Tottenham Hotspur took out a £175m loan from the Bank of England last year and decisions have already been made over what happens next.
With the revenue losses in the pandemic taking grip, Spurs turned to the Covid Corporate Financing Facility to take out the short-term loan last year, which came with a low interest rate of 0.5 per cent.
The club confirmed in June last year that it had “met the criteria set by the Bank of England for the CCFF and has issued £175m of Commercial Paper through this facility.”
Tottenham explained that “due to the significance of income from matchday, conferencing and third party live events such as concerts and other sports, our estimated revenue loss, including broadcast rebates, may exceed £200m for the period to June 2021”.
Chairman Daniel Levy said of the loan, which would not be used for player acquisitions: “We have always run this club on a self-sustaining commercial basis. I said as early as 18 March that, in all my 20 years at the club, there have been many hurdles along the way but none of this magnitude – the COVID-19 pandemic has shown itself to be the most serious of them all.
“It is imperative that we now all work together – scientists, technologists, the Government and the live events sector – to find a safe way to bring spectators back to sport and entertainment venues.
“Collectively we have the ability to support the development of new technologies to make this possible and to once again experience the passion of fans at live events.”
Spurs have £823million of long-term debt due to the financing required to build their new stadium.
Tottenham were not alone in using the CCFF as the latest weekly public records (as of Wednesday May 12) which show who still owes money, make it clear that while Spurs still owe the full amount, so do Arsenal, who took out £120m, and the FA, who also took out £175m.
Other non-football companies, such as Boots and easyJet, are shown to have loaned £300m and Ryanair a huge £600m from the fund.
The loans come to maturity a year after being taken out and must be paid back in full. However, there are ways to delay the full payment until next year.
“All loans must be repaid by the time the scheme closes in March 2022,” a spokesperson for the Bank of England told football.london.
“Participants were able to roll their loan into a new one if they still met eligibility criteria, up until 23 March 2021. For any loans that mature beyond 19 May 2021, they are specific rules around dividend payments and senior pay.”
Spurs’ north London rivals Arsenal are reportedly set to pay back their £120m loan this month despite their financial struggles.
The Gunners’ supporters’ trust had previously predicted the club will suffer a £158m loss for the next financial year, which will be worse should they not qualify for European football for next season.
football.london understands that Tottenham have given themselves more time by rolling over their Bank of England loan into a new one which gives them until March next year to pay off the full £175m.
The club will be hoping that the return of matchday and event revenue at the stadium, as fans return from next week with a growing hope of full capacity games from the start of next season, will help them find some of the funds towards that repayment.
The likelihood could be that Spurs will have to increase their huge long-term debt in order to next year pay off the short-term Bank of England loan, which was essential in keeping them operating during the pandemic with the bulk of their revenue loss.
“Our stadium will hopefully soon re-open to full attendances and non-football events will return. Like many clubs, we shall need to recover from the loss of substantial revenues,” said the club in a statement this week.
“The still-new stadium is the game changer in our progress – it will deliver the revenues for investment in the first team. Be assured, we are absolutely clear that the heartbeat of the club is success on the pitch and our fans.
“It’s important to now get behind Ryan [Mason] and the team as we look to finish the season as strongly as possible and strive to retain a European spot.”
European qualification and the revenue it provides could be an important building block towards helping to ease some of Tottenham’s financial problems in the coming years.