Tag Archives: She Wore

Tottenham face financial difficulty

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Yesterday it was announced that Tottenham had failed to secure naming rights for their new stadium.

Whilst calling their ground the Tottenham Stadium is more pure than the FedEx Arena, the lack of naming rights will push them into a financial melt down.

The stadium is already well over budget. It will cost nearly £1bn, with a couple of hundred million pounds worth of hotels and housing developments already cancelled to keep costs down.

The stadium is also set to be delivered at least 3 months late, the project has been a disaster. Were it a new hotel, supermarket or block of flats the investors would probably have ghosted the project a year ago and looked to sell out on to another party, such are the spiralling costs and delays.

The naming rights were key to the financing of the project.

When Arsenal signed their first deal with Emirates, a lot of the money was front loaded, to the extreme point that Arsenal got very little money from the airline in the last few years of the original deal.

The front loading of both the Emirates naming deal and Nike sponsorship allowed Arsenal to balance the books when loan repayments were at their highest.

Spurs had hoped for a 10 year £150m naming deal. Like the Arsenal deal, it would not be £15m a year over 10 years, but a heavily front loaded deal with Spurs receiving the majority of the money in the first 5 years.

That first 5 years is most important.

Tottenham took out loans with 3 separate banks. Each approved five-year loans worth a total of £400m. After five years the outstanding debt can be refinanced or put into longer-term bonds.

In the first 5 year repayments will be at their most aggressive until the club can refinance. As we saw with Arsenal, after 5 years (2011), we were able to renegotiate the terms of our loans – reducing payments dramatically.

In that first 5 years, Spurs are going to have to find in the region of £50m a year to repay the loan. They would have hoped that a naming deal front loaded for the first 5 years would have serviced a lot of the debt. No naming deal leaves them with £100m+ extra to find in the next 24 months.

Spurs are also yet to sell out their season long hospitality packages.

From memory, when Arsenal sold their hospitality boxes for the Emirates, you had to sign up to a 10 year deal. This freed up more money to pay off loans as it meant even more guaranteed income. Empty boxes will further push Spurs into financial difficulty.

You then have the NFL deal.

A lot of Spurs fans go on about the NFL deal like it is the golden egg.

The deal was reported as 10-year agreement between Tottenham and the NFL starting in 2018. Spurs to host 2 games a year.

To bring things into perspective, Wembley’s profit from the NFL games there is between £500,000 and £1 million per game. So without even considering that the Spurs stadium is 2/3’s of the size, Spurs will expect to bring in around £1-£2million for hosting the NFL.

It is understood that the Spurs deal with the NFL is not actually a straight 10-year deal. There have been mixed reports as to whether it is a 2-year deal with an option for a further 8, or a 4-year deal with a further 6-years.

Daniel Levy’s “end game” with the NFL was clearly for Spurs to host a London based franchise, so that from September – February, they could have football one weekend, NFL the next.

The entire NFL deal is in doubt with Wembley set to be sold to Jacksonville Jaguars owner Shad Khan.

It has been Khan’s long term dream to move the Jaguars to England – they have played at least one game at Wembley since 2013. If he does buy Wembley, a London franchise kill off any long-term deal for Spurs.

Spurs will also fail to attract future external income from concerts.

With Wembley, Twickenham, the Olympic Stadium, the 02, Emirates Stadium and Hyde Park, London is currently overly saturated for stadium arenas.

Arsenal have not hosted a concert since the Muse / Green Day double header in 2013 Muse. Since 2016, we have seen a huge rise in artists performing at the Olympic Stadium.

This summer along we have seen the Rolling Stones, Beyonce & Jay Z and the Foo Fighters host 6 nights at the London Stadium. Why would you perform elsewhere when iconic stadiums like Wembley, Twickenham and the London Stadium are available?

No artist will want to travel to Edmonton, with its lack of transport links and facilities for a gig.

Tottenham have bitten off more than they can chew with the new ground. Once they realise the fan base isn’t their to buy 62,000 tickets in the long-term, it will push the club further into obscurity.

Keenos

Premier League Top 6: Signings so far

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The Transfer window shuts in less than 2 weeks time on Thursday 9th August.

This year, Premier League clubs have voted to shut the window for incoming players before the season starts, however players can still leave to Spain, France, Italy, Germany, etc.

With a little under 2 weeks to go, on a boring Saturday morning, shall we have a little look at the transfer dealings of the top 6:

Arsenal have done the most business, which should be expected considering they finished at the bottom of the pile last season.

Whilst Chelsea, Liverpool, Manchester City & Manchester United have all spent big on singular players, Arsenal have spread their spending across 5 players, bringing in a mixture of youth and experience.

The biggest spenders of the summer have been Liverpool with over £160million spent. It should kill off all the defending of Liverpool that they do not spend as much as those above them.

The majority of their cash has come from the sale of Coutinho in January. Keita and Fabinho coming in has to be offset by Oxlade-Chamberlain being out for 12 months and Emre Can leaving on a free.

For me, their best signing is Shaqiri. He is a brilliant back up player and game changing substitute. A steal at just £13m.

I do not really understand Manchester City‘s transfer dealings. It probably shows that they have more money than sense.

They already have Leroy Sane, Raheem Sterling, Bernado Silva, Kevin de Bruyne and Davild Silva who can play play in the 3 attacking positions behind Sergio Aguero or Gabriel Jesus. Spending £60m on Riyad Mahrez just seems excessive.

I guess the thing with Manchester City is having won the league by 19 points, losing just two games, any big money signing could have been deemed “excessive.”

It feels a bit like Chelsea ~2007 when their squad was so strong that they ended up buying players just to stop rivals signing them.

Fred could turn out to be the player that Manchester United need to get the best out of Paul Pogba. Pairing him with Nemanja Matic and the Frenchman looks like a solid central midfield.

£19million for a left back who has played not much more first team football than me seems silly, but the proof will be in the pudding.

Chelsea‘s business could be about who leaves rather than who comes in. The money seems to have dried up for the club, and they seemed to wasted a lot of time and money on removing Antonio Conte and getting in Maurizio Sarri.

Taking into account that they finished 5th, just 7 points above Arsenal, you would expect them to have bought a lot more than a central midfielder. How much money have they wasted on central midfielders since signing N’Golo Kante and letting Matic leave (Drinkwater, Bakayoko, Barkley, Jorginho)?

With the futures of Eden Hazard, Willian and Thibaut Courtois in the air, it feels like they are waiting to see who leaves before bringing anyone in. It could be a deadline day dash for them.

As for Tottenham, they have bought no one. In this game, you stand still you actually go backwards. With Arsenal and Liverpool bringing in a lot of quality players, they could quickly find themselves struggling next season.

Clearly the £1bn stadium is impacting their transfer dealings. They have signed their key players to new contracts, but their over reliance on Harry Kane, Cristian Erickson and Dele Alli remains.

I would not be surprised if they do not actually sign anyone.

What I will find interesting next year is the progress of the 4 defensive midfielders Arsenal, Chelsea, Manchester United and Liverpool signed.

https://twitter.com/KeenosAFC/status/1022429711832625152

Keenos

Should Arsenal fans fear Stan Kroenke owning 100% of Arsenal?

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With the rumours floating around that Alisher Usmanov is looking to sell his shares in Arsenal, the spotlight for a few days has fallen on majority share holder Stan Kroenke.

I am going to be controversial here. Whilst I do not “support” Stan Kroenke, no more than I would support the majority share holder of Tesco, Sainsbury’s or Waitrose, I actually do not think he is that bad an owner.

A lot of people point to him as being greedy. Only in Arsenal for the money. This is probably true, but the money he is in Arsenal for is the rising share price.

He has often been criticised for “taking money out of the club”, but do we actually know how much money he has taken out? Well we do.

According to club accounts, he has taken out £6million. Two payments of £3million. That is over an 11 year period, for “services rendered” apparently associated his own STATs DNA company (or whatever they are called).

£6million is not that much in the grand scheme of things.

Compare this to the Glazier family at Manchester United.

It was reported in May 2017 that they were going to pay themselves a £18.7million dividend. This was following a £15million dividend the year before.

That makes a total of £33m that the family members will have shared in the two years since the dividend was first announced in September 2015.

You add this dividend to the £790million they leveraged against the club when they bought it in 2005 – literally using Manchester United’s own funds to buy the club, and you see what a true greedy owner is.

Kroenke used his own money to buy Arsenal’s shares and has taken out £6million. The Glazier’s are using money generated by Manchester United’s to pay off loans when buying the club, and have taken out £33million in two years.

A 2015 report by Manchester United Supports Club estimates that Glazier’s have profiteered  by “more than £1 BILLION and it’s still rising” since buying Manchester United.

A bit like Ivan Gazidis, the recent actions by the club with the appointment of Unai Emery, Raul Sanllehi & Sven Mislintat are to be highly praised. How much Kroenke had to do with it is unknown. Chances are Josh Kroenke was more involved than his father.

But this is also something that Kroenke should be praised for. His “silent Stan” moniker is a criticism, but can also be praised.

Kroenke is a hands off owner. Some might see this as bad, but it is actually good in my eyes.

He is not a football man. He has no idea about football. He is an investor, no different to investors in Tesco, Sainsbury’s or Lidl. They do not know how to work in a supermarket, how to run it. There job is to put the correct people in place to run it. And Kroenke has finally done that with Gazidis, Sanllehi & Mislintat.

The last thing we want is to have an interfering owner who does not know about football, meddling. Going into the dressing room, attempting to influence the manager, picking the team, signing players based on who he wants, rather than what the manager wants.

We have seen plenty of owners who interfere, the likes of Mohamed al Fayed at Fulham. They want to become the footballer, they want to become the star. They own the club to push themselves in the limelight. Kroenke does not want that. He wants to sit quietly and let the football people run the football club.

But this is also where he is heavily criticised.

By sitting back, seemingly not doing much, he is also not putting his own hand in his pocket. He does not spend his own money on players.

A lot of fans look at Roman Abramovich at Chelsea, Mansour bin Zayed Al Nahyan at Manchester City, the blokes at PSG, and that is what they want in an owner. Someone who wants to spend £200m a year of their own money on the club. They want Arsenal to become a rich mans play thing.

As we have seen with Chelsea over the last decade, being a rich mans play thing might be exciting in the short term, but what happens when the owner starts to become disinterested, like Abramovich is now.

Chelsea Football Club owe its owner nearly £1bn.

Arsenal have always run with a self-sustaining business model. It is the way the best companies, and best football clubs, run.

Bayern Munich, Juventus, Manchester United, Barcelona, Real Madrid. All self-sustaining models who spend what they bring in (even if there are a few tax irregularities). The likes of Manchester City, PSG and Chelsea might be successful in the short term, but you can not buy a long term seat to the top table.

By spending within yourself, ensure the books balance, you ensure a natural future for the club. Not a boom and bust model.

When it comes to transfers, as far as I am aware, Kroenke has never stepped in and refused club funds to buy a player.

Other criticisms of Kroenke are also unfounded.

Those that claim he is using the value of Arsenal to raise loans to fund his stadium in LA, and to buy a ranch in Texas are commenting without proof. He bought the ranch with cash, and the $1.8bn stadium in Inglewood is privately financed.

And it also highlights that people do not know how things work.

Kroenke can not take loans out against Arsenal Football Club. He is not the sole, private owner, he is just a share holder. What he could do is take out loans against the value of the shares he owns, but this will have zero effect on the club.

Were he to default the loans, the bank would own the shares and sell on. He is not using club funds to secure loans but his own assets.

Now if he was in the position of Abramovich, owned 100% of the club and turned it private, he could use Arsenal funds to secure loans elsewhere, or take even more money out of the club.

There is a fear that if Usmanov sells, Kroenke might be the buyer.

If the American purchases Usmanov’s 30%, he would then be able to force through the purchase of all remaining shares. He could then follow the Glazier’s model and throw a load of debt into the club which he can profit from.

I do question how much debt he would be able to throw in.

Arsenal still owe the banks £200m-ish for the stadium build. Would too many creditors offer additional loans on top of what the club already owes?

It would be a bit like having a £200k mortgage left to pay on a £400k house. You go the banks to get a second mortgage, but they are only going to give you another (perhaps) £150k as you do not have the assets to cover much more.

Would a bank give Kroenke a £500m loan to buy Usmanov’s shares, knowing that the club is being used to finance the loan, and therefore putting Arsenal £700million into debt with the club? Probably not. So I think the fear of Kroenke using the club to leverage more debt is scare mongering.

Kroenke is certainly not the perfect owner, but he is certainly not the worst.

Could Kroenke have done things earlier with Arsene Wenger? Yes. Does he have his faults? Yes. Could he engage fans better? Yes. But is Stan Kroenke as bad as some people make out? No.

Keenos