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Spurs Stadium Pays For Itself

4 min read

Spurs Stadium Pays For Itself


Spurs-Stadium


We have seen jealous Arsenal fans on Twitter complaining about Spurs signing Tanguy Ndombélé, arguably Europe's most complete young midfielder, while we have a stadium to pay for. Arsenal couldn't do it and they don't understand how Spurs can go out and break our record transfer fee with our first purchase of the summer.

Got news for these guys, there are more signings to come and Giovani Lo Celso isn't coming cheap either.

Tottenham have a £637 million (€711.86m $808.33m) stadium debt and it has been estimated by a leading firm of football accountants that it will cost the club £47.8 million (€53.42m - $60.66m) a year to pay in interest and loan payments.

The £637 million figure is our loan facility from Bank of America Merrill Lynch, Goldman Sachs and HSBC. This is payable by 2022 and it is thought the interest rate was 3.5% originally, Bank of England changes may have changed that.

Paying back £637 million at 3.5% interest will cost about £22.3 million (€24.92m - $28.3m).

Paying back £637 over 25 years will cost about £25.5 million (€28.5m- $32.36m) a year.

Add the two together and you have your £47.8 million figure.

Each year we pay a piece of the debt, the repayment and the interest on it become smaller as we reduce the amount we still owe and therefore the cost of the interest.

It has been reported that in food, drink, all the match day revenue that doesn't include ticket sales, Spurs generate around £800,000 (€894,012 - $1.02m) per game compared to less than £150,000 (€167,627 - $190,345) at Old Trafford on a good day.

In our final season at White Hart Lane our matchday income was £45.3 million (€50.62m - $57.48m).

At Wembley, this increased to £71 million (€79.34m - $90.10m) and it will increase again at the new stadium. We expect to make over £100 million (€111.75m - $126.9m) (similar to Arsenal) but with lower operating cost via being cashless, brewing our own beer and having our own bakery, we would make more profit from the same transaction figures.

That revenue increase from £45.3 million to over £100 million is £55.7 million (€62.25m - $70.68m) which more than covers the cost of paying for the stadium. The stadium is paying for itself.

We have yet to earn from NFL games, concerts and non-sporting events, additional revenue not generated at other stadiums in the country and when an American franchise is eventually brought to London it is pretty obvious where they will be housed, in a stadium built with them in mind and the most technically advanced stadium in Europe if not the world.

Manchester United converted some of their loan facility into bonds whereby the club had to pay back the investor in a bond a certain amount on a certain date together with periodic interest payments that are lower than the bank facility and in that way they raised £500 million (€558.76m - $634.48m).

That is a route Daniel Levy has said that Tottenham will be going down and that, assuming it is successful, will reduce the £47.8 million figure and improve our cashflow situation.


The plan was to open the new stadium and qualify for the Champions League to coincide, hopefully to then be able to maintain that status with the additional revenue the club would have.

We are thus well ahead of schedule and in a better financial position than we expected to be at this stage. That allows us to now invest in the team, but only invest in the calibre of player we want or youngsters we think have potential.

Pochettino is not interested in just signing someone for the sake of it, as we saw last summer. The winter window is always very quiet for most clubs as nobody wants to release a quality player then.

The club is in the best hands it could possibly be in, both on and off the field.

(This was originally written pre-the publishing of our accounts, so loan figures may be different, but the principle remains the same so I have left it as it was written).

The following article will explain how transfers are paid for and show you the recent article from Football London and others in the main media on our supposed transfer budget are not a true reflection.

Transfer Budgets And Transfer Payments

COYS

6 comments

  1. Sorry to nitpick and broadly speaking I usually agree with this blog which is much better informed and more pragmatic than most others. But the matchday revenue increase of £55.7m needs VAT (as the food and drink is served on premise) removed from it, then also the cost of goods/ingredients/direct cost of sales, then overheads before you can say what is left to contribute towards stadium debt.
  2. Nothing wrong with nit-picking when dealing with accounts.

    That said, it may well be that even if you're right the story (if not the accuracy of the figures) remains the same. The profit may be reduced. It may be that we don't fully cover the overheads of the stadium loan from the stadium itself, but even if we nearly do, and I suspect that is easily supported by the figures, we're in a very healthy position indeed.

    We all remember how our esteemed neighbours down the road struggled after building their new stadium. It doesn't look like we'll suffer in the same way. This is due to exceptional planning on behalf of the Tottenham board. It may even be that we learnt from their mistakes. I can live with that and I hope it brings joy to their hearts too, to know that.

    All in all, looking good down at the New White Hart Lane :-)

    COYS!!
  3. Indeed. Creating significant revenue streams from within the new stadium to make sure it's construction debt doesn't necessarily drag on transfer budgets seems like a no brainer. Its actually quite amazing that Woolwich didn't have the forsight to realise this in their build.
    • I suspect many of the opportunities that have been leveraged by Levy would have been unavailable at that time. Much of the new stadium is designed around cutting-edge technology that simply wasn't there that long ago. Another part of the expected revenue stream is based on the forward thing negotiations of Levy with the Americans about hosting NFL games there. That's not something everyone would even think of, let alone push to fruition in spite of various potential blocks on the way.

      I say we should be grateful to our Woolwich brethren for pointing out some of the pitfalls, as well as to the fact that Daniel Levy is so good at what he does. I don't see any other chairmen being as clever, pro-active & fundamentally competent to get such a massive undertaking over the line. Bear in mind that's also been happening at the same time as our team is having a resurgence like we haven't seen for decades.

      And there are those that will tell you, in spite of all that i…
  4. Sorry but you contradict yourself in this article. You say the loan is payable by 2022 but then divide repayments into 25 years!! There is absolutely NO WAY any of these banks would allow for such long repayment terms. Ive read it’s 8 years in which case the payments will over double to £100m. My guess is until levy is no longer in charge ya fans will not see the benefit of the ‘increased revenue’. The stadium is an investment to increase ENICS investment portfolio. We still haven’t signed anyone and if we do our net spend will not be wildly different to the previous 15 years. We made £115m NET profit last year so there’s your answer as to how we can spend £60m on a player. Let’s see if we do tho!
    • I suspect you're right about 2022. Those reading this blog regularly almost expect such typo mistakes as Clive is hampered by very poor vision at this stage in his life. It makes checking things over before you post very unreliable. I expect it should have read 2042, which would co-incide with the 25 year repayment period.

      As for banks always working to an 8 year repayment schedule, I suspect that, while that may be the normal parameters, building circa billion pound stadia doesn't really fit within that normal. It would make it impossible for anyone except a personal multi-billionaire to undertake such projects (and they wouldn't need to). No business board could ever agree to loans on such terms. I can't imagine a scenario where that would be worth anyone's time even to consider.

      I can't say I speak as a financial expert but 25 years sounds about right to me.

      COYS!!