Spurs, the profitable club

The authoritative Swiss Ramble has now provided commentary on Tottenham Hotspur's 2016/17 accounts on Twitter. He provides comparisons with other Premier League clubs and a temporal dimension.

He notes, 'The £58m profit before tax was the secod highest in the Premier League, only surpassed by Leicester City at £92m, boosted by their Champions League exploits, but ahead of Manchester United £57m, Arsenal £45m and West Ham £43m. Thanks to TV money, all clubs that have published 2016/17 accounts are profitable.

'The £58m profit before tax in 2016/17 is actually the fourth highest ever made in the Premier League. However, it is not Spurs’ record profit, which was the £80m made in 2013/14, due to the highly lucrative sale of Gareth Bale to Real Madrid. It should be no surprise that Spurs posted a profit, as they have only reported two (small) losses in the last 13 seasons. In the last four years they have aggregated a highly impressive £188m of profits.'

'The profit from player sales has had a major impact on the club's figures, contributing £355m to the last 12 years, turning a £112m loss into £243m profit. Next year will again benefit from big money sales, including Walker to Manchester City, Wimmer to Stoke and Bentaleb to Schalke.'

'Tottenham's£306m revenue is still a fair way behind their rivals, e.g. Manchester United £581m are a full £275m higher,) followed by Manchester City £473m and Arsenal £423m. That said, the gap to Liverpool £364m and Chelsea £361m has narrowed.'

'Revenue has increased at Spurs five years in a row, more than doubling from £147m in 2013 to £306m in 2017. Most of the £159m growth in this period was driven by TV money (£126m), but there has been solid commercial growth (£28m), though match day has been relatively flat (£5m).' The new stadium will markedly improve this figure. Revenue should be at least £20m higher before taking account of naming rights.

'Despite the enormous increases in Premier League distributions, European participation can still make a difference for the leading clubs. Spurs have earned €84m from Europe in the last five years, but this is much less than Manchester City €244m, Arsenal €213m, Chelsea €193m and Manchester United €167m.'

Commercial revenue was up 24 per cent (£14m) from £59m to £73m, the 6th highest in England, though still a long way below rest of Big Six, e.g. Manchester United £276m is almost four times as much. The facilities at the new stadium should help close the gap, e.g. NFL games & other major events. Commercial income will rise significantly in 2017/18, thanks to two major new deals. AIA shirt sponsorship has been extended to 2021/22 season, increasing from £16m to £35m, while Nike have replaced Under Armour, reportedly doubling the payment from £15m to £30m.'

'One area where Spurs wages “lead the way” is directors’ remuneration, up from £4.8m to £9.0m. Chairman Daniel Levy’s pay surged from £2.8m to £6.0m, far more than Ivan Gazidis (Arsenal) and Ed Woodward (Manchester United), both £2.6m. The figure apparently included backdated pay rise and bonuses. As a result of higher PL TV money, all clubs have reduced their wages to turnover ratio in 2016/17, but none are lower than Spurs at 41 per cent. The next lowest are Manchester United 45 per cent and Arsenal 47 per cent.'

'The club's £185m gross debt is 3rd highest debt in the Premier League, only behind Manchester United's £503m (Glazers’ leveraged buy-out) and Arsenal £227m (Emirates stadium loan) It will surely rise as the investment in the new stadium increases, which will present a major financial challenge. Levy underlined the club's delicate balancing act, “We are in an historic period for the club and there is a growing sense of excitement. There will, however, be many challenges in the coming months as we near the latter stages of the construction of the new stadium and its opening.”'

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000. The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts. Money brought in from football has gone up too. Match day ...

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...

The Political Economy of Football V2

Search This Blog