by Sugar, Alan
It was an awful time and very demoralising. Ken Ashcroft came to me one day with some story about wanting to retire. He explained that he’d spent his whole life working and now he’d made some money on the share options, he wanted to move on. He wasn’t at retirement age; I think he was one of those people who liked to be associated with success. Clearly the Amstrad bubble had well and truly burst and there was no single product or idea that was suddenly going to elevate us to our former glory. All Ken could see was aggravation ahead and he wanted out.
He suggested we recruit a heavy-hitting senior accountant and offered to bed the guy in for six months before leaving. We hired a very experienced finance director from Gillette, Peter Thoms. Having worked for this large international company, he most certainly would be capable of putting systems into place which would get Amstrad and its subsidiaries into reasonable shape again – at the very least, we would have proper credit control, not to mention control of over-optimistic salespeople. Unfortunately, Peter wasn’t as sharp as I had hoped and didn’t last long. Eventually, we promoted Tony Dean, one of our existing senior accountants, to the role.
Marion was very frustrated. She had seen her shares-wealth dwindle and she kind of blamed me for the fact that she’d held on to half of her shares. I reminded her (and some of the others) that I’d gifted them their share options and that the million-pound windfalls they’d enjoyed a couple of years ago were just that – a gift.
Also, her reputation had waned in the French marketplace as our fortunes declined. She had become a legend there. She’d been bigged-up by the press and had won lots of awards, such as Businesswoman of the Year. She was now suffering a bit of a downer, like a fallen star. On top of this, giant companies such as La Redoute and FNAC were refusing to take stocks – she ended up rowing with her customers about their lack of loyalty.
To their credit, Bob Watkins and Malcolm Miller were hanging in there with me, assisting in whatever way they could with the fire-fighting process, constantly trying to think positively about new product sectors we should enter.
*
In between bouts of fire-fighting, I used to cheer myself up with new ideas. I was always on the lookout for new innovations. One of those ideas came from thinking back to how we went from the single cassette tower system to the twin cassette version. I wondered if the same philosophy could be applied to VCR. I was conscious of copyright issues, however. I had to think carefully about how we could justify a twin-deck VCR without getting ourselves into lots of trouble, because in those days people rented pre-recorded tapes from Blockbuster and a twin-deck VCR might be thought of as a means to copy them.
However, after a bit of fancy work in the software and electronics, we designed a product that would allow a customer to load the double-deck VCR with two tapes and set the thing to record for eight hours. Bingo – that was it – the true justification of why we would make a twin-deck VCR.
It was not easy to convince Funai to produce this product. They started to worry that the licence-holder, JVC, might complain that the product incited copyright infringement. There were many twists and turns and arguments which I won’t bore you with, but eventually we managed to convince Funai that the product was viable. I knew if we could reach the magic £399 price point, it would be a big hit.
Of course, our advertising displayed a bold warning of how it was illegal for people to copy copyrighted material and we also put large red labels on the front of the unit and outer packaging. There was uproar within the media industry about this product, but despite their protestations, there was nothing they could do. Amstrad had cleverly warned consumers – using the same reverse psychology trick as we used on our audio units – that the Double Decker must not be used for illegal purposes. The product was born and became a tremendous hit in 1990.
It was something positive, as was our business with Sky, but overall it was still a pretty horrible time.
13
‘Terry Will Look After the Eleven on the Pitch . . .’
‘I’ll Look After the Eleven Million in the Bank’ – Buying a Nightmare
1991–2
As a kid, my dad and Uncle Jack used to take me to see Spurs play. We always stood in the East Stand, on the right-hand side, and my dad would lift me up and put me on top of one of the crush barriers so I could see. Sometimes he’d lift me up over the turnstile to avoid paying for me, winking at the man in the cubicle at the same time. He also used to take me to reserve games quite a lot, which in those days were played at White Hart Lane. I don’t want to portray myself as a fanatical Tottenham supporter, but most people tend to follow one football club – and Spurs was my club. It’s one of those things you do for life – every Saturday you watch out for your team’s results and follow their progress. My brother Derek was a real Spurs fanatic. He had a season ticket and he’d go to every game with his mates.
I was so busy during Amstrad’s early days that I never had time to go along to Spurs. Ann’s brother, Mark, was a big fan and would take Simon and Daniel to White Hart Lane sometimes and one of our neighbours up the road in Chigwell was also a massive Spurs fan and would take the boys there occasionally. I went along a few times with Mark and Ann’s cousin, Melvin, another fanatic. So that gives you an honest background to me as a Spurs fan.
Around 1991, I couldn’t help but read in the newspapers about a load of aggravation going on with Spurs’ finances and how it was on the verge of bankruptcy. My friends and my kids were telling me that the club was in danger of being shut down. It was one of those things you tended to hear in the background but not pay too much attention to.
On Saturday 18 May 1991, I was at home watching the FA Cup Final. Spurs were playing Nottingham Forest. A deal had been done by Spurs to sell Paul Gascoigne to the Italian club Lazio for £5.5m at the end of the season, which would pay off part of Spurs’ debts. The fans were not happy, but accepted it as part and parcel of the survival of this famous club. We beat Forest 2–1 that afternoon, but regrettably Gascoigne suffered a serious knee injury, which meant that his transfer to Lazio was off and the £5.5m obviously wouldn’t be coming. Nevertheless, Spurs had won the Cup and were in Europe the following season.
To this day I don’t know what possessed me, but on the following Monday, I put out a call to Spurs’ manager, Terry Venables. I’d met him previously, as he once took part in an advertising campaign for our hi-fi tower systems – we’d used the strapline ‘Great Players’. I’d received a call a few years earlier from the Inland Revenue, asking us to provide details of the fee we paid him, and I’d called him out of courtesy, marking his card that we had to supply the Inland Revenue with these details. Terry also attended one of our dealer dinner bashes as a celebrity speaker. Terry was a friend of Gerry Eriera’s partner, Morris Keston, so I was able to pick up the phone to him to find out where the land lay as far as Spurs was concerned.
The newspapers had reported that various consortiums were going to buy the club from the existing owner, Irving Scholar. All failed because none of them had any money! There was also talk that Terry Venables, who’d been managing the club for over three years, was going to try to get his own consortium together to buy the club off Scholar. From what I could gather from the newspapers, Venables was at loggerheads with Scholar who, as chairman, had been cast as the bad guy, responsible for the demise of the club. Reading the papers, you got the impression that everything wrong with Spurs, both on the pitch and in financial terms, was down to Scholar. Scholar was the devil and Venables was the white knight – only without any money.
I made the fateful phone call on Monday 20 May and got through to Venables immediately. I agreed to meet him and his adviser, Eddie Ashby, at the Hilton Hotel in Park Lane later that week. It was the same night I was due to attend an industry dinner.
I couldn’t quite understand why people were hovering around as we sat openly in the Hilton lobby. Naïvely, I didn’t grasp that the mixture of Alan Sugar, the multi-millionaire, and Terry Venables, manage
r of financially struggling Tottenham Hotspur, was bound to get tongues wagging. To be honest, I didn’t realise how high-profile football was.
The first indication I had that our informal meeting at the Hilton had attracted some attention came on Saturday night. I was out for dinner at Langan’s Brasserie when suddenly a journalist from the Sunday Times appeared at my side and asked, ‘Did I hear that you’re buying Spurs?’ I was shocked.
‘No, it’s not true – I haven’t bought Spurs. I haven’t done anything like that at all. I was just discussing it. I’ve really got no comment to make.’
Ann turned to me and said, ‘What’s all this? Spurs?’ as did the friends we were having dinner with. When I explained to her that I was thinking of taking over Spurs with Terry Venables, she looked at me as if I were nuts. ‘Since when have you been interested in football? Bad enough you used to be out flying every Saturday – now I suppose you’re going to be at football every Saturday!’
‘Calm down,’ I said to her. ‘It’s only a discussion at the moment. It could be a good financial deal because it’s a public company and I believe there’s potential in football.’
Sure enough, the headlines in the business section of the Sunday Times the next day read, ‘Sugar to take over Tottenham Hotspur’. It was at that point that I realised what a high-profile thing this was. My phone didn’t stop ringing that Sunday. Everywhere I went, people were asking me, ‘Are you going to do it? Is it true? Will it happen? Are we going to buy any players?’
Daniel and Simon were very excited at the prospect. Daniel in particular wanted to know every detail. He’d followed the Spurs situation closely and, like all fans, understood that the devil was, allegedly, Irving Scholar. Daniel asked me on a daily basis throughout the course of the next week what was happening. Were we going to end up buying it or not? What was Scholar doing? What was Scholar saying? He called him ‘Swerving Irving’.
At the Hilton meeting, Ashby had explained that Venables had £3m available and if someone else would match that £3m, then between them they would have enough of a fighting fund to buy Scholar’s shares and take control of the company.
I’ll say it again – I have no idea what prompted me to get involved, but I agreed to meet Ashby at my offices in Brentwood, so we could sit with my accountants and go through the financial situation at the club.
According to Ashby, unless this great institution, Tottenham Hotspur Football Club, was rescued, the next move would be the Midland Bank calling in the liquidators to shut it down. I told Ashby I was prepared to go ahead on the basis that Terry put up his £3m. I would then match it with my £3m and we’d each own the same number of shares acquired from Scholar and another shareholder, Paul Bobroff. (It was necessary to acquire both Scholar’s and Bobroff’s shares to take control of the company.)
My vision of Venables at the time was of a chirpy chappy, a shrewd lad. He was rumoured to own lots of clubs and pubs and he was a so-called football genius. He’d played for Spurs in the past and had a couple of England caps. As a manager, he’d taken Crystal Palace and QPR into the first division and was in charge of Barcelona at one time. He came highly recommended by the likes of Gerry Eriera and Morris Keston.
It never dawned on me to challenge whether Venables actually had £3m of his own money. You must be thinking now, ‘Is this Sugar really a clever bloke?’ After years of wheeling and dealing, making millions, I was now about to enter a transaction without bothering to check whether my new partner had any money or not.
Venables and I enlisted the services of a merchant bank, Ansbacher, to act on our behalf in buying Scholar’s and Bobroff’s shares. To fast-track this part of the story, a bunch of lawyers and accountants drafted up an offer document, I had discussions with Scholar at his home in Monaco about acquiring his shares and we near enough agreed on a price of 75p.
There was a lot of publicity surrounding this possible acquisition and media mogul Robert Maxwell, owner of the Daily Mirror, was making noises on the front page of his paper that he was going to rescue Spurs. This was a fly in the ointment, as negotiations between the old owners and us were being stalled by them throwing this spanner in the works as an alternative. It was very confusing at the time, as Maxwell’s offer looked quite credible.
I was really hyped up to ensure that Maxwell would not scupper the deal. Andrew Neil, now back as editor of the Sunday Times, called me trying to be helpful by bringing me up to date on what his market intelligence was telling him about Maxwell’s intervention. As I was so hyped up, I rudely said, ‘That’s not news, Andrew, I know that already.’
Andrew saw this as a massive insult. He was trying to help and I was so dismissive. He got very angry on the phone and basically told me to get stuffed. It was a case of my mouth working faster than my brain – instead of thanking him, I came across as a real bigshot and deserved the bollocking. A few minutes later, I called him back to apologise, but he was still fuming and from that day on he’s been quite hostile to me. Obviously a man who doesn’t forgive and forget.
The whole thing reached a climax at Ansbacher’s offices on Friday 21 June. Venables, Ashby and I were present when Bobroff turned up to sign some documents and sell his shares. Scholar had sent his lawyer along, but had still not agreed to sell to me. Something fishy was going on. Then the officials at Ansbacher told me they’d received an eleventh-hour approach from Robert Maxwell, who was sending a team of people down to Ansbacher’s offices to scupper the Venables/Sugar deal, stating that he’d agreed to buy the shares off Scholar and Bobroff.
I was still digesting this information when one of the officials from Ansbacher told me that Robert Maxwell was on the line and wanted to speak to me. Maxwell told me to back off from this transaction, that Venables was not a man to be in partnership with. He suggested that the better partnership would be him and me.
Maxwell said he could assure me that he would be a passive investor. I’d seen enough of this outlandish man to know there was no way he could ever be passive about anything! He was already the owner of Derby County FC and I remembered watching this fat oaf running across the pitch on TV after his team had won an important match. I also remembered the days of the Sinclair deal and how Maxwell had plastered himself across the front page of his paper, claiming he was going to rescue Sir Clive.
After listening to his rant, I told him, ‘I deal in simple facts. We have bankers’ drafts here on the table, ready to do the deal. With respect, Mr Maxwell, you do a lot of talking – as you did on the Sinclair deal – but when it comes to putting your money where your mouth is, you seem to back off. I’ve been told you don’t have any money. Does this mob you’ve sent down here have a banker’s draft with them?’
Maxwell went nuts, spouting off a load of rubbish. I cut him short and said, ‘Okay, that’s all well and good, but do you have the money – yes or no?’
He started waffling again and again I cut him short. ‘You don’t have the money, right? So in that case you’d best tell your team of lackeys to piss off and let me get on with this deal.’
He hung up.
I’d sussed out that Maxwell had no intention of buying the club; he was just looking for another front-page story on how he was going to rescue Spurs. Nevertheless, he’d sent a team of lawyers and bankers down to Ansbacher’s offices. I instructed Ansbacher’s people to lock them in another room and keep them away from Bobroff.
Bobroff, meanwhile, had received a call from Scholar telling him that Maxwell was about to make a counter-offer and that Maxwell’s people were actually there in Ansbacher’s offices. He told Bobroff to insist on seeing them. We couldn’t stop him, so he went off for about a quarter of an hour, then came back and said, ‘They’ve offered me eighty-five pence per share and you’re only prepared to pay seventy-five.’
Everybody was panicking. I pointed out to Bobroff that this was his onetime opportunity of walking away with a banker’s draft for his shareholding. My bank manager was there in the building with the banker’s
draft ready. I said to Bobroff, ‘Maxwell can offer you eighty-five pounds a share, as far as I’m concerned, but you’re not getting one penny more from me. The difference is, we have the money and they don’t.’
I explained to him that Maxwell was full of shit. He always talked about buying things, but did not perform. He tried to impress people as ‘Robert Maxwell, the billionaire’. No one other than me would have had the audacity to ask him whether he actually had the money. The bottom line was, he didn’t have the money – simple as that.
I said to Bobroff, ‘I’ll come with you, if you want. I’ll talk to Maxwell’s financial advisers. Just ask them if they have the cash to give you today.’ Bobroff went off on his own and came back ten minutes later, talking some bullshit that Maxwell wouldn’t pay him the money until Scholar had also agreed to sell to him.
I reiterated to Bobroff that, surely, as a clever businessman, well respected in the property business, he could read between the lines and see that Maxwell was full of crap. I finally convinced him to sign a share transfer to me and we gave him a banker’s draft in payment for the shares he owned, at 75p per share. I asked Bobroff to call Scholar in Monaco and tell him that he’d sold to me, but he was frightened to do so, as I think he’d made some kind of gentleman’s agreement to sell to Maxwell.
I ended up calling Scholar in Monaco. I told him about the fiasco which had just taken place and that he could check it out with his lawyer, who was standing next to me. An hour or so later, Scholar called back to say he’d accept the deal. He congratulated me and told me to make sure that we won the European Cup-Winners’ Cup now that we’d won the FA Cup.