A.G.M. 1999

10.12.1999


The AGM for the Tottenham Hotspur plc was again held in White's Club in Paxton Road.  However, this year shareholders had to assemble for coffee and cake in the Bill Nicholson suite in the West Stand (collecting a free handbook on the way), before you were summoned to follow a flunky up some stairs, along a corridor behind the executive boxes, down a staircase in the corner of the North and the West Stands out into Paxton Lane itself and then into White's.  Was this a ploy to get everyone so out of breath that they could not ask any questions ??

The company seem to make it as difficult as possible to attend these do's.  A Friday afternoon in December is not an ideal time to attend and the numbers certainly seemed down on last year's meeting.  I can remember when one was held the morning of a matchday ... or is my memory playing tricks on me ?

Anyway, the top table was laid out for the Chairman & Directors, while another to the left was set up for Bill Nicholson, Igal Yawetz, Martin Peters and George Graham.  As is usual, Bill Nicholson entered to his customary ovation, which the grand old man of Tottenham looked pleased to receive.  The others all came in and the meeting was called to order on the dot of 2.30 p.m.

(I have detailed the answers to the questions asked, but have tended to paraphrase them without, I hope, taking away the gist of the answer.  They tended to fall under the following headings.)

Dividends

As is customary, the formal, financial part of proceedings opens the meeting and there was much debate about the matter of no dividend being issued, while the annual report was being considered.  One gentleman, a pensioner, said that he depended on dividends from his investments to keep him going financially.  Alan Sugar said that until the company showed surpluses over losses (there is currently no surplus because after transfer dealings the company trades at a loss), there would be no dividend.  Sugar informed the audience that most shareholders didn't want a dividend and when asked how he knew, he went on to explain that he was in a no win situation as previously, he had been criticised for giving a dividend (when Terry Venables needed the money) and would be criticised if he didn't as some investors want them.  He should have asked those assembled whether or not they wanted a dividend, although I don't know if that is allowed under Stock Exchange rules or not.  He further added that the 500,000 a dividend would cost would be better paid in salaries to players than go (mostly) into his pocket, which he thought most shareholders would agree with !!  He was asked why he couldn't announce a dividend and then choose not to cash his own dividend, to which he replied that the financial community would not have confidence in a company which did not pay a dividend.  When asked how investors should expect their shares to appreciate, he said that when investment on the playing side of on-field activities (working to the Man. United model) and merchandising, TV rights, etc. picked up, then the share price should be buoyant in the next few years. Someone suggested that despite the Worthington Cup win, the share price had remained static, but the Chairman said he thought that the share shad performed well in a depressed market.  Someone suggested this was because it would deter anyone coming in to buy him out.  Another questioner put it to Sugar that the fact that no dividend was being paid was not consistent with the increase in Director's remuneration.  AS felt that the way the accounts were set out did not reflect the true position about directors pay.  To wrap up the subject of dividends, it was suggested that a token divi could be paid to keep investors happy and those who did not to cash it didn't have to.  Sugar replied that he would take that comment on board, but some said that they have been paying a token dividend for some time now !!

Remuneration

This opened up a whole new area of questioning about remuneration.  Some felt it was unfair for Claude Littner to be paid 200,000 when there was to be no dividend.  Sugar said that the payment was in line with other top executives  in commerce who had a loss of office and anyway, it was less than a year's salary in his outgoing post.  He also felt that there were not enough directors to make up a remuneration panel and so he had to make these decisions himself.  Some one even asked the Chairman why he was paid so little and how he could then justify higher wages for other Executive Directors or players.  Sugar thought that it was strange that a shareholder should think he should take more money out of the club and that if he wanted to give his time and effort to the company for a small remuneration, then that was alright by him.  As a Director and Chairman of a number of companies, he was happy with the salary he drew from TH plc. 

"Shareholder Value"

The matter of increasing "Shareholder Value" in the Chairman's statement was raised by the floor.  Sugar said this would be done by increasing the merchandising arm of the company, by opening new shops and improving sales on the Internet. A worried question about "potential for further development" cross-referenced what has gone on at Newcastle, where season ticket holders have been told they will be moved to accommodate corporate customers.  He was reassured that this would not be the case here and that the comment related to merchandising. A subsequent question raised the matter of WHL's capacity and AS said at the moment the capacity was sufficient, but if there was further success and the ground was sold out for every game, then the expansion of the stadium would be considered.  However, it was always a trade-off between investing in the ground and the team.  Another shareholder informed the Board that if it was increased to a 50,000 capacity stadium, then he would make the money back in two years.

Buy Back

A motion passed last year to allow the board to buy back shares and increase the share price was raised and questioned as to whether it had been used.  Mr. Sugar said it had not.

Internet / Pleat's role

The Internet was a matter which was raised and the fact that Tottenham's website is so poor.  Sugar revealed that the deal with Cable & Wireless was nearly up and that from March 2000, a new, improved website with free commentary service would be launched.  This would include the prospect of interviews and other news items being included.  A question on whether Tottenham were going to buy a feeder club went unanswered, while the matter of David Pleat's salary and the large rise in it was answered by the Chair.  He said that for many AGM's the shareholders had said that they knew nothing about football and that was why someone of Pleat's undoubted knowledge and experience was brought in.  His worth was not entirely or obviously evident as AS was asked regularly about what Pleat did, but he felt that the establishment of the Academy would be beneficial to the club in the long run and would save a  lot of money by bringing players through the ranks.  Pleat's commitment to the cause was also questioned when it was pointed out that he did not hold any shares, but later in the report said he had a large shareholding.  The questioner had read the report wrongly and had seen the part about share options, which Pleat is not entitled to until 2001.

After bringing back some questioners to the fact that this was the financial part of the meeting and that there would be opportunity to ask footballing questions at the end, the motions were all passed and then the interesting session started.

Sol

The first member of the audience congratulated Mr. Sugar for spending 50% of the annual income on assets and while some shareholders were interested in dividends, if that was their sole interest they should sell their Tottenham shares and invest in Marks & Spencers !!  He also asked if Sugar intended to take the company private and added that he was willing to pay whatever it took on his season ticket to keep Sol at Tottenham.  The response was that he would not be taking it private ... ominously adding, "at this time" and said that they would do everything they could to keep Sol at the club.  This lead to a clarification about the club's lack of support in the case taken against Sol by the steward at Derby County.  It was confirmed that John Ireland (Company Secretary) and a leading solicitor accompanied Sol in this matter when it was heard in court.

Stadium matters

Ground matters were raised again in that after Arsenal and West Ham redevelop/relocate, Tottenham would have the smallest capacity in the Premiership.  Sugar thought that both clubs were being quite cunning in their assertions and that Tottenham are currently in the act of preparing drawings for Planning Permission to extend the East Stand above the road in Worcester Avenue, but felt that it might take 18 months of negotiations with the Council on this matter.  There followed a question on the facilities in the West Stand and Sugar said he was aware of this.  He had planned to relocate the club offices above the Ticket Office, but the cost was prohibitive and so it was back to square one.  However, it was something that was in the Board's mind.  One shareholder said he took some corporate clients to the West ham game and was appalled that their food arrived at different times and when he complained, the waitress said she did not speak English. Sugar replied that the contract with Christopher and Letherby runs out at the end of next season and they have been warned about the quality of their service.  The new contract would have standards set and if these were not met, than the contract would be void.  Someone wanted to know why the cameras were up so high at the Lane and that in previous years it had been said they were going to be moved.  Sugar said he couldn't recall that being said, but what was the problem, rather it could be a problem with the questioner's TV !!  Someone suggested he was looking at Dominguez !!  Sugar said that on Sky the cameras are at pitchside, so they give a close up view.

Players, money and progress

The West Stand facilities questioner was also interested in why there were no Spurs players featuring in the younger England teams these days and why Pleat had said a "quick fix" would not be bought for the club - surely Bridges and Keane were not in this category. Pleat answered that a number of players had been involved in the lower England representative sides.  At the moment there are three boys away in La Manga with the England Youth side, while Ben Bowditch is regularly in the Under-16 team.  there are also three youngsters in the Under-16 set-up who would be joining the Academy next season.  As for Bridges, he was brought down to discuss terms after a fee had been agreed with Sunderland, but decided the club wasn't for him.  With Robbie Keane, the club were aware of him and the money was available, it was a managerial decision.  This lead onto a question about GG's 5-year plan and if he wants four quality players, is the money there for them.  Graham himself answered the question by saying he had to get off to a quick start when he joined, because of the position the club was in.  Winning the Worthington Cup was great and getting into Europe, but his first stage takes two years and he had been in post for just over 12 months now.  Alex Ferguson had three years at man U before success came his way and the Board there knew he was doing a lot of work behind the scenes.  Looking at the side now, it is possible to see the effort Ferguson put into the youth set-up.  With Sol's injury and being without Anderton and Ferdinand, the side had done well this season, especially with Chris Perry coming straight in and settling well.  Anderton will be back in the new year, with Ferdie two weeks behind him.  Korsten will be ready for action in a couple of weeks too.  There have been some very exciting games at the Lane this season; the West Ham match being the first when we didn't score.  He felt that Spurs fans were quick to moan and that there was a lot to be happy about, but even when he was winning trophies at Arsenal, there would be groups complaining about something.  A top six finish this season was a natural progression on last year.  He said that DP is doing a good job and the Academy would be a great thing in a few years time as what opportunity would youngsters get at Arsenal and Chelsea, where imports block their way into the first XI.  Graham also went on about Robbie Keane and said he wasn't sure about the player, because we all saw what happened to Kevin Davies - so for every success, he could point to a failure.  Sugar added that there was money available if GG wanted a player and since he came to the club, all the players he has asked for, the club had tried to get them, thus spending 19 million in the process. Wages and bonuses add on another 7 million, but he added that GG had been very sensible about transfer dealings, whereas he could have gone for the first prices which were asked. Someone else asked if top six was the limit of the club's ambition and AS said that as a first step this was.  However, this would get us into Europe and then after GG had been here 3 or 4 years, he would have hoped the club would be around the top three to get into the Champions League, where the money is "awesome".  Would we ever be signing record transfers again and isn't the only way to catch Arsenal and Man. U to bring in the top class stars came from the floor.  Sugar said that Leeds had bucked the trend, but spending big had seen Blackburn relegated and Newcastle baled out of bankruptcy by a sponsorship deal with NTL.  A member of the audience commented that throwing money after players didn't always work - Newcastle had spent 80 million over the last few years and had only won one trophy in 50 years !!  Someone said that he thought the side was very good and possibly only two players away from being top three, while another had  a rant about the club being too inconsistent. Another question about transfers wanted the procedure at the club clarified.  GG, Pleat and the scouts all spot players and many are played against in the Premier League.  Videos and tip-offs come in by the sack load, but it is the manager who decides who he wants and then AS and DP try to get them.

Still on players, a shareholder said that in the old days, players would walk to sign for the club, but that didn't appear to be the case now.  Why ??  Sugar said this was a good question.  He felt the media were a lot more active than previously; filling their pages with rumours and stories, like the one about Horsfield of Fulham, which was completely fabricated.  He went on that agents are the real problem nowadays as they decide when and where a player goes and how much for, depending on how much you paid the agent.  Was this legal someone asked.  It doesn't matter, said Sugar, it is what happens.  He said Pleat's scouting team identify a player, but the agent wants to see how much another club will pay him to obtain the player.  Some players don't even turn up to see the facilities or speak to the manager, just send their agent.  Agents may even be acting illegally, as Jermaine Pennant was all lined up to come to Tottenham, who had done everything to bring him to the club and then, at the eleventh hour, he signed for Arsenal.  because of the alleged greed of one of his agents.  Next he was asked what about Anderton and Lund ?  Anderton's agent was still in "dialogue" with the club, but from 1.1.2000, he could sign a pre-contract agreement with another club and his agent could tout him around to see what he could get.  Sugar added that if Spurs are in his heart and it is not about money as he says it is, then he will sign.  Someone added that if Darren left after the club sticking by him all through his injuries, then it will be the biggest injustice ever.  AS didn't know who Lund was !!  A question was put to Mr. Sugar that he might like to name and shame the guilty agents, but he said that he had enough trouble already !!  Next up was a question about the maximum wage at the club, Ruud van Nistelrooy and Patrick Mbomba of Cagliari.  The wages are spiraling because of TV money coming into the game, but as far as van Nistelrooy was concerned, Pleat said that he was aware of the player and was close to Frank Arnesen (the PSV coach).  The player was content at PSV and last time someone asked how much, they were told 13 million.  However, if he became available the club would be interested.  Mbomba he wasn't so clued up on, but said that he and George had not been to Cagliari, so perhaps they needed a trip there !!  

Then the time came for asking about players we had been linked with - namely, Heskey and a last minute approach for Sutton  .  Pleat replied that Sutton is represented by a PFA agent - Eamonn O'Keefe and at the time, the club were aware that Blackburn wanted 12 million.  They considered this too much, but his agent had told Chelsea that another club was interested to up the ante.  As for Heskey, Leicester were approached, but as has been seen in the papers lately, he only wants to go to Liverpool.  "What about Berkovic ?" came the question, "did you speak to Harry Redknapp about him?"  Pleat answered that he speaks to Redknapp every 2-3 weeks, but did not make a bid for Berkovic in the summer.  The last query about players was about a trip that GG and DP made to Argentina to see a striker.  Apparently, they went, but he was injured after 17 minutes, although they intend to watch him again in the future.

Footballing Statement

A comment was made to the effect that as part of the Annual Report, the manager and Director of Football should prepare statements to let the shareholders know what was happening in footballing terms and offer hope for the future.  Sugar thought this was a good idea, but said that everything in the Annual Report had to be audited and he had problems with other companies trying to get past the auditors to include things in the report which promised things or didn't comply with their rules.  Someone else suggested that it could be included as a small booklet to shareholders, which didn't form part of the formal report.  

Media / TV money

The thorny question of income was raised in the way of a question about Media companies sniffing around the club and Pay Per View (PPV).  The Chairman said that lots of companies had approached the club and it was a bit like selling the family silver.  If you sell now, then two years down the line it could be worth an awful lot more and you look like you have sold cheaply.  Many companies want a tie-in with Internet rights and TV negotiating rights to restrict the freedom of clubs.  One even wanted you to sign away merchandising rights in perpetuity !!  Sugar felt that PPV was just around the corner - 18 months away.  The money associated with this will be huge and media companies want some of this as part of any other deal at the moment.  Agents and players are also carefully watching the situation, so that they can calculate how much clubs should "donate to their cause" !!  With Sky Digital hoping to have 5 million units installed in homes across the country by the end of 2000, the potential for PPV by slipping a credit card into a slot on the box was massive.  Another thing that came up was about the Bosman ruling and wages.  AS said that there was something every year that arose to make running a club more difficult.  TV revenue, Bosman ruling, contractual legislation; they all make it very hard to adapt, but things move so quickly now, that it is very hard to keep up.  They all add to the increasing demands of the players and these days, the gate money doesn't come close to covering wages.  So, the club has to find other ways of raising the money to pay salaries.  One member of the assembly asked for an assurance that players are not sitting at home watching TV if they are injured.  Mr. Sugar said that this is not the case and the manager had them in for longer than if they were fit.  Another shareholder confirmed that they were down at Chigwell on Saturdays when receiving treatment and raised the statement in the report about some players no longer being part of the manager's plans, thus being a drain on resources.  Two have four years left to run on their contracts and he wanted to know why they were still there and what was being done to get rid of them.  Sugar said they could not just be written off, basically "you're just stuffed" !!  He would prefer to see us take a pasting in next year's accounts having got shot of the ballast, but having lightened the payroll.  The club had done everything to get them out on loan apart from wheel them to other clubs !!

Tickets

Ticketing for the Kaiserslautern away leg was brought up.  The person wanted to know why he had to buy tickets in Germany. was arrested on turning up at the ground, was marched across the car park, was videoed, warned not to come within 500m of the stadium and then had to buy black market tickets off the Spurs fans out there to get into the match.  Sugar said "It sounds like you had a bad night" !!   Packages and tickets were sold, with Spurs taking up the full allocation offered.  The questioner said that he was fed up with going with the official tours as they left people behind and his party had to take some of the official tour back with them and catch up the club's coaches at the ferry.
The "supporter friendly" aspect of customer care was raised in relation to the season ticket cock-up at the start of the season.  Also questioned was the fact  that telephones are left to ring, without anyone answering and that a liaison committee with the fans would be a good point to try and iron out the little things that irk us all.  The gentleman said that for a technological genius like Sugar, sorting out the phones shouldn't be hard.  He replied that for a short period of time (i.e. to deal with season tickets) a professional company who claimed to have call centres to deal with large amounts of enquiries was hired; the club not having this facility and it not being economic to introduce it for such short periods of time.  However, the company failed and now the club would have to find someone else for next season.  The fans inconvenienced by the Zimbru delay was recompensed with free tickets for the next match.  The Fans Forum exists for raising matters and the biggest complaints are always about Food and Tickets.  The next point reprised the fact that we were told last year that the Ticket Office "would be sorted", but the glib remark given to the chap asking about his night in Kaiserslautern shows that it displays a lack of sympathy for someone who follows Spurs abroad and speaks volumes.  Someone said that the BBC had a series where Directors and Chairmen go and work back on the shop floor and had Sugar considered going to work in the Ticket Office for a couple of weeks ??  He had queued for 2 hours for West Ham away tickets only to get to the office and be told they were sold out yesterday.  Sugar said that the Ticket Office would always be the bane of our lives.  Why wasn't it possible to purchase tickets on the Internet through the website, another person asked, to which Sugar replied that would be possible on the new site coming in March 2000.  A question about ticket pricing was made when a gent had been charged for a West Upper Stand Centre seat, while not moving seat from what was West Upper Near Centre - a price hike of 40%.  Sugar said that if you get the best view you pay the best prices and he had been getting away with it previously.  He did say, however, that he realises that prices are high - a father taking his two children could buy a video recorder for the price of the tickets - but they were a drop in the ocean compared to the running costs of the club.

Then after two hours it was all over.  Apart from a threat to throw a couple of people out should they continue shouting out or abusing Sugar, it all went off fairly quietly.  No vote of "No Confidence" as was mooted on the radio news, no difficult questions to be fielded by the Board and no change from every other year really.  Although, the amount of food they provided was pretty sparse !!

MARCO VAN HIP

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