The Athletic has appointed Chris Weatherspoon as its first dedicated football finance writer. Chris is a chartered accountant who will be using his professional acumen as The BookKeeper to explore the money behind the game.
What follows is the latest in his series analysing the financial health of some of the Premier League’s biggest clubs. This time he’s tackled Tottenham, but we’ve already published his analyses of Manchester United, Manchester City, Arsenal, Liverpool and Chelsea.
You can read more about Chris and pitch him your ideas. He has also written a glossary of football finance terms, here.
There was a time, not all that long ago, when Tottenham Hotspur were routinely highlighted as the Premier League’s best-run club. And by not that long ago, we mean last August. Fair Game, a campaign group for improved football governance, placed Spurs as the highest-ranking English club in their Fair Game Index last summer, a measure that assesses clubs in terms of financial sustainability, governance, fan engagement and ethics.
Daniel Levy, chairman of Spurs since 2001, expressed his delight. Spurs were, Levy said, “a club that prides itself on good governance — with a key focus on sustainability and engagement with stakeholders and communities”. Topping the index could be seen as a vindication of Levy’s approach to running the club since he arrived over two decades ago, when the English National Investment Company (ENIC) assumed a controlling stake.
Spurs fans reading that today may either scoff or recoil in horror. In the here and now, this season has been nothing short of dreadful. Under the increasingly embattled tutelage of Ange Postecoglou, Spurs have lost over half of their Premier League games, flirting with the bottom three rather than the top four. Were this season’s promoted sides not so clearly behind their peers, they’d be in a serious relegation battle.
If things are bad on the field, at a glance there have at least been improvements off it. Spurs’ recently released 2023-24 accounts detailed a £26m pre-tax loss, which, though the eighth poorest financial result in the Premier League last season, was a 73 per cent improvement on a year earlier.
The primary driver in reducing losses was a single event in August 2023: the sale of Harry Kane to Bayern Munich. Kane’s sale accounted for the bulk of the £82.3m profit on player sales Spurs recorded last season, with the £66.8m positive swing on that accounting line comprising almost all of the £68.7m improvement in the club’s pre-tax result.
In 15 seasons from 2004-05 to 2018-19, Spurs were profitable in all but two, racking up £468.4m in pre-tax profits along the way, peaking at £138.9m in 2017-18 after leaving White Hart Lane. But the bottom line has worsened markedly since. Last season’s £26m loss was the club’s fifth consecutive deficit; Spurs have now lost £329.9m since the summer of 2019.
What do Spurs’ recent financials look like – and what’s their PSR position?
With a club-record loss in 2023 of £94.7m in the mix, Spurs’ pre-tax losses over the 2022-24 PSR cycle totalled £182m. Yet they had no trouble complying with their £105m PSR loss limit. Spurs’ financials dove into the red in sync with the arrival of the Covid-19 pandemic, and while both the virus and other matters since have contributed to a half-decade of loss-making, the bulk of those deficits have been driven by a single line item: the accounting cost of depreciating the recently built Tottenham Hotspur Stadium (THS).
Since 2019-20, depreciation and non-player amortisation has routinely hit Spurs’ bottom line to the tune of £70m. In the most recent PSR cycle, depreciation costs were £213.9m; without those, Spurs would have been profitable.
Accounting doesn’t work like that, but the costs are deductible from Spurs’ PSR calculation. Combine them with the £15.9m the club spent on their women’s team from 2022-24, along with estimates of community and youth development costs, and you arrive at PSR headroom in excess of £200m. With a £61.3m pre-tax loss falling out of this season’s equation, Spurs could lose over £250m in 2024-25 without breaching Premier League PSR.
At the top line, Spurs’ revenue has surged in recent years, even allowing for a four per cent drop last season. As recently as 2015-16, turnover was £209.8m; now it sits at £528.4m, a growth of 152 per cent in eight seasons. Obviously, the move to a new stadium has helped, with Spurs one of only four English to boast over £100m in annual gate receipts. They’ve benefited too from the continued march of Premier League TV rights.
But the most impressive growth has come commercially. Spurs refer to the income stream as ‘non-football revenue’ and the focus on boosting it has been clear, with the new stadium integral to the mission. Last season the club were granted planning permission to host up to 30 major non-football events per year, and they extended an existing partnership with the NFL through to 2030.
Ten NFL games have been played at THS, with another two coming this autumn. The ground has separately held multiple heavyweight boxing title fights, a wide array of music concerts and both formats of rugby. It will also host Euro 2028 games.
All of this has helped drive commercial income up to a record £255.1m (including £10.4m of ‘other income’, which includes visitor attractions and pre-season tour income). That’s fourth in England, eclipsing fellow London clubs Chelsea and Arsenal, and the £195.3m improvement in the last decade is the highest in the country.
Even so, for all Spurs now generate some of the highest revenues in world football, and losses are heavily impacted by big depreciation costs, the club’s profitability has drooped in recent years. That’s the case at both the bottom line and the operating level — and remains so even if we strip out depreciation.
Spurs’ operating profit has suffered a £161.2m negative swing since 2019, with increased depreciation costs only making up £44.4m of the movement. Other non-staff expenses have jumped £50.7m (47 per cent), a by-product of having to operate a bigger stadium more frequently. Spurs actually reduced those other expenses by £8.2m last season, with only Manchester United managing a larger decrease (£10.9m). The fall was down to fewer matches being played, and fewer third-party events hosted at THS, but it’s still worthy of note given the high-inflation environment clubs have been operating in.
The big driver in Spurs’ diminished operating performance has been their transfer activity. In 2018-19 Spurs player amortisation costs — the spreading of transfer fees across player contract terms — were £47.5m, only the 11th highest in the Premier League. Five years later, that had jumped £88.3m to £135.8m, the league’s fifth-highest figure. Spurs’ hefty recent spending is the primary catalyst for the club’s reduced day-to-day profitability and, as we’ll see, is having a big impact on their cash position too.
The inverted problem of the wage bill
Spurs’ wage bill was slashed last year, dropping £29.2m (12 per cent) to £221.9m. That’s over £100m less than the rest of the ‘Big Six’, with Arsenal’s £327.8m the closest of that group. Spurs’ wages to revenue of 42 per cent is the Premier League’s lowest.
The ratio isn’t just low for the Premier League — it’s low for football. Of the 20 clubs that spend the most on wages in Europe, Spurs’ wages to revenue is the lowest. Only AC Milan (46 per cent) and Real Madrid (48 per cent) came in under the 50 per cent mark. That’s hardly poor company to be in, but each of those clubs have won their domestic titles in recent years (and, in the case of Madrid, a fair bit more besides). Spurs, as if you need reminding, haven’t. There is a fine line between prudence and penny-pinching.
All of which begs the question: are Levy and Spurs being excessively prudent? A low wages-to-revenue metric is generally held up as something to be proud of — not least since the Covid-19 pandemic stymied income while player wages kept growing — but how low is too low?
Last season was the first time Spurs’ wage bill wasn’t among the Premier League’s six highest since 2009-10. Finishing fifth with the seventh-highest wage represents an over-achievement, and performing better than their wage bill ranking has been a theme at Spurs over the years. Across the mid to late-2010s, they consistently finished higher than clubs with heftier staff costs.
Yet while last season was another over-achievement, 2024-25 has been anything but. Where Spurs’ wage bill will land this season is unknown, but it certainly won’t be down in 16th, where the club finds itself in the table at the time of writing. Having bettered their wage bill for so long, this season will be the third in the last five where Spurs have finished lower than they’d be expected to based on wages alone; where once Levy could point to careful spending nevertheless yielding good results, it’s an argument increasingly lacking in heft.
Given player wages continue to spiral ever upward, Spurs and Levy can be commended for refusing to give in to the madness. Yet there’s also an element of realpolitik here, of taking the world as it is rather than as we might like it to be. Spurs have long had to compete with the bigger wage bills of their fellow ‘Big Six’ clubs, but now they find the likes of Newcastle and Aston Villa surging by them too. Wages remain the clearest financial indicator of how a club will perform. If Spurs are unwilling to keep up with the Joneses, can they really expect to compete at the top of the sport?
One matter that has caused plenty of chagrin among Spurs supporters is Levy’s own salary. Levy was paid £3.7m in 2023-24 which, though a significant drop on 2022-23, when £3m in bonuses accrued towards a total pay package of £6.6m, still marks him out as the Premier League’s highest-paid director. Across the last decade, Levy has earned £40.7m from his role at Spurs, peaking at £7m in 2018-19 when he received another £3m bonus for the completion of THS.
Big debts for a big stadium
That stadium, held on the books at £1.5billion, is responsible for another huge addition to the club’s balance sheet: debt.
Spurs are one of the most indebted clubs in world football, carrying £851.5m in assorted loans at the end of June 2024. Add on £20.6m in finance leases and Spurs’ gross debt at the end of last season was £872.1m. That puts them second domestically behind Everton and, further afield, only Barcelona (£1.534bn) and Real Madrid (£1.157bn) currently carry more financial debt.
If depreciation represents the paper price of accounting for a stadium already built, it doesn’t mean Spurs’ shiny new home is no longer costing them anything. Far from it. Last season saw Spurs shell out £29.7m in interest payments, only trailing Everton (who also have a new stadium to pay for) and Manchester United (who don’t — yet). In total, since first taking on debt to fund the stadium build nine years ago, Spurs have spent £163.9m in interest on their borrowings.
In terms of its structure, the debt is diverse, with £856m spread across various facilities (the difference between this sum and the £851.5m on Spurs’ balance sheet stems from how loan arrangement costs, totalling £4.5m, are accounted for).
The largest debt portion comprises £525m in long-term bonds issued to US investors in September 2019, as part of a broader refinancing of £637m of stadium debt. Those bonds were issued with staggered repayment dates of between 15 and 30 years; per the latest accounts, the average maturity date of the bonds is the end of 2043. The £525m accrues interest at a weighted average of 3.3 per cent, or £17.3m annually.
The rest of the £637m refinancing was a £112m loan from Bank of America Merrill Lynch (BofA), of which £50m has since been repaid. The remaining £62m accrues interest at a rate of 1.4 per cent plus SONIA (an interest rate benchmark). Based on current rates, the loan costs Spurs £3.6m in annual interest fees.
The BofA facility was extended by £19m in March 2023, as part of a separate restructure in which debt owed to Investec Bank, first taken out in the 2010-11 season to fund the building of the Hotspur Way training ground, was repaid. The £19m portion due to BofA attracts around £1.2m in annual interest and is due for repayment in March 2028.
The final £250m of debt on Spurs’ books was raised through a further issue of long-term bonds to US investors in June 2021. That replaced a loan from the UK government’s Covid Corporate Financing Facility and, like the other long-term bonds, attracts a fixed rate of interest and includes borrowings with varying repayment dates. The earliest such repayment is not due until January 2029; one tranche of the debt needn’t be repaid until 2051. The average repayment date for the £250m stack of bonds falls during autumn 2041, and the bonds as a whole attract a weighted average interest rate of 2.83 per cent, or £7.1m annually.
If that all sounds a bit byzantine, the upshot is Spurs have managed to lock in much of their debt at low rates. Of the £851.5m in loans sat on the balance sheet, £770.5m is borrowed at a fixed rate, inoculating the club from rising interest rates across the world. The average repayment date of the total debt stack is not until midway through 2042. Between now and June 2029 just £34.7m is due to be repaid. In all, Spurs’ debt attracts interest at a weighted average rate of 3.16 per cent. Set alongside the current UK base interest rate of 4.5 per cent, such terms are more than favourable.
… and for an expensive team
While Spurs’ borrowings are massive, and the cost of servicing them not to be sniffed at, of far greater impediment to their current ability to spend are their own recent transfer dealings. Spurs have, though it may surprise some, spent heavily in recent years. Last season topped the lot — the club spent £272.2m on bringing new players to north London.
That was comfortably a club record. In fact, among English clubs, only Chelsea and Manchester City have ever spent more in a single season. Across the last five seasons, Spurs spent £830.3m on new signings, more than double their £401.3m outlay in the prior five.
That was still only the fifth-highest spend in the Premier League, or the fourth highest on a net basis. Spurs continue to be outspent by their ‘Big Six’ rivals, with the exception of Liverpool. The latter directed their resources towards wages though, carrying a wage bill £164.2m higher than Spurs last season. What’s more, Spurs have also been playing catch-up; their squad cost to the end of June 2024 was £696.6m, the eighth-highest in world football but the lowest of that ‘Big Six’ grouping.
Where Spurs do lead their peers is in the amount they still have to pay on transfers. At the end of June 2024 their net transfer debt — amounts due from clubs less amounts owed to clubs — was £279.3m, the highest in England. That vast transfer debt acts as an obvious limiter on future activity. Any further dealings have to consider the cash requirements of past signings not yet fully paid for, an especially important factor for a club attempting to operate sustainably.
Unlike an increasing number of clubs, Spurs haven’t actively pursued a player-trading model. That might seem odd to say given last season’s £82.3m profit on player sales was the second-highest such profit in club history, but for the most part they’ve made only modest money from player sales.
A look at their player profits over the last 11 years highlights how Spurs have generally only boosted their bottom line through one-off sales of key players. Gareth Bale’s €100m departure to Real Madrid was a world record at the time, and its impact on the finances was clear. Likewise, the sales of Kyle Walker in 2017 and Kane last season served to lift an otherwise meagre source of income.
Between those sales of Walker and Kane, from 2019 to 2023, Spurs generated £79.9m in profit from £111.2m in player sales. On both counts, that only ranked them 18th in England, and their profitability here was miles behind rivals like Chelsea (£417.1m) and Manchester City (£336.6m). Even Manchester United, whose own transfer failings have been much referenced, generated greater transfer profits than Spurs during that five-year span.
That’s a clear choice, and Spurs have proven adept at managing costs such that they’ve mostly not needed to tap a source many others do. But the big increase in transfer spending of recent years has whittled away at Spurs’ profitability and placed a significant strain on cash. In the last two seasons alone, Spurs’ net cash outflow on transfers exceeds £250m.
Declining cash — and why it matters
In a feat of either supreme business intelligence or parsimony, and naturally there’s no in-between thinking allowed here, Spurs have been cash-positive at the operating level every year under ENIC and Levy. On a day-to-day business before any transfer activity, the club has generated sufficient cash to run of its own accord. If that sounds like something every sensible business should be doing — which it is — then football’s nonsensical nature is made abundantly clear when we consider the only other club who can claim the same in that timeframe are Manchester United.
Across the last decade, Spurs generated positive operating cash flows of £1.204bn, only surpassed by United. No other English club has generated over £1bn in that time. In seven of the last nine seasons, operating cash flow has exceeded £100m.
Yet their free cash flow (FCF) — in effect, the amount of money they have left over after paying for capital expenditure, prior to any owner or external funding — has been consistently underwater. That was most pronounced during the stadium build, and helps explain why the club needed to take on loans to part-fund the build (the rest came from club cash). But Spurs’ free cash is in decline again — and their heavy spending on transfers is the reason why. The club makes huge money on the day-to-day, but, much like United, is now feeling the pinch of transfer-market largesse.
Spurs’ ability to spend is limited by the sustainable approach of those in charge, one that jars with many other football club owners. The club received £122.1m in owner funding between ENIC’s 2001 takeover and the end of 2023-24, the equivalent of £5m per season. The bulk of that came in May 2022, when the ownership injected £97.5m in cash via a share issue, to provide “greater financial flexibility and the ability to further invest on and off the pitch”. It was, by some distance, the largest individual tranche of funding provided by Spurs’ owners.
It has already been eclipsed by several others. Across the last three seasons, 13 English clubs received funding from their shareholders in excess of that £97.5m poured into Spurs. ENIC had actually agreed a capital increase of ‘up to £150m’, meaning the club could draw down a further £50m or so in shares until the end of 2022. It didn’t happen.
There has been a shift, if a small one. In January of this year, ENIC proved another £35m in funding, again via equity. Having injected just £25m over their first two decades in control of Spurs, the ownership have now provided £122.5m inside three years. It still pales in comparison to many rivals.
What’s next?
In the here and now, Spurs’ goal is exactly the same as Manchester United’s: winning the Europa League. Doing so would not only provide a tonic to supporters and some silverware to the trophy cabinet; winning UEFA’s second competition comes with the added prize of a Champions League spot next season.
Spurs, like United, like Chelsea, have quickly grown to the point where the club’s ability to stand on its own two feet is pinched without income from the Champions League. Unlike at Stamford Bridge, where the thick end of £800m has been poured in by owners over the last two seasons, Spurs continue to operate largely off their own back.
ENIC injected £35m in January, true, but that feels more likely to have been out of necessity than any overarching shift in strategy. Spurs owed a net £95m in instalments across the current season, and that was before they spent over £100m bringing in Dominic Solanke, Wilson Odobert, Antonin Kinsky and Lucas Bergvall. They did bring forward the Kinsky signing in January, and tried to entice Marc Guehi from Crystal Palace, but there was no winter splurge.
ENIC providing funding is curious for at least one reason: at the end of last June, Spurs had £55m in undrawn bank facilities available to them, so that would seem a more obvious source of funding before a share issue. It may be they’d already tapped those funds before January; we won’t know until this season’s accounts are published.
Whatever the view on ENIC and Levy, there’s no denying Spurs have been transformed under their leadership. In the year before the current owners took over, Spurs’ revenue was the 17th-highest in world football; last season, even without any European income, they were ninth.
The recent decline in UEFA revenue has been stark. Spurs earned £94m en route to the 2019 Champions League final, and topped £50m either side of that season and again in 2022-23. Even if they were to win this season’s Europa League, they’d only bank around £35m — the real financial prize would come next year.
The paradox of Tottenham Hotspur lies in how at the point the transfer spending taps were finally opened, results haven’t flowed. Last year’s record spend on new players has been followed by a season where they sit in a position that, if they remain there at season’s end, will be their worst league finish since 1994.
Without improvements on the pitch, and no sign of a shift to benefactor ownership, recent excesses will hinder Spurs’ ability to invest further. Debt is well structured and repayments won’t fall due for years, but there’s still a near £30m annual interest bill to service. Much like North London neighbours Arsenal, Spurs can’t lean on owner wealth to fund infrastructure upgrades, so the cost comes out of the club’s pocket.
As for whether owner reliance may change, Levy was unequivocal in a statement accompanying the 2023-24 accounts: “A closer examination of today’s financial figures reveals that such spending must be sustainable in the long term and within our operating revenues. Our capacity to generate recurring revenues determines our spending power. We cannot spend what we do not have, and we will not compromise the financial stability of this club.”
Not for turning, then. There’ll be a summer budget, but it looks unlikely to match that of recent seasons, and certainly not unless the Champions League makes a return. Spurs will mostly have to improve with what they’ve already got.
Illustration: Eamonn Dalton / The Athletic; ADRIAN DENNIS/AFP via Getty Images
