Tottenham and Daniel Levy are ready to back major £105m rule change - Kieran Maguire

09/06/2024 12:45 PM

Daniel Levy is poised to use Tottenham’s clout to try and force the Premier League’s hand to reform perhaps its most controversial rule.

As a negotiator, Spurs chairman and co-owner is known as stubborn operator – often to his credit and sometimes to his detriment.

The 62-year-old ENIC supremo takes the same approach when it comes to matters of governance, both at Premier League and UEFA HQ.

And with Tottenham currently for sale – or a significant chunk of their equity, at least – the club’s wider regulatory environment has never been more important.

After Leicester City undermined confidence in the PSR (Profit and Sustainability Rules) system across the Premier League this week, Daniel Levy and his peers in the Spurs boardroom will be reeling.

To consider how Spurs will react to events and what PSR’s future might look like, TBR Football spoke exclusively to Liverpool University football finance lecturer and industry insider Kieran Maguire.

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Tottenham’s stance on PSR reform

In relative terms, Levy and ENIC are among the Premier League’s least wealthy owners.

In terms of net worth, they are in the bottom half at least and their cash reserves pale into insignificance next to the owners of the rest of the so-called ‘Big Six’.

If there were no spending rules in place, state-run clubs like Man City and Newcastle United as well as private equity-backed teams could outspend Tottenham by an order of magnitude.

As it stands, Premier League clubs are allowed to lose a maximum of £105m over a rolling three-year period. And Spurs have more capacity in the system than most other clubs.

With this in mind, Maguire is confident that Spurs and Levy would vote in favour of a more restrictive PSR system when it is tabled at the Premier League’s AGM next summer.

“Spurs would be in favour of a system of more cost control rather than less,” he said.

“By Premier League standards, Spurs wage control is not the most demanding. They also don’t have the most significant levels of spending in terms of investment in the transfer market.

“It is a competitive budget but not one that is going to be at the elite level that Man City, Liverpool and historically Chelsea, although we don’t know whether Chelsea’s new wage structure is as different as the stories that have been leaked to the press suggest.

“I would anticipate that Spurs would rather have a system which is more geared towards financial control rather than letting the genie out of the bottle and allowing unlimited amounts of spending.”

Spurs, the next multi-club empire?

The multi-club model is very much in vogue at present, with over half the clubs in the 2024-25 Champions League draw being part of some sort of multi-club network.

As well as giving clubs a lift in terms of recruitment and retention, the multi-club model also allows clubs to pool certain costs, reducing strain on PSR.

Spurs are the only club in the Big Six who are not either part of a multi-club model or looking to set one up.

However, the arrival of Scott Munn as chief football officer has been seen in some quarters as a signal that a move in this direction is in the post.

Maguire is sceptical though and believes that Spurs’ more commercially-focused ventures into other sports mean they are unlikely to go down the multi-club route.

“I don’t think Spurs under ENIC are particularly interested in the multi-club model.

“Part of the reason for that is that Spurs themselves are a multi-club in the sense that they are an NFL host and other sporting activities.

“In that sense, they are more multi-sport and multi-function than they are multi-club.

“That has served them well to date. If Spurs were to go down the multi-club route, that would probably involve borrowing more money.

“I don’t think that would be something the current makeup of the board is interested in.

“However, that could change if there is new investment in the club who are willing to embrace broader approaches and the diversification of the company.”

Daniel Levy’s Champions League final ambitions

Commercial income is central to clubs’ capacity to spend under PSR, as well as creating the cashflows that ensure owners do not have to bankroll investment themselves.

The Tottenham Hotspur Stadium has been a commercial goldmine for Spurs, allowing them to stage NFL matches and concerts for some of the world’s biggest artists.

They were also recently given license by Haringey council to double the number of non-football events per year, creating another massive revenues stream.

As well as hosting matches at Euro 2028, Tottenham also could now theoretically throw their hat into the ring to host the Champions League final in 2027 after the San Siro was removed as host venue.

“I suspect hosting the Champions League would be desirable but not essential.

“There is no doubt that the club has the facilities, which would be attractive from UEFA’s point of view.

“But remember, there are many countries and grounds who are willing to host this prestigious event.

“Daniel Levy will only do this if the price is right. In an ideal world, he would absolutely love it if Spurs were there on merit as one of the participants at that stage of the competition as well.”