I'm not sure how interested you are in this, but you've brought up the debt at Spurs at least a couple times in the past few days, so here we go. First and foremost, there are plenty of things we can laugh at Levy for, but fiscally he's been excellent. I don't even say that as a Spurs supporter...it's hard to argue that he could have been more prudent and capable on the financial front.
So, the debt can be sort of a confusing issue. You have gross debt, and you have net debt. Then to get a little more cloudy yet, you have total debt. At Spurs, the total debt reported for 2020/21 was about 831m pounds. That's a lot of money! Some clubs get a loan from their owners (usually interest free), but that's not the case with Spurs.
Spurs had a lot of cash through the year, and they reported this as $226m pounds, which gives you that net debt figure of $605m pounds. Still a lot of money! Spurs also have some transfer debt because they bought players while that stadium was being built, so here you obviously take the incomings and subtract the outgoings, which is a net of 114m pounds for Spurs. That sounds like a lot...until you see clubs like Barcelona or Atletico. UEFA makes clubs report another figure here, which is a slightly different definition of debt and takes into account everything including the transfer fees, and all the obvious debts. Here Spurs get to about 970m pounds, which comes to a net of about 719m pounds with cash and receivables factored in.
If you're still with me, this is why it's not a factor for Spurs (or English clubs as compared to Barcelona in particular, or Atletico). The average maturity of that debt is about 23 years, and financed at a super low rate. Levy got a loan from the Bank of England, for example, and their borrowing costs are only 14m pounds a year. Debt level is a factor, absolutely, but debt servicing is critical and Spurs really shouldn't have any issues there.
There's another English club that has piled on the debt though. United increased their debt by about 33% this past year. They already had a lot of debt (because the Glazers used the leveraged-buyout). They have financed things with high yield bonds (which are junk bonds), bought largely by hedge funds at over 8%/year. The maturity for their debt is also far off though, and like I said, it's how the English clubs can have significant debts, but not have it impact them as much as the European clubs. I think that United are paying about 20m pounds a year to service those debts.
And finally, in case you're curious here are the similar United figures for things above. They reported debt of 526m pounds in the gross category and had 52m pounds cash, for a net debt of 474m. That figure, btw, is largely or entirely the leverage buy-out. So while the THFC balance sheet has a liability for say $1bn for the stadium, they also have an asset for say $1bn. Anyway, I digress, United also has no loans from the owner.
United has less transfer debt than Spurs (about 91m pounds), and when you look at the UEFA calculation for debt, the total for United is about 565m pounds. It's actually Tottenham first, United second by that particular definition. Like I say, the reason it doesn't cripple these clubs is term; United has a mere 6m pounds of short-term debt and 520m pounds in long term debt.
Finally, when you add up literally everything and get to one giant number that shows all of the debts you get to a figure for Spurs of basically 1.5b pounds in debt. It's basically 1bn pounds for United.
tl/dr; Spurs are fine, United also has gobs of debt, but Spurs have a new stadium to show for it. Th concerning clubs are Barcelona and other European clubs.
|