Tottenham or Stratford? But can we really afford it?

Emotions are certainly running high over the new ground proposals and the possibility of a move to Stratford. Like a number of other clubs our Board have told us that to prosper we require a new stadium so that we can rival Manchester United and Arsenal. As a consequence we’ve been committed to redevelopment and now as the moment nears we – like many businesses – realise that we might not have the money to undertake the development so we look at options.

This has already happened in Liverpool and the owners chased out of town. The new owner John Henry is already associated with sports in America and owns The Boston Red Sox. Boston play at Fenway Park and this is one of two ball parks, Wrigley Field being the other, which is likely to see out the test of time. It’s a heritage stadium and I would expect Mr Henry to consider Anfield in the same way and perform some redevelopment of it. 

The problem with this is reduced revenue during the redevelopment period putting pressure upon cash flow and for this reason our own N17 redevelopment looked very positive. Our own issue mirror images those of Liverpool. The area around the ground is not a place of natural beauty so real estate values would appear to be low. Our plan showed a hotel and supermarket development as part of the scheme which would be an inflow of money.

I take it that the old tired Sainsbury store on the High Road would be replaced by a new store or succumb to that of a competitor taking the slot. I understand this part for we all need to eat and an improved store would be welcomed but the hotel on our existing ground. 

Who is going to stay in that? Around match day Spurs supporters from far and wide may take the opportunity to stay but at other times where is the occupancy going to come from? I know Tottenham is in London but is it not too far from the City or West End and is this why the transport links need improving? 

Then as with all developments come the listed building issues and contributions to the local area by the constructor known as Section 106 monies. All developments carry these issues and ours is no different. I believe I read on the Spurs site that our contribution is £17 million – a little over the sum we paid for David Bentley or maybe the annual wages of six players at £50,000 a week. 

So what we are saying is we object to contributing so much to the local area – and it is a heck of a lot of money – but in the current football market it’s a sum of money quoted in the press every day against our club. So can Spurs really object that the Council see us as able to contribute such a sum? 

The real problem is not where the ground is going to be situated but can we actually afford it? We’ve released our 2010 results and these are now published on the Club website. These show a loss for the year of £6,647,000 after providing a tax liability of £108,000. This equates to a loss of £127,286 per week which is clearly unsustainable.

The thing is that this loss would not have existed if other clubs had met the Chairman’s valuation of a number of players during the summer. For example, Alan Hutton would be plying his trade at Sunderland had they matched our valuation of £9M and we would have declared a profit of £2.5M. However, as cash payment are over a period it would probably not have produced a cash profit. 

Our balance sheet has value, £70,501,000 but that depends upon player contracts which are entirely speculative. If these were written off we’d be in the red by £45,159,000 and heavily reliant on our property assets which are not cash.  This year will look better with the Champions League money and hopefully a return to profit.

Interestingly both Mr Levy and Mr Collecott received a bonus equivalent to 100% of their base salaries so it is not just in banking where this practice continues.

So what do they have to show for their bonuses? A team in the Champions League, further improvements on the pitch since the balance sheet but a partner for the Stadium Naming Rights; I don’t think that I’ve seen this but it may be part of the “secret things” that the Chairman is not allowed to disclose.

To me this is the crux. If a partner’s name can be found to sit on the roof – as the club’s photos of the new stadium show – then it becomes much easier to stay in N17 and I fancy that this is the aim. But in the current economic climate is this going to be easy?

That is anyone’s guess but I reckon that at the present time it might be difficult. Spurs have traditions and the last 15 years has mainly been as losers so one season in the Champions League might not be enough to get the right investment. Added onto that the Chairman’s valuations may also make a deal difficult to strike. 

Arsenal fans I know suggest that they maybe did not do the best deal in this area but it was an important part of the development. Spurs may go in with more knowledge but are likely to be negotiated down from the sort of sum they are looking for on a take it or leave it basis. 

So it boils down to what positive effects we will see if we develop the new stadium. As a new Bronze member and somewhere in the 29,000’s for a season ticket a new stadium should not produce me a ticket but I think it might be close. I have a theory that many bronze members are on the list because they know that it offers a marginally better opportunity to get a ticket a day earlier for Premier League fixtures. 

My theory works as follows. Last fixture Fulham tickets bought by 9.40. Chelsea and Liverpool fixtures absolute bedlam lucky to succeed. As it stands if we get to a Wembley final I might get in based upon my loyalty points so I’m a regular visitor to the stadium. Those I compete with for tickets are not going as regularly as I may be so would they all want the season ticket? If AEG do due diligence on the season ticket list they may well amend their thought processes.

And that is the key issue. We have got used to seeing empty stadiums at Blackburn, Bolton and Boro over the years so would we be able to sell out a massive stadium for every game? We would like to think so but it also depends upon the prices we will have to pay. Again, hearsay comes into play. My understanding is that the club think that they can get at least double the money from a home game with a new stadium. So as we increase by 20,000 that means we all pay more for our privilege.

But even if they double the money will that make a big change in the accounts? Certainly the revenue available for wages will increase but it will also be needed to repay interest and capital on the monies borrowed to build. So in the first 20 years of occupancy the risk is that a poorly performing team would add to our financial burden through no shows and our risk is that we slide down the table with debts like Leeds, Sheffield Wednesday and Southampton unless we use Gareth Bale as we did Paul Gascoigne to get us out of jail in the early 1990’s.

Now it won’t get as bad as this, will it? I doubt it but you can see why a move to East London might be on the cards if the building costs are much cheaper and £150M was one figure quoted by a fellow blogger as I recall.

Our history suggests short periods of success rather than the more prolonged periods of our North London neighbours. The Premier/Champions League period has changed much of this and provided the four clubs we have put into the competition with much needed extra revenues. But have they used it wisely? With Chelsea it’s irrelevant as the rich benefactor who saved them from Administration takes care of the loss each year and these have been ridiculous some seasons. 

Liverpool and Newcastle are financially exposed having wasted all of their money and Manchester United have plenty of debt though the owners financing of the club makes it difficult to see how responsible they are. That leaves Arsenal and their spending programme has seen them manage their finances best but without trophy for a number of seasons. 

So what we can see is that bigger stadium is no guarantee of success in terms of winning trophies but can be a millstone around the club’s neck as expectation and pressure from the crowd puts pressure onto the board, manager and team.

But without it? The Carling Cup remains an opportunity to win whilst the biggest sides treat it as a development trophy and a FA Cup final appearance a chance of the draw goes well. We’ve proved that you can get into the Champions League but we haven’t proved yet whether we can repeat the feat and I for one would rather keep a decent team on the field rather than put massive efforts into a new stadium development that may cash strap the club, risk the management and return us to months of no points.

Traffic is the other issue. I travel more than 40 miles to the ground with 2 kids and a mate. For us road travel and free parking are the cheaper option and we wouldn’t want to go main line to Stratford. I would be interested in park and ride and I cannot understand why the club have not looked at this option with West Ham or Arsenal, or publicised the results, to keep traffic down to low levels by providing cheap parking at a central point before a bus run in.

This would allow local residents to get their streets back and maybe reduce the current black economy parking fees into the club’s hands. Many won’t be in favour of this but it could be done be extending the no parking zones around the grounds. Surely the Council could assist in this objective by looking at those businesses using their grounds as unofficial car parks.

So in conclusion I’m not yet decided as to whether I rule out Stratford. My major concern is whether we can afford the project at all and until I am clear on that I shall follow it with some nervousness. We’ve come a long way in the last few years it would be such a shame to give it all up due to our Chairman making another decision as silly as appointing Glenn Hoddle. Let’s really understand the cost issues of the project before we get emotionally divided on it.                                  

4 responses to “Tottenham or Stratford? But can we really afford it?

  1. If we go to Stratford then thfc dies.
    If not in name then the soul of the club will be removed.

    East London is not an option no matter what.

    The vast majority are like me who are st holders and go away every week and we will never go to spurs in east London.

    There you go a mild version of how we real spurs feel about this sickening prospect.

    I would give me life if it meant we stayed in N17

    • I think we all share your feelings – well most of them – but if it comes to this are we going to support someone else and turn our back on everything the club has meant to us? That’s a really difficult decision to make after everything we’ve been through to get to our current position and one that would be hard to take.

  2. Some great points you made. I would personally like to see management invest in a team that is successful, consistent and growing, before going and spending millions, which we may or may not have, on a new stadium. It seems like we’re caught in a “catch 22”: increase capacity at the stadium to make money or spend less in the hopes of making money through success on the pitch. Obviously, I would choose the latter; but does that make good business sense in the times we’re living in now?

    All I know is I don’t want to lose the atmosphere we have at the Lane. Adding more seats might result in us having less filled, if that makes any sense. I’m just going to leave it to Levy. He’s done great so far and knows how to make money. I’ll just carry on waiting for my season ticket (18,000 and some).

    Great article! COYS!

    • We’ve got onto a roundabout that is difficult to jump off unfortunately and now have some pressure to deliver.

      No one wants to leave Tottenham but to deliver something Mr Levy might have to make that step. I hope it does not come to that but even without moving I’m still not convinced we have enough dosh.

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