Can Tottenham beat Arsenal in the high-stakes game of being No. 1 in North London?
James Olley
July 10, 2020
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This weekend's north London derby is precisely the type of occasion the Tottenham Hotspur Stadium was built for. It is a £1.2 billion ($1.5bn) bricks-and-mortar manifestation of the club's decades-long struggle to emerge from Arsenal's shadow, something they achieved to an extent under Mauricio Pochettino on the pitch and are now attempting to replicate off it as well.

Spurs took a calculated gamble in proceeding with the project, just as Arsenal did when hatching their plan to leave Highbury in 1997. Both clubs were seeking to position themselves at the vanguard of English football and believed investing in their own backyard was the most viable option. However, a landscape change in the early 2000s brought Arsenal's decision into focus as a new wave of owners with limitless funds diluted the importance of matchday revenue in a club's success.

And now, the financial aftershocks of the coronavirus threaten to have an equally compromising influence on Tottenham as the world adjusts to pandemic life.

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Arsenal are arguably still dealing with the ramifications of their stadium move as they attempt yet another rebuild. Spurs must be concerned that a similar fate awaits them now.

"None of us thought we'd suffer the incredible heartache that we did during the process," Tottenham chairman Daniel Levy said shortly after the stadium finally opened in April 2019. It was, in some senses, a miracle the stadium was only delayed by six months given the obstacles Spurs had to overcome during an 18-year struggle to complete construction.

Initially, Spurs projected the venue would cost £400 million ($505m), just a shade more than the £390m ($493m) it cost Arsenal to leave Highbury in 2006. However, a series of delays triggered by myriad reasons caused the price to triple.

Seventy different businesses were relocated and 80 different property transactions took place, the last significant one taking years as Archway Sheet Metal Works Ltd. dug in to protect their family-owned business. The London riots of 2011 cast fresh doubt over the plans, the Brexit vote of 2016 increased construction and material costs and at one point, a warehouse the club acquired was broken into and turned into a drugs factory. There were countless sleepless nights, 4,000 people working round the clock at one point and more than 14 million man-hours clocked but the end result is undeniably spectacular. There was even a subtle dig at Arsenal, making the capacity 62,300 -- a fraction higher than their rivals, which currently stands at 60,704.

The Tottenham Hotspur Stadium can lay a strong claim to being the best arena in world football, but it comes at a price. Levy converted £525m ($660m) worth of debt into bonds with staggered maturities of between 15-30 years, staving off the prospect of having to pay back £637m ($805m) in loans next April. Sources have told ESPN that Levy secured an "impressively" low interest rate when refinancing and a sum of £25m ($32m) was ring-fenced for transfers each summer. However, that was before COVID-19 struck.

The human cost of the pandemic is thankfully beginning to subside, but the economic consequences appear bleak and uncertain.

Just after the United Kingdom went into lockdown, Levy warned at the end of March that "people need to wake up to the enormity" of the pandemic, becoming the first significant football administrator to voice concerns for the future. Levy has always preached and practiced financial sensibility, yet the appointment of Jose Mourinho in November seemingly put a pragmatist and a spendthrift on collision course even before COVID-19 emerged. Mourinho insisted the issue of economic constraints stemming from the stadium were never mentioned in talks over succeeding Mauricio Pochettino.

"[There was] no discussion at all," Mourinho told ESPN this week. "The only thing that was important for me at that time is that my club has the best stadium in the world, the best training ground in the world. For me, there is nothing else than that.

"The other day [before Tottenham beat Everton 1-0], the first thing [Carlo] Ancelotti told me -- and you can imagine, he managed some of the best clubs in the world, managed in the Bernabeu, the Allianz Arena, the San Siro -- the first thing he told me was 'wow. This stadium is absolutely incredible.'

"So when it is my stadium, I don't think about anything else in relation to the stadium than the beauty, the comfort and the motivation that it is to play for a club that owns that stadium. After that, I think everything is internal and not to share in any discussion."

That last line hints at the pressures to come. After all, Spurs built their new home as an event centre. The book chronicling its journey is titled "Destination Tottenham." It speaks of a desire for the stadium to be a "365-day-a-year asset to north Tottenham and the driving force behind the regeneration of the area."

Spurs deserve credit for adapting their site to operate as a hub for NHS activity during the pandemic, but this is not the social engagement Levy envisaged. Summer concerts have had to be cancelled, NFL matches postponed and Anthony Joshua's heavyweight title fight against Kubrat Pulev delayed as well. The ongoing absence of fans inside the ground costs Tottenham millions of pounds every home game, more than most clubs given the stadium was designed to stay open longer on matchdays, encouraging supporters to get there earlier, stay later and spend more throughout.

Spurs' business model was predicated upon the kind of engagement COVID-19 has attacked. It's hoped that fans will be allowed back inside stadiums early next season, but there are no guarantees. Similarly, there is no projected date for the resumption of gigs or similar mass gatherings.

Money will have to come from elsewhere. There is no desire at the club to cash in on prized assets, most obviously England captain Harry Kane, despite a pre-coronavirus market valuation of around £200m ($253m). However, Kane is desperate to win trophies and has hinted he may see his future elsewhere if that ambition isn't matched at Tottenham. The striker turns 27 later this month so his peak years are upon him.

The probable absence of Champions League football is another blow Mourinho's appointment was designed to avoid. "A Champions League wage bill on a Europa League budget" is how Arsenal director Josh Kroenke described the club's reported £235m ($296m) figure and although Spurs' is considerably lower at around £179m ($226m), missing out on Europe's elite competition creates another pressure point.

There is a school of thought suggesting failing to qualify for European competition altogether would boost...
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