On the latest episode of the Last Word on Spurs podcast, Ricky Sacks and Lee McQueen were joined by football finance expert Kieran Maguire to discuss the finances at Tottenham Hotspur.
One topic of discussion on the recent episode, which was titled: ‘Tottenham Hotspur – Behind the Finances’ – was Daniel Levy’s decision to renegotiate the club’s stadium loans.
A report from the Guardian from 2019 states that: ‘Spurs borrowed £637m from Goldman Sachs, Bank of America Merrill Lynch and HSBC for the £1bn project and the money was due to be repaid by April 2022. But through US investors Levy has converted roughly £525m of the debt into a bond scheme, with staggered maturities of between 15 and 30 years.’
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Here’s what Maguire had to say about Levy’s refinancing on the podcast:
“In terms of the debt, I think it was a really smart renegotiation by the club.
“They never were going to be in a position to be able to repay those loans in 2022, the banks were pretty relaxed because they’ve worked out just how much money Spurs are generating per match.
“So, with hindsight, getting that revision of the loans sorted pre-pandemic was a very, very clever move because if you’re just paying interest at 2.5% on loans of £637 million, you’re paying £15 million a year in interest.
“Okay, £15 million sounds like a lot of money, but compared to the £461 million that Spurs are generating, they can cover that with ease.
“When you contrast that to the challenges that Arsenal had when they moved to their new stadium and when you look to see what happened with the Glazers and Manchester United, Manchester United were paying over £100 million a year in interest in 2006/07, around about that period.
“So, you’ve got to give the club some credit in the way that they’ve dealt with those monies.”
TIF Thoughts…
Maguire clearly feels that it was an excellent decision by Levy to renegotiate the stadium loans, and considering the financial impact of the current viral outbreak, this has arguably proved to be even more of a smart move.