Money

We simply don’t have the money to pay our players more – fact or fiction?

So, let’s talk money for the moment. Why? Because something has changed for Tottenham Hotspur Football Club and Levy now has to fund our elevation. Our players are about to enter a second season playing in the Champions League against some of the best players in the world and who are being paid twice per week as much as our players.

So how do we meet player’s expectations?

We are told that ‘there are limits on what Tottenham can afford, and, while they’ve done well to reinvest in their squad and keep them content by regularly moving the restraints on their contracts and wage packets, there’s only so much we can pay before we hit a ceiling.’

Anyone who has read any of my articles over the last ten years of writing them will know that I am no fan of DL or Enic or Joe Lewis.

Now based in the Bahamas for tax purposes, Joe Lewis, the sixth ‘richest cub’ owner in the world, is reported to be ready to sell Spurs when the new stadium is complete. Our loyal Joe is worth $5.7Bn. Net assets will rocket by the time the new Stadium is built from £206.1m to close to £1bn which is why Joe wants to sell – agreed?

Your right, we don’t have to buy big to be successful, we just have to buy smart, but that doesn’t mean we can’t increase the wages bill!

At the end of the day if we are not able to meet wage demands we will not be able to keep our best players. Players wages should stay at 60-65% of a club’s revenue in order to make an operating profit, but, most PL clubs often run around 70% (especially at the bigger clubs, where the commercial deals increase revenue, and, where the remaining 30% still represents hundreds of millions). I mean, did you know that some Championship clubs go as high as 90%. At Spurs we dedicate 52% of our revenue but 52% of £201m is not the same as 52% of £400m and that is where a discrepancy starts to arise.

Let’s take a look at where the money is going to come from next season and let’s ask the question ‘why can’t we afford to give Walker and Alders and anyone else for that matter a pay rise?’

Last season we made a net loss from players bought and sold – £169,832,500. That includes Mason, Chadli, Carroll, (out) and Wanyama Janssen Sissoko N`Koudou, in.

This summer? Who knows! We have just finished off paying £30m for our new training ground and we have earmarked a further £10m to support the local community in the area.

The Spurs Stadium redevelopment is a significant step closer after the club agreed a £350 million funding package with three investment banks. HSBC, Goldman Sachs and Merrill Lynch will provide almost half of the money required to complete the £750 million rebuilding of White Hart Lane. The rest of the funding will come from advanced ticket sales, a ten-year ground rental arrangement with the NFL at £10m per year and then there is the naming-rights deal still to be agreed. Levy wants a 20-year agreement worth £20m annually, knowing how difficult it would be to re-name a UK stadium for a second time, and there is talk of a possible Chinese investment worth £400m.

The prize money awarded to PL Clubs now stands at £5.178 bn. The Sky Sports Packages (5 package 126 live games) – £4.2 billion from Sports Packages 42 live games) – £960 million BBC Match Of the Day highlights deal – £204 million from other bits like the Sun Goal app and UK media rights – £150 million. That means £55.5m equal share to each club per season. Merit money is £1,236,083 per league position finished so Spurs will pick up £23.5m for finishing 2nd. Playing in the Champions League will generate ?12.7m for them playing in the 32 who play in the group stages. ?1.5m every time we win a game. ?6m for making the last 16.

Sponsorship and corporate hospitality revenue was £48.8m. Merchandising revenue was £12.0m (2015: £12.3m) up 8% last year and no doubt on the rise for next season. Profit from operations, excluding football trading and before exceptional items and depreciation, was £63.3m up from £46.7m in 2015. Profit for the year after interest and tax was £33.0m in 2015: £9.4m. The club had net cash at the year-end of £47.6m from a net debt in 2015: of £20.8m and net assets were £206.1m (2015: £183.0m). At the year-end the club`s net investment in fixed assets was £288.0m up from 2015 of £217.9m.

Wembley

The FA have stated that the application seeks to establish a temporary cap to accommodate up to an additional 31 sporting events at Wembley Stadium between 1 August 2017 and 31 July 2018, where the available spectator capacity is increased from 51,000 up to 90,000. There is every indication that Spurs will be able to fill that capacity for every home game for Europe and domestic games. To give you an idea of the net increase in revenue that could realise; Woolwich and Real Madrid clock up £131m per season in gate receipts where as WHL can only generate £37m. We are therefore set to treble our gate receipts in 2017/18. Revenue for Spurs in 2016 is reported as £209m turnover up 7% from last season.

By my reckoning, without cup revenue for wins and draws in the CL and sales of players? our turnover will be in or around £255.8m in 2017/18, up from £201m. The profit on that, depending on player purchases in the summer will be another £10m. The club will increase its £47.6m in the bank by at least 2% -5%. Leave it to you to do the maths.

Can we afford to pay Alders and Walker the same as Harry Kane per week? You decide?