Why Spurs Have A Small Transfer Budget
Why Spurs Have A Small Transfer Budget
Good morning once again folks.
Well it is morning as I start this article with a Magpie crowing outside as it eats some of the suet that has dropped into the tray from the suet bird feeder.
Birds like Magpie's and unfortunately pigeon's, which seem to be bright birds, sit in the tray and eat or, in the case of pigeons, sometimes just sit in the tray and watch the world go by as it swings.
The plan is to get this Tottenham Tittle Tattle completed this morning (it now takes 4 hours to write an article that used to take an hour) and continue to attack the big planter with holes in that I want to grow different herbs out of different holes.
Not forgetting to fill the pond with more water as it evaporates very quickly at this time of year. It goes down at least an inch, double that on a hot day.
Very easy to get sidetracked instead of writing you guys an article but one must look after the frogs.
OK, what are we going to talk about today?
Today (Tuesday) I'm going to take another look at Tottenham's situation this coming transfer window and why we are short of money and thus having to be prudent.
The Manchester City ruling is disgusting but their claim that the evidence used to punish them was inadmissible because of the way it was obtained has won the battle.
Man City were built on inflated sponsorship schemes, everyone knows it, but nobody can prove it. Internal Man City documents prove it but they have not been passed to UEFA as part of the investigation and thus can't be used.
So Man City are guilty of breaching FFP rules but nobody can prove it.
Does this mean an owner can simply pump money into a club now, no it does not.
Chelsea owe Abramovich £1.4 billion, which at some stage will have to be paid back,presumably upon the sale of the club.
Let's concentrate on Tottenham though.
Well it is morning as I start this article with a Magpie crowing outside as it eats some of the suet that has dropped into the tray from the suet bird feeder.
Birds like Magpie's and unfortunately pigeon's, which seem to be bright birds, sit in the tray and eat or, in the case of pigeons, sometimes just sit in the tray and watch the world go by as it swings.
The plan is to get this Tottenham Tittle Tattle completed this morning (it now takes 4 hours to write an article that used to take an hour) and continue to attack the big planter with holes in that I want to grow different herbs out of different holes.
Not forgetting to fill the pond with more water as it evaporates very quickly at this time of year. It goes down at least an inch, double that on a hot day.
Very easy to get sidetracked instead of writing you guys an article but one must look after the frogs.
OK, what are we going to talk about today?
Today (Tuesday) I'm going to take another look at Tottenham's situation this coming transfer window and why we are short of money and thus having to be prudent.
The Manchester City ruling is disgusting but their claim that the evidence used to punish them was inadmissible because of the way it was obtained has won the battle.
Man City were built on inflated sponsorship schemes, everyone knows it, but nobody can prove it. Internal Man City documents prove it but they have not been passed to UEFA as part of the investigation and thus can't be used.
So Man City are guilty of breaching FFP rules but nobody can prove it.
Does this mean an owner can simply pump money into a club now, no it does not.
Chelsea owe Abramovich £1.4 billion, which at some stage will have to be paid back,presumably upon the sale of the club.
Let's concentrate on Tottenham though.
Financial figures released in March 2020.
Revenue: £460.7m year ending June 30 2019
£184m spent on player registrations.
Published with the accounts by Daniel Levy:
“We are all facing uncertain times both at work and in our personal lives. I have spent nearly 20 years growing this Club and there have been many hurdles along the way – none of this magnitude – the COVID-19 pandemic is the most serious of them all.
“You will have noticed that we have, as a necessity, ceased all fan-facing operations. With such uncertainty we shall all need to work together to ensure the impact of this crisis does not undermine the future stability of the Club."
And yet sections of our fans continue to work against the club on social media, generally through a lack of understanding of the football business.
Football has been dictated by who has money in the Premier League era.
As a recent article showed 88.88% of all domestic trophies have been won by clubs with more money than Spurs.
Of the 9 trophies out of the available 81, not won by the richer clubs, Tottenham have won 2 of them, which is 22%, not the 18% previously mentioned.
Spurs won the League Cup in 1999 and again in 2008. We would have won it in 2009 if the referee had done his job properly and reduced Man U to 10 men in the first quarter of the game in the final.
Tottenham reached the final in 1999, 2002, 2008, 2009, 2015. That's 5 finals in 21 years, 6 when you add in the UEFA Champions League final.
So we could, with a better mentality, have won several trophies in the last 27 years.
OK back to the financial figures after that little foray.
Football has been dictated by who has money in the Premier League era.
As a recent article showed 88.88% of all domestic trophies have been won by clubs with more money than Spurs.
Of the 9 trophies out of the available 81, not won by the richer clubs, Tottenham have won 2 of them, which is 22%, not the 18% previously mentioned.
Spurs won the League Cup in 1999 and again in 2008. We would have won it in 2009 if the referee had done his job properly and reduced Man U to 10 men in the first quarter of the game in the final.
Tottenham reached the final in 1999, 2002, 2008, 2009, 2015. That's 5 finals in 21 years, 6 when you add in the UEFA Champions League final.
So we could, with a better mentality, have won several trophies in the last 27 years.
OK back to the financial figures after that little foray.
£135m commercial revenue constitutes 29% of our income.
The pandemic and lockdown will mean a fall in commercial income because sponsors will, of course, be receiving less exposure of their brand and obviously we will be making fewer retail sales with nobody able to come to the stadium on match day.
The stadium isn't earning money either.
If we assume a 20% drop for 3 months (but how long is this going to last) that's £5.5m, for 6 months £11m.
The stadium isn't earning money either.
If we assume a 20% drop for 3 months (but how long is this going to last) that's £5.5m, for 6 months £11m.
TV revenue is estimated to be down £18m this season. If the situation continues then there will have to be a reduction in TV and global broadcasting revenue for next season as well.
Lost matchday revenue this season for the last 5 home games is £15.1m (£3.025m per game). Add to that the other games behind closed doors this season and do the same for next season, if we still have no fans.
Spurs Net Transfer Debt is £83m, only Manchester United have a higher transfer debt thus us with £170m.
Transfer debt is calculated from money we are due to receive for players sold and money we have to pay out in instalments for players bought.
Right, the board predict a £200m loss in revenue in the coming season.
So, income £460.7m - £200m = £260.7m
That is where we are at £260.7m expected income.
Right, the board predict a £200m loss in revenue in the coming season.
So, income £460.7m - £200m = £260.7m
That is where we are at £260.7m expected income.
Spurs interest payments on loans amount to £26m (highest in the Premier League) to pay for the new stadium.
Going off at a further aside, only two clubs in the Premier League have the top credit rating available and can thus get a loan from the Bank of England.
As you know, we have taken out a £175m loan, none of which we can use for transfers, to help our cash flow and pay wages.
That loan is at an interest rate of 0.5% and we don't start making repayments for 12 months from the day we took it out.
Spurs are only in a position to do that because of the manner in which our accounts have been handled by the board.
We have had to show very healthy profits to obtain loans and that has enabled us to take this cheap loan too.
Going off at a further aside, only two clubs in the Premier League have the top credit rating available and can thus get a loan from the Bank of England.
As you know, we have taken out a £175m loan, none of which we can use for transfers, to help our cash flow and pay wages.
That loan is at an interest rate of 0.5% and we don't start making repayments for 12 months from the day we took it out.
Spurs are only in a position to do that because of the manner in which our accounts have been handled by the board.
We have had to show very healthy profits to obtain loans and that has enabled us to take this cheap loan too.
Tottenham wages budget is 39% of the £460.7 revenue, which is £179.63m.
£179.63m + £26m (interest payments) = £205.63m
Expected income £260.7m.
It doesn't take a genius to see and don't forget there are contract renewals with increases in wages to take into account, that money for transfer isn't abundant.
Oliver Skipp, Japhet Tanganga and Eric Dier are the ones currently being talked about, but all will have negotiations.
The club have to offload some players, bring other in on relatively low wages, this is what makes Thomas Castagne so appealing over Max Aarons as I discussed in another recent article.
Spurs have debts to manage, interest payments must be made, they are not optional.
Spurs have the second highest net loss on transfers in the Premier League currently due to our purchases of Tanguy Ndombele, our loan and then purchase of Giovani Lo Celso, Ryan Sessegnon, Jack Clarke and Steven Bergwijn, all since last summer.
The fact that our income grew quickly when the stadium opened and when we obtained Champions League football show the future is bright.
We have to get through the pandemic, get fans back and start earning again, get the club on a healthy footing and then investment can come into the team through transfer fees and wages.
Currently we have to be smart, we have to be savvy.
We have to look for free agents, for those with one-year remaining on their contracts, for cheap players, for players on low wages abroad.
Obviously I would say we have to employ sports psychologists to get the best out of what we have got, but I don't see the club doing that any time soon, but one club, one day, will begin the trend and than it will become the norm.
Right, I have prattled on long enough for he sane among you to have a basic grasp of the problems right now.
The sooner our brewery is open to customers, the sooner a relaxing beer can be had, chill out folks, chill out.
PS. Thanks to you guys on Twitter sending me other "catch up" tweets, keep them coming and a reminder to those living in the past, owners can not give clubs money for transfers, but can give loans for infrastructure which have to be paid back.
If you have enjoyed this article, post a link to it on your social media for more to enjoy.
COYS
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