The "If we go down" thread

[robp135]

In the last set of published accounts we had £337 of transfer debt and £852m of stadium debt, so close to £1.2b of total debt Against that we had £79m of cash and were owed £58m in transfer fees. That is an extremely scary amount of debt if we were to drop to the championship.

Its spread out over a period of time. We will be on the hook for conservatively net £100M outlay. Its not ideal but its not going to kill us. We can sell some players, some of whom are on big wages and we have others already leaving to be on track.

The stadium debt is £1.2B when you factor in the interest. We only pay the interest at this point and down the line will attack the principal. It's still a manageable amount. Again a 1.2B debt for a business that makes £600M per year is like making £60k per year and you have a £120k home you pay a mortgage on.

 

[Finney Is Back]

Its spread out over a period of time. We will be on the hook for conservatively net £100M outlay. Its not ideal but its not going to kill us. We can sell some players, some of whom are on big wages and we have others already leaving to be on track.

The stadium debt is £1.2B when you factor in the interest. We only pay the interest at this point and down the line will attack the principal. It's still a manageable amount. Again a 1.2B debt for a business that makes £600M per year is like making £60k per year and you have a £120k home you pay a mortgage on.

Mate. When you have total debt of £1.2b and net debt of over £1b and your revenue suddenly halves that's worse than 'not ideal'.

£1.2b of debt for a business with revenues of £600m is OK. £1.2b of debt for a business who's revenue suddenly drops to £300m and has had recent history of both burning through it's cash pile while also increasing debt is really bad,

Our debt level is fine in the short term if we're just paying back interest and not the principle. However, our loans are at a mixture of maturities and we've clearly been taking on new debt as tranches expire. Our interest costs have already significantly increased these past few years. I think a lot of financial institutions would think twice about lending to Spurs if we end up in the Championship with vastly reduced revenues and that is before considering our existing debt covenants that very likely require us to retain an amount of liquidity above a certain threshold before punative charges and interest kick in.

I can't help but think of the famous 'This is fine!' meme when reading your posts. It really isn't fine however.

 

[Robbo]

I think the biggest issue with relegation is that everyone will want to beat us so bad. We're looking at 46 cup finals.

 

[robp135]

Mate. When you have total debt of £1.2b and net debt of over £1b and your revenue suddenly halves that's worse than 'not ideal'.

£1.2b of debt for a business with revenues of £600m is OK. £1.2b of debt for a business who's revenue suddenly drops to £300m and has had recent history of both burning through it's cash pile while also increasing debt is really bad,

Our debt level is fine in the short term if we're just paying back interest and not the principle. However, our loans are at a mixture of maturities and we've clearly been taking on new debt as tranches expire. Our interest costs have already significantly increased these past few years. I think a lot of financial institutions would think twice about lending to Spurs if we end up in the Championship with vastly reduced revenues and that is before considering our existing debt covenants that very likely require us to retain an amount of liquidity above a certain threshold before punative charges and interest kick in.

I can't help but think of the famous 'This is fine!' meme when reading your posts. It really isn't fine however.

Its still more than manageable for 1 season. The club has money it just choses to borrow money cheap like most businesses.