The Spurs News believes that Tottenham’s recent £90 million loan from Macquarie Bank could impact the club’s decision to sack Thomas Frank.
Frank is under big pressure at Tottenham, with the team currently sitting 14th in the Premier League and out of both domestic cup competitions.
Change our mind: Tottenham must pay whatever it takes to SACK Thomas Frank…
The North London club’s season is quickly unravelling, and the Lilywhites need to decide whether they will sack or back Frank this month.
To find out more about the finances behind sacking the Danish head coach, The Spurs News exclusively spoke to the site’s Head of Football Finance, Adam Williams.
How much could it cost Tottenham to sack Thomas Frank
The Spurs News estimates that Tottenham Hotspur would have to pay Thomas Frank £8 million to sack him, roughly one year of his salary.
In total, Frank’s contract at the Tottenham Hotspur Stadium is worth around £20 million, given he has two and a half years left.
When asked about the costs, Williams told The Spurs News: “It has been reliably reported that Frank earns a salary of around £8 million at Spurs. When we get figures like this in the press, however, we don’t know whether that is his fixed pay before performance-related bonuses, image rights and so on or whether that £8m figure is an estimate of his ultimate earnings assuming he meets certain targets.
MORE SPURS STORIES
“In my experience, the figures we see reported are often a sort of best guess, guided by what the club or the manager’s agent – who are the ones briefing the press – think the guy will earn, rather than a concrete number.”
But, as is the case in most circumstances, Spurs will most likely have a liquidated damages clause, meaning they would not have to pay the full amount to remove him.
True or false: Daniel Levy was far from the biggest problem at Tottenham?
Who do you blame for Tottenham’s current malaise? 👀
“But let’s take that £8m as our starting point. He’s under contract until the end of 2027-28, so he has two-and-a-half years left on his deal. The basic assumption is that, if you are disposing of a manager, you have to pay out the remaining value of his deal, which in this scenario would be about £20m.
“However, that is very rarely the case in reality. It’s far more common that the club will have inserted what is known as a liquidated damages clause in a manager’s contract that says the club can pay X amount to terminate their deal if certain targets haven’t been met,” he added.
“That amount will be far lower than the remaining value of the manager’s contract. Looking at where Frank came from and his leverage when he was at Brentford, I think we can probably say with some confidence that there will be that kind of clause in there. The amount in question will move up and down depending on how far into the contract Frank is. This early on, he might be able to expect a year’s salary, though that’s just a guess.”
Tottenham’s £90m Macquarie loan could impact Thomas Frank sack decision
However, Williams believes that a crucial factor in determining whether they sack Frank could be their recent loan with Macquarie.
Back in September, Tottenham took out a £90 million loan with the Australian global financial services group, so adding £8 million to the money they already owe would be far from ideal.
“Spurs have been cash negative in recent years, for example, they have spent more than they have earned, relying on cash injections from the owners, their £50m revolving credit facility, which functions like an overdraft, and, more recently, loans from the Australian lender Macquarie.
“Yes, they had the Premier League’s lowest wages-to-turnover ratio at the last count, but they also had very, very high transfer debt, second only to Chelsea. They’ve also got interest payments of £20-30m per year to keep up with, plus very high operating expenses.
“The fact that they took out the £90m loan from Macquarie in September shows that, even with Champions League income this season, Spurs are having to shuffle things around to meet their cash obligations,” said Williams.
Fill in the blank: Tottenham most need to focus on signing a __________________ in January?
🤔 Which position must Spurs target?
“So adding, say, £8m of compensation to Frank wouldn’t be ideal, especially given that it was only a few months ago that they paid Brentford £10m for him. But if it’s the difference between finishing in Europe or not, it’s a no-brainer, really. I expect each place in the Premier League to be worth about £3m in prize money this season, so if they finish, say, 6th rather than 9th under a new manager, they’ll have pretty much made their money back, even before you account for revenue from European qualification.
“You have to be guided by the football, not the finances. All the best run clubs have this approach. Ultimately, it’s performances on the pitch which dictate your finances anyway, so you’ve got to lead with that. Spurs have got that balance wrong far too often in recent history.”