Financials 17/18

[carmeldevil]

Apparent inside source said to be going through in the summer? Might be typical bullshit but because I dont see any rumours anywhere it may be legit

Just tell Kraft there are no massage parlours in Tottenham area. He'll cancel his plans.

 

[Gareth88]

Just tell Kraft tell him there are no massage parlours in Tottenham area. He'll cancel his plans.

Ill give him a tug for a season ticket and massive transfer budget

 

[Lilbaz]

Apparent inside source said to be going through in the summer? Might be typical bullshit but because I dont see any rumours anywhere it may be legit

If they could convince levy to stay i would be happy with that. Would love to see what spurs and levy could do with funds.

We'll see though. If an offer is made then shareholders will be informed so even if it is true it is early days.

Sure the financial experts will be able to shed more light on the process.

 

[Lilbaz]

Be wary @Gareth88 now you've mentioned it, it will probably he all over twitter and even the media by the end of the week.

I once had a bit of itk on joe cole coming to us (from his uncle) it was reported on espn website 2 days later. Lol.

 

[wrd]

Spurs value is significantly higher than 1.5 Billion, why would they sell the club under value as an investment company, it's nonsense.

 

[ComfortablyNumb]

I'm not talking about formal credit ratings but the esteem in which a borrower is held by professional lenders and investors.

I don’t like quoting credentials, but I've held several senior banking board memberships and been on advisory boards to the Bank of England as well as other senior positions in the City and other financial institutions, so I'm talking from a position of some considerable direct experience of how lenders and investors view the practice of taking our loans with the intention of medium-term refinancing. Some of my experience is in the top-tier football business too.

None of that means I can’t be wrong.

But in my view, whilst I agree that it isn't uncommon practice, it isn't ideal, and is usually perceived to be a sign of relative weakness unless there are specific and unusual reasons for it such as temporary adverse market conditions. It speaks of insufficient equity and a less reliable cash flow than the ideal. Planned serial refinancing is certainly a concern to potential investors, and that must be a consideration for the current owners.

That's not to say that as THFC's finances improve they won't be able to refinance on better terms than currently available, of course. But they'd be able to finance even more effectively and on even better terms if they had demonstrated not only the ability but the will to pay down their loans according to the original schedule from the start.

I don’t think that’s how it works at all. The original loans were for a short term, risky project, and the money would have come from sources who understand the risk, only want their money tied up for a few years, and are happy with a high rate of return to balance the risk.

Now the build is complete, the risk has largely gone, those investors will actively want their cash back to reinvest in their next project. We’ll refinance it from completely different investors (pension funds, or similar) who hate risk but want a home for money over 20 years, with a low but safe rate of return.

To be honest, the ‘market’ would be seriously worried if we didn’t refinance, as it would suggest something has gone wrong.

 

[rez9000]

Spurs value is significantly higher than 1.5 Billion, why would they sell the club under value as an investment company, it's nonsense.

Might be enough to buy a significant stake. I don't reckon there's anything in it, I should add. Just hypothetically speaking.

 

[Lilbaz]

Spurs value is significantly higher than 1.5 Billion, why would they sell the club under value as an investment company, it's nonsense.

Dunno would they be buying the whole club or just enics share (although they have to offer other shareholders the same price if they do). We'll see. No point getting excited till an offer comes in.

 

[ComfortablyNumb]

Nope. Where's this from?

Anything serious shareholders will have to be notified ala cain hoy.

We’re not quoted anymore, so don’t need to tell shareholders anything (I think).

 

[wrd]

Dunno would they be buying the whole club or just enics share (although they have to offer other shareholders the same price if they do). We'll see. No point getting excited till an offer comes in.

Yeah that might be true, personally I don't see it happening.

 

[Frozen_Waffles]

I think levy will not go for the long term loan option, he will try to pay it off as soon as, if we are planning on using the profits from the stadium, it basically means 20 years of not feeling the financial effects of the stadium.

This is my guess, we use the stadium rights money for big player investment, 150-200m this summer.

Then we go back to our spending only what we sell for a few years of serious repayments. Scrimping.

As soon as we hear about naming rights, I expect the transfers to flow.

 

[am_yisrael_chai]

So my best attempt at summarising previous discussion....

We are likely, per @Led's Zeppelin , to pay back significant amounts of the loan between now and 2022. Once we have shown that the stadium brings in serious cash we are likely to want to refinance on a better long-term deal. This is consistent with @skiba who has referenced Levy as saying we will use « debt instruments with a mixture of maturities to repay the debt facility. »

The most informed people in this thread seem to believe that we will have some extra funds to spend eg on the playing squad, right away. In @Led's Zeppelin view this is despite the fact we will pay back relatively large sums in the coming years.

Tell me if if I’ve got this wrong ...

I think that’s about right.

But just to clarify, there will be some large cash inflows that will help repay debt, including naming rights. There may also be some capital restructuring. Not all loans repayments need come from the normal revenue streams, and there may indeed be some debt restructuring too; I don’t rule that out. it’s just that I very much doubt that the plan is to simply refinance all the debt with new debt at maturity. In my view that would be imprudent financial management and not how DL goes about things.

So that should leave plenty of scope for buying new players in addition to the cash generated by player sales while, still reducing the debt burden quite significantly.

I see the new stadium as being a very healthy boost for Tottenham both off the pitch and, more importantly for us, on it.

With all due respect to @Led's Zeppelin I very much doubt there will be large scale capital repayments between now and 2022. Levy has previously said, apologies don't have the quotes to hand, that the existing term facility will be refinanced by a series of bonds with varying maturities. In simple terms we won't be repaying our debt like a mortgage where each repayment is part interest and part capital but we will create our own capital repayment profile through a series of bonds that mature at various dates in the future. I'd very much expect this to be over the useful life of the asset (the stadium) which I'd estimate to be 20-25 years. This is fairly standard for a large property asset of this type and will bring the maturity profile of our capital repayments more into line with the time profile of our revenues. (Apologies if this bores anyone but it does have a significant impact on how much cashflow might be available for player acquisition and wages).

Finally a note of caution based upon the experience of the goons. While paying down debt should free up cashflow for the playing staff we shouldn't lose sight of the fact that there is nothing to stop our owners (current or future) from re-leveraging the club again. This seems to be what has happened down the road with Kroenke using the Emirates as collateral to help fund the stadium build for the LA Rams. I'd imagine a debt free THFC would mightily attractive to a private equity fund, which is essentially how the Glazers funded their purchase of Man United.

 

[thebenjamin]

With all due respect to @Led's Zeppelin I very much doubt there will be large scale capital repayments between now and 2022. Levy has previously said, apologies don't have the quotes to hand, that the existing term facility will be refinanced by a series of bonds with varying maturities. In simple terms we won't be repaying our debt like a mortgage where each repayment is part interest and part capital but we will create our own capital repayment profile through a series of bonds that mature at various dates in the future. I'd very much expect this to be over the useful life of the asset (the stadium) which I'd estimate to be 20-25 years. This is fairly standard for a large property asset of this type and will bring the maturity profile of our capital repayments more into line with the time profile of our revenues. (Apologies if this bores anyone but it does have a significant impact on how much cashflow might be available for player acquisition and wages).

Finally a note of caution based upon the experience of the goons. While paying down debt should free up cashflow for the playing staff we shouldn't lose sight of the fact that there is nothing to stop our owners (current or future) from re-leveraging the club again. This seems to be what has happened down the road with Kroenke using the Emirates as collateral to help fund the stadium build for the LA Rams. I'd imagine a debt free THFC would mightily attractive to a private equity fund, which is essentially how the Glazers funded their purchase of Man United.

I know this is going to be difficult, but imagine for a second that I understand very little about finance. I know it's tough to do so.

And please explain how the bond model would differ to the mortgage model in terms of what we actually pay and when. Cheers!

 

[Lilbaz]

We’re not quoted anymore, so don’t need to tell shareholders anything (I think).

We weren't listed when cain hoy showed interest. The club were required to inform shareholders.

Am not an expert so others will have to explain the legality.

 

[am_yisrael_chai]

Heard a rumour that we are been bought by Robert Kraft in the summer 1.5billion? Any one else heard this?

I received the same thing via WhatsApp last week, it is to quote Trump "fake news". This is what I received, you can tell it is nonsense because it says the Kraft's have released a statement and there is no such thing anywhere on the web.

 

[ComfortablyNumb]

We weren't listed when cain hoy showed interest. The club were required to inform shareholders.

Am not an expert so others will have to explain the legality.

I don’t think Spurs announced anything about Cain Hoy, or even acknowledged it. However, you are correct that Spurs would have to tell all its shareholders. What I meant was that it wouldn’t be a public announcement. So the fact that you and I haven’t heard anything doesn’t mean it isn’t happening.

 

[am_yisrael_chai]

I know this is going to be difficult, but imagine for a second that I understand very little about finance. I know it's tough to do so.

And please explain how the bond model would differ to the mortgage model in terms of what we actually pay and when. Cheers!

Sure. A bond is just a fancy capital markets term for a loan, just one where there isn't a single lender but lots of lenders who can transfer the loan whenever there is a willing buyer.

In a mortgage there is a defined repayment schedule which is computed based on the term of the mortgage and the interest rate. Say for example you borrow £100,000 for 25 years at 5% per annum there will be a single level monthly amount that ensures the outstanding amount of the loan in 25 years is precisely zero. At the beginning of the loan most of that monthly repayment is interest and at the end most is capital.

A bond operates differently, it is basically a loan with only interest payments and then one payment of capital at the end. So again let's say you borrowed £100,000 for 25 years at 5% per annum you would make interest payments every year of £5,000 and then at the end of 25 years make one single capital repayment of £100,000.

If the club refinances the current loan via a series of bonds then it is effectively controlling the repayment profile for the big capital payments. So for example it could issue an equal notional of bonds maturing every year from year 6 to 25 and in that way would pay off 1/20th of the capital each year over 20 years. This is in practice highly unlikely as the bond markets operate with fairly prescribed maturities such as 3, 5, 7 ,10, 12, 15, 20 and 25 years so in practice they are likely to issue a varying amount of each of these maturities. The precise balance between these will be a factor of a number of things decided by the CFO such as the trade off between maturity and interest rate, generally speaking the longer you want to borrow for the more it costs.

Hope I haven't confused you further

 

[absolute bobbins]

Kraft to part with at least 35% of his net worth for Spurs?

If you’re buying that, let me tell you about these fantastic bags of magic beans I’m selling for only £25 each

 

[am_yisrael_chai]

Kraft to part with at least 35% of his net worth for Spurs?

If you’re buying that, let me tell you about these fantastic bags of magic beans I’m selling for only £25 each

If he was buying Spurs I think I know who the DoF would be, it would surely have to be David Pleat (if that goes over your head you need to Google both and find out what interest they share in common)

 

[Wheeler Dealer]

Kraft to part with at least 35% of his net worth for Spurs?

If you’re buying that, let me tell you about these fantastic bags of magic beans I’m selling for only £25 each

Kraft Heinz are struggling across the globe... The people have moved on from all the mass produced shite they turnout.. even the Americans. Not sure how much of his wealth is still tied up in the business, but it maybe a good time for him to cash in and focus on something new. He's no doubt wealthy, but still someway behind Abramovich and Usmanov