Club say transfer cash not funded by the taxpayer
Tottenham Hotspur’s transfer spending – including the imminent return of Gareth Bale – is not a concern for the Bank of England, which agreed a £175 million taxpayerbacked loan to the club in June, The Daily Telegraph has been told.
Spurs’ summer outlay was last night set to rise to £72.5 million and their net spend to £60.5 million, with a season-long loan for Bale expected to cost £15 million in fees and wages at a time when they are losing millions a week due to the coronavirus crisis. The club were able to borrow £175 million from the Bank of England this summer at an interest rate of 0.5 per cent, under what is known as the Covid Corporate Financing Facility (CCFF), which was set up in March to support large companies affected by the pandemic.
The club said at the time that the money was to give them financial flexibility and additional working capital at a time when their losses might exceed £200 million over the course of the year.
They also specifically stated it would not be used for player acquisitions, something The Telegraph was told yesterday was a “prerequisite” of its granting. The Telegraph was also told the Bank of England was confident the money had been ring-fenced and that Spurs were adamant that was the case.
Among the restrictions placed on them is one forbidding the chairman, Daniel Levy, who was paid a £3 million bonus for completing the club’s new stadium, from receiving a dividend should they not repay the money within a year.
Bank of England guidelines state that those using the CCFF “will be expected to provide a letter addressed to HM Treasury that commits to showing restraint on the payment of dividends and other capital distributions and on senior [executives’] pay”.
As well as the return of Bale, Tottenham are close to signing his Real Madrid team-mate, Sergio Reguilon, for £27.5 million, having already bought Matt Doherty and Pierre-emile Hojbjerg for £15 million each.
Whether the £175 million loan has had any impact on Spurs’ transfer spending is unclear. Had they not had access to the CCFF, Spurs could have taken out a commercial loan or their owners could have made up the shortfall.
Kieran Maguire, a football finance expert and lecturer in the subject at the University of Liverpool, said: “Their wage cost base is so far below that of the other large clubs that they probably had a bit more wriggle room to get out into the market – but not a huge amount. I think they would’ve needed some sort of funding.”
Spurs have avoided making the same level of redundancies as Arsenal, having last season reversed their decision to take advantage of the furlough scheme following criticism from fans.