The worrying side of Tottenham moving to a new stadium

Moving to the new ground brings a lot of reasons for fans to be excited about a new era at the club.

But there is a financial burden which comes with the stadium and that could essentially limit the club’s spending power in the transfer market.

The fear is that we will endure a period like Arsenal for example, who were held back from spending heavily on players for a decade, due to the left over responsibility of paying off the debt of their new stadium.

Mind you, we have already been witnessing a period of limited spending from the club over the past 24 months and it is hard to presume that the next 24 months will actually be dramatically different.

If anything, it will be more of the same shoe-string budget for Mauricio Pochettino and that is concerning.

How much is Tottenham’s yearly repayments on the stadium? I researched and found an estimate of £45m after accounting for extra income even though I’m not sure how accurate it is:

The last reported figures are that the stadium will cost £1bn (not £400m like Arsenal’s).

According to various claims, the increased profit from the new stadium is estimated at only £28m per year.

Not being one to take figures on face value, if we consider that the stadium capacity will go from around 36,000 to 62000, that’s an extra 26,000 tickets.

Let’s say tickets average around £1100 per season, that’s £28m per year.

Yes, there will be boxes and hospitality which will bring in a few more million but there will also be increased operating costs, so £28m per year is hardly idle.

A £1bn loan, if we assume they manage to get an interest rate of 4% which is typical for business loans (property bonds tend to be 7% so 4% is conservative) and if we assume they want to spread the costs over 20 years to reduce the effect on transfer spending, the annual cost of repayment is still £73m.

Thus, the club’s spending power will be reduced by £45m per year for 20 years or more if we want to repay the debt quicker.