100 Owners: Irving Scholar, Tottenham Hotspur and Nottingham Forest

In November 1982, Tottenham Hotspur was £4 million in debt. For the standards of the time, this was a crippling sum, brought on by a redevelopment of the West Stand at White Hart Lane that had run over budget and taken fifteen months to finish. The old board, led by the Wale and Richardson families, was swept away. In its place came a new regime fronted by a 35-year-old, Monaco-based property developer named Irving Scholar.

Within a year, Scholar had done something unprecedented in world sport. He announced that Tottenham Hotspur would be floated on the stock market. The move, he claimed, would bring in fresh investment to mend the holes in the club’s finances, balancing the books against spiralling transfer fees and the costs of the new stand. It was a radical solution, one that treated a football club less as a community asset and more as a business like any other. The application of Thatcherism to football had found its champion in a working-class corner of North London.

The move was not without its obstacles. The Football Association had a statute on its books designed precisely to prevent this kind of financial speculation. The rules prevented paying part-time directors and unlimited dividends, and restricted what could happen to a club’s assets if it were wound up. Scholar’s lawyers, however, found an elegant, almost too simple, workaround. They created a holding company, Tottenham Hotspur PLC, and made the football club a wholly-owned subsidiary. It was the PLC, not the club, that was floated on the stock market. The FA’s ninety-year-old statute was rendered impotent overnight. It is not even known if the FA ever responded to the club’s request for permission. A template had been created that would be used by clubs time and again over the next three decades.

A Brave New World

The early signs were positive. The first annual meeting in August 1984 announced pre-tax profits of £902,000, a massive increase from the £168,000 of the previous year. On the pitch, Keith Burkinshaw had delivered the UEFA Cup just months earlier, the club’s first European trophy in twelve years. Yet Burkinshaw departed that summer, famously declaring, ‘There used to be a football club over there’. His words proved prescient.

Scholar’s vision extended beyond his own club. By October 1985, as English football reeled from the Bradford and Heysel disasters, he was part of an elite group of owners from Spurs, Arsenal, Manchester United, Liverpool and Everton discussing a potential breakaway league. “If we don’t make changes, our sport will continue to decline,” he said after one meeting. That attempt was headed off by the ‘Heathrow Agreement’, which gave First Division clubs a 50% share of television and sponsorship revenue, but the direction of travel was set. The Premier League’s formation in 1992 was not the beginning of a story but the end of one that arguably started at White Hart Lane.

At Tottenham, the new corporate model began to create friction. The 1988 reconstruction of the East Stand angered supporters on The Shelf, a famous terrace area which was to be largely replaced by executive boxes. The project was delayed, forcing the postponement of the home debut of Paul Gascoigne, the club's record £2m signing, just six hours before kick-off against Coventry City. The club had overreached elsewhere, too. A sportswear deal with Hummel turned sour due to supply issues, and external economic pressures mounted. By the end of the decade, the club was again heavily in debt.

The situation came to a head in the summer of 1990. Desperate for funds, Scholar turned to Robert Maxwell, borrowing £1.1m from the notorious publisher to sign Gary Lineker from Barcelona. The move backfired spectacularly. The board, the supporters, and soon the market turned against Scholar. His willingness to deal with Maxwell was a sign of the club’s parlous financial state. By early 1991, with shares in the club suspended on the stock exchange, Scholar resigned. A battle for control ensued, with Terry Venables and Alan Sugar eventually taking over in June 1991.

The Nottingham Forest Affair

It took six years for Scholar to return to football. His new target was Nottingham Forest, a club struggling to find its feet after the departure of Brian Clough. Forest’s membership structure made outside investment difficult, but by 1996 the board, under pressure from its bankers, was ready to accept a takeover. Scholar was part of a consortium including historian Phil Soar and Saracens rugby club owner Nigel Wray. Their plan was the same as before: float the club on the stock market, this time the Alternative Investment Market.

The float, in October 1997, was a complete disaster. Forest had just been relegated from the Premier League, and the exercise raised just £2m, a mere tenth of the amount projected. Wray, a London-based rugby man, quickly resigned as chairman. His replacement, Eric Barnes, was tasked with putting “the Nottingham back into Nottingham Forest.”

Barnes turned to Nigel Doughty, a local fan and businessman who had been a rival bidder a year earlier. Doughty agreed to invest up to £12 million for a controlling interest. This prompted the resignations of Scholar and his associate Julian Markham in June 1999, with Scholar decrying a “farcical lack of professionalism” from the other board members. But the affair was far from over.

Doughty was advised to put his initial £6m investment directly into the football club, not its holding company. Scholar and Markham sued, claiming the transaction was illegal and had devalued their shares. The demand for the return of the £6m was an existential threat to Nottingham Forest; it was an amount that would have bankrupted the club. The subsequent court case exposed the immense distrust between the directors.

Before the end of the case, Scholar and Markham withdrew their demand for the repayment, acknowledging the damage it would cause. Instead, they sought compensation by trying to force the individual directors to buy their shares. They failed. The judge, Justice Hart, sided with Doughty and the club, finding no justification for the claim that Doughty’s investment was harmful. He ordered Scholar and Markham to pay £3m in costs.

In his summary, Justice Hart captured the feeling of many supporters about football’s brief and unhappy flirtation with the stock market. He described the consortium as “a collection of out-of-town investors who had invested for narrow financial motives… None had local Nottingham connections.” Scholar had seen that football’s old financial model was failing and tried to change it. But his conviction that the stock markets held the answer proved almost catastrophic for both clubs he touched.