like a full grasp of the facts – or without having lifted even a finger to grasp them.
So enough. Please. Get off those high horses. Even in lockdown, we surely have more productive things to do with our lives than prolonging the rancour or dialling up the sustained barrage of cynicism raining down on our club. It amounts to self harm.
And that’s the last thing that any of us needs right now.
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