Now you might recall that when the new stadium was first announced there was a certain amount of crowing by some Tottenham supporters (although not by the club) that they were going to build a better stadium than Arsenal, at less than the cost of the Emirates. And of course that was always possible, not least because they have the benefit of seeing what Arsenal got right and what it got wrong.
In 2013 the price of the new Tottenham ground was quoted at £400m. Today the Telegraph (not always the most reliable of papers I must admit) are saying that they have seen estimates that the price has rise to £800m. The Emirates cost £390m including the construction of the stadium itself, a new waste and recycling centre and relocation of local businesses and statutory services.
The problem Tottenham has, as I understand it (and please don’t shout at me if I have got this wrong, I am just relating information that is in the public domain) that the 2013 price quickly went up from £400m to £450m and then went up to £750m and now is £800m.
Part of this is due to the introduction of the plan to play American football on the site, and part because of the decision to try and build the largest single stand yet seen in UK football. Arsenal saved a lot of money by using a design that had already been tried out in Portugal, and thus were less open to cost shifts which can happen with a totally new design.
Again I have to say, “as I understand it” as a caveat to all this, but it looks as if Tottenham can’t get a final agreement with the banks to secure the loans it needs until these escalating costs are sorted. And there is the problem that once the deal is done, any extra money needed if the costs escalate further, gets increasingly expensive. If you have ever had this experience in which you ask for a business loan and then go back and ask for more, you might well have suffered the same problem. Banks don’t like people going back and asking for more.
Recently Mr Levy said: “We continue to focus on ensuring that the future of the club is protected at all times and therefore, whilst everyone is eager to know if this is our last season at the Lane, we shall only make the decision to decommission our historic White Hart Lane when we have greater certainty on the delivery of the new stadium.
“We have run this club on a financially secure basis for the past 16 years, whilst remaining ambitious and with a vision for its future growth and success.”
Now I have no argument with Tottenham over the way they run their finances. Arsenal has done the same thing – although some Arsenal supporters have had a lot of anger over this approach over the years.
But the Telegraph says that it has seen a leaked email in which Mr Levy revealed that the attitude of Tottenham’s bankers had “hardened” because of the sheer level of funding that is needed and the escalation of estimates. In particular Mr Levy noted that the bankers “have focused on the risks associated with the development for a company that only has a turnover of £250m despite its global profile. The option to utilise Wembley for next season expires in a few weeks, the process of season ticket renewals, demolition notices etc are all reasons why the banks require certainty.”
One of the interesting issues here is that when I first started raising questions about the plan for Tottenham’s ground back in 2009 I was told in no uncertain terms that Tottenham had the money secured, and that the owner of the club would put money in.
Then again, in May 2013, I raised a point about Tottenham’s new ground which had as we knew by then, been delayed in its development. I suggested again funding was the issue There were then suggestions of government co-funding, which does not seem to have happened.
Thereafter, to many cries of derision, there were further assertions that Tottenham would not follow Arsenal’s route with years of austerity. Indeed the point was made subsequently that Tottenham, uniquely, made a profit on transfers while everyone else made a loss. A valid point in recent years.
But as we have noted all the time, Tottenham’s website on the stadium never mentioned funding – and of course there was no reason why it should. It’s a private company and it is a private matter. But in October 2013 the Guardian said,
The full extent of public contribution to Tottenham Hotspur’s planned new stadium project can be revealed for the first time, with the club positioned to benefit from controversial council plans to develop an area opposite the new ground involving the demolition of existing local businesses.
Spurs have bought substantial land in that area, now proposed for residential development, and recently moved ownership of the property offshore, raising the possibility of avoiding corporate capital gains tax when it is sold at a profit – although Spurs deny the transfer was motivated by tax avoidance.
The development, proposed by Haringey council, follows a renegotiation of Spurs’ planning permission last year, when the club was released from a £16m commitment to improve transport and community infrastructure, and to build 50% affordable housing in the apartment blocks planned on the site of the current ground.
Tottenham’s chairman, Daniel Levy, argued that those requirements were making it difficult to raise the £400m necessary to build the new stadium, and called for the wider development to boost land values and investor confidence in the Tottenham project.
As I noted at the time it was the final paragraph that was of interest here – the difficulty of raising the money. It was the first public statement I saw to the effect that Tottenham were borrowing money to build the stadium. And the first that raising the money was problematic.
But now it is worth looking at again, because that article suggested Mr Levy had said that it had been hard to raise £400m because of a commitment to improving housing in the area. So Tottenham were released from that. Now however they are trying to raise £800m – and they have no more annoying bits of social commitment that can be removed.
I am of course not saying that the stadium will not be built. Rather I am saying just saying that Untold got it right from the start by suggesting that financing of the stadium could be a problem, in that it could escalate, that money would have to be borrowed from banks (who have a nasty habit of being, well, nasty) and that the whole project could be fraught with as much difficulty and knock on effects as we saw at Arsenal. And I like making the point that we got that right, because a lot of our readers are always very happy to point out all the things we get wrong (which I admit are many, largely because we delve into all sorts of odd areas, and come up with all sorts of odd things).
Of course maybe Tottenham will find a way through the escalating costs and problematic banks; I have never suggested they would not. Rather all I said was that, they will have to borrow the money, and costs have a habit of escalating. And the money will have to be paid back, and it is hard to do that while buying lots of expensive players.
Which really wasn’t very profound or very clever. But at least it was an accurate prediction. And in terms of the stuff I write, that makes a change.
From the Arsenal History Society.
The mega-series on Arsenal in the 1930s is complete, running as it does to almost 100 articles: The index is here.
Now the first four articles in the series have been completely revised, updated with new research, and expanded…
4: September 1930; played 8 won 7 drawn 1.