Editor’s note: This article was originally published in January and has been updated following Joe Lewis’ sentencing on April 4.
Joe Lewis, the billionaire and founder of the company which owns Premier League club Tottenham Hotspur, has avoided prison for insider trading but must pay a $5million fine and serve three years’ probation.
The 87-year-old investor had been indicted in the United States for “orchestrating a brazen insider trading scheme” last July.
Lewis’ lawyer had initially claimed the government had made “an egregious error in judgement” by charging Lewis and promised to “defend him vigorously”.
However, Lewis, who founded ENIC Sports Inc, the company that owns the vast majority of shares in Spurs, pleaded guilty to one count of conspiracy to commit securities fraud and two counts of securities fraud at a Manhattan court in January. He returned there on Thursday for sentencing.
But what does this mean for Tottenham?
Lewis ‘ceded official control’ of Spurs in October 2022, didn’t he?
Technically, yes. But in reality, not a lot changed and the noises coming out of Spurs at that time were that it was business as usual.
The club’s steer last year was that the decision was part of the restructuring of the Lewis Family Trusts, with one eye on the long-term future (Lewis turned 86 in February). The day-to-day running of the club has been unaffected and Spurs effectively remained in Lewis’ control.
The Athletic’s report on the change at Companies House, the UK’s registrar of companies, described it like this: “The key point here is that Tottenham Hotspur is still essentially Joe Lewis’ club. ENIC Sports owns 85.56 per cent of the club’s shares. And, to quote from the club’s website, ‘a discretionary trust of which certain members of Lewis’ family are potential beneficiaries ultimately owns 70.12 per cent of the share capital of ENIC’.”
That was an uncontroversial and widely reported take at the time, with The Athletic’s headline saying that “Tottenham Hotspur is still Joe Lewis’ club”. Tottenham, however, have repeatedly emphasised Lewis is no longer the “owner” of the club since he was charged.
Lewis in discussion with Daniel Levy at White Hart Lane in 2014 (Getty Images)
In a statement later last year, a Tottenham spokesman said: “The owner of Tottenham Hotspur is ENIC, with majority control held by a family discretionary trust of which Joe Lewis is not a beneficiary.
“The trust is managed by two independent professional trustees on behalf of its beneficiaries. Lewis ceased to be a person with significant control of the club in October 2022.
“This is a U.S. legal matter unconnected with the club and, as such, we have no further comment.
“Certain members of Lewis’ family are potential beneficiaries of a discretionary trust that ultimately owns 70.12% of the share capital of ENIC. Of the total issued ordinary share capital of Tottenham Hotspur Limited (THL), ENIC owns 86.58 per cent. ENIC also owns one THL convertible A share.
“Lewis ceased to be a person with significant control of THL on October 5, 2022.”
It is perhaps worth pointing out that the Lewis family trust effectively controls just over 60 per cent of the club’s shares (70.1 per cent of ENIC’s stake). The rest of ENIC’s shares are owned by chairman Daniel Levy and his family via a similar setup of discretionary trusts.
So what does this mean for Tottenham?
Tottenham were not mentioned by name in the original indictment, only that Lewis is the “principal owner of the Tavistock Group” and its investment portfolio includes “hundreds of companies, including in agriculture, sports, resort properties, and life sciences”.
Around eight hours after the story broke last year, Spurs issued the following statement: “This is a legal matter unconnected with the club and as such we have no comment.”
Given Lewis’ long-standing relationship with the club, this raised some eyebrows. Lewis has been synonymous with Spurs since ENIC bought Alan Sugar’s 29.9 per cent stake for £22million (then around $32m) in December 2000.
Lewis’ sentence does not, however, impact the day-to-day running of the club or give them problems with the Premier League’s owners and directors’ test.
What does this mean for any future sale of the club?
Tottenham chairman Daniel Levy insisted earlier this week that they are “in discussions with prospective investors” about selling a stake in the club — despite denying this was the case when contacted by The Athletic in November.
In a statement accompanying Tottenham’s financial results for the year ending June 30, 2023, Levy said: “To capitalise on our long-term potential, to continue to invest in the teams and undertake future capital projects, the club requires a significant increase in its equity base. The board and its advisors, Rothschild & Co, are in discussions with prospective investors. Any recommended investment proposal would require the support of the club’s shareholders.”
Levy’s statement led to questions about whether Tottenham’s owners ENIC were about to sell up, but the club say the talks are over selling a stake, not a full-scale change of ownership.
That said, the impenetrable cloud that descended over the club last year has lifted.
When Lewis was originally charged, anyone who was thinking about doing business with him will have thanked their lucky stars they didn’t — albeit anyone who was in serious talks with him, or any of his businesses, would have learned about this issue during the due diligence process, which might explain why the various rumours of interest in Spurs from North America and elsewhere went nowhere.
But now Lewis has pleaded guilty and been sentenced, the skies have cleared and those rumours can resume…
(Top photo: Angela Weiss/AFP via Getty Images))
