Tottenham ‘best run business’ in Premier League under Daniel Levy
Daniel Levy might be feeling vindicated after Tottenham were praised as the “best run business” in the Premier League by a football finance expert.
The Spurs chairman can be a lightning rod for criticism, sometimes justified, but at a time when the top flight is controversially cracking down on spending [i Sport, 4 February], leaving clubs scared in the January transfer window, it appears he deserves not insignificant credit for the financial side of things at the club.
Everton have been hit by a 10-point deduction and are at risk of another, pending appeals, after a second referral on profit and sustainability grounds, while Nottingham Forest have also been charged.
Manchester City infamously have over 100 spending charges outstanding, all denied, while Chelsea are also under investigation by league authorities.
Part of the issue for the Toffees’ ongoing dispute with the Premier League relates to interest relating to loans for their new stadium development [Forbes, 22 November], suggesting it is no mean feat that Tottenham now have one of the best new stadiums in world football built with money secured on “absolutely fantastic” borrowing terms and highlights the positive side of Levy’s place at Spurs.
Football finance expert Kieran Maguire said on The Price of Football podcast (5 February) that the club were able to borrow all of the funding for building the Tottenham Hotspur Stadium on as little as three per cent interest, below the Bank of England base rate.
He explained that it was due to the club’s “really good track record” as a business that they were able to secure such strong terms as they were not deemed a big risk by lenders, and with the entire development estimated to have cost as much as £1.3billion [Tifo Football] clearly even a small difference in interest terms is worth a huge amount of money.
That is not to say the process that took Tottenham out of White Hart Lane and installed them in the new stadium was faultless by any means, and the lack of investment in the squad at a time when Mauricio Pochettino had Spurs challenging for league titles will always be a point of contention.
But given the huge expense the club were obliged to take on to move into their new home, only for Covid-19 to quickly arrive and wipe out various revenue streams, they would have been faced with a far more onerous situation to have repayments many multiples higher than they have been.
Tottenham reputation key to “absolutely fantastic” financial achievement
Maguire contrasted the low interest Tottenham pay to that on the debt Manchester United were saddled with after the Glazers’ takeover in 2005, at over 14%.
Maguire said (9m 20s): “Spurs are the best run business in the Premier League. You don’t follow Spurs because of the business side of things but that has allowed them to borrow all of that money for the stadium at around about 3-3.5% interest, which is absolutely fantastic, that’s lower than base rates.
“And that’s on the back of having a really good track record. If we go back to the Glazers and when they first acquired Manchester United, nobody had heard of them, football was seen as a risky business, and Manchester United were paying on some of the PIK loans [payment in kind] they had 14.25%.
“This is Manchester United, what you’d think would be a gold chip company, but the lending industry was very suspicious of football 20 years ago, which is not the case today.”
Borrowing terms are certainly not the be-all and end-all in football, and plenty of fans would justifiably prefer trophies to financial praise.
No supporter is going to celebrate interest payments below base rates in the same way they will a stoppage-time winner on the pitch and failures on the pitch can undercut actions off it, but in contrast to perilous situations elsewhere it highlights the value of Levy and his methods for Spurs at times like these to not have such worries.
In other Tottenham news, one first team ace’s Spurs career is now over despite a “really good” breakthrough says a disappointed pundit.
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