The £300 million funding question and the dangers of “doing an Arsenal” — New Spurs Stadium Deep Dive (Part 1)

[Part two of this series can be found here]

In a quiet moment over the Christmas break, and being a fun guy, I had time to sit down and go through some of the documents published as part of the planning review process for the new Spurs stadium.

Spurs, normally quite circumspect in how they go about their business, have been quite transparent in publicising information on the new stadium. But there is nothing like a public review process to impell companies to truly let the light in on their plans.

I’ve always been curious about how Spurs are going to actually fund such a massive project, and what repercussions this could have on the team we see once the stadium finally opens.

Among the documentation bundle available to the public was a Viability Report on the scheme.

This report was produced by accountancy firm KPMG for Haringey Council and the Greater London Authority. It does exactly what it says in the tin — assesses whether a planning applicant such as Spurs has a feasible plan to ensure their project is completed.

Having gone through it, it is fair to say this is an interesting document. As the report states, its primary source is information provided by the club.

The report highlights the huge financial challenge facing Spurs, and details the commercial assumptions that are underpinning the project. It also offers some hints about the long-term strategy that may be in play by ENIC.

In this post, I’m going to look at the key financial questions surrounding the stadium scheme. In part two, I’ll look in detail at the most eye-grabbing part of the whole scheme — the NFL provisions.

1 Project Cost and risk

The Viability Report lays bare the immense cost of the project that Spurs have embarked upon. While Daniel Levy, at the recent fan forum, put the final stadium cost at £500 million, KPMG estimates the cost of the entire scheme at between £675 million and £750 million. This includes the development of the land at the south of site — where the apartment blocks, hotel, climbing wall and scuba tank (indeed) will be located.

Whichever way you shake it, this is a lot of money, particularly in comparison with other stadium projects. Per the report, the Stadium of Light cost just £15 million to construct, helped tremendously by the fact it is located in Sunderland and presumably built from cardboard. West Ham are chipping in a derisory £16 million of the £194 million cost of the Olympic Stadium refit. I’ve struggled to find an accurate figure for the Emirates Stadium — on Wikipedia, it cites both £390 million (the commonly held figure) and £440 million. Either way, the cost facing Spurs is significantly above any of this.

The report notes the relative decline in importance of the increased match-day revenues a new stadium would generate amid soaring TV income. “The financial benefits of a new stadium could be less than the merit payments attributed to finishing a few places higher (in the Premier League),” it states.

I’d add on that point though, TV rights may be soaring now, but there is no guarantee they will continue to do so — the Premier League deal is revisited every three years. A world-class stadium, so long as you can continue to fill it, offers secure long-term revenues.

But it just shows how the huge influx of TV money is transforming the environment. The TV income is so high it is seen to be creating an argument AGAINST expanding stadia, even as it provides the finance that should be enabling every club to build for the future like Spurs are doing.

2 The £300 million funding gap

A key area of consideration in the KPMG viability report is the “funding gap” — the difference between what Spurs have already invested and the commitments they have been able to secure, and what still needs to be found. The gap is considerable.

So far, Spurs have spent around £100 million — including in purchasing land. They have also found three banks willing to loan £350 million towards the project. This is no mean feat — the KPMG report notes there has been “little recent appetite to fund stadia projects” This loan is £90 million more than Arsenal secured, more than 10 years ago (more on them later).

This still leaves between £225 million and £300 million to find.

The report lists the potential funding options as public sector contribution, junior debt, equity investment, sales from the southern development, and advanced sales of naming rights and hospitality/season tickets.

I’ll talk about equity investment shortly, but the report shows that Spurs are facing a delicate balancing act. For example, it states securitizing future naming rights and hospitality sales could restrict options when it comes to issuing new debt.

A key to this balancing act is the “bridge loan” that the three banks have offered. Essentially, the banks will advance Spurs £200 million of the £350 million total loan, enabling the club to push on with construction. Levy has spoken previously (I can’t recall exactly when so I can’t find the link) about the naming rights issue — how typically, agreements are reached once construction is well advanced. This removes the risk of a brand being associated with a heavily delayed project such as Wembley, for example.

The report also sets out the likely financing terms: the £350 million loan (including the bridge element), will be a five-year loan that will then be refinanced. This is important guidance for us fans — for five years money will be tight due to high interest payments, but then the burden should soften. This is similar to the Arsenal experience — after they refinanced they were able to push the boat out and make signings like Ozil and Sanchez (Arsenal now have both a massive cash balance and massive debt).

The report stated that the “bridge” loan could have been in place by the end of December 2015. I’ve seen no announcement of this by the club yet. Approval is still needed by the Mayor of London and Secretary of State before construction can advance at full speed, which should be a formality.

You can clearly see Levy’s strategy in terms of ensuring a “train” of money rolling steadily onwards to ensure that adequate finance is in place through the phases of the project.

The £100 million that has already been spent (a proportion of which came from equity investment from ENIC, more later) has enabled Spurs to complete the first phase of the redevelopment (Lilywhite House), and reach the “shovel ready” stage on phase two, the stadium itself. (In fact, it is more advanced with some groundworks already done). The £200 million bridge loan will enable Spurs to go full-speed as soon as it gets the final of the many green lights required. This would include expensive items such as purchasing raw materials. The next £150 million of the loan will then be paid out in installments as the project moves towards completion.

Accepting the £500 million cost for the actual stadium build, with £100 million already spent and £350 million already committed, Spurs are getting there. It is funding the final phase, the southern development, that is more uncertain. However, by then the stadium will be up and running, a naming rights deal will have kicked in, and increased match-day revenues should be rolling in.

3 Lessons from Arsenal


The closest terms of reference for what Spurs are embarking upon comes from Arsenal, understandably. And Arsenal offer some valuable lessons, in particular in funding the project.

Arsenal pushed ahead with their stadium project without adequate funding in place (they had a loan of £260 million), forcing them to halt work at one stage when the money dried up. They were required to issue fresh debt and equity, securitize commercial revenues and curtail transfer activity at a greater level than initially planned, according to KPMG.

I suspect, the cash crunch also limited what work they did on the stadium, in particularly the finishing touches that can give it that unique feeling of “home”. Subsequent to completion, The Emirates had to undergo an “Arsenalisation”, which is a little embarrassing.

Money from the redevelopment of Highbury only started to roll in after the stadium was completed. This will be the same for Spurs, who will finish the stadium then work on the redevelopment of the south of the site. So, it must be noted, the stated idea of funding for the scheme potentially coming from this redevelopment appears optimistic.

Failure to have money in place when required would be doubly painful for Spurs as we are having to play away from White Hart Lane for one season during construction.

The deadlines appear quite tight for the magnitude of the project, and from what I am aware, Premier League rules dictate that you can only play in one “home” stadium per season. One year in Milton Keynes (we need to start accepting that Wembley isn’t likely to happen as Chelsea have more money than us) will be bad, two will be very annoying for fans and cost the club millions in lost revenues.

4 Naming rights, and the assessment of a length of a piece of string


As stated, Spurs will need to find between £225 million and £300 million to complete the stadium scheme. The first priority in bridging the gap will be securing naming rights.

So how much can Spurs expect to receive from naming rights? There is a “how long is a piece of string” aspect to the question, as the report notes, but Spurs have put a clear figure on how much they think they can get from from naming rights and some other related commercial income streams: £30 million per year.

The report states: “Key drivers of commercial revenue growth in the new stadium are expected to be stadium and cornerstone naming rights, and income in respect of increased merchandising and conference events, which together will give annual incremental income of approximately £30 million per year.”

Obviously, I can’t divine how much of this £30 million would be naming rights, and how much conference or merchandising income. But is this even realistic?

Arsenal signed a £90 million, 15-year deal with Emirates, for both shirt sponsorship and naming rights, in 2004. Per The Guardian’s Daniel Taylor, the naming rights were valued at just £2.4 million per year. In 2011, Manchester City signed an FFP-busting £400 million, 10-year deal with Etihad, again for both shirt and stadium rights. In recent naming rights deals in the US, MetLife paid $400 million (£275 million) over 25 years for rights to Meadowlands, home of both New York NFL franchises. Levi’s paid $220 million over 11 years to sponsor the home of the San Francisco 49ers.

The KPMG report makes clear this £30 million figure is the club’s, and it came from an external report. But the huge disparity between what Arsenal achieved in 2004 and Manchester City engineered in 2011 provides few clues, while the rights deal in the US may suggest what Spurs are after is optimistic.

One thing I would also note is that Spurs’ shirt sponsorship with AIA runs until the end of the 2018/19 season, which may rule out a joint shirt and stadium sponsorship deal unless there is a break clause in the contract, or unless AIA is interested in a more comprehensive sponsorship.

The key in Spurs’ negotiations once the club begins marketing the rights will be twofold: securing as big a deal as possible, obviously, but also ensuring that it is “frontloaded” to as great an extent as possible to ensure finance is in place through the later stages of construction.

Can Levy pull a rabbit out of the hat, and land a £225 million to £300 million naming rights deal to cover the gap? We’ll see. But it appears likely that Spurs will need more funding to complete the scheme.

5 That £80 million profit 

At this point, it should be noted that Spurs is a profitable club, stonkingly so in the last financial year. Per football finance blogger Swiss Ramble, Spurs booked a cool £80 million profit in the last set of accounts.

This figure was helped by the sale of Gareth Bale to Real Madrid, but Spurs reinvested much of that money in the transfer market.

I suspect, the accounts were polished shinier than the silverware at Buckingham Palace in the last financial year as Spurs knew that they would soon be securing financing for the stadium — the better shape the club is in, the lower the initial rate of interest on the £350 million loan. This financial year, the wage bill will have decreased with some big earners gone, and the wage bill should still be relatively low the following financial year when the new TV deal kicks in, due to the age profile of the squad. Depending on the degree of deferment of certain costs away from last year’s accounts (for example you can do smart things with player amortisation, i.e how you write down the cost of purchasing a player), Spurs could still be quite stonkingly profitable in the next couple of seasons, too.

There is a big difference between flogging the crown jewels to fund a stadium, and reinvesting profits to build the club’s future. In fact, Spurs have been doing this with little complaint for years — the club invested £45 million on the new training facility, for example.

Daniel Levy has been clear there will still be money available to strengthen the squad through construction, and he has no intention of selling any players. He appears to have an ally in Mauricio Pochettino, who doesn’t like to spend unless necessary and is the Premier League’s “Mr Youth Development”.

It would appear that there may be profits from the club in the next couple of seasons that could be poured (almost literally) into building the new stadium.

6 Equity sale: ENIC’s last resort


For what remains, the KPMG report gives some interesting detail on the final likely source of funding: an equity sale.

(As far as I’m aware, there is no public funding for the stadium itself, and KPMG doesn’t give any further details on junior debt issuance).

Talks on an equity investment have already taken place, although the report notes that these are at an earlier stage than talks with banks over a loan. It continues: “The club have verbally indicated that they have received expressions of interest from credible counterparties, including entities with significant experience in financing similar sports stadia construction projects.”

A while back, Spurs confirmed an approach from an investment company named Cain Hoy, a London-based outfit apparently focused on real estate that was set up by several executives of Guggenheim Partners, a major investment company. The approach was serious enough that Spurs were forced to open their books so Cain Hoy could conduct due diligence. Per @ztranche, a Spurs-supporting finance professional, things never went further. The club subsequently put about a figure of £1 billion needed to buy the club. As some noted at the time, this seemed extremely high.

Currently, ENIC’s control of the club is very secure — per the last annual report, ENIC held over 182 million shares in the club, representing 85.46 percent of those in issue. I don’t know who owns the other 14.5 percent — filings to Companies House simply state “other”. Regulations mean any shareholdings over 3 percent must be disclosed. Per Tottenham Hotspur’s annual reports, the last time someone blipped above this mark was in 2009, when Michael Ashcroft (Lord Ashcroft for those who follow British politics) upped his stake to about 4 percent. Polys Haji-ioannou (the older brother of the EasyJet fella Sir Stelios) previously owned just over 9 percent, through his HODRAM vehicle, but it would appear he sold down his stake at the same time that Alan Sugar sold his remaining stake to ENIC in 2007, as it is no longer disclosed as a substantial holding.

By the way, Daniel Levy and his family are “potential beneficiaries of a discretionary trust that ultimates owns 29.41 percent” of ENIC  — I always think this is important to remember. He may drive us crazy at times, but he is a Spurs fan and has serious skin in the game.

I picked the brains of @ztranche on ENIC’s strategy, and we held a similar hunch: ENIC view an equity sale, now, as a last resort.

Simply put, the value of Spurs should soar once the stadium is built. The club is making a huge, and risky, investment in a new stadium, dragging down its value. While debt will increase tremendously, revenues will soar once the stadium is built.

By extension, you can see why investors such as Cain Hoy may fancy taking a stake in Spurs now — hence a figure of £1 billion being bandied around to deter them.

The last time Spurs issued fresh equity, it was almost all bought by ENIC itself — this occurred in 2009 and enabled Spurs to press ahead with land purchases, I believe. Could this happen again? I don’t know enough about Joe Lewis or his finances beyond what is in the public domain — but safe to say he has significant means. Forbes puts his net worth of $5.2 billion, and his Tavistock portfolio has a long list of assets. The idea that ENIC itself “buys” much of the new equity, essentially pumping money into the club, with a view that the value is going to soar, is far from outlandish.

I’d note, Spurs will be keen to avoid another lesson from Arsenal — warring factions of investors that create an atmosphere of stasis, or arguably worse, instability. So ENIC strengthening its control of Spurs isn’t a bad thing, per se.

Judging by the amounts Spurs already have committed, the potential for naming rights and the profitability of the club, the amount of finance needing to be raised by ENIC may be fairly modest — by my fag-packet maths, it would more likely be in the tens of millions than the hundreds of millions. This is a relatively small amount in the grand scheme of things. Provided it has the funds, there seems little incentive for ENIC to dilute its shareholding of the club, and even reduce its control by, say, surrendering seats on the board.

To sum up, ENIC appear to have made major strides in ensuring sufficient money is in place to fund the Spurs stadium project. And it will be fascinating to watch their strategy in securing what else needs to be found.


Thanks for reading, please follow me on Twitter for more Spurs chat, my handle is @spurs_report. I’d welcome any feedback on this article.

NEXT: In part two, I’m going to look in detail at the most curious single aspect of the whole stadium scheme — the NFL connection.

46 thoughts on “The £300 million funding question and the dangers of “doing an Arsenal” — New Spurs Stadium Deep Dive (Part 1)

  1. hotspursam

    Quite an accurate account of the KPMG report, which backed up the Spurs funding report completed by Rothchilds. The report also concluded IIRC that the Southern Development would not retain sufficient residual value to pay for any affordable housing – as things stand.


      1. hotspursam

        No, I don’t they are being naughty, they are being quite open about it and they have produced affordable housing in other areas of N Tottenham. Their figures have been backed up by two respected financial institutions in Rothchilds and latterly, KPMG, plus another independent consultant whose name I can’t remember now.
        The viability for affordable is to be revisited at some point, date yet to be agreed, but will be in the S106 agreement.. Planning permission isn’t ratified until after S106 is signed. There is 3 months to do this otherwise they are called back to the Council. A date in March has been set aside for this contingency I believe. That’s what the big last minute Hoo-ha was all about at the Planning Meeting.


      2. hotspursam

        Oops sorry had a blonde moment there. The 3rd independent I referred to was for the H&S report of the Tottenham Experience and the listed buildings, and nothing to do with financial viability and affordable.

        On that score, the estimated cost of the Southern Development is circa £366m, yet the residual land value on completion, on current figures is £267m, an expected loss of £100m, hence the non viability for affordable housing. This of course has nothing to do with commercial value etc, which is the part that will help pay for the cost/debt/loan in the building of the stadium.

        On current figures, KPMG expect Spurs as developers to make a return of 1.5% on the scheme when fully completed, whereas, on most projects developers would expect 15% to 20% and certainly wouldn’t go ahead with anything less than 10%.
        The completion of the stadium is expected to increase land value and so that £100m deficient will be extinguished and if the rerun goes above 4.5% then affordable housing will come back into the equation.
        It is the date/point at which this is to be re-calculated and final% mark, that is for agreement in the S106 and is of contention between Spurs and the Council atm.

        I can’t remember if the cost of the Tottenham Experience is included in the southern development or as part of the stadium build though. I believe the Health Centre is, but will stand corrected on that if otherwise.


      3. hotspursam

        Hi again, try here:-

        Page 55 sections 9.1 and 9.2 including table 15 shows the negative value at minus £100m

        Section 7 details the GDV of the completed scheme at £291,8m see section 7.47

        Section 8 details the cost of build and charges at £335.53m. See page 54 section 8.22

        Lots of pages of detail in there to get your teeth into. Was included in the main bundle of Docs submitted to planning as additional material.

        Report by DS2 not Tothchilds as I thought earlier. Rothchilds is for financing.

        Also got some of my other facts slightly incorrect from memory so I’ll post up copies of two of my notes from the planning meeting I did for the Spurs List (out of 9) following this for your info.


  2. hotspursam

    Planning Meeting – Note 1

    I watched all 5 1/2 hrs of the Planning Sub- Committee meeting and will break my notes down into a series of posts.

    Meeting started on time at 7pm, was due to finish at 10pm but didn’t finish until 00:28 when the final vote was taken.

    After the first few agenda items were completed, apologies, introductions etc a spanner was thrown into the works. Spurs had come up with a last minute submission which needed discussion with the planning officers in a separate room. Meeting was adjourned for 30mins.

    Turns out this was about the viability of affordable housing. Spurs had only received the KPMG report the day before, and this concerned a viability review towards affordable housing re date and percentage trigger points.

    There was some Argy Bargy about Spurs late submission when the subject came up in the meeting. Council nit happy with Spurs, Spurs not happy with Council etc. By it for tat exchanges.

    In essence, KPMG agreed that currently there is no residual value in the southern development and so affordable housing isn’t possible. However, it was agreed by them, as suggested by Spurs, that once the stadium is built land values may increase and so there may be scope for affordable housing then. KPMG recommended a trigger point of 20% increase in land value as a trigger point for which anything above that would be split 50/50 between Spurs and Council for the provision of affordable housing. This amount being estimated at £48.4mil on current valuation. They also recommended the review date for this is when the building of the stadium is complete. I.e. Not when it is first used.

    Spurs response was a trigger point of 25% but they wanted a date of 31 Dec 18 or when the stadium is first opened, which ever is the earlier. They wanted this date for their protection. Their argument was that it isn’t a matter of not wanting the viability review but a question of funding. The housing/flats are to act as an enabler towards the funding of the stadium build and in a planned phased project they needed to be able to protect their funding stream as the project progressed.

    Don’t ask me the ins and outs of this, it is very complicated and the Councillors weren’t able to follow it all either. I’m not sure that Spurs agreed to the 20% figure or not during the discussion. In the end it was voted on to put the KPMG recommendation into the S106 agreement.

    Planning permission is granted of course subject to both parties signing the section 106 agreement. A date of 18 Mar 16 was set for this. If not signed by then, permission is rescinded and they have to come back to the committee. This is usual.

    Other quick points of note :-

    Stadium capacity. 61,080

    A figure of £600mil for the project was mentioned.

    Spurs already using 400 White Hart Lane as a compound without planning permission, and asked to explain themselves. Confessed, bang to rights, planning officers knew but had to submit formal planning application at same time as the stadium application. Laughed it off.

    Vote was 8-2 in favour

    More tomorrow. Bed is calling me (all sorts of names).


  3. hotspursam

    Planning Meeting – Note 2

    After the early shenanigans the lead Planning officer made his presentation.
    He stressed that the application is properly presented and meets in principle the conditions set out in The Haringey Plan, The London Plan, Communal Plans, and is appropriate and in line with policy for a growth area, as is High Rd West and Northumberland Park. The area is a dedicated growth area and been nominated for sport led regeneration and stadium area by the Council. He stressed there was nowhere else in the area where a sport stadium of equivalent size could be built.

    Next up the Chair Lady went through the application subject by subject as listed in the Planners report 400+ pages, not line by line f course. Various graphics and charts were used but not seen from the static camera position. This took some while to complete.

    However, as their Viability expert had to leave early (as meeting had been postponed for a week), this subject was raised out of turn at the beginning and opened to question from the council. I explained as best I could this subject in Note 1 last night. What I didn’t mention is that developers would normally seek a return on profit of about 15% to 20% certainly no less than 10% for a scheme to be considered viable. Rothchilds (Spurs experts) and KPMG (Council’s independent experts) both came to the same conclusion that Spurs Return to profit would only be approx 1.5% on value. Hence the lack of affordable housing. Lots of discussion took place mainly how this was all so very terrible and sought detailed reasons. Some said why didn’t they have less expenditure on the stadium infrastructure and fittings so affordable housing could be included. They kept having to be reminded that the central reason for the project is the stadium, not housing, which is to act as an enabler for the stadium. The stadium needed to be iconic and just more than football to attract use for 365 days a year etc to act as catalyst for wider regeneration. An ordinary stadium just wouldn’t do that. It needed to be first class in all respects. Which this design is.

    Although Spurs (like everyone ) would seek a greater return, their object here is to build and operate a world class stadium that can also act for the greater good of the community. This stadium and project does that.

    They then went through the review mechanism as reported earlier.

    Sent from my iPad

    I was normal once – it was the worst 20mins of my life!


  4. T (@micropop77)

    Interesting, but completely useless. He’s comparing apples and oranges. He says Emirates cost 390-440 mill£ and ours, including the development to the south, between 675-750 mill£. In what value of the currency? There is a HUGE difference if the numbers for Emirates are in 2005 £ and ours i 2015 £,
    and our total scheme is A LOT bigger than the Emirates, and will yield a lot more income from rent. So to compare these to projects is just not possible, or indeed relevant in any case.
    Also the development to the south of the stadium is not key or necessary to the viability of the STADIUM. They are really two separate schemes, and the funding of them are not reliant upon each other.


    1. hotspursam

      Here is a relevant para from the DS2 report conclusion about the SDL being required to help pay the funding gap for the stadium. This also acknowledged in the KPMG report.
      Both DS2 and KPMG used the Emirates as a comparison but more as a funding model and the figures quoted are also cited in the DS2 viability report.
      IIRC, Donna Cullen, at the planning meeting also said, during Q&A on affordable housing, that the SDL, is required for the financial experts viability of the stadium funding.
      So, Spurs and two independent financial institutions do believe, to use your words, key to the financial viability of the stadium.

      10.2 The Applicant is eager to bring forward the development of the SDL following construction of the stadium and associated works. The funding strategy for the stadium site is predicated on the basis of the SDL generating a receipt which will assist with an identified funding gap and this principle has been established by way of the extant consent and also as a robust viability methodology on other sites.


  5. THFC_Dan

    There are several points which need to be made:

    1. It is widely recognised that Arsenal’s Naming Rights deal with Emirates was so poorly negotiated that, as a result of discovering the extent to which the intangible asset had been undervalued, they sacked their Commercial MD, Keith Edelman. It is therefore highly disingenuous to reference such a deal either as a means of benchmarking or as a base to build assumptions or “lessons” from.

    2. Both commissioned reports share a common source – the Club itself. The main issue which both reports talk to is the extent to which project viability is dependant on the inclusion/exclusion of social/affordable housing, as it is noted that none is scoped within NDP. It should be recognised that a view of viability can be influenced through the provision of financials that will buttress the Clubs’ corresponding narrative.

    3. It is not the case that the Club is obliged or conditioned to self-build Phase 3 of development. It is far more likely that the Club would, following a consented application, look to secure a deal with a developer; therein shifting the funding risk away from the core business. Therefore, whilst full consideration of cost might be given within a report, the clear options open to THFC shouldn’t be omitted from consideration.

    4. Interest in the Premier League has shown continual deal-on-deal growth, and there is simply no evidential foundation to any suggestion that such growth won’t continue. Indeed, it is forecast that advances in technologies alongside cost economies will further enable more and more regions to receive Premier League content. Unlike NFL, the interest in football is global and the Premier League is keen to exploit that.

    5. Finally, in your “part 2”, I trust you will recognise the true weight of the NFL deal. This is a HIGHLY significant, ground-breaking deal as it enables both sports to firmly anchor and mutually benefit their interest in new terrorises. The deal will expose THFC, by way of association to New White Hart Lane, to a population of 300m; and, similarly, the NFL will likewise reap exposure to a further population of 65m.

    I merit your research, but – in many parts – it is clear that you’ve missed or glossed over the nuances and context within which much of the details need to be considered.

    Hopefully you’ll do better in Part 2.



    1. thespursreport Post author

      Hi Dan,

      Thanks for the well-informed comments.

      On Point 3, I’d be interested in learning more about this aspect.

      On Point 1, it is widely known that the Emirates sponsorship is undervalued, but nonetheless, this is what they managed to get. My point was that past deals offer limited guidance on what Spurs may be able to get. On Point 4, I accept your criticism of how I phrased this part. As for Point 5, you’ll have to wait and see.

      I’d also add, the “hopefully you’ll do better in part 2” is cheap.
      This article has been well received, and where people have taken issue with any of my assertions, or raised questions over what has been omitted, it has generally been done in a constructive and polite manner. Attempting to patronize people in this way makes you look rather silly and undermines the serious points that you make. If it is an attempt to influence what I have to say on the NFL, or future articles, it is not the best way to go about it.

      Drop me a line on — i’ve some question to ask on phase 3, and it sounds like you are a man with answers.




      1. THFC_Dan

        Point 3 discusses Phase 3 options, and further to it:

        In order to establish a comprehensive risk profile of a project, a condition of a viability report is that full consideration be given to a project in its entirety. From this, a view can be taken as to the higher level of credit exposure. However, in practice – and particularly so in mixed-use developments such as NDP – it is of little use, as you can de-risk projects by exploring interest from better-placed, often already interested partners.

        Notwithstanding THFC choosing to self-build, the Club – following receipt of consent – is also at liberty to invite interest from property and hotel developers. It could then choose a multitude of options: off-plan transaction (100% de-risk) joint-venture/profit share (varied%) leasing options (Negotiated £) etc. It is worth noting that, whilst Tavistock has property interests, it is not in the residential unit arena and I see little appetite for that to change.

        In respect of Point 1: if your point “…was that past deals offer limited guidance on what Spurs may be able to get”, I am struggling as to why your Blog carries the alarming “…and the dangers of doing an arsenal…” headline? If, as it seems, you accept the comparison to be poor, then it is reasonable to ask: why make it? Other than the projects both being in North London, their scope, design, timing and funding mechanisms are materially different.

        As you’ve asked for some elaboration, I think it’s reasonable to assume that my posting has been constructive. I also think that it is constructive to point out how important it is that facts which you refer to – particularly when using them to support your opinion – are quoted within their context; and, moreover, that the same recognition is given to nuances, however subtle. This helps to avoid misinforming any readers with any false premises. No offence intended.

        Genuinely looking forward to Part 2.



    2. SamZ

      Dan, I believe you are being overly harsh here. I’m unsure why you feel your 5 points need to be made, with the exception of your 3rd point. There are many permutations as to how the entire project reaches a permanent financing solution. It’s a very fluid situation and the author does as good of a job as anyone pointing out various issues and concerns – some that naturally should have greater consideration versus others.

      Points 4 and 5 you make don’t make a lot of sense to me as you contradict yourself:

      Firstly, “Unlike NFL, the interest in football is global and the Premier League is keen to exploit that.” I believe you need to re-assess this comment. You then go on to espouse the significance of the NFL deal in your 5th point. ” Finally, in your “part 2”, I trust you will recognise the true weight of the NFL deal. This is a HIGHLY significant, ground-breaking deal …” Strange given you claim in your prior point that the NFL does not have global interest.

      Although you may be right about the continued future financial success of the Premier League, to model a transformational project like this on yield-to-perfect assumptions is a recipe for potential financial disaster. It’s a kin to saying that markets never drop and a silly way to forecast.


      1. THFC_Dan


        There is no contradiction with Point 4 & 5.

        Again, this is about context.

        Point 4: “Unlike NFL, the interest in football is global and the Premier League is keen to exploit that.” This is within the context of an ascertain that the growth of the Premier League might slow or contract; and specially in reference to the value of its media rights. I referenced the NFL in order to illustrate the global reach of football, or “soccer”, and the obvious TV yield as a result.

        Point 5, you will follow, is manifestly important for the NFL as it would be the first real ‘export’ of the sport outside of the USA – and this is a commercial objective which the league has maintained for quite some time. In the same commercial context, there are mutual benefits for THFC to find itself associated with an NFL franchise as with it comes exposure to a 300m market.

        NDP hasn’t been modelled on ‘perfect yield’ – indeed, I think you will find that the business case is pessimistically influenced – evidence to which you see by how KPMG were informed as to the assumptions made. Further, less-than-optimistic budgeting figures are also available which illustrate that THFC assume ‘moderate’ success for its planning.

        I recognise you say that you have concerns, but my primary concern is that facts are incorrectly presented or quoted without context. For what it is worth, I have no concerns whatsoever about this project and I am fully confident that it will be delivered in the equally successful manner which Hotspur Way has before it.

        I am also confident that THFC will not build – at least not through its own means – Phase 3, therefore I view “the funding question” to be a false premise. Of course, in the fullness of time, we will all see what materialised, but don’t be too concerned about whether THFC can afford to build Phase 3.



    3. hotspursam

      The DS2 conclusion in section 10.2 of their report (page 56 or 59 IIRC), stated that the funding strategy for the stadium site is predicated on the basis of the SDL generating a receipt which will assist with an identified funding gap…..
      Donna Cullen also stated similar at the planning meeting. This was accepted by KPMG.

      I doubt very much if any figures produced by Spurs would just be taken at their word by such professional bodies without being tested. Should you care to look at the DS2 report you will see they report on various methodologies that can be used to arrive at a conclusion.
      They have also used numerous examples of developments near and further afield to a certain a current equivalent cost and value per Sq ft etc when coming to their independent conclusions and calculations.
      One of the conclusions, by both, is that as a stand alone, the SDL is not viable and indeed as a project as a whole Spurs are only expecting a return of 1.5%. I suspect that no other developer would touch it on that basis. Indeed, various tried and tested scenarios were put forward to cover funding gap, but not for an independent developer for the SDL, especially one willing to include affordable housing and to use some of their commercial profit towards Spurs Stadium – see above.
      Note, there is to be review of this re affordable housing, including value sometime on or after Spurs take occupancy of the Stadium. Club and Council are still in negotiation on this I understand.

      The DS2 didn’t just look at the Emeriates but also Stadium of Light, and the Etihad with a mention to the Olympic Stadium as examples to recent large stadium projects of cost, funding, type and quality of build. They also paid a mention to those of Southampton, Leicester, Swansea, Brighton and Cardiff, but mainly as a comparison to the size, scale, complexity and aspiration of the Spurs project. A conclusion arrived at is that most chairmen/Clubs prefer a piecemeal upgrade as most owners do not deem the increase of income streams to be sufficient for a new stadia increased capacity to be commercially viable on its own. Secondly with the cost well in excess of of £200m for a basic stadium alone plus land and land acquisition costs on top, to be prohibitive (as things stand – my words)

      This article is a blog, nothing more nothing less and these are normally of about 250 to 300 words I am led to believe. The author I suspect is like me, a layman on these things, just a Spurs fan expressing a view on the club he follows. I doubt the blog was written as a professional article going into great detail or depth and up for professional scrutinity or ridicule. There are many scenarios that can be put forward and postulated upon with Mandy’s ifs and buts of what may or may not happen in the future.

      As for the NFL deal we know very little on this and can only guess how much this will financially benefit Spurs or even if it is tied into any naming rights and the like. I suspect that Levy has factored in this additional income stream into making this project long term viable. Greater exposure to the North American market (and beyond) could well be significant, but just how many Bengal fans (for example) will decide to become Spurs fans as opposed to R Madrid, or Chelsea maybe in addition to a local team is anyone’s guess, so just highly significant remains to be seen.
      I for one am not expecting anything other than a discussion paper in part 2, as if you take 100 blogs on the subject I suspect you will get 100 alternative speculative views, all of which can be pulled to pieces for missing points a, b, c or d and not putting enough emphasis on this that or the other.

      The DS2 report is here:-

      Just a view


  6. SamZ

    Point 4, you contradict yourself with the use of, “Unlike the NFL…”

    Both leagues are interested in global expansion and the NFL has been far more focused on global expansion of its respective league for a much longer time relative to the Prem.

    Point 5, the NFL deal is massive for both parties, no question. I don’t believe that was ever a doubt in the author’s work. But from a pure initial cash flow (and ultimately EBITDA) perspective, the deal in and of itself is not a financial windfall, I appreciate the potential positive long-term effect of a deal with the NFL, but we are not going to be the only stadium in London to host the NFL. Personally, I doubt the probability of a permanent London team in the NFL. Purely opinion and we shall see. Even if a team comes to London, it’d difficult to assess what that means for our club.

    In regards to modeling to yield-to-perfect, I did not claim that’s been our practice here. I simply remarked on your comments in regards to financial growth prospects of the PL growing in perpetuity.

    I actually have very few concerns in regards to the entire project. I’ve always contended that any funding gap will be manageable and at the end of the day ENIC will write whatever cheque is necessary. It’s focus is to make sure the project is viable from a cash flow and debt service perspective, fits within the culture of club, while retaining 100% ownership and limiting any equity injections on its part.

    There is a funding question here. The severity is debatable and no differently than a viability study identifying all issues, the author (in my opinion) has taken the same approach here. Some issues deserve greater concerns relative to others. .


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