Tottenham Hotspur Signs Loan Deal for $900 Million Stadium

Tottenham Hotspur Ltd., the Premier League soccer club that’s clawed itself up to become one of England’s elite teams, announced a 700 million-pound ($900 million) plan to fund a new 61,500 seater stadium.

Tottenham, based in London and commonly known as Spurs, has signed a 400 million-pound facility with Bank of America Merrill Lynch, Goldman Sachs Group Inc. and HSBC Holdings Plc, the club said in a statement on Wednesday. That replaces an interim 200 million-pound deal that was put in place in December 2015, of which 100 million pounds has been drawn to date. The financing was arranged by Rothschild & Co.

“We are delighted to have three of the most prestigious and globally recognized banks supporting us,” said Matthew Collecott, director of finance and operations.

The deal paves the way for Tottenham to complete its move to the new stadium, the second-most expensive in the U.K. after Wembley. The club plans to compete at the new venue in the season after next, with home matches played at the national stadium in the interim. The stadium is being built adjacent to the site of White Hart Lane in north London, where Spurs played home matches for more than a century.

Elite Club

The move will help Tottenham cement its place among Europe’s elite clubs that regularly qualify for the Champions League, the lucrative continental competition for the top teams. Spurs have qualified for next season, having finished second to Chelsea in the Premier League, its highest finish in more than 50 years.

The club has already spent 340 million pounds on planning, building and the acquisition of land, according to the statement. The remaining cost of the project will be funded from the new facility and the resources of the club, which is owned by ENIC, controlled by billionaire Joe Lewis.

The 400 million-pound facility has a term of five years and is priced at libor plus 2.25 percent to 3 percent.

Tottenham’s matchday revenues will probably more than double to about 100 million pounds per season as a result of the move, Collecott said. The cost of the project won’t affect the plans of manager Mauricio Pochettino as he seeks to strengthen the team and offer new deals to top performers, as a similar move did to north London rival Arsenal when it upgraded to a 60,000-seat stadium in 2006.

“This is not going to touch the football, these are very separate budgets,” Collecott said.

The U.K.’s vote to leave the European Union and the appreciation of the euro have produced an additional challenge to the club as it agrees to contracts with suppliers, the executive said. Tottenham is also yet to secure a stadium-naming rights deal along the lines of Arsenal’s contract with Emirates airline, something West Ham hasn’t managed to do a year after it moved into the Olympic stadium in East London.

Tottenham has built in the possibility of having a safe standing area, in line with an experiment in place at Glasgow Celtic in Scotland.

Tottenham is ranked 10th in a new survey of Europe’s top clubs by KPMG in terms of its valuation. Six of Europe’s most ten valuable clubs come from England, where domestic broadcast revenues are higher than in other leagues.

HSBC is also providing an additional 25 million-pound working capital facility and ENIC has put in a 50 million-pound contingency facility to ensure the project is fully funded through to completion.