A costly season for Spurs part 2: stadium sentiment could be Spurs’ stitch-up!

In my first article I discussed how Spurs need to keep pace with the current top 4 during this summer’s transfer market, but with no money spent so far and player exchanges being offered for players instead of cash, are there some serious financial restrictions in the background at Spurs?

One major financial burden for Tottenham is the need for a new stadium and this has huge implications in respect of the finances at the club. They are the only club in last season’s the top 6 with a stadium capacity under 45,000, this is a major issue, especially when you look at how much profit clubs like Manchester United and Arsenal generate from gate receipts.

Although a lot of Spurs fans were opposed to the Stratford move, it was very costly for Spurs that they missed out on securing the Olympic site. The estimated cost of the move to Stratford was around £250m, when compared to the £450m it would take to redevelop White Hart Lane or start from scratch somewhere new, Spurs are looking at taking a £200m bath.

I fully understand why Spurs fans weren’t keen on the move, who wants to move out of their home territory to a rivals back garden, but as football moves forward into a new age, there is less time for the sentiment’s of us fans, business is now the priority.

Take the example of Arsenal, the Emirates stadium cost the club £390m, this left Arsenal vulnerable and unable to spend in the transfer market for a prolonged period of time, their transfer activity leading up to the move and also post move is down. Luckily they had a squad they could rely on, were successful at the time and could see such a long period of financial restriction through whilst maintaining their status. Could Spurs do this? I think Spurs are ready to push on and become more consistent, but is the playing squad reliable enough to deliver a top 4 finish season in, season out?

Manchester City are another example of good business strategy. They were appealing to an investor because the club made a shrewd move to Eastlands at a minimal cost of only £30m, an amount you are likely to see them spend on one player.

The finance deal to buy land and build a stadium comes at a great cost to a club, they will have to put money in to a deal to give the bank some security and interest payments can be ridiculous. Looking again at the Emirates for a relevant comparison, it cost £390m to build, £260m of which was funded by the bank and the remaining £130m by Arsenal. The repayments on this alone was approximately £20m per year.

You are then in a catch 22, you have to be in Champions League to make the stadium investment worthwhile and ultimately increase profits, but if Spurs don’t keep up with the pace now by improving the squad, it will be even harder for them to have continued success going forward.

Manchester City have stupidly wealthy owners yes, but the finance to sign players doesn’t just come out of the personal accounts of the owners and get written-off, it is part of the businesses balance sheet. Because of the stadium move Manchester City are able to focus on recruitment, scouting, youth development, brand development and making the club one of the most up-to-date clubs in the world because they have minimal financial burdens other than transfer fee debts.

Spurs’ infrastructure is a long way behind this, to catch up will only come at a considerable cost. They are already having to spend £45m on the development of the new training ground.

Rumours have been circulating for a while that Levy wants to sell and you would think there would be a buyer for a club like Spurs, but in this financial climate it has to make complete business sense and be a low-risk investment with high chance of growth and profitable returns. Levy is taking Spurs forward as a fan and businessman and will take them as far as he can, but he realises without super-rich backing there is a limit to how far the club can go. He is getting them in a position where they would be a highly appealing acquisition for an investor which is why the stadium move is so critical.  

It is not all negative at Tottenham, the good news is to make Spurs an appealing investment they must have Champions League football, therefore they have to invest in the squad. This is why this summer is so important, Spurs have already let 4th slip and have to spend money to improve. Don’t get me wrong, they won’t be far off the pace with the current squad, but the current squad couldn’t deliver 4th and they want to be challenging for 1st.

One way or another all Spurs fans will know how good the financial footing is at the club come August 31st. They will also know how costly the 2010/11 season was losing their place in the top 4. Don’t be surprised if Spurs don’t splash the cash this summer, but to keep pace with the ever-improving pack they simply have to. If they do not spend and recruit world-class personnel then Spurs fans will have to wait a long time before they see Champions League football at the club again.

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  1. Ryan Yid says:

    A good 2 parter, didn’t really agree with the first part, but the second changed my thinking-I can’t believe we haven’t got any money though? Stadium will have a big effect, Arse were buggered for ages (excuse the pun) after Highbury. We have to make signings an keep the important players simple as.

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