Arsenal could finish eight points clear of 3rd, and the horrors of Man U under Ferguson
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By Tony Attwood
Let me admit by way of an intro, what is already obvious: I’m an Arsenal supporter so of course I am biased. But it does seem to me important that the 115 (or thereabouts) Manchester City cases have still not been resolved, even though the whole investigation began over five years ago when Uefa found Manchester City guilty, fined them 30 million euros and banned them from European football for two seasons That ban was overturned on the technicality that the case had been brought too late, but the League’s subsequent case is still there, awaiting a decision.
Of late the UK media has tended to ignore both the case and the possible outcome, perhaps because they think the case is too complicated for their readers to understand. But the fact is that tales being told suggest that certain outcomes could infuriate some clubs that argue they have obeyed the rules throughout. There are whispers that some might walk away from the Premier League just as they walked away from the old Division One.
Meanwhile we now have four clubs capable of taking £100m each in gate receipts in a season: Liverpool, Manchester United, Arsenal and Tottenham Hotspur, and it is whispered that these four are indeed pretty fed up with ManC.
But there is also something else interesting in that list of four since Liverpool and Arsenal are first and second while Manchester U are 16th and Tottenham H are 17th, yet these two each have the bigger grounds. Gate receipts alone, it seems, are not enough.
We have been told by many that Tottenham have no debts while Arsenal are lumbered with debts. But in their last set of financials for the year ending 30 June 2024, Tottenham itself stated that it had a net debt of over three quarters of a billion pounds!
Of course, this doesn’t mean those owed money will suddenly demand payment. Most of the debt is at fixed interest rates over a fixed period of time, so there is no call on repayment now. But with debts like this it does suggest that these clubs can’t be sold, and over time the amount of money available for more and more transfers will decline.
According to TransferMarkt Tottenham spent €175.35m in the season now coming to an end, on players. They sold players too, but only to the value of €55.30m. Which of course doesn’t matter if the stadium is paid for and the club is doing well. But in these circumstances, the club needs to be doing well in the league. The Europa helps, but not enough, and if next season were to be without the Europa League, financially that could be troubling.
And there is another problem for Tottenham lurking in the shadows. Transfer fees are rarely paid at once, but tend to be paid over a number of years. So at any time each club is owed money for players sold, but also owes a lot moer money for players bought. The difference between the two is known as the Net Transfer Debt, which in the last accounts for Tottenham was reported as over a quarter of a billion pounds.
Now add together the stadium debt and the Net Transfer Debt, and you have a fair amount of money that has to be paid out each year, in relation to the past. And this in turn reduces the amount of money Tottenham have to buy new players. Indeed it makes some clubs willing to sell a player, look a little askance at Tottenham, as they wonder if they will get the money they are owed.
Of course the media like to see such clubs as Tottenham as “too big to fail,” and that probably is true, because if a club effectively goes bust, no one gets paid. But it does make other clubs more and more demanding in the terms that they insist upon when selling a player.
Thus a player who might be sold to Club A that has a load of cash and can pay either at once or over just three years, might not be offered to Club B that is sitting on a mountain of debts on totally different terms. For example, there can be a 50% upfront demand, and the rest paid with a high level of interest added to the quoted cost of the player.
Likewise, it is not unknown for a club with such “cash-flow” problems to find that other clubs offer less and less for each player, because everyone knows the selling club is desperate for cash to meet previous buying commitments. And this is why we can see some clubs selling stars, allowing top players to leave on a free at the end of the contract, and taking risks with unknowns.
As the report in the New York Times recently said, “Tottenham’s ability to spend freely in the transfer market” is limited and the club is involved in a “strategy of ‘selling to buy’ to mitigate debt and maintain competitiveness.” Which is a strategy known to antagonise managers and deter players from coming to certain clubs.
It is of course true that until now the debt structure of Tottenham has allowed the club to refinance the debt, and the stadium does indeed bring in money. But the restructuring of debts is starting to look a little bit complex and that might suggest that most of the obvious ways of staying afloat have been used up.
Of course, Tottenham are not going to go bust. But the recent fining of their owner, Joe Lewis $55m, with him being on probation for three years didn’t help enhance the confidence others might have in Tottenham H’s long-term financial stability.
It is six seasons since Tottenham finished in the top three, and this season’s end position of somewhere between 14th and 17th, massive debts, and an owner on probation, does not always attract players who will have no shortage of clubs looking at them.
And that is Tottenham’s problem. There are just too many issues at once.
And there is one other issue too. Tottenham might hope that a way forward can be found through players coming up through the Professional Development League, known generally as Premier League 2. But Tottenham ended this season 22nd out of 26 clubs which suggests they have already raided their reserve squad for players who might step up or be sold.
Of course renting the ground out for American football and the like helps, but these schemes don’t seem to be bringing in the money the club needs to pay off its debts and allow big new transfers of PL players to be made. Yet generally that is what a club that comes one place above the relegation zone actually needs.
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Arsenal could finish eight points clear of 3rd, and the horrors of Man U under Ferguson
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