The outcome of Thursday night’s North London derby – the first at Spurs with a sold out crowd since April 2017 – could shape both clubs’ medium-term future with Champions League football on the line
It is a fixture and it does not need to be promoted, even though Antonio Conte attempted to fan the flames of controversy by questioning whether January’s original date should have been delayed. The stakes can be high and it’s about much more than bragging rights and three points.
The outcome of this North London derby – the first at Tottenham with a sold out crowd since April 2017 – could shape both clubs’ medium-term futures.
Arsenal’s victory would confirm Champions League football. However, a loss would put pressure on MikelArteta’s team with only two games remaining and the deficit at one point.
The consequences of pitching may be worse than those on the pitch.
Five years have passed since Arsenal’s last appearance at the pinnacle of club football and there is a convincing argument that right now they need the Champions League more than Spurs, who were finalists three years ago. It is essential to keep up with the elite in a world where on-field success seems more important than financial strength.
Despite the justified excitement surrounding the emergence of many young players and supporters, the balance sheet shows that Arsenal is more likely to be cut without the substantial revenue from Champions League participation.
But five years ago, Arsenal was still the largest club. Their revenue in 2016, the last time the club finished in the top four, was 67.5% more than Spurs (£391million compared to £233million).
Sponsors were attracted to Arsenal like a bull. Arsenal was the club with the highest matchday revenue, beating Manchester United. The broadcast income was also higher due to the on-pitch success.
By 2019 Spurs had a revenue 17 per cent bigger than Arsenal’s (£435million compared to £371m) and, according to Deloitte’s latest Money League rankings, are expected to climb from 10th place now the pandemic’s worst has passed while Arsenal have slipped from sixth to 11th since 2017. The latest available figures, taken from a period when stadiums were empty, indicate Spurs’ revenue was about £34m bigger than their rivals.
“Arsenal had always been the club that had the money, the old Bank of England thing,”John Purcell, one of the financial analysts at vysyble, said this. “They always had that label while Spurs were looked at as this nice club but it was only Spurs.
“A lot of investment has gone into the new stadium and Arsenal went through a similar thing before it and that’s been the overriding factor in how they have conducted themselves in a financial manager since.”
As Spurs chairman Daniel Levy said in mid-2020, the pandemic came at the worst possible time for a club seeking to reap the rewards of its new £1billion asset, which has left an outstanding debt of £706million according to their latest accounts.
“Tottenham have really, really suffered,”Purcell: “Pre-covid Tottenham actually achieved an economic profit of £27.5million from a revenue of £460million after just moving into the stadium.
“By 2021, to give you a measure of the transformation, Tottenham’s revenue was £361m, a significant drop because of the lack of Champions League and matchday revenue, with an economic loss of £142million. In the space of two years there was a negative shift of more than £60million. That will hurt.”
The balance sheet for 2022 is now open for several months. The Lilywhites will be even better off as they capitalize on their decade-old NFL deal. Two American football games were announced last week in N17.
“It takes time to get back on track,”Purcell: “but Spurs do have an advantage over most clubs in the Premier League because of the stadium. Their revenue recovery period is likely to be shorter than most other clubs.”
That is not to say Spurs will be in a strong position now the pandemic’s peak has passed, particularly when the squad remains in dire need of surgery despite improvements in January. There remain doubts that the required investment will be sanctioned by Levy and owner Joe Lewis, leaving a cloud over Antonio Conte’s long-term future.
Levy’s assertion early in the season that Tottenham lost sight of its DNA during the pandemic was a nice soundbite but a look at their transfer history points to a track record of frugality unrivalled by the other big teams.
They find themselves in a similar position to Arsenal 12 months back. While they recognise the need to invest, they must also offload well-paid fringe staff before they can act. Conte has been blunt about the need for additional options and supporters’ impression of Levy has been at its lowest ebb this season.
In terms of recruitment Arsenal are much further along the road with a league-high £149m spend last summer, though the project is far from its latter stages with a new centre forward and additional midfield options earmarked in the next window. Josh Kroenke has committed to further investment after years of complaints directed at his father, Stan, from the club’s supporters – although a degree of scepticism remains.
They have learnt the hard and painful way, most notably through the Mesut Ozil saga, with the industry’s collective belt-tightening during the pandemic complicating clubs’ ability to part with unwanted players.
“Look at the contracts signed by Ozil and Aubameyang and you end up with players locked in on high wages who they then can’t get rid of,”Tom Bason, an assistant professor at Coventry University in sports management, said:
“I suspect clubs in the current climate are now reluctant to do that because you don’t want to end up with a player who is 31 or 32, not in the first team but the highest-paid player in the squad.”
Spurs’ wage structure is less extreme, but they are having difficulty moving several players.
“It’s been exacerbated by the pandemic. We’ve seen in the past 18 months that English clubs have managed OK broadly but clubs abroad haven’t and that’s cut off a sale option,”Bason continues. “That means they’re not spending money now, cutting off a sale option for English clubs. All are tightening their belts apart from the clubs who are backed by owners who can put the cash up easily.”
Last year, there were compelling arguments that the era was over. ‘Big Six’Arsenal achieved a second consecutive eighth-place finish. Since then they have made clear strides, the brakes have been applied to Leicester City’s progress and such is the clear split between third and fourth right now there is a temptation to argue it is really a big three.
And that is before factoring in yesterday’s announcement from UEFA that from 2024/25 the Premier League stands to gain an additional Champions League space.
“The big six is a revenue classification and the gap between the sixth and seventh had been growing and growing since 2009 but shrunk a bit last year,”Purcell: “Arsenal are sixth, Everton are seventh and the difference is £344million to £185million.”
The future remains uncertain, and Newcastle United’s wealth means there may be another challenger in the medium-term, but the renewal of a derby that seldom fails to produce fireworks has the potential to shape far more than just the mood of supporters.