White Hart Lane and the Importance of Frugality

The only objection I have against European club football is not having playoffs. As an American sports fan, this is a hard concept for me to grasp.

Despite no postseason, relegation encompasses all the anxiety and excitement of a playoff. The bottom of the table as the regular season winds down plays out like the BCS as teams desperately try to avoid relegation to the league below, which would cost a club millions in revenue.

Tottenham Hotspur currently find themselves out of the bottom in thirteenth place. They'll probably avoid relegation this season, but certainly feel the disappointment of a self-fulfilling prophecy not fulfilled.

Every team has its ups and downs, but what is most frustrating for Tottenham fans is the poor results after two summers of record spending. In their outwardly desperate attempt to compete with the top four clubs in England (Manchester United, Arsenal, Liverpool, Chelsea), Spurs have gotten little success in return (aside from the Carling Cup).

A financial report from 2006/2007 season by accounting firm Deloitte showed that Tottenham was quite an anomaly by being one of the richest clubs in the world despite not qualifying for UEFA Champions League. Apparently success without European play meant nothing to those in charge at White Hart Lane.

In a league where debt is commonplace (latest reports show a £3 billion debt for the English Premier League), Tottenham decided to join in on the fun and become a frugal farce.

How do they compete with the top four? By apparently purchasing as many high quality players as possible.

Last summer saw Tottenham outspend (£54 million total) everyone except Liverpool. This past summer Spurs spent close to £60 million, while also selling their top scorers from last season, Robbie Keane (who has since returned after a brief stint with Liverpool) and Dimitar Berbatov.

The past two summers, however, Spurs has spent more than any other club in England. The only good news is they continue to have a halfway decent turnover despite other clubs getting hit hard. The bad news? They have little to show for it.

The idea of spending a lot of money in free agency in hopes of quickly putting together a winning franchise is not foreign to American sports fans.

In exploring expensive off-season spending and its capability to produce championships, I decided to examine North American sports leagues. I barely had to look outside of New York City.

I started with the New York Giants. In 2006, they had the eighth highest payroll in the NFL at $108.1 million. They finished 8-8 and were eliminated in the first round as a wild card.

In the 2007 season, the eventual Super Bowl champions had the lowest payroll at $75.7 million. Who’d they beat in the Super Bowl? The team with the second highest payroll, the New England Patriots ($117.9 million).

The Giants cut roughly $33 million, became the cheapest team in the league, and walked away champions.

Meanwhile, teams like the Redskins and Cowboys spent over $100 million in each of the last two seasons and have come away empty-handed.

In the actual city limits we have an obvious case study for inflated payrolls: The New York Knicks.

It’s no secret that their record payroll has not paid off. Since the 2001-02 season, the Knicks have had at least the second highest payroll in the NBA, having the actual highest for five of the last seven seasons.

Since 2001, the Knicks have gone 256-356, a winning percentage of .418. Even worse, they have not made it out of the first round of the playoffs during this stretch. The NBA champion the past two seasons has spent an average $24.6 million less than the Knicks.

And of course we have to talk about the New York Yankees. The Yankees’ payroll and the correlation to championships becomes a little more complicated than its New York brethren, the Giants and Knicks.

I’d like to emphasize the word excessive in examining the Bronx Bombers.

The Yankees have four championships in my lifetime, and for three of those championships they had the highest payroll in the majors, though not by much.

Take a look at the last four championship seasons for the Yanks and how many dollars separated them from the next highest payroll:

- 1996: Highest payroll by $3.4 million
- 1998: Second highest payroll, behind Baltimore by $7.2 million
- 1999: Highest payroll by $6.8 million
- 2000: Highest payroll by $2.5 million

Excessive? Not really, especially when many people would say their best team was in 1998, when their payroll wasn’t the highest. But the championships ceased after 2000, and the real spending began.

From 2002 on, they have had the highest payroll in the majors – by a lot.

Here’s the dollar separation between the Yankees payroll and the second highest payroll in MLB since 2002 (World Series Champions and their MLB payroll rank in parentheses):

- 2002: $17.5 million (LA Angels – 15)
- 2003: $35.5 million (Florida Marlins – 25)
- 2004: $56.8 million (Boston Red Sox - 2)
- 2005: $84.8 million (Chicago White Sox – 13)
- 2006: $74.5 million (St. Louis Cardinals – 11)
- 2007: $46.6 million (Boston Red Sox – 2)
- 2008: $71.2 million (Tampa Bay Rays win AL pennant with the second lowest payroll at $43.8 million compared to Yankees’ $209 million)

It’s interesting to note that from 2004 to 2006, the second highest payroll dropped each year (a total of $7 million over the three seasons).

In the Yankees’ championship years, the average separation of the two highest payrolls was close to $5 million. Since 2002, the Yankees average a whopping $55.2 million higher than the team with the second highest payroll.

Frugal they are not.

And how many championships has this excessive spending turned out? A big fat goose egg, capped off this year with no playoffs after a 13-year run.

There is no formula that could possibly prove some type of correlation between money spent and championships. Plenty of rich teams have won. But the sports deities frown upon excessive spending and vain attempts to “buy championships,” as we so often put it.

Instead of mimicking the desperation of the Knicks and Yankees, Tottenham should take a page out of the Giants’ playbook. They stuck with Coughlin and Manning, made good draft picks (Jacobs) and played it out.

So as Spurs fans ponder the meaning of this season, a few things to me are for certain.

First, they should not succumb to the temptations of spending money on just any player. Figure out your identity, buy players who can fulfill that vision (Modric - and thank goodness they did not get Arshavin) even if they are not necessarily the best at their position, and find a coaching staff that will carry this out.

Oh—and this is very important—allow what you have put in place to run its course.

Secondly, don’t potentially squander a financially sound franchise to be successful this instant.

They were the only club ranked in the top twenty of the richest European clubs to have not played in the Champions League. That means they’ve figured out how to be profitable without it, so they could have afforded to be patient.

Unfortunately, now they find themselves having to fight off relegation, which could reportedly cost the club more than £40 million in revenue.

They’ve done well by putting a new stadium on hold (a reported mortgage of over £300 million) and have avoided disaster with their bank investment owner. With a new coach who has proven himself more than capable of leading a club to success, the core of players seem to now be in place.

Summer signings Luka Modric and David Bentley have since been joined by English national player, Jermain Defoe, and Irishman, Robbie Keane.

Hopefully the powers that be at White Hart Lane are settled on the club's identity and a return to a summer of frugal terms returns to North London. Besides, the sports deities having frowned on this club after such record spending may now be willing to bestow a little more than middle of the table finishes.