by Sugar, Alan
In the meantime, Gino Santini had slung in a bill for £200,000 which we paid into a Swiss bank account. It seems Venables and Ashby had entered into an agreement with him that a fee would be payable as soon as the transaction went through. There was nothing much I could do about it other than demand that he send us a proper invoice.
With the further injection of cash from me and the money from the Gascoigne transfer (plus revenues from gate receipts), we were able to get the Midland Bank overdraft down to manageable proportions and at least I had honoured the promises I’d made to the bank.
In his capacity as chief executive, Venables was totally out of his depth. He knew nothing about merchandising and nothing about the commercial side of business, but he was paranoid about maintaining his status. As he saw it, he’d spent all his life as a player and a manager – this was his big opportunity to become an owner and a boss. The only problem was, he didn’t have a clue about things like Stock Exchange requirements, accounting, cash flow or marketing – he left it all to Ashby.
I was getting very concerned. On many occasions, at board meetings, Venables would make some totally stupid comment, but Crystal, who turned out to be a real arse-licker, would insist that Terry was on the right lines. Berry would take a schtum powder and keep quiet. I looked to him and Ashby for some support when I explained the logical and professional way things should be done, but they were all shit-scared of offending Terry. It was very frustrating and an uncomfortable atmosphere was growing.
I started to notice that Venables was very distrustful of me. He was always looking to see if I was lining my own pockets in some way or another. Every time I said something, you could see him weighing up how this might disadvantage him. Venables had employed his daughter to work in the merchandising department, which, I was informed by Colin Sandy, was burning money as if it were going out of fashion. There was no stock control – players and other playing staff members were simply coming in and taking stuff. ‘That’s how it’s always been’ was the famous expression. I insisted we needed to put in a computer system to create some form of control.
Bearing in mind that I was in the computer business, it made sense for the equipment to be supplied by us at wholesale prices. Venables thought that my company selling the club £4,000 worth of computers was going to make me a fortune. He wouldn’t say it to my face, of course – he got Crystal and Ashby to come up with some cock-and-bull story about a conflict of interests between the public companies. It was totally ridiculous. We needed a computer system and I was in the computer business. Venables was sick in the head with his paranoia about anything to do with money I might get out of the club. He, on the other hand, felt that as joint owner, he was entitled to have as much as he wanted and employ who he wanted. It was a case of dual standards.
He had his nightclub, Scribes West in Kensington, where Tottenham Hotspur bashes were regularly held to celebrate various things. Not that we had much to celebrate, but any excuse: start of season party, FA Cup draw party, winning a game party, Christmas party, New Year’s party, any pitiful excuse. Everyone was invited. The irony was that he made his mates pay for their drinks, but for so-called official Spurs parties, Tottenham Hotspur footed the bill. Spurs was paying a fortune to Venables’ Scribes West club.
I was told, ‘Oh, this is quite normal – football clubs have to entertain all the time and it’s better we do it at Terry’s club than hold the event in a hotel.’ Yet buying £4,000 worth of computers from Amstrad (whose turnover was £350m at the time) was, in Venables’ eyes, lining my pocket.
Crystal had employed the services of Brian Fugler, a small and smalltime lawyer I’d known as a youngster in my Stamford Hill days. Every single litigation we were involved in (and there were a lot) was passed to Fugler to deal with. His fees were outrageously high, even higher than Herbert Smith’s.
Fugler’s brother was employed by Spurs as some kind of design expert to come up with new logos and letter heads and generally restyle the club. Fugler’s cousin was Eric Hall, the resident agent at Spurs, who handled the sales of players, negotiated their contracts with the club and then sent in large bills. Eric Hall would spend seven days a week at Scribes West. He was so far up Terry Venables’ arse it was untrue. I gave him the nickname Anusol.
I had never in my life experienced two people like Crystal and Hall, who were so besotted by this messiah Venables that they would literally do anything for him to get his attention.
As the months passed, I could see things were not going as well as had been anticipated with this so-called dream team. The way Nick Hewer had spun it to the press was, ‘Terry will look after the eleven on the field; Alan will look after the eleven [million] at the bank.’
Certainly, on the pitch, we weren’t setting the world alight. Venables had appointed Peter Shreeves as manager of the team and he wasn’t doing well at all. On my side, however, after a lot of twists and turns with Midland Bank and the Stock Exchange, we finally got the shares listed back on the stock market again – they had been suspended at the tail end of the Scholar era.
*
The acquisition of Tottenham by myself and Venables took place in June 1991. In February 1992, the first division football clubs (including Tottenham) resigned from the Football League to form the Premier League, which was established in May 1992. The Premier League would have the power to organise its own sponsorship and broadcast agreements.
From this point on, there were regular Premier League chairmen’s meetings, which I did not attend, as I was told they were just discussing fixtures and the rules of the game, and there was nothing financial to bother me with. Venables, as chief executive, would go, along with Crystal, and the club secretary, Peter Barnes, would also attend and sit at the back.
On one particular occasion, they informed me that a very important vote on television rights was going to take place. Up until then, television rights for English top-flight football were split between Match of the Day on BBC and ITV, who were paying around £4m per season to the league for the rights to show a few games live. However, there was a feeling among most of the Premier League that a small nucleus of clubs comprising Arsenal, Manchester United and Liverpool seemed to attract most of the television coverage. They were closely involved with ITV and wanted to keep the next round of negotiations with them.
Rupert Murdoch’s BSkyB was making noises that they wanted to bid for the Premier League rights. The whole thing had grown to a crescendo and at this particular Premier League meeting, on Monday 18 May, a decision was going to be made by the chairmen as to which company would win the rights.
Rick Parry, the Premier League’s chief executive, quite rightly insisted that a proper tender process should be followed. Broadcasters would have to deliver their best and final bids by a certain time, which I believe was 9 a.m. Sam Chisholm had previously spoken to me about this, to seek my advice on the sum that would be needed to win the bid.
Rick Parry had been tasked with hammering out the deals with the various broadcasters. This was no longer going to be a closed shop or a foregone conclusion. For the first time, ITV looked like they might not win and they’d have to come up with a darn sight more than the peanuts they’d paid in the past. More importantly, the Premier League clubs now wanted to share the prosperity from any TV windfall – many of them bitterly complained that in the past, the only winners seemed to be an elite few.
On the day of the meeting, I turned up at the Royal Lancaster Hotel. As we entered the room where the meeting was to be held, Trevor East, an ITV executive, was handing out pieces of paper to the chairmen. This was a last-minute dirty trick and it broke the rules of the tender.
I, of course, wanted BSkyB to succeed, so I went to the public phone cubicles opposite the meeting room and called Chisholm. Little did I know this call would go down in the annals of football history – some in the media have described it as ‘the phone call that irrevocably altered the history of sport and media in Britain’. I told Sam that ITV was try
ing to pull a fast one at the eleventh hour and he needed to get hold of Parry quickly and find out what was going on. He asked me to call him back after he’d spoken to Parry.
About half an hour later, I got hold of Sam again. He told me that he had put in his strongest bid in compliance with the tender process, but ITV had somehow found out the details of BSkyB’s bid and wanted to top it.
I can’t recall the exact numbers, but faced with this type of auction (where, for example, £45m per season was on the table and your opponent could top it and win by offering £46m), I told Sam, ‘There’s only one way to clinch the deal – you’ll have to blow them out of the water!’
‘What do you mean by that, Alan?’
‘Look, Sam, they won’t expect a giant increase in your bid – they’ll be thinking you’ll go up in one million pound increments – so make your final bid £60m per season and blow them out of the water.’
I’m not exactly sure what happened after that – how Sam contacted Parry to get his message through or indeed the actual figure he offered, but the meeting of the Premier League chairmen had started and the TV deal was about to come up.
At this point, I interjected, through the secretary, stating that I wanted to declare a conflict of interests. I explained that Amstrad manufactured satellite dishes and that I was a big supplier of BSkyB, who were one of the bidders for the TV rights. I suggested that due to this fact, Tottenham Hotspur Football Club should abstain from the vote, to avoid any accusations that I was acting in my own interest.
Most of the other clubs, including Chelsea, Leeds, Wimbledon, Manchester City and Nottingham Forest, objected to this suggestion, saying that Tottenham not being able to vote might alter the decision. A motion was put forward balloting all the clubs as to whether Tottenham should vote, in view of my declared conflict of interests.
After a lot of protestations from Arsenal’s David Dein and Manchester United’s Martin Edwards, the meeting agreed that Tottenham should indeed be allowed to vote. David Dein was dead against BSkyB and was singing songs of praise about ITV. He was throwing all kinds of curve-balls into the discussion, like suggesting the Murdoch empire might not have the money.
Fortunately, I was there and was able to counter all this rubbish. To be honest, my back was up. I was disappointed by all the sniping going on when discussing whether Spurs should be allowed to vote or not and I could see agendas forming. The big clubs were trying to bully the rest – it was undemocratic. It seemed clear that they wanted to line their own pockets by favouring ITV. I was annoyed, so I went in to bat big time for BSkyB.
After a couple of hours’ discussion, the motion was put to the room as to whether we should accept BSkyB’s or ITV’s offer. BSkyB got the deal. Ironically, they won it by one vote – clearly Spurs being allowed to vote was important. The ITV people were furious.
The next day, I went off to France for a few days’ holiday. My son Daniel called me to tell me the newspapers were full of stories about me telling Chisholm to ‘blow them out of the water’. The stories went on to say that ITV were going to take BSkyB to court and get an injunction to stop this deal going through. Daniel told me that, in football terms, I had started World War Three. There were pages and pages on the whole thing in every national newspaper and it was suggested that it was all down to me.
The thing about football people is that they don’t like change. They tend to get stuck in their ways and this move to BSkyB, a satellite company who were going to charge a subscription, was alien to most of the football fraternity, as well as some of the old sports hacks in the media. They were happy with the way football had been broadcast in the past and were worried that the face of football would change now that Murdoch had got his hands on it. It was quite negative stuff and the non-Murdoch media was giving me a load of stick, suggesting that, as I was a supplier to BSkyB, I was lining my own pockets. However, I had openly declared my conflict of interests, so there was no foundation to this.
A few days later, in the High Court, ITV were again blown out of the water by BSkyB’s lawyers, who argued that the tender for the television rights was conducted in a correct and legal manner. It was a great victory for Sam Chisholm who, coincidently, was at my offices in Brentwood at the time his lawyers called with the news that ITV had lost again. Sam asked if he could call Rupert and give him the good news.
Was I pleased that BSkyB won the deal? Absolutely. Yes, it was going to be good for the satellite business, and yes, it was going to be good for Amstrad, but I had acted in good faith and declared my conflict of interests. In any case, it was also a good business proposition for the clubs because BSkyB stumped up a fortune compared to the peanuts previously paid. It was good for Spurs too, as we’d get a healthy share of the money.
14
Bungs and Barristers
A Backseat at Amstrad and Shooting Bambi’s Mum
1992–4
The affairs of Tottenham Hotspur were not distracting me too much from the core business of Amstrad – at least, not yet. Bob Watkins and I were discussing other markets for Amstrad, including telephones, which is where my friend Dennis Baylin came in (you may recall Dennis, who thought he’d broken his ankle in Florida). Dennis ran a small public company by the name of Betacom, which specialised in selling telephones. He’d sold Betacom to a venture capitalist, but decided to stay on and, together with the capitalist, float it as a public company – I guess this was with a view to retaining some of the shares and hopefully making another windfall. This public company didn’t do very well at all and Dennis did a bit of a Ken Ashcroft. Having made enough money, he figured he’d hang on and work out his contract with the company, then leave.
It was after another Christmas visit to Florida that he called me to say he’d been sacked by his board on his arrival back to the UK. In truth, I don’t think he was too bothered, as he wanted out; what was more hurtful was that some of his so-called colleagues had ganged up against him.
Betacom was going down the drain and Bob and I saw our opportunity. In May 1992 Amstrad PLC made a most unprecedented move in acquiring 66 per cent of the shares of Betacom, also a public company.
No one could understand why I didn’t buy the whole company outright, but in the back of my mind I had the vision of one day, having squeezed Amstrad down through rationalisation and possibly having found a buyer for it, being able to retain this other small public company on its own and effectively start again. Let’s face it, leading a public company had been very good for me. I was able to cash in on large chunks of shares as Amstrad’s share price rose. I made far more money than I could ever have done if the company had remained private, as the only way of getting money out of a private company was by dividends from profits. In the crazy Amstrad days, our stock market rating valued our shares far beyond the equivalent of any dividends I could have taken. So I would never complain about being involved in public company life. How could I?
I had this in mind because it was clear that Amstrad was still struggling. We’d lost the PC market due to the failed PC2000 series, the buzz of blockbuster products had gone and I’d spent so much of my time fire-fighting that I was out of ideas. The share price had plummeted from the dizzy heights of £2.35 and was now hovering at around 26p. The new share options I’d given the staff were worthless, as they were issued at a higher price – 48p.
Marion’s frustration with the retailers as well as the demise of her share options resulted in her resigning in February 1992. I too was frustrated by the situation. I guess the market was losing confidence in us, seeing us shrinking our subsidiaries, shutting things down in Hong Kong, selling off computers at low cost and with profits dropping year on year. Then, in June 1992, we reported a huge loss of nearly £71m – we had taken a realistic view on the value of the massive PC2000 series inventory and had written it down.
Confidence from the market had now totally drained away. From my perspective, this was outrageous. I could see why the market was nervous, but I didn’t understan
d why the share price had dropped to as low as around 22–23p, meaning that the market value of the company was below its asset values – lower than the cash balance in the company! I commented on this several times in the media, explaining that this was crazy. No matter how bad business had been in the last year or so, we still had good assets and potential in the marketplace.
After my summer holiday, I decided to see if it would be possible to privatise the company, so that it would be 100 per cent under my control again. I believed in Amstrad, even if no one else did. I’d amassed a lot of cash from previous share sales and the company had cash in itself. Margaret Mountford from Herbert Smith explained the mechanics of how to make an offer and we also discussed it with Tim Holland-Bosworth from Kleinwort Benson. I’d calculated that as the share price was hovering around the 23p mark, then from a logical point of view, if I offered 30p per share, people would bite my hand off.
Margaret also explained that although the company I was trying to privatise had lots of cash in it, it would be illegal under stock market rules for me to try to acquire Amstrad using its own cash. Instead, I needed to find a bank to lend me the money for a few weeks while the transaction was going through, then pay them back quickly once the deal was done. Lloyds Bank was cautious about giving a guarantee for over £140m, even though they could see the cash was in the company. I was a bit frustrated about this charade – in order to do the deal, I had to put up personal assets as security, such as cash and real estate I’d acquired.
Tim Holland-Bosworth was not particularly happy with the 30p price. Traditionally, your merchant banker would recommend what they felt was a good offer’ to shareholders. I argued with him on the basis of simple logic, saying, ‘Right now the share price is twenty-two pence and it’s been like that for the last six months. Why would anybody in their right mind turn down thirty pence? Why should I offer any more?’