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Financial Results 2019

shelfboy68

Well-Known Member
Jun 14, 2008
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On Tuesday morning, the Tottenham chairman Daniel Levy announced a 20 per cent reduction in the wages of the club’s 550 non-playing staff during April and May.
At around the same time, Tottenham’s annual accounts for the year up to June 30, 2019, revealed that his salary was £4 million — plus a £3 million bonus. These were the headline numbers on a day that felt like the perfect storm for Spurs — an overly well-remunerated executive and an underpaid workforce.
But, is there more to it than that? Here, The Athletic delves into those annual accounts and the current situation at Tottenham to look at the numbers behind those headline figures.
Broadly, what is the financial situation at Tottenham?
With discussion dominated by Levy’s announcement and salary, it went largely unremarked that the broader financial picture at Spurs is very healthy.
From July 2018-June 2019, the club made a post-tax profit of £68.6m, which in the third year of a three-year TV cycle is very impressive. Though with clubs often offsetting profits against previous losses to reduce their tax bills, you can get a clearer picture from the pre-tax profit figure. Again the picture for Spurs is very encouraging — their figure of £87.4m was the highest in the Premier League.
By way of comparison, the latest figures for their big six rivals are: Liverpool £41.9m, Manchester United £28.4m, and Manchester City £10.1m. Arsenal and Chelsea meanwhile posted losses of £23.5m and £101.8m respectively.
The reason for this is largely Tottenham’s relatively meagre wage bill of £179m, which isn’t much more than Everton’s £160m and again much lower than their big six rivals’ tallies of £332m (Manchester United), £316m (Manchester City), £310m (Liverpool), £286m (Chelsea) and £232m (Arsenal). To put those figures into context, that £107m gap to Chelsea is less than the total wage bill of eight Premier League clubs during the same period. Tottenham’s wage to turnover ratio of 39 per cent meanwhile is the best in the division by a distance.
Revenue-wise, Tottenham’s growth has been similarly remarkable — especially for a period before the move to the new stadium at the start of last April. Tottenham made £461m last season, up £80m on a year before, and up £151m for the previous cycle of 2016-17. Going back another year to 2015-16, they made only £196m.
UEFA prize money of £94m for reaching the Champions League final was a big factor here — though they also increased their revenues in pretty much every other area (television rights, hospitality, merchandise etc).
As for total assets, finishing the stadium made a massive difference to the balance sheet, with Spurs’ total assets now at £1.69 billion.
Why has Levy given himself such a handsome salary and big bonus?
A big reason for Levy’s salary of £4m — up from the £3m disclosed in the previous accounts and making him the highest-paid director in the Premier League — and the bonus of £3m is because of the above achievements.
If advocating for Levy receiving these kind of figures, one would say that he runs a top-six Premier League club that does not rely on handouts from their owners and makes very good profits.
During the period in question, he also oversaw the completion of arguably the best sports stadium in the world and Tottenham reaching the first European Cup final in the club’s history. We can debate how much credit he deserves for those achievements, but he undoubtedly played an enormous role in controlling Spurs’ wage bill to help them become so profitable. And compared to the £172m more that Manchester United spent on player wages during this period, Levy’s £4m salary starts to look a little less lavish.
That said, as The Athletic has reported previously, the amount Levy pays himself has been a source of frustration among the players previously. This was especially the case in 2018 when Tottenham’s accounts revealed that for the 2016-17 season, Levy’s pay had jumped from £2.84m to more than £6m — at a time when players were already irritated not to have been given proper pay rises despite them finishing second in the Premier League with a club-record 86 points.
On this occasion, it is the £3m bonus for overseeing a stadium that was completed seven months later than planned that has, among the public at least, been particularly contentious. The explanation is that since the stadium was completed in 2019, Levy remained eligible for the bonus — though many will disagree with the terms of that arrangement and whether he should have still received it.
One of the counter-arguments is that as Wembley, the Olympic stadium and the Emirates have demonstrated, constructing a stadium in London is a fiendishly expensive and time-consuming exercise. Spurs also did the project managing themselves, subsidised the improvement of White Hart Lane station and put money into a local sixth-form and supermarket.
If the financial situation is so healthy at Tottenham, why are non-playing staff having their pay reduced?
The policy Tottenham announced on Tuesday will see the wages all of the club’s 550 non-playing directors and employees (including Levy) reduced by 20 per cent for April and May.
In his statement, Levy confirmed that this will be done by using “where appropriate, the government’s furlough scheme” which allows staff who are not working to claim 80 per cent of their wages, to a maximum of £2,500 per month.
The first point to make here is that the annual accounts only go up to June 30, 2019 — a time period that feels like a different universe to the present day.
The reality now is very different, especially for a club like Spurs that has hundreds of millions of pounds worth of stadium debt to repay. They will also feel the absence of live events keener than some of their rivals since the stadium was also scheduled to be hosting concerts, as well as rugby, boxing and NFL matches, over the course of 2020.
In addition to this, their accounts revealed that they owe clubs about £84m in transfer instalments over the next few years, with only £4.5m coming in. On top of that are what are known as post-balance sheet events, in this case transfers last summer, which saw Spurs bring up a net spend of £74.5m.
None of these figures would be at all alarming in a normal financial climate, but amid today’s uncertainty due to the coronavirus pandemic and the possibility of a Premier League TV deal worth £762m being voided, they are suddenly brought into sharp focus.
The end-date of Tuesday’s accounts are also significant because it falls before the hugely expensive process of sacking Mauricio Pochettino and his staff, and hiring Jose Mourinho in his place. These payments will all be in next year’s accounts and even in financially stable times could make for uncomfortable reading — dismissing Pochettino alone cost Tottenham around £12.5m.
OK, but why aren’t the players taking a pay cut?
This is the one of the most pertinent questions arising from Tuesday’s announcements, and is something that Levy himself hinted at in his statement. “We hope the current discussions between the Premier League, PFA (Professional Footballers’ Association) and LMA (League Managers Association) will result in players and coaches doing their bit for the football eco system,” Levy wrote.
He also referenced the fact that Barcelona, Bayern Munich and Juventus players are taking substantial pay cuts.
Closer to home, the situation should become clearer after Wednesday’s meeting between the Premier League, English Football League (EFL) and PFA. But broadly speaking, the picture is brain-scrambingly complicated.
Because of differences in different countries over factors like legal jurisdictions, football’s governing bodies cannot impose global rules on players. Premier League clubs could go rogue like in Spain, Germany or Italy but much more satisfactory would be for the players of all clubs to accept a voluntary cut or a deferral, as Adam Crafton explained here.
But there is no guarantee that the PFA will advise players to do so or that the players themselves would want to.
Many will view this as rank selfishness, but think of it this way: if you’re a player at a big club like Tottenham that made a big profit last year, has £123.5m in cash, can pay its chairman £7m and is hoping you can be ready to play again in June for nine weeks of non-stop football, take a short break and then be back at it again, you might think you merit full pay.
It’s also worth remembering that there is a huge discrepancy between the highest and lowest earners at a club like Spurs, so deciding on a universal amount for players to sacrifice is not straightforward.
For example, emerging defender Japhet Tanganga is on about £1,000 a week, while Kane and record signing Tanguy Ndombele are on about £200,000 a week.
The amount some Premier League footballers make in real terms is also less than many would think, once tax and regular payments like mortgages are made.
Clearly these are issues that are not expected to elicit sympathy. They are also ones that can be resolved — and it is likely there will be a Premier League wage-deferral scheme put into force this week — but they explain why there has been this delay. Remember also that there is no “force majeure” clause in a British football contract, so the clubs can’t impose contractual changes (pay cuts, deferrals or short-term extensions), and it is illegal for the players to be coerced into agreeing. Everything must be mutually agreed, and that takes time.
Given all the uncertainty, how worried should we be about Spurs repaying their stadium debt?
At this point, not overly concerned — even bearing in mind outgoings that have not yet been registered like sacking Pochettino.
The stadium cost more than £1 billion to build but Tottenham managed to refinance their construction borrowings on a good long-term rate (£637m at 2.66 per cent over 23 years) and their total borrowings for the 2018-19 period were only a bit more than this sum at £658m. They’ve also got £123.5m in cash, and a £50m overdraft facility at HSBC that they’re not using.
In short, Spurs are not exactly on the breadline. The Athletic has also heard from numerous sources that Levy is precisely the chairman they would want looking after their club at such an uncertain period.
Tuesday’s headline figures were striking, but it’s only over the next few months that we will really see the merits of the decisions that have been taken in the days, weeks and even years gone by.
Levy is a very clever fucker good job his bonus isn't linked to the football side of things like winning the. Premier League or CL, otherwise the poor ****s bonus will never see the light of day. :happy: :happy:
 

spursfan77

Well-Known Member
Aug 13, 2005
46,680
104,956
Levy is a very clever fucker good job his bonus isn't linked to the football side of things like winning the. Premier League or CL, otherwise the poor ****s bonus will never see the light of day. :happy: :happy:

We don’t know if he does or doesn’t have one for that do we?
 

pagevee

Ehhhh, What's up Doc?
Oct 4, 2006
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Someone mentioned the taxes earlier and another person touched on the reason. I wanted to elaborate on the point of why Levy would allow more taxes versus player purchasing.
Everything comes down to the Debt-to-Income (dti) ratio and bank underwriting for the Stadium build. Throughout a commercial build of this size, Spurs would be reporting updates a d the banks would be monitoring the clubs dti. Just like qualifying for your mortgage, you must have income to receive credit. Revenue means absolutely nothing and income creates taxes. The higher the credit need, the higher the income needed to qualify; which inherently creates higher taxes.
As far as choices, you have none. Either you show the income for the most recent 2 years (and pay taxes) or you don't receive financial credit (Stadium financing). Minimum underwriting in USA is 2 years of tax returns claimed and our commercial underwriting is much more extensive. I would imagine the banks required documentation of income for THFC, ENIC, and probably Joe Lewis & Levy as majority owners of ENIC (over 25%).
Your accountant writing off all of your income and lowering your tax bill is a blessing and a curse. Blessing =lower bill, curse =credit access lowered. I've watched small business owners earning $200k plus declined approval for financing strictly bc of their creative accountant. I remember a specific example with revenue of $210k and income of $38k; unfortunately I couldn't get them personal or business financing because of the accountant. They would be forced to refile the most recent 2 years of taxes with the IRS claiming more income, pay more taxes for each year, and basically flag themselves for an IRS audit.
I am not an underwriter but this is my profession. I am not an insider but am giving a general opinion. I have been exposed to, trained in, and apart of most credit products available in the US market. I have worked with a British based company before but did not complete any credit requests at the time. If a US bank is involved in the Stadium financing, the bank would require more compliance from THFC/ENIC, not less.

Hopefully this will clear up the conversation about why Levy would pay taxes versus buy players with the earned revenue (thus decreasing net income and potentially credit availability for the Stadium build).
 

bubble07

Well-Known Member
Dec 27, 2004
22,959
29,895
According to KPMG we are the 8th most valuable club in world football. Outside of the PL only real, barca and bayern are ahead
 
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