Only a couple of thoughts, because I really hate getting cast as a defender of ENIC/Levy when, again, I'd be happy to see regime change - I just find some of the complaints to miss the mark and/or be exaggerated.
The genesis of this is this tweet:
View: https://x.com/KieranMaguire/status/1884129673422229992?t=qLj5B2_ELfTH4zdbheqc9Q&s=19
Which when you put it on that little bar graph looks astounding. But there's a disconnect, because that visualization does not capture the scale of time. That's £105M profit
over 16 years. That's equates to £6.5M/yr.
Obviously, it's not strictly spread evenly across the 16 years and we've been much more profitable in recent years. But its also not what it seems to many supporters from that basic graph - that we have massive amounts of capital available for annual spending.
Our wage bill at 42% is a very, very low ratio. As was mentioned, however, that's low even for us and just last year it was higher than woolwich. That aberrantly low ratio is a product of turning over the average age of the squad. I don't think it's necessarily bad - spending money just to spend it is not smart, so we shouldn't just raise salaries to do it. But it does provide us room to recruit players at higher wages.
How high? I don't know. Our 42% wage bill is roughly £117M/yr. Increasing that to 60%, where I think we need to be to realistically challenge Liverpool, would be £167M. That's a £50M increase, or around 6 Romeros - we'd definitely be competing with that sort of talent infusion.
If we got the recruiting right which we rarely do and could easily end up with a load of Ndombeles and Sanchezes. And, if we immediately ratcheted up to 60% how would we grant increases to VDV, Sarr, Bergvall, Gray, Spence, Porro etc. To keep them?
Reality is we expect those players, soon, to be on wages more comparable to Romero (£8.6M/yr, £165K/wk). So we're really looking at maybe having flexible wage room for ±3 more Romero like signings
Nothing was addressed in the video about the capitalization and liquidity of the ownership groups. I maintain our biggest weakness comparatively is our ownership group being much less capitalized/liquid. Too much of Lewis' wealth is the paper value of Spurs, which cannot be leveraged to inject money into the club unless he can find a buyer for some of the equity.
But, it does seem rational to use the 16 year build up of profits for additional capital outlay in additional spending to buy 3 Romero-like players on salaries which push the wage bill ratio to 51% (£143M/yr) - on top of a standard sustainable net spend and salary replacement for players like Davies, Richarlison, Werner, etc. We need a big summer, and have the ability right now to do it. We need to make the investment now, because our big PSR surplus is going to start dwindling because of bad FYs to be filed in the coming years.
