Spurs financials

[Achap]

This is a very good explanation - in an easy to understand format - of our current financial standing. I have no idea of the author's professional qualifications, but at first glance it all looks pretty kosher, and inaccuracies - if any - can soon be remedied by the accountants on here.

We are all plagued from time to time by dumb supporters of other clubs questioning our financial viability, and - whilst we all know that our financial position is sound - it is sometimes difficult to immediately lay our hands on the exact, up to date, figures.

This piece, written within the last couple of weeks, contains all those figures. It is therefore rather long - hence the link instead of a cut 'n paste - but is generally complimentary and well worth persevering with, even if it is written by an....um...admitted gooner.

http://swissramble.blogspot.com/2010/12/spurs-daring-to-dream.html?utm_source=BP_recent

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[Adam]

He is pretty much 100% reliable-fully respected by every footie journalist on twitter

 

[SlickMongoose]

Ahhh, he's an Arsenal fan. That explains his previous ridiculous piece on us. Just like last time he spends an inordinate amount of time attacking us for presenting our accounts in the best light, just like every other company does!

Nothing else immediately jumps out as silly, though, so I guess he's getting better.

 

[MattyP]

Not a bad piece, but it does contain a few inaccuracies.

For example, in respect of the stadium financing it states the Gooners financing costs are 5.75%, whereas the Goon's financial report states it is fixed at 5.3% (in my defence at the time I looked at it is was in relation to financing our new stadium).

But yeah, ultimately the author has more time on their hands than I have to disprove the figures contained in it, so fair play for putting the effort in.

 

[andyw362]

The last time I wrote a thread on our finances not being to hot I was ridiculed. Seems I was right.

 

[danielneeds]

The last time I wrote a thread on our finances not being to hot I was ridiculed. Seems I was right.

Not according to this guy's conclusion:

Spurs are in pretty good condition at the moment. The core business is clearly very healthy, for which the chairman Daniel Levy deserves a lot of credit, especially as he has one of the most spendthrift football managers around in Harry Redknapp. However, it feels as if the club is standing at a crossroads financially as they are confronted by some critically important investment decisions.

 

[stevenqoz]

I woul like to have also heard his opinion of takiing on financing debt for the NDP and OS....especially on the solvency ratios

 

[gibbs131]

Not according to this guy's conclusion:

Spurs are in pretty good condition at the moment. The core business is clearly very healthy, for which the chairman Daniel Levy deserves a lot of credit, especially as he has one of the most spendthrift football managers around in Harry Redknapp. However, it feels as if the club is standing at a crossroads financially as they are confronted by some critically important investment decisions.

:rofl:

 

[Wiener]

Not according to this guy's conclusion:

Spurs are in pretty good condition at the moment. The core business is clearly very healthy, for which the chairman Daniel Levy deserves a lot of credit, especially as he has one of the most spendthrift football managers around in Harry Redknapp. However, it feels as if the club is standing at a crossroads financially as they are confronted by some critically important investment decisions.

:rofl:

Clearly highly entertaining when read in ghibberish. Given I don't understand ghibberish I can't see the humour in it.

 

[Adam456]

Still reading it (!) but this bit made me laugh:

That’s why the blatant attempt to “spin” the results is so disappointing, as there’s really no need to do so, with the figures indicating that the club is well run financially, all things considered. This should come as no surprise, given that this year’s loss is the first since 2004.

Yes it should be no suprise because, according to him, if we'd lost money we'd have just 'spun' it into a profit anyway :roll:

Yes it's true they've focused on the positives but part of the reason that they report profit before player trading is that it gives a far clearer picture of the business' real profitability and whether our wages etc. are reasonable. We can then use a portion of those real profits each season to re-invest in the playing squad

 

[dimiSpur]

According to those figures, with the backing from the Olympic Fund to the tune of 35m and the stadium transformation costing 100-200m, lets take the worst and say 200m, minus the 35m = 165m.

Compare that to the 450m for the Northumberland Park project and its frighteningly more of a viable option financially, one I can see us taking up if we beat West Ham's bid, something unlikely whilst W.Ham are a PL team, but that's not going to last long is it? The Spammers are destined for the drop this year, and I think commercially it makes more sense to give the stadium to us.

This leads to the old argument of stay where we are and carry 450m debt vs. move to Stratford and save 285m

 

[sloth]

What a great effort by the guy. Particularly as he's not a Spurs supporter. I love the way you can tell he kind of wants to do a hatchet job on Levy (he's an Arsenal supporter), but his business man head keeps overruling his heart and he is forced into a plethora of "to be fair"s.

Basically, if you can't be bothered to read it, the whole tenor of the article is to say that we're in a very rude financial health (rude = good for our foreign SCers), that Levy's done a fantastic job, that we're going to be even better off when the current year's results come out, but that we're at a cross-roads. Whichever choice we make in the next couple of years each has the potential to make or break us. He agrees that standing still is probably not an option, but points out all the risks involved with taking on large debt to finance the new stadium.

The main thing is that he puts in a lot of detail providing financial facts and figures. There's probably enough material in there to start a dozen threads!

 

[Mr Pink]

What a great effort by the guy. Particularly as he's not a Spurs supporter. I love the way you can tell he kind of wants to do a hatchet job on Levy (he's an Arsenal supporter), but his business man head keeps overruling his heart and he is forced into a plethora of "to be fair"s.

Basically, if you can't be bothered to read it, the whole tenor of the article is to say that we're in a very rude financial health (rude = good for our foreign SCers), that Levy's done a fantastic job, that we're going to be even better off when the current year's results come out, but that we're at a cross-roads. Whichever choice we make in the next couple of years each has the potential to make or break us. He agrees that standing still is probably not an option, but points out all the risks involved with taking on large debt to finance the new stadium.

The main thing is that he puts in a lot of detail providing financial facts and figures. There's probably enough material in there to start a dozen threads!

Think its excellent myself. The grasp of the bigger picture is definitely evident too and really its very complimentary regarding Levy and his business acumen.

The Financial Fair Play regulations are going to be really significant as well...I liked this paragraph:>

It therefore appears as if Spurs will be well placed to meet the impending UEFA Financial Fair Play Regulations. Indeed, the club’s finance director believes that these will “vindicate” their financial prudence, while also supporting their decision to go for a new stadium, as it is “now more important to drive revenues to the next level.” Given that the new rules are all about clubs operating within their means, it clearly makes sense to boost Spurs’ revenue in this way, especially as the stadium development costs are excluded from the break-even calculation.

So being able to increase revenue through a new stadium doesn't compromise our healthy position in relation to said regulations.

Our wages to turnover are pretty impressive and Levy deserves a lot of credit for running a tight ship given our continued and impressive progress.

 

[MattyP]

According to those figures, with the backing from the Olympic Fund to the tune of 35m and the stadium transformation costing 100-200m, lets take the worst and say 200m, minus the 35m = 165m.

Compare that to the 450m for the Northumberland Park project and its frighteningly more of a viable option financially, one I can see us taking up if we beat West Ham's bid, something unlikely whilst W.Ham are a PL team, but that's not going to last long is it? The Spammers are destined for the drop this year, and I think commercially it makes more sense to give the stadium to us.

This leads to the old argument of stay where we are and carry 450m debt vs. move to Stratford and save 285m

The £35m Olympic Fund is actually not a guaranteed amount.

As far as I am aware, Spurs plan would be to knock down the Olympic Stadium and build a brand spanking new one in it's place, plus provide an athletics legacy somewhere else like doing up Crystal Palace.

I'd be staggered if all that could be done for between £100m-£200m.

 

[worcestersauce]

I'm never bothered by this idea of spin, it is the nature of the world at the moment and it is never a choice of to spin or not to spin, the fact is that it will be spun.
If one party, the club for example, doesn't spin the financial information then someone else will, probably a journalist from some paper or other and so the club is duty bound to spin in a good light even if the results are good in order to prevent the bad spin becoming the accepted position.
It's like governments, they didn't invent spin the media did and they just had to do it in order to redress the balance.

Interesting figures on SSN this morning saying that Levy has spent approximately £150m on players net, about £15m per year average.

 

[Bus-Conductor]

I thought it was a good read, pretty fair. There is nearly always a degree of spin with any annual reporting by companies, as these often serve as prospectuses for potential investors, and is to be expected and most accept and interpret it for what it is, and the author seems to.

Two things that we have talked about lately that it reinforces:

It does make you think a lot harder about the possible stadium relocation. The massive cost difference has to be taken into account; we all want us to remain in Tottenham, but if it means extra debt of 200m+ over the other option, and the inevitable knock effects on player purchasing, team development, wages etc ? When you realise the disparity in help we would get compared to Arsenal did as well you can fully understand the reasons behind a possible alternative being considered, and I for one will support whatever Levy decides from here on in.

The other thing, which coincides with the massive cost of developing whichever new stadium option we elect, is the development of youth/young players. I have posted on here several times now my concerns about how this appears to be drying up, compared to the almost constant influx of promising starlets of all ages and nationalities under the Arnesen & Comolli regimes.

This is surely important for any club in any climate, but, as we saw with arsenal, absolutely vital when taking on huge debt for stadium development. It also can't hurt with regards to the fiscal/wage ratio and nationality quota regulations.

For the last 4/5 years we seemed to be signing Hudds, Lennons, Perrats, Bales, Bostocks every window. Under Redknapp this seems to have dried up. These players represent massive profit for the club whichever way you look at it.

 

[Mr Pink]

I thought it was a good read, pretty fair. There is nearly always a degree of spin with any annual reporting by companies, as these often serve as prospectuses for potential investors, and is to be expected and most accept and interpret it for what it is, and the author seems to.

Two things that we have talked about lately that it reinforces:

It does make you think a lot harder about the possible stadium relocation. The massive cost difference has to be taken into account; we all want us to remain in Tottenham, but if it means extra debt of 200m+ over the other option, and the inevitable knock effects on player purchasing, team development, wages etc ? When you realise the disparity in help we would get compared to Arsenal did as well you can fully understand the reasons behind a possible alternative being considered, and I for one will support whatever Levy decides from here on in.

The other thing, which coincides with the massive cost of developing whichever new stadium option we elect, is the development of youth/young players. I have posted on here several times now my concerns about how this appears to be drying up, compared to the almost constant influx of promising starlets of all ages and nationalities under the Arnesen & Comolli regimes.

This is surely important for any club in any climate, but, as we saw with arsenal, absolutely vital when taking on huge debt for stadium development. It also can't hurt with regards to the fiscal/wage ratio and nationality quota regulations.

For the last 4/5 years we seemed to be signing Hudds, Lennons, Perrats, Bales, Bostocks every window. Under Redknapp this seems to have dried up. These players represent massive profit for the club whichever way you look at it.

Good post BC.

 

[beats1]

According to those figures, with the backing from the Olympic Fund to the tune of 35m and the stadium transformation costing 100-200m, lets take the worst and say 200m, minus the 35m = 165m.

Compare that to the 450m for the Northumberland Park project and its frighteningly more of a viable option financially, one I can see us taking up if we beat West Ham's bid, something unlikely whilst W.Ham are a PL team, but that's not going to last long is it? The Spammers are destined for the drop this year, and I think commercially it makes more sense to give the stadium to us.

This leads to the old argument of stay where we are and carry 450m debt vs. move to Stratford and save 285m

Yes the NDP project is 450m, but in a way it will benefit us more in the long term because the stadium will cost around 200 to 300 million then the development will cost 150 to 250 million.
in the long term the club would be making money from the lease of the supermarket or the sale
As well as the lease of the flats and the sale or lease of the hotel

The £35m Olympic Fund is actually not a guaranteed amount.

As far as I am aware, Spurs plan would be to knock down the Olympic Stadium and build a brand spanking new one in it's place, plus provide an athletics legacy somewhere else like doing up Crystal Palace.

I'd be staggered if all that could be done for between £100m-£200m.

The OS site would be prepared with transport links and site around stadium, so that would results in a saving and maybe a possibility of using existing foundations,

Also the sale of WHL would help to pay for the development of Crystal Palace as well as the 35 million, the total would be around 100 million or more

And if sponsorship deal of around 150 million is secured, as has been suggested and we build a stadium for 150 to 250 mill we wouldn't have to pay as much

BUT the same could be said about the NDP
with 200 to 300 million to make the supermarket and stadium
and with 150 million or more from sponsorship
and x amount from the lease of the supermarket(every little helps)
that would mean we would be in 50 to 150 million in debt initially after the stadium is built

150 to 200 for the hotel (which imo is going to be more, as steel prices are likely to rise, when this stage of the development starts)
Then once built the hotel would be making the club money which would help pay that debt off or it would be leased out
The flats would either be sold making a profit or they would be rented out, which would help the club pay off both the debts and then once payed off, that money would be pumped in to the club

Imo Levy doesn't have to make the flats and the hotel but he knows it would make that debt of the stadium smaller. Who knows, some conspiracy theorists might say Levy and Lammy have joined forces behind the scenes to make it look we are serious about moving to the OS, so we can drive the price down and maybe some form of funding

 

[gibbs131]

We basically just made a loss after record revenue.

There are a lot of if's and butt's in the article as relation to us making profit in the future.

Just because we have less debt than Man Utd does not mean we are doing well and can ignore our debt. The debt for Prem clubs is more than the rest of Europe combined.

Going far in the CL will help. But a lot, probably half the CL money will be Gobbled up by player transfers and extra wages not taken into account like VDV and Sandro. Staying there is paramount.

The fact is, we are already in debt. We spend more than we earn. And we are pinning a lot of hope on the CL. So far the gamble has paid off.

I had to laugh at the HR being a spendthrift. He wants to buy, but he can't because of the stadium etc and the financial reality of the current market.

 

[sloth]

Every company carries some debt Gibbs, that's capitalism for you! It's tax efficient, as they say.

The trouble is you're trying to apply common sense home economics to business economics and it doesn't work. I'm no expert, but it's as well to realise when you're not, better to anyway, rather than think you do, when you don't :up: