By David Owen
June 4 – Spurs have become the first football club to tap the UK Government coronavirus support measure known as the Covid Corporate Financing Facility (CCFF).
The North London club announced that Tottenham Hotspur Stadium Limited, a wholly-owned subsidiary, had issued £175 million of commercial paper through the facility.
The club, whose business operations have been handled chiefly for two decades by Daniel Levy, its chairman, has been the most profitable outfit in the Premier League, and hence probably the world, in the 2017-19 period. But it is also heavily indebted, due to the cost of building its impressive new stadium. This debt mountain has a mix of long-term maturities up to 30 years.
This new loan is short-term in nature, and is designed to help larger firms to bridge coronavirus-related disruption to their cash flows.
In a statement that will have been closely read by its Premier League rivals, Spurs has now said that its estimated revenue loss, including broadcast rebates, “may exceed £200 million for the period to June 2021”.
This is presumably a worst-case estimate – Levy had already described the pandemic as the most serious hurdle encountered in all his years at the club. It also appears to relate to a period of more than a year. Nevertheless, given that revenue in 2018-19 totalled fractionally over £460 million, you can see that the potential anticipated hit is huge.
This is pure back-of-envelope calculation conducted in haste, but, if you take the expected revenue loss to cover 18 months and further posit that the club might have expected to generate around £700 million in revenue in that period had Covid-19 not struck, then this appears to amount to an anticipated possible hit of 25-30% of turnover for participants in the world’s richest national club football competition.
The facility will not be used for player transfers, though presumably it might have the knock-on effect of freeing up finance for acquisitions that would otherwise have been needed elsewhere. The club said it had been arranged to “ensure we have financial flexibility and additional working capital during these challenging times”.
Levy said: “We have always run this club on a self-sustaining commercial basis…It is imperative that we now all work together – scientists, technologists, the Government and the live events sector – to find a safe way to bring spectators back to sport and entertainment venues.”
The Premier League is due to resume behind-closed-doors on June 17.
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