Tottenham Hotspur have been particularly badly hit by the pandemic due to the substantial debt the club has incurred on their new stadium.
Daniel Levy warned in March of last year that navigating the crisis was the biggest ever challenge he had faced during his time in charge of the club.
Spurs had taken out a loan from the Bank of England to the tune of £175m in the summer to help them deal with the financial impact of the pandemic.
Recent reports indicate that the North Londoners have put contract talks with the likes of Harry Kane and Son Heung-min on hold due to the financial uncertainty caused by COVID-19.
However, football finance expert Kieran Maguire has claimed that Tottenham have been very smart in the way they have managed their debt.
He opined that despite the substantial long-term debt incurred on the stadium, the club’s ability to negotiate player contracts and buy players in the transfer window will not be affected in the short-term.
When asked about the financial implications of not being allowed to have fans at their new stadium, Maguire told Football Insider: “It will be hurting them.
“But the deal they’ve got from the Bank of England in terms of the loan, borrowing the money at 0.5% interest is really clever. It means they won’t have any problems in the short term in terms of paying outstanding instalments, transfers, the wage bill and things of that nature.
“That’s good because you don’t want unhappy players and you don’t want a reputation for not paying your bills on time.
“In terms of the long-term repayments of the loans, £627m is the total value of the loans for building the stadium.
“That’s not an issue because they’ve renegotiated those, they don’t have to be paid until about 2037. And they are interest-only loans, so they’re actually in a pretty strong position.”
Spurs Web Opinion
We are incredibly lucky to have a shrewd financial operator like Daniel Levy at the helm. The fact that we have maintained a manageable wage bill, compared to some of our rivals, has also worked to our advantage.
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