When we suggested Tottenham’s stadium’s costs might increase, we never thought they would double

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.

Spurs new stadium

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…

1: Life in 1930 and winning the first major trophy.

2: The cup winners who dropped out and the players who came in

3: How Chapman put his triumphant 1930/31 team together.

4: September 1930; played 8 won 7 drawn 1.


33 Replies to “When we suggested Tottenham’s stadium’s costs might increase, we never thought they would double”

  1. As a Spurs fan of 50 years standing, i found this to be a very interesting and fair-minded article. Thank you. As I understand it, the problem Spurs have isn’t just the funding (and the whisper on this is that Joe Lewis, the owner of ENIC, will stump up if he has to), but completion dates on what is a project of major proportions. If the contractors can’t give a cast-iron guarantee that the new ground will be ready for 2018/19, Spurs will have to stay at WHL for another season, so allow time for completion, acquiring safety certificates and so on. How West Ham must be laughing, with their virtually rent-free access to an enormous stadium. Grrr…

  2. Why do the media and bloggs (and Untold too!!!) always refer to the Spurs chairman very respectfully as “Mr Levy” whereas our own chairman is often simply referred to by his forename and surname?

    I often wish such respect is equally shown to all chairman or CEOs of clubs.

    It often feels like the media is trying to make the Spurs chairman a superior type of guy than other chairmen. Even during match commentaries, the Spurs boss is always referred to as “Mr Levy.”

    How about Mr Kroenke?
    How about Mr Gazidis?

    Your “Mr Levy” is nothing special. He was outwitted financially by none other than Mr Emmanuel Adebayor.

  3. They can spend £8000 million and put in a champagne bath for the players, but they will always be in our shadow.

    Long live Gooners.

  4. My innocent comment has held up for “moderation”. No swear words. No repeat argument. No repeat posting. But … The filtering system just doesn’t like it.

    I am a regular poster and contributor who never swears or disrespects Untold or other contributors. Surely the filters would have some built-in “intelligence”?

    Something wrong with the “moderation filters” on Untold.
    Or maybe the filters were designed by a Spurs or Man United fan (and Tony has unwittingly subscribed to them).

  5. Uncle Joe Lewis has agreed to fund the new stadium, if necessary, taking a bigger share percentage. Don’t worry about the mighty Spurs.?

  6. Hahaha.
    On a more serious note Tony, please get the moderation “logic” checked for reasonableness.
    The programming needs to be revisited.


  7. I like the design which could make the stadium the most aesthetically pleasing building in Tottenham ( unless you count the Gilpins Bell down the road ). And it has some merit with the 17000 seat single tier stand, a micro brewery (wonder what they’ll name their ale), 87 metre long bar, heated seats, USB ports for lap tops etc., and a glass wall where fans can pay extra to watch the team scratching their nuts before kick off.

  8. MickHazel – well, we’ll have a mighty expensive stadium and a mighty large bank debt.

  9. Tony

    Thanks for following up your earlier article with this piece
    The £800 million figure isn’t a rumour it was the sum Levy himself advised was the cost at the last meeting of the THST
    KPMG carried out a viability study for the local council and it was far from glowing indeed they were struggling when the costs were estimated as being circ £650 million.
    Spurs increased equity , mainly purchased by ENIC, by around £100 million to finance the start up costs ( similar to Arsenal through Granada Media) that money was utilised in land purchases etc.
    The second tranche of money , some £250 million, was raised so that the build could continue. The dilema is that the balance it seems, or as at the end of Feb, has not been confirmed as being in place.
    The Tavistock group are the owners of ENIC who in turn own THFC . The Tavistock group is the vechile by which Lewis invests in numerous companies and the comment about attitudes Harding came from a senior official at the Tavistock Group.
    Spurs stadium is ultra ambitious there almost certainly will be problems with the proposed roof and retractable pitch. The timelines in the stadium build are extremely tight and I suspect there is little wriggle room
    I read a report the other day that no where have Spurs yet stated that 2016/17 will definitely be the last season in the current stadium.The only thing Levy states is that Spurs will not play more than one season away from WHL.
    But for me the problem at this time is funding and whilst many expect ENIC to make the funds available those funds will almost certainly have to come from the banks and as Levy himself says the risks associated with that level of equity in a £20 million pa business is far from attractive

  10. It’s all relative Mick, but the fact is we are getting bigger, while you are getting smaller. What’s not to like??

  11. Gaz

    Even the sun shines on a dogs arse sometimes!!

    Spuds have always spent more for less, add the new stadium to that list?
    This season isn’t over yet, never mind the gap, hey!

  12. Interesting that the media aren’t all over them pushing out the story that they are struggling for funding, just as they did with us when we were looking to build the Emirates.

  13. Gaz….you aren’t perhaps struggling but based on what the media and reports are saying, Levy and company might have to stump up a boatload of $$$, which represents almost double the initial estimates. Did you bother to read the above article?

  14. I’m quite sure that they always offset any overdraft by selling some of their valued England family jewels .Heard on the local radio that ManUre want Eric Dier .
    A 100 Million Pounds for both him and Harry Kane ?

    Also heard that Alexis Sanchez wants to stay in London buts wants to join a whining club .
    At least that what it sounded to me !

  15. I wouldn’t put too much stock in that Telegraph article. The leaked email that you say they claim to have seen was, in fact, widely circulated more than a week ago, It was written by Levy and sent to the Mayor, TfL and Haringey. It was also most likely leaked by Spurs. Essentially, it amounts to Levy giving the various authorities a bit of a bollocking about their failure to keep their side of the bargain with regard to investment in the area. There is supposed to be a revamped White Hart Lane station, a third track on the Northumberland Park line (which will allow for more frequent trains), various other transport initiatives and a general upgrade of the area. But work on each of those is well behind schedule, if it has even started at all. Levy’s purpose in writing the email was to put pressure on the various parties to get their arses in gear. He doesn’t want the stadium opening in 2018 to be dogged by negative stories about transport meltdown. Furthermore, since Spurs own a fair amount of property in the area, it is in their interest that wider regeneration gathers pace as soon as possible – thus to increase property prices. It is in this context that you should read this supposed, sudden and dramatic increase in build costs to £800m. Put simply, there is not a chance that the stadium alone will cost that much. This is merely classic Levy, fighting his corner and applying the squeeze.

    So what about the actual stadium cost? First off, I have to point out that, back in 2013, the cost of building the stadium wasn’t estimated at £400m. That figure was for the entire Northumberland Development Project. The stadium itself was expected to cost in the region of £250m – more or less the same as it cost Arsenal to build the Emirates. A couple of years later, however, Spurs opted for a totally new design. It would be bigger (by 5K); include a complex sliding pitch mechanism; and added facilities for NFL; and a basement floor; and 1.5K added corporate seats; and an overall far higher internal spec. And it was this new design that was estimated to cost in the region of £400-450m. Of course, it is very likely that costs have risen further still – especially given the pound’s post Brexit vote collapse. But the notion that costs have doubled is entirely divorced from reality.

    Oh, one other point about the increased cost………..it has nothing to do with the 17K single tier stand. Quite the opposite, in fact. The single tier stand will be far quicker, and consequently far cheaper, to construct than any of the other three stands. Unlike the others, it will have no basement floor; it will have a steel frame structure; the terracing will be SPS which is both lighter and far more quickly installed than concrete terracing; and there will be no time and money consuming corporate areas within. This is all necessarily so because the builders will be on a very tight schedule from the instant that the clock starts ticking immediately after the final game at the old stadium.

    Lastly, you perhaps ought to know that today’s Times is running a story about Spurs having just secured £350m of finance from the banks.

  16. David

    As a fellow Spurs fan, allow me to reassure you. Regardless of any other reasons that there may be to force Spurs to stay at WHL for a further season, the stadium build schedule isn’t one of them. The three quarters of the new stadium that is currently under construction is more or less on schedule and the vast majority of the main structure will be up by the time that Spurs play Man Utd – the last ever game at the old Lane. That will leave 15 months to complete cladding and fit out – more than ample.

    The main concern is, and has always been, the remaining quarter of the stadium, the sliding pitch and the roof – none of which can be started on until the old stadium is demolished. That situation will be the same whether Spurs leave this summer, next summer or in ten summers’ time. So it isn’t a determining factor in any decision as to when to vacate the old stadium.

  17. I hope the WOB bores follow the spuds into their new stadium,I would love to lose those glory hunters who seem to always be looking for the latest new thing.This playing NFL games, retractable pitch,pop corn girls and watching the players in the tunnel is so American and spursey,I bet the chav Ruperts try and put one over on spurs in the tacky stakes when they build their new ‘theater of flagwavers’

  18. I have read it, perhaps you need to. Tony has got his facts wrong, we are not delaying due to being unable to get the funding from the banks. The contractors can’t guarantee a deadline, the funding is already in place.?

  19. Gaz

    Not sure you are right about the funding being in place because at the THST meeting held on 28/2 Levy was asked about that very point yet he failed to confirm the money was there all he did do was confirm the costs would rise to £800 million

  20. The funding for the Spur’s new stadium, is still to be negotiated!.

    The London Times’ report, is the initial funding, no more, no less. Being rehashed by the usual suspects. Spur fans, believe every word that Levy tell them.

    The further funding is still based on future season ticket sales, the NFL 20 games over 10 years income, plus the stadium naming rights.

    The retractable pitch and the NFL games, may well be proved to be Levy’s Folly!

  21. There are a few examples of Levy’s folly. The Bale windfall squandered, the huge amounts spent on tat before that. What kind of idiot would ask someone with that track record to build them a giant stadium. Unless they are the sort the admire the “method” used in the Wembley boondangle.


  22. Notoverthehill

    Why would the retractable pitch and NFL involvement be “Levy’s folly”? The added cost will be more than compensated for by the added income that Spurs will be able to earn. The NFL arrangement will ensure that naming rights will dwarf what Arsenal managed to get from Emirates. And the retractable pitch will mean easy conversion for all manner of other events. Its versatility will allow for many more events than a grass football field could handle. Whatever the extra cost of the retractable pitch and NFL changing rooms etc – even if it is as much as £100m – will pay for itself within five years.


    It’s only natural, I suppose, that you should have a pop at Levy. Fair enough. But when you take your red specs off, I’m sure you’ll concede that Levy has overall done an outstanding job since taking the helm 16 years ago.

    When he took over, Arsenal had practically disappeared over the horizon. They were better in every way. Better team. Better academy. Better training ground. Better stadium on the way. And the margin by which they were better was huge. No better illustrated than 2003-04, when the gap between the two teams come season’s end was some 45 points. There seemed no way back for Spurs.

    How different the picture is now. Spurs are yet to finish above Arsenal in the league but there has been little to choose between the teams for quite some time now. And who knows…perhaps this will finally be Spurs’ year? Spurs’ training ground is now considered to be superior (which is why England training in London moved from Colney to Enfield). Spurs’ academy has been better for a number of years. And the new stadium, when built, will eclipse the Emirates. And much like Arsenal, Spurs have done it all without winning the oil lottery and without getting into financial difficulty. It is a remarkable transformation. A situation I couldn’t have imagined in the dark days of the 90’s and early noughties.

    All of which is not said to boast. Rather, just to give credit to one of the very best chairmen in the business. He may be a right ****. But he’s our right ****. And I suspect that many gooners, if they were being honest, would far rather have him at the helm than Gazidis.

  23. Spurs have secured a £350m finance package to fund the new stadium development, with three investment banks: HSBC, Goldman Sachs & Merrill Lynch. The remaining finance will be provided by way of advanced ticket sales, a ten year ground rental arangement with the NFL, and a £400m naming rights deal.?

  24. Wow – Spuds certainly feeling light headed being above the Mighty Arsenal in the league! This will be one of the sweeter St Totteringham’s days when it arrives.

  25. wait. Tiny totts are a little short in cash. Hmmmm. I for one hope they dont find the hidden reserve. It’ll be fun looking at a half moon shaped stadium.

  26. The KPMG report produced for Haringey Borough Council, pointed out a few glaring problems.. The biggest being the Investment Rate of Return (IRR) that that the time was calculated at being 1.23% based on a total estimated cost of £650M.. Private investors look for an IRR closer to 10% but since that report was produced (almost 18 months ago) we have seen the Brexit happen and the pound weaken considerably against the Euro and USD and new estimated completion cost of $800M, I raise the question as to what these developments would have done to the likely IRR ?.. I think it is fair to say that this could well be lower than 1% now, making it an even less attractive proposition for private investors. It is widely acknowledged that Spurs have secured funding from 3 banks for the sum of £350M and that advanced ticket sales, NFL deal and stadium naming rights would raise another £400M.. The NFL deal has so far secured £10M in funding the rest is going to come over the next 10 years, this still leaves a huge gap, Daniel Levy seems confident that Spurs will secure a £20M a year stadium naming right deal, but 2 other clubs in London are also chasing that same ‘golden goose’ for naming rights on their ‘new’ stadiums namely Chelsea and West Ham, so unless there is a queue of private companies out there eager to layout millions for naming rights then this might not be easy to obtain especially to the tune of £20M a year.. Daniel Levy has yet to convey the ‘actual’ details of how the funding has (or will be) generated.. The banks have ‘hardened’ their position (post Brexit) and with an IRR at such a low rate, private investors will be better off putting their money into a low interest bank account with no risk involved.. Daniel Levy is a master of spin, but I still think he is coming up short for funds.. I think it will be inevitable over the next year or so for the club to sell off other assets such as star players, to meet the final bill.

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