Let’s compare Arsenal’s stadium move with the new Spurs stadium

From Rhys Jaggar:

Is NIgel Keng right about the Spurs stadium move?

I read what Nigel says and ask one simple question:

‘Will the increased profits from matchday revenues cover finance repayments or not?’

The answer based on Arsenal’s stadium move is ‘Yes, they will’.

Arsenal had to put aside £35m odd into a ‘stadium reserve fund’ to cover contingent risk of loss of revenues. Back then, Champions League income relative to EPL income was much higher. So the downside risk of no top four was much higher. Now you get £170m odd for finishing 6th.

If you assume Spurs increase matchday revenues to £100m like Arsenal (remember they will get a fee for two NFL fixtures as well), they will get £60-70m extra income. Assume Spurs will have £30-40m repayments per annum, then they can spend £30m extra a year running the stadium and increasing wages and still break even. They may get more than £100m matchday income….

That excludes any increased commercial revenues accruing from the project. Spurs are not building flats like Arsenal did, so there will not be two years of heightened property risk. Levy may decide that 100% of stadium naming rights revenues goes on increased player salaries. He may do likewise with all increased profits from retail at the new stadium shop. Ditto new partnering revenue stream profits. These are options open to a diligent Chairman….

Their position may not improve radically from the move immediately, but I simply fail to see how they will have to sell players to survive when they could keep them at the old 36,000 stadium.

Whether they CHOOSE to sell players is another matter. You could sell Harry Kane for £200m, pay £100-150m off the debt and buy hungry young players looking to fit his shoes. You could sell Erikssen for £100m, pay £50-70m off the debt, put in Lucas Moura and buy a £20-30m challenger. You could sell Alderweireld for £50m+, promote Juan Foyth and buy someone as an ambitious young squad member for £5-10m aged 20-22. You could easily reduce debt by £200m that way. The players chosen for sale are exemplars. Others could be chosen (Alli, Son, Rose, Lloris, Wanyama, Dier etc).

If they did that over the next three summers, they could then turn their line of credit into a mortgage similar to Arsenal’s. They may not choose to. It is an option available to them. They would need to be super-confident that Pochettino or a successor would continue weaving his magic wand with whatever squad resulted from transfer business. They might have a few academy graduates ready to fill slots up to 2022, based on age group World Cup winners etc.

Arsenal chose not to compete by building a £220m cash mountain.

Ok reporting on 31/05 inflates that a bit, but a £100m real cash mountain is more than enough to be solvent, satisfy the bankers and invest in the team. After 2008, selling was unnecessary financially. Players angling for oil money at City were the drivers for sales. That would have happened at Highbury. Nothing to do with the stadium move.

Wenger took the money as the best of a bad job. Selling Adebayor was good business, Fabregas was undervalued, Nasri was a troublemaker, Clichy had served his purpose. Hleb, Song and van Persie was holding up the white flag.

Spurs are not obliged to build that cash mountain. They may sweat the stadium assets better than Arsenal.

Reality is, Man City were gifted a stadium with owners worth £200bn. The deal was the owners invested in East Manchester development as a quid pro quo. Whether they have spent what a 55,000 commercial build in East Manchester would have cost, you had better ask Sir Richard Leese.

Spurs’ new stadium is as much about a statement of being a serious European Football Club, with a stadium worthy of late stage Champions League ties as anything else. Real, Barca, Bayern, Juve, Utd, City, Arsenal, Atletico, Dortmund, Lyons, Zenit, others too: all have either huge stadia and/or state of the art ones.

Spurs do not wish to be seen as poor relations……not to mention West Ham having a 57,000 stadium now…Chelsea are in the same boat.

If it is just about money, Juventus will lose all their players. Max Allegri is trying to ensure it is not just about money. Bayern may start to struggle. Liverpool are now a selling club at the top end. Suarez, then Coutinho. Who says Salah will not be next? Arsenal do not have a £100m player to sell.

Arsenal fans, many of them, need to believe that Spurs are about to implode. The thought Arsenal might be poor footballing relations for 20 years is their Nightmare on Elm Street scenario.

I disagree that Pocchetino will throw the FA Cup this year. He did not throw it last year, losing a classic semi final to Chelsea.

As a student of the game, he will note that Arsenal won League Cup in 1987 as first trophy of six under George Graham. Man Utd won the FA Cup in 1990, the Cup Winners Cup in 1991 and the League Cup in 1992, prior to dominating. He will note Chelsea won the FA Cup in 1997 and 2000, the League Cup in 2005 prior to top level success for a decade. He will note Houllier winning 3 cups in 2001 at Liverpool prior to Benitez winning Champions League in first season. He will note Man City won FA Cup in 2011 as first trophy of ADIA era.

It is only Arsene Wenger (double in 1998) who went straight to the title and then consoled himself into his dotage with FA Cups. And he had six players in 1996 who knew how to win trophies already.

I think Pochettino will stay two years for sure, to see the club into the new stadium and complete the current project. After that, the longer term financial position will be clearer and he and Levy can decide how to proceed.

Unless Levy sees an opportunity to replace a Real-bound Pochettino with someone even better.

Myles says:

Thanks, Rhys.

I also think Pochettino will stay and run his own show.

The methods used by Pochettino and his staff are not expensive. The squad does intensive fitness work and intensive shape & tactical work.

A tall, powerful lad from Milton Keynes, acquired in the January window, fitted nicely into that kind of football .

But Poch said, “Fine, let’s buy Dele Alli for £5 million, we’ll let him finish the season at MK Dons and join us pre-season. That way he can settle in. He can get used to the way we train, how we play, how we do things. And in those weeks I can figure out exactly how I want to use him.”

Because Tottenham’s style of play come partly from principles, from ideas the manager has had for a long time, and partly from what he sees in training.

It’s a style I enjoy watching and their players have bottle. We saw that last night when they came back from 0-2 down in seven minutes to outplay Juventus in a 2-2 draw.

This Spurs team is learning as they go along.

You have to do that in  the Champions League. It’s an unforgiving environment.

If you don’t learn quickly, you’ll fail.