By Tony Attwood
There has over the years been a very obvious difference of opinion about Arsenal and its stadium. I don’t recall too much discussion about the stadium and its finances while it was being built – indeed I think most fans welcomed its arrival – especially those on the season ticket waiting list who were able to get a ticket as a result of the growth in capacity.
And certainly some of us think that building such a stadium, and retaining a place in the Champions League throughout was little short of a miracle. Now the major part of the repayment is over, Arsenal is able to spend a lot more on players and salaries, and we have (for example) a fair number of sites saying that Arsenal are close to signing a new Ozilian arrangement.
The contrary argument is that fourth is not a trophy and the failure of the manager to win anything up to the two FA Cup triumphs is unforgivable and he should have been dismissed. Mr Gazidis also should go because his salary is too high and he doesn’t bring in top players.
Of course one can never go back over old ground and compare things, because there never is a like for like comparison. But it will be interesting to see how Tottenham fares in terms of its progress up the league as the heavy work starts on its stadium, and because they have a particularly prominent chief exec at the head of affairs.
The current cost estimate for the new stadium in the Tottenham High Road is around £500m for the stadium, and another £200m for the rest (Swiss Ramble is quoting up to £250m for the rest, and that may be true. As he says, this is “double the original estimate”).
Back in April this year the Ramble reckoned Tottenham had spent £100 million and arranged £350 million of loans from three banks. That (as even the more financially illiterate of us can see) leaves a bit of a gap. £300m in fact. Quite a bit really. So that too will have to be financed from somewhere.
Off and on over the years of the debate about Tottenham’s new ground I’ve suggested that as matters progress they could suffer from Arsenal’s problem of simply not having enough money to keep up with the transfer market. Mr Levy has said there will be money for transfers – so we shall see if his prediction comes to pass.
But the starting point looks a little difficult. Certainly in the latest figures Tottenham only had £11m cash, compared to Man U’s £156m and Arsenal’s £228m. Of course they could find someone to buy the whole package of club, players and stadium project, but that has to mean that the whole package is for sale. No one has come along yet to test if that is the case.
If we look at the last set of annual returns we can see the difference between Arsenal and Tottenham.
|Arsenal (£m)||Tottenham (£m)|
|Income – gate||100||41|
|Income – broadcasting||125||91|
|Income – commercial etc||120||60|
Tottenham are famous for making good money as they sell players on, but they also occasionally get caught out, as with the payment of £4.7 to a Mr Villas Boas of Portugal and the coaching team, followed by a huge payment to a Mr Emmanuel Adebayor of Togo, who had a rather long and rather useless contract that needed paying out.
Recent figures for Tottenham have been aided however by profits on the sale of unwanted property around the site including an £8.6 million profit from the sale of Brook House Primary School at 881 High Road. I never knew primary schools were worth so much.
Of course one problem is that Tottenham’s match day income is way below Arsenal’s because Arsenal have regularly played in the Champions League while sometimes Tottenham have made appearances in the Europa, and also because the stadium is much, much smaller.
The resultant image of the club is that of one not quite in the Euro elite has meant a much lower income from broadcasting, commercial and other activities, although Tottenham’s PR operation has been extremely successful in raising their profile into that of a top four club.
According to media handouts Tottenham is estimating an additional £28 million match day income a year from the new stadium. Some commentators have expressed surprise that this is a bit low, but much of the explanation probably comes from the loss of corporate facilities across 25% of the ground, following the forced move to a single tiered stand at one quadrant of the ground. The club has talked up the fact that the ground is going to be 1000 capacity bigger than Arsenal, but it comes at a considerable cost.
Certainly Mr Levy is realistic about the scale of the task in front of the club. “We know that our North London neighbours experienced delays and setbacks during the delivery of their stadium and their challenges were far less than ours with no site constraints and with significant enabling development.”
Mr Pochettino followed the party line saying, “I have read a lot about Arsène Wenger saying the toughest period for Arsenal was in the period that they built their stadium and I think the people need to know that this is a very tough period for us.”
Part of the toughness comes from the fact that Tottenham’s commercial income has been growing very slowly compared with other clubs near the top. For example in the three years up to 2015 they grew their commercial income by £18m while Arsenal grew by £51m. Tottenham will grow its income faster when the stadium is built of course, but even so, the momentum that Arsenal and others have got, is going to be hard to reach – not least when much of the income from the stadium sponsorship deals will be front loaded (as Arsenal’s was) and ear marked for immediate debt payments.
Likewise Tottenham have a history of securing lower amounts of income on sponsorship deals than other clubs near the top, and their current deal which runs until 2020 brings in just over half per season of Arsenal’s current deal (£16m to £30m). The higher profile of the new stadium will help, as all eyes will be on the new ground as they have been at the Tax Payers’ Stadium over to the east.
Management of the move is far more important than saving a few thousand quid, (as State Aid United have learned far too late in the day), and certainly the bad publicity surrounding the Tax Payers’ Stadium has not endeared some top sponsors to venture too close. The failure of State Aid to get a stadium sponsor has not gone unnoticed. Nor have the comments by Ms Brady that “The move has been a complete success on every level … Be in no doubt, we are part of the most successful stadium migration in history,” I suspect Tottenham will have a much greater grip on the notion of PR than Ms Brady and her chums.
As for the kit suppliers – Tottenham’s arrangements bring in a third of the money Arsenal make. Again it will go up with a higher profile, but it will only go up significantly, in my estimation, if Tottenham can achieve the much derided “non-trophy” fourth place or above on a very regular basis. Which means making sure that at least two of Man C., Man U., Liverpool, Arsenal and Chelsea don’t.
Of course Tottenham do believe that in Mr Levy they have the best man for the job in all this, and to mark that, they pay him £2.61m a year (compared to the £2.29m a year Mr Gazidis gets at Arsenal). He will certainly need to deliver to show that he is worth it.
And there is the pressure of players wanting more salaries. As I noted at the start the word around is that Arsenal have reached an agreement with Mesut Ozil over a new contract. But the cost is huge. That issue again could raise problems for Tottenham, and I’ll return to this anon.