Spurs have biggest revenue growth in top six

The tireless Swiss Ramble applies his forensic accounting skills to the latest financial results from Tottenham Hotspur.

The pre-tax loss widened from £68m to £80m (£84m after tax), as revenue dropped £32m (8%) from £392m to £360m, though profit on player sales rose £4m to £19m. Partly offset by a £9m (2%) decrease in operating expenses, while net interest payable was cut £6m (15%) to £37m.

Of course, all football clubs have been significantly hit by the effects of the pandemic, so the £84m loss after tax is by no means the largest in Europe. In fact, it is much lower than Inter £215m, Juventus £184m, Roma £163m and especially Barcelona £422m.

The main reason that revenue only fell 8% was £71m (52%) increase in broadcasting from £136m to £207m, mainly due to deferred revenue from 2019/20, which compensated for COVID driven reductions in match day, down £93m (98%) to £2m, and commercial, down £10m (6%) to £152m.

Revenue was significantly impacted by COVID. The Swiss Ramble has estimated the revenue loss as £133m in 2020/21 (mainly match day £122m and commercial £10m). Added to 2019/20 £35m shortfall, that gives a total of £168m lost in the last 2 years (probably under-stated).

The pandemic has resulted in Spurs posting pre-tax losses of nearly £150m in the last two seasons, compared to seven profitable years in a row before that, which generated an impressive £412m surplus. In 2018 and 2019 alone Spurs delivered a hefty £226m profit.

The bottom line only benefited from £19m profit on player sales, albeit up from prior year £15m, mainly Kyle Walker-Peters to Southampton. This was much lower than many other clubs in 2019/20, e.g. Chelsea £143m, though transfer market has been depressed due to COVID.

Player sales have had a big impact on the club’s figures in some years, e.g. in 2014 they made £104m, largely from the lucrative sale of Gareth Bale to Real Madrid. However, they have made relatively small profits from this activity in the last 3 years, averaging only £15m. Profit from player sales of £166m in the 5 years up to 2020 was only better than Manchester United in the Big Six and was a fair way behind Chelsea £434m and Liverpool £276m.

Spurs have enjoyed the highest percentage revenue growth of the Big Six since 2016, while in absolute terms Spurs’ £151m growth has only been surpassed by Liverpool. Furthermore, Spurs have eliminated a £141m deficit against their North London rivals. The £360m revenue is now fifth highest in England, ahead of Arsenal £343m, even before the Gunners publish their 2020/21 results (with a full year of the pandemic). in 2019/20 Spurs outpaced Arsenal in all three revenue streams: match day, broadcasting and commercial. That said, Spurs are still a fair way behind the other leading clubs, e.g. Manchester United are still £130m higher.

The importance of the Champions League to club revenue growth is clearly evident, especially in the three years between 2018 and 2020 (including reaching the final in 2019). They have earned €293m in last five years, though surpassed by Manchester City €422m, Liverpool €361m and Chelsea €311m.

The club will be happy that the new stadium returned to full capacity at the start of 2021/22 season, as they should generate more match day revenue than any other English club. The Swiss Ramble estimates they will earn around £122m, which is higher than the £112m record established by Manchester United.

The splendid new stadium has a 62,850 capacity, though there were lengthy delays and the total cost was £1.2 bln. Nevertheless, it will drive significant revenue growth (NFL, boxing, rugby, concerts, conferences, etc), while the club is pushing for a naming rights deal.

Two major commercial deals increased in last 3 years: (a) AIA shirt sponsorship extended to 2027, up from £35m to £40m; (b) Nike replaced Under Armour in 2018, doubling money from £15m to £30m, running to 2033. However, these long-term deals run the risk of being overtaken.

Despite the revenue decrease, the wage bill rose £24m (13%) from £181m to £205m, which means that wages have doubled in the 5 years since 2016. This is the highest percentage growth in the Big Six, though in absolute terms Spurs have been beaten by Manchester City and Liverpool.

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The Political Economy of Football V2

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