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Mar 18, 2008

Spurs escape credit crunch

Tottenham fans can breathe a sigh of relief after the man who owns the club's parent company moved to calm fears that the £500million he's just lost will not force him to sell the North London outfit.

Last week Joe Lewis, Britain's 16th richest man (he's now based in the Bahamas - well, you would, wouldn't you?) and the man who controls the investment company ENIC, found himself out of pocket to the tune of half a billion pounds as a result of the American bank Bear Stearns' collapse.

Analysts had been predicting that Lewis might be forced to tighten his belt and sell-off a few assets in order to offset the loss of a fifth of his reported £2.5billion fortune. Other calmer observers pointed to the fact that with around £2billion of assets still at his disposal, there was no need to hit the panic button just yet.

However, Spurs chairman Daniel Levy, who is understood to have been in contact with Lewis since the global credit crunch claimed its latest high profile victim, has been reassured that selling the club is not on Lewis' agenda.

Lewis holds a majority stake in ENIC, which in turn owns 82 per cent of Spurs, so the decision to bail out or stick in the game clearly has a significant bearing on the club, which is currently enjoying success on and off the pitch.

Coupled to a strong, though ultimately disappointing, UEFA Cup run, Spurs this year landed their first trophy since 1999, boast a decent squad and reported strong profits of £27million for the year ending June 30, 2007. Just as Spurs seem to be finding some stability the last thing they need is a takeover, so that Lewis is looking to ride out the storm is good news indeed.

One interesting question that might have crossed Lewis' mind is how much he might have got for Tottenham in the current market, and who might have been able to stump up the cash?

Debt-financing is currently the choice for most investors who want to spice up their portfolio with a football club, unless of course you are a deep-pocketed billionaire.

The problem is that the current economic climate means that borrowing against future earnings or other similar refinancing options are unlikely to be met with a positive response in the debt markets; meaning that the pool of potential suitors for football clubs could be dwindling fast.


If you live in the UK, don't have Sky TV and are not partial to paying to stream games over the internet the chances are from the 2009-10 season onwards you are going to struggle to get anything like comprehensive Champions League coverage in the comfort of your own home.

Sky, the UK's dominant pay-television operator, has acquired all the available rights, save for one single match per week - the first choice of those games played on Wednesdays - after tabling a bid valued in excess of £240million for the TV rights to the Champions League until 2012.

The one remaining game per week will now go out to a second round of bidding with the rest of the UK's broadcasters set to fight it out for this highly-coveted television property.

While it would not be a surprise if a commercial broadcaster like ITV or Five landed the last remaining game, the same cannot be said of the publicly-funded BBC, which because of its licence fee funding is not permitted to show or sell advertising, a factor which has been a key concern for UEFA and the sponsors of the Champions League.

The problem isn't the pitch-side boards, but rather the added value bumper ads Champions League sponsors gets either side of the commercial breaks which are scheduled before and after the game, and at halftime.

When involved in the first phase of bidding it was reported that in order to placate tetchy sponsors worried about not getting as much screen time on the BBC, the broadcaster, and therefore the licence fee payer, would have been required to provide a £10million premium on top of a competitive bid.

When it comes to sports coverage the problem for the BBC is that a large body of licence fee payers, not to mention politicians, object to vast amounts of what is basically public cash being spent on expensive sports rights; it would be anathema to these critics to have to pay extra simply to placate sponsors who don't like the idea of seeing the Champions League on the BBC.

The chances are that ITV will pip Five and the BBC to the last remaining game and will therefore retain the Champions League they have partnered since 1992. But if you want more than one game a week starting saving up for your Sky Sports subscription.


A new report from South Africa's Sports and Recreation Minister, Makhenkesi Stofile, has revealed that the country will spend 30billion rand (£1.8billion) on hosting the 2010 FIFA World Cup, which is scheduled to kick-off in 815 days.

However, despite the scale of investment in the country itself and in event infrastructure, serious doubts still remain over South Africa's readiness to host the World Cup, with power cuts, crime rates and stadium construction the key areas of concern.

Around 20 billion rand has already been spent on upgrading existing stadia as well as building new venues, but grave concerns are still circulating over the Nelson Mandela stadium in Port Elizabeth, with FIFA set to decide in April whether to scrap the venue from the Confederations Cup in 2009.

Similarly, around 1 billion rand will be made available to the local police in order to ensure safety and security at the event, with more than 40,000 police dedicated specifically to World Cup duties.

Since the turn of the year, South Africa has been enduring powercuts which have left millions without electricity; the entirely sensible, though slightly anachronistic-feeling contingency for the World Cup will see the deployment of generators at stadiums.

With the South Africa hoping for an influx of around 450,000 visitors for the tournament the worry is that negativity publicity could prove to be damaging to the tourism industry.

Let us hope that over the next 800 days all such fears are allayed.


  • Any thoughts? Then you can email Phil Holland.