From Nigel Keng:
Interesting response from Rhys and some good points, especially regarding Spurs not throwing the FA Cup last year but being beaten by Chelsea.
As for the stadium not affecting things, I have to disagree. The last reported figures are that the stadium will cost £1bn (not £400m like Arsenal’s), repaying that would affect anyone.
According to articles the increased money from the new stadium is estimated at £28m per year. Not being one to take figures on face value, if we consider that the stadium capacity will go from around 36,000 to 62000, that’s an extra 26,000 tickets.
Let’s say tickets average around £1100 per season, that’s £28m per year. Yes there will be boxes and hospitality which will bring in a few more million but there will also be increased operating costs so £28m per year is about right.
A £1bn loan, if we assume they manage to get an interest rate of 4% which is typical for business loans (property bonds tend to be 7% so 4% is conservative) and if we assume they want to spread the costs over 20 years to reduce the effect on transfer spending, the annual cost of repayment is still £73m.
So their spending power will be reduced by £45m per year for 20 years, more if they want to repay the debt quicker.
Rhys comments that he fails to see how they will have to sell players to survive when they could keep them at the old 36,000 stadium. Because their wage bill is already lower than the rest of the big 6.
Because money talks, if not today then eventually. Because people want to be paid a fair wage. Because if their spending is reduced by £45m a year and other clubs are willing to quadruple your wages your head will be turned…it’s already happened with Walker and Rose. Because if you’re Harry Kane no matter how loyal you are you’re still aware that a lot less talented players than you are earning as much and even much more than you even though you’re being touted as the best.
We’re not talking about £110K to go to Arsenal v £100K to stay at Leicester as Vardy had to decide.
We’re talking about 3 or 4 times your salary at clubs who are willing to spend big money to win the Champions League. Can Spurs compete with that? Not whilst they’re paying off debt. The Spurs team are on the up and in the long run the stadium will put them in good stead. But the stadium move in the short term could be the worst thing that could happen to them.
All that is in the future.
Arsenal ran out of cash building their stadium and had to to stop building work twice. They had a ramrod project manager in Keith Edelman, who got the job finished in time to have the mandatory “safety” testimonial match test before the season started.
If I was an accountant I might comment on the numbers.
As you know, Spurs chairman Daniel Levy IS an accountant.
While lawyers are often gregarious, many accountants are quiet types.
Levy doesn’t say much or give interviews because he thinks football is about the manager, the players and the fans.
Remember: the running costs of a football club are very high.
That is why, when Reading chairman Sir John Madejski wanted to sell the club he said, “I’m looking for a billionaire because a millionaire couldn’t afford it.”