What You See is What You Get

by Sugar, Alan

  I will finish where I started on this football thing. I’ll say it again: I wasted ten years trying to do something great for that football club. Yes, I put Tottenham into a sound financial position, but as far as performance on the pitch was concerned, we did nothing.

  Amstrad suffered the most. In those ten years I don’t know what I could have turned my hand to, but I’m sure I would have turned my hand to something – and I’m absolutely sure the fortunes of Amstrad would have been far better. In fact, after I was free of football and had refocused on New Amstrad, we did see our fortunes rise again – and perhaps that tells you something about me.

  Am I a one-trick pony? Can I only concentrate on one thing at a time? I guess the answer to that must be yes. It is perhaps because I have to be in total control and understand everything about everything – every last nut and bolt.

  Football took its toll on me. People say that in the period I was involved in football, I lost my sense of humour – ‘What happened to the Alan who used to make us laugh?’ The Alan who used to make them laugh went into protective mode. He assumed that everybody who spoke to him was sniping; he looked for the ulterior motive behind every question put to him.

  I felt an immediate sense of relief when I left Spurs. For one, the media stopped mentioning me, which was great. I know that Ann and the family were glad that I was able to relax a bit, once all the stress of the constant fire-fighting was over. But it’s true to say that the scars remain and to this day I still find it hard to shrug off the feeling that every question has an ulterior motive; I still remain sceptical and untrusting of new people I meet. I have never regained the light-hearted sense of humour I had as a younger man – it’s really now just dry sarcasm.

  To be fair, these days when I visit the club on match day and take up my seat in the directors’ box to watch the team, I come across passionate Spurs fans who still thank me for putting the club on a sound financial footing. There is a certain smugness about some Spurs fans these days, knowing that out of all the Premiership clubs Spurs is one of the most financially stable and well run. In recent times we have seen great clubs like Liverpool and Manchester United turned into a financial mess by their foreign owners. We’ve also seen irresponsible financial management resulting in clubs like Leeds United being relegated from the Premier League after going into administration and now trying to claw their way back from two divisions below, and, more recently, Portsmouth facing the same struggle.

  Daniel Levy, the current chairman, has continued to run Spurs based on the solid foundations I implemented in my reign and has managed to balance competing in the transfer market with keeping the club well insulated from financial danger while turning Spurs into a force to be respected on the pitch. So I guess I can look back and say that I am happy I took the club from the verge of extinction and helped it to move forward to the position it is in today – a club on the verge of success.

  On another positive note, my daughter Louise got married to Mark Baron on 5 August 2001. Mark was once a member of the boy band Another Level and had also been brought up in Chigwell. The wedding was a grand affair in the grounds of Bramstons. The ceremony and party were held in a massive marquee and, once again, Simon’s sons Nathan and Matthew were page boys. We also had a new addition to the family, Daniel and Michaela’s firstborn son, Alex. There were some funny pictures of Alex taken on the day. Michaela, being a typical Jewish mother, was always worried that her baby boy was hungry and the pictures showed little Alex wasn’t so little – she had chubbed him up good and proper.

  As usual, all our family and friends were at the wedding, as well as people from Amstrad and some from the world of football. In his speech, Mark joked that when he asked me for my daughter’s hand in marriage, he saw a look of relief on my face that he’d only seen once before – and that was when I’d finally sold Spurs to Daniel Levy!

  18

  ‘I Don’t Like Liars, Bullshitters, Cheats and Schmoozers’

  Hired on The Apprentice!

  2002–6

  While I was preoccupied with football, Amstrad’s relationship with BSkyB was going down the pan. By the time I came back to Amstrad, I found we’d lost our position as BSkyB’s main supplier. Instead, Pace had got their feet well and truly under the table, aided and abetted by their new managing director, Malcolm Miller, who had joined them from Sega. To make matters worse, there was talk of a change in technology from analogue to digital and none of our engineering people had any experience of digital satellite receivers.

  The BSkyB situation had been deteriorating for some time. While I was involved with Spurs, I left it to other people to continue the relationship. The last I’d heard, BSkyB had reverted to selling equipment through retailers (and paying them a commission for signing customers up) with Amstrad supplying the retailers. However, unbeknown to me, BSkyB had exhausted that initiative and had decided once again that they would sell direct and arrange the installations themselves, buying the equipment directly from manufacturers. The only problem was, they weren’t buying it from us!

  Sam Chisholm had been replaced by a new guy, Mark Booth, and when I looked at Sky’s management team it was unrecognisable. A new wave of people had been brought in on the marketing side, younger people who knew nothing of the history between Rupert Murdoch and me, between Sky and Amstrad. It was quite an amazing phenomenon. When I tried explaining to this new wave of people who I was and what Amstrad and Sky had done in the past, they couldn’t have cared less. It didn’t occur to them that the existence of BSkyB – and their very jobs – was largely down to Amstrad. That was all history now.

  You can imagine my frustration when confronted with this attitude. Considering what I’d been through with Rupert Murdoch and Sam Chisholm in establishing Sky over the years, I thought the way I was treated by this new wave of individuals was disgusting. Simon, our sales director, told me, ‘They’re not interested in listening to stories from the past – we’re treated just like any supplier. They talk about Samsung, Thomson, Pace and Amstrad in the same breath – there’s no special relationship going on here any more.’

  I called Mark Booth. When Mark took the job, one of the first things he did was meet up with me to have a recap on the past. At the time, he was quite sympathetic to my feelings; now, however, he told me that things had to be handled in ‘a more professional way’. It wasn’t as dynamic as the old times, when I could get on the phone to Chisholm and they’d give us an order. They’d now put in layers of management whom he could not be seen to undermine. This was very much the case in the technical department and these people now had a big say. Some of the technical staff taken on in this new regime were ex-Pace employees who were still very pally with the Pace organisation. It appeared to me that the new regime certainly had a tendency to support and side with Pace. They also enjoyed the hospitality Pace dished out, not to mention flying off to every electronics fair in the world for no reason at all. These jobsworths would use any opportunity to slope off when there was a good junket going. They probably justified it on the basis that they had very important business to discuss with their suppliers, including Pace, who of course would be at every exhibition. The fact that they may have seen and spoken to them the week before made no difference!

  There’s a lesson to learn here. When you are faced with the situation I was, where you actually know the top man, what you imagine to be ‘playing your trump card’ turns out to be administering the kiss of death. You might speak to the boss and try to influence him to override his lower-level management, and this may work once, but after that you’ve made enemies for life with those managers. Believe me, I tried it. It got to a stage where it was like pouring oil on the fire. The more my people alluded to ‘Sir Alan’s great relationship with Rupert Murdoch, the more difficult these people would be, particularly those in the technical department. And the commercial people would find it very easy to cite the technical department as being the ones holding everything up. Unfortunately, it took me a whi
le to realise this new wave of people were a different breed and that my intervention wasn’t getting us anywhere.

  I decided the best thing was for Simon to go along and play the game with BSkyB’s new management, and Ian Saward to join the game with his engineers on the technical side. I’d let them be the front men, while keeping me fully informed.

  The problem with BSkyB in those days was a classic example of a company which – how can I put it? – was simply making too much money! There were endless divisions, all with executive heads of department. Each and every time some marketing brain surgeon came up with an idea, a new division was formed or a new feature was incorporated on the product or a new method of procurement was introduced.

  One example was the e-auction. Simon explained that we were going to be asked to tender for an order for digital set-top boxes, but this tender was going to be conducted on the internet, the idea being that all the manufacturers go online at the same time and start beating each other up. The BSkyB people would oversee the e-auction, like people watching a dogfight, baiting the manufacturers with comments like, ‘Your price is still not good enough – someone else has come up with a better one.’

  I’d never heard of anything like this before and told Simon it was absolutely ridiculous. Why not get on the phone to BSkyB’s buyers and tell them that if they’ve got three suppliers, we’ll just go along with the price they want to pay, as long as it’s fair, and get a third of the orders? In truth, none of the manufacturers ever expected 100 per cent of the orders – we all understood that BSkyB needed three manufacturers to protect their supply chain. But Simon told me I was banging my head against a brick wall trying to reason with these people.

  As the e-auction went on, Simon called me up and told me it was getting stupid. We were being prompted by BSkyB to reduce our price ridiculously. I told him to type in something derisive like, ‘We’re not playing this space invaders game any more. Goodnight. Call us when you get some common sense,’ and we logged off.

  Mark Booth had been moved on by then and the new CEO was Tony Ball. He also came to see me when he first got the job and tried to pick up some history. At top management level, I was still respected and a friend of the company. Tony Ball was a reasonable fellow, he spoke my language and wasn’t a bullshitter in any way, shape or form. I called him and went straight for the jugular, telling him this new wave of people and their mad ideas were a total and absolute joke. I couldn’t stand by any more, sitting there on the periphery, being treated as if we were a piece of shit with all this e-auction bollocks.

  I said to him, ‘The place is being run by a bunch of Harvard Business School graduates. In the meantime, your so-called best pals, the ones who helped your boss start this business, are being kicked to one side, being asked to piss about playing space invaders with this new cyber-bid scheme.’

  My tirade paid off. I had touched a nerve. Tony told me that, in truth, the e-auction had turned out to be a bit of a disaster. When it got down to the nitty-gritty, people like Thomson and Pace were all bidding low, but supplementing their bids with loads of caveats and extra costs, which meant the bids were worthless. He told me they’d paid some consultancy firm a big fee to initiate this e-auction crap and he’d subsequently canned it. When BSkyB finally dished out orders for that particular period, they had to start from scratch in the conventional way.

  Regrettably, you can win a little battle, but there’s always a danger that you will go on to lose the war. Tony Ball had a lot more to worry about than Amstrad and eventually the business ended up being done by the middle management, who were totally pissed off that each and every time something didn’t go right for Alan Sugar, he got on the phone and complained to the boss.

  I don’t know whether I was justified in feeling that I had a right to be a supplier since I’d helped them start the business. I did feel they owed me something, but perhaps I’m old-fashioned – I was in the habit of remaining loyal to my suppliers, but that was an ethic not shared by this new wave of young management. Also, while we had always been able to fight on price, special cosy relationships between buyers and suppliers were never our forte. As a result, we now found our technical ability and quality constantly questioned and compared unfavourably to those of the preferred competition. It simply goes to show that in the cruel, hard world of business there is no sentiment.

  While all this was going on, Ian Saward had managed to get to grips with developing digital satellite receivers in the traditional Amstrad way. We found a very hungry chip manufacturer, Connexant, who could supply the core chips and, more importantly, would take on most of the rocket-science software development, allowing us to concentrate on the hardware. We developed a win-win situation between Connexant and our own hardware people and were able to develop the digital boxes quickly and recover our position from being behind the pack.

  On top of becoming one of the suppliers to BSkyB, we also managed to pull off a deal with Sky Italia, a company owned by News Corporation, to supply them with digital boxes, so things were going quite well on that front.

  However, the relationship between BSkyB’s middle management and Amstrad was still quite frosty, so much so that we were totally excluded from a brand-new technology, one which would go on to revolutionise the face of digital television. This was the digital PVR (personal video recorder), a set-top box incorporating a hard disk drive which enabled users to record TV programmes. It effectively replaced the VCR.

  BSkyB had secretly developed a PVR with Pace – they called it ‘Sky+’. Launched in September 2001, it was a great product. Customers could use an on-screen TV guide to choose the programmes they wanted to record. I fully believed the advent of Sky+ was going to change the habits of TV viewers and I said as much during a Q&A with a group of advertising executives at a function hosted by ITV. They invited me along to give my opinion on marketing in general. During the session, I must have upset the hosts because I told the advertising executives, ‘If I were you, I’d leave ITV and get a job with the BBC because the writing is on the wall.’

  ITV’s revenue came from advertising. Why should viewers sit through an hour-long TV show which effectively only provides forty-five minutes of real programming (plus fifteen minutes of adverts) when they can whizz past the adverts and get back to the programme? My comments that day were premature and the audience couldn’t understand what I was talking about. They thought I was just being provocative. But anyone who was there and recalls what I said would agree about the effect Sky+ has had on TV advertising. In the United States, advertisers are no longer interested in hearing how many people viewed a particular show; they want to know how many people saw their adverts in the breaks. One of the advantages of digital equipment is its ability to store data inside the box which can be read remotely by the broadcasters, giving them visibility on consumers’ viewing habits. Giant companies like Coca-Cola or Gillette in the United States are demanding data to verify that people actually saw their adverts and didn’t skip through them on their PVRs. Only on the basis of this proof are they prepared to pay for advertising.

  When I first saw Sky+, alarm bells started to ring in my head – not because of any concern for the advertising industry, but rather that Amstrad might be kicked out as suppliers to BSkyB. To my mind, it was inevitable that the conventional set-top box would die off and the whole market would change to Sky+.

  Ian Saward told me the engineers at BSkyB would not release any technical data to us – their boss had told them Amstrad was not in the frame to be a supplier of PVRs. I suggested we should go ahead and develop the box anyway and once we had it working I’d present it to BSkyB as a fait accompli and hit them with a fantastic price. He explained that while my idea was good, it would be impossible to develop the box unless certain BSkyB contractors would co-operate and give us some of the technical data.

  It was time for me to get on the phone again to Tony Ball. Tony was a bit fed up with me pestering him all the time and he told me this approach wasn’t doi
ng Amstrad any good inside BSkyB. He said that instead of me crying into my beer, our companies should try to enhance relationships at middle management level.

  The good thing about Tony was that we could talk frankly in this kind of way. I laid my cards on the table and told him I understood that he, as head of Sky, had lots of things on his plate and procurement of set-top boxes was probably one of the least important things he had to worry about. I understood him leaving this matter to his management, particularly on the technical front, but I wanted him to know one important fact. I said to him, ‘Your procurement people are not being fair at all. To be perfectly blunt, they don’t like Amstrad simply because we’ve sung the old “Sugar knows Murdoch” song so many times. On top of this, the Pace people are so far up their arses, it’s untrue. And it’s not just your middle management giving us grief – I get the distinct impression that the organ grinder on the technical side of things is Pace rather than your people. And, of course, Pace is bound to try to stand in our way.’

  I won’t say it was a row, but Tony didn’t like me telling him what I considered to be a few home truths. But he was a fair bloke and, to make a long story short, he instructed his people to release to Amstrad all the technical documentation on Sky+. I told him we’d sign all the non-disclosure agreements he wanted.