Sugar gets Spurs down to business: Amstrad's boss, in a rare interview, explains his plans to make football commercial; the man he sacked should stick to the game

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The Independent Online
ALAN SUGAR, the Amstrad boss, has been in the business of football less than three years, but he looks and sounds like a man who has seen quite enough already.

Never one to mince words, the Tottenham Hotspur chairman says: 'Football still runs itself, in certain areas, with a small-minded mentality. Tottenham has fallen in that category.'

Since Sugar bought into Spurs in May 1991, the sparks have been flying almost continuously. First there was the dramatic falling-out with Terry Venables - after the pair had appeared to present Tottenham, the business as well as the football club, with a dream ticket. Then came the court action, as Venables tried to fight his dismissal. Now the club is anxiously awaiting a Football Association investigation into its financial affairs which might result in Spurs being relegated. No wonder Sugar looks exercised by the subject of business and football.

In a rare interview, Sugar, pacing up and down as he talked, argued that football needed to undergo a significant cultural change if it was to move successfully into a new era. 'Football clubs are now becoming large businesses,' he said, 'with turnovers reaching anything from pounds 18m to pounds 25m a year. In some respects the industry as a whole just has not recognised that.'

In Sugar's world, football clubs need to get their act together, and fast, because of the way in which the business side of the sport is expanding. Just as the potential for profits has increased, so has the danger of huge losses.

'Serious money is involved now. Whereas it would have taken, say, pounds 11m to save a big club three years ago, in three to four years' time it will take something like pounds 25m.'

According to Sugar, football clubs have three main sources of finance: white knights (of which he is clearly one), the clearing banks and institutional investors. He believes there is a limit to the funds available unless clubs operate more professionally.

'The sums are getting so large now that if a club needs rescuing, you don't need a white knight any more - you need a platinum knight. And there must be a limit to how many of them are around, willingto support a business that is not properly run.'

Clearing banks, he said, were unwilling to lend money to clubs because they had trouble covering their risk. 'You cannot blame them. They realise that unlike any other business, you cannot just call in a receiver and close the club down - for fear of having 30,000 supporters screaming at you.

'A club like Tottenham has fantastic assets, a massive freehold site and valuable players. If there were a fire-sale, I honestly believe they would get more money than an ordinary industrial company could achieve in similar circumstances. However, the reality is that a bank would not want to be seen to be pulling the plug on a club that has a heritage going back to 1882 or something. Therefore the banks are very tight on money.'

Sugar opined about the way in which Tottenham's previous financial crises had been partly caused by 'irresponsible spending on players and new stands'.

'Take the construction of the east stand, for example,' he said. 'The professional way would have been to bring in teams of professionals, to have negotiated a price freeze. It's been alleged that that just was not done, that the price kept changing and that what was to be an initial cost of pounds 4m turned out to be more like pounds 9m. That sort of thing just would not happen in a normal company.

'The people who run football clubs tend to take a series of stop-gap measures - to rush out to buy a player, for example. Sometimes they do a pounds 1m or pounds 2m transaction where, in a commercial company, the amount of due diligence would be tremendous. In football, players are bought on the rush, where the main criterion is that they should be signed by four o'clock in the afternoon so they can play the following Saturday. This results in bad buys, whereas it should be a case of holding one's nerve.'

Others, though, say that Sugar's views on transfers are out of touch; that clubs watch players for ages before deciding to purchase them, that they conduct endless medical tests, and that the amount of due diligence would put many businesses to shame. Despite this, however, nobody can really predict how quickly a player will slot into a new team.

Sugar sees his task now as trying to give Tottenham some stability. His new chief executive, Claude Littner, a former Amstrad man, is making presentations to the City in a bid to recapture institutional interest for the longer term. Sugar said: 'Tottenham has been its own worst enemy. The serious institutional investor has just shied away. But we will try to show the City that football, run properly, can be viable.'

In the short term, the task is to ensure that Tottenham escapes relegation from the Premier League - not because the team is likely to fall into one of the bottom places, but because there is a danger the FA inquiry might recommend relegation as a punishment for the way the club has handled its financial affairs in the past. Sugar is used to playing hard-ball in business, and the FA team can be sure he is ready to play it with them.

(Photograph omitted)

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