THE LAB | If Spurs Go Down, What Actually Happens Financially?

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1:13There's a birthday girl searching for them right now. Your one-and-done look is about to pay for your next night out. Or at least the ride home. Your style can make you cash. Start selling on Depop, where taste recognizes taste. In this episode of The Lab, we look into the financial reality of what would happen if Spurs get relegated. From parachute payments and wage reduction clauses, to player sales, stadium revenue and the Leeds United comparison. We separate panic from fact and ask just how bad it would really be if the worst happened. Categorically, both Ben and I don't think the worst is going to happen, but we've been asked this question over and over again.

1:55could you do a podcast about what might happen financially to Tottenham Hotspur so here it is if you enjoyed this episode of the lab or any of the the ones we've done previously please hit follow wherever you get your podcasts uh it means a massive massive massive thing to us cheers

2:25Hello Ben, how are you doing? Good, thanks. How are you? I'm good. It's been a week since we put together the five pillars that will save Tottenham Hotspur. And I don't think at the time of recording that De Zerbi had been confirmed. No. No, you hadn't? And I don't even know if we alluded to this, but we thought that strong leadership was a massive issue at Spurs and someone to create culture and identity and something for players to believe in. new players to believe in and future managers of head coaches to believe in and we've gone kind of like arse about face which isn't surprising at all because of the nature of the leadership structure at Spurs there was an opportunity for someone like Deserby or what I mean my preference remains it would have been Pochettino who would have come in and wanted the level of power and decision making that deserve he's been granted but just before we go into the subject matter at hand what do you make of his appointment as a tactician and as a manager do you think I do think he's a good manager like leaving aside all the sort of moral stuff and the arguments about Greenwood and stuff like that like purely on a managerial perspective like with all that stuff I would have avoided him personally but leaving all that aside as a manager he plays the right sort of football he does he plays the sort of football we want that's sort of ingrained in Tottenham as well the stuff that we all want to see so he will do that he does get clubs ticking my worry is the five year contract he blows up after two years three years max he falls out with the hierarchy so I think that's a bit mad unless there's a break clause but I get he had a save for a barrel so we've probably didn't have much of a choice of the available managers probably arguably one of the best we could have got realistically now But like you, I think an ideal world would have maybe limped to the summer, stayed up.

4:20If we had another five points, I don't think we'd have done this. I think we'd have waited until the summer and then seen what happened. I agree. I agree. And according to Langer, it probably would have still been to Zerby. I wonder, and I always look, I've been accused of sort of happy clapping my way around every decision that Tottenham Hotspur would make, which is fair because I always try and think about the most positive things. and I don't think a manager imploding we always sack a manager when they implode and he didn't last at Brighton and he didn't last at Marseille the reasons why he left Brighton weren't about an implosion in my opinion it was a difference of opinion and a lack of a willingness from the Brighton set up and Tony Bloom given how well they that they recruit that they weren't willing to abandon all of the good work they've done and just give it to Deservey to try and sign the players he wants so that's why he left.

5:12Marseille was a different conversation or all you could say definitely imploded because the performances this season weren't good enough. But maybe over the five-year period we just need to let this guy do what he needs to do and see where we land and there will be moments where it's very difficult but in that moment you just give him room to go mental and then hopefully he brings it back if the football's good enough. Anyway, what I've been hearing Ben is a lot of the part of the reason I wanted to talk to you is on social media there's accounts talking about what what might happen to Tottenham should we be relegated I saw one bunch of lads one of them professed to have looked into the numbers at Spurs and his top line argument was that Tottenham could go out of business if they get relegated and it just didn't feel like it was true um so I want to get your take on all of that what safe measures we put in place and safeguarding and all the stuff that Daniel Levy would have been fully across.

6:16But I guess I want to start with now, right now, how financially damaging is relegation from the Premier League in 2026 to perhaps what we saw 10 to 20 years ago, do you think? Yeah, I mean, obviously it's damaging. It's very damaging, but it's not maybe as damaging, well certainly not as amazing as 20 years ago because parachute payments came in 2020 2006 they're the big you know as includes the name they're the big parachute for you so you get 55 percent of your revenue 21 years ago you didn't get that so you were completely on your own and that's why it was a it was a huge deal now it's still a huge deal revenues in the premier league gone up um but you do get a chunk of that back uh for the next i think when they first came in it was two seasons now it's three so you'll get 55 in season one you get 45 in season two you get 20 in season three so first two seasons it's not as damaging as it was 21 years ago 10 years ago arguably slightly more damaging because of you know the premier league revenues the overseas revenues have shot up while the championships haven't climbed to the same degree so it does hit you but these days and particularly as we'll get into this a club like spurs that isn't even in our main revenue source anymore, the Premier League revenue.

7:32So it's, yeah, it's very damaging. It's a big hit. It's not an automatic you're going under. So the parachute payments are based on or measured on the baseline you receive from just existing in the Premier League. Yeah, so the Premier League, they split it up into three buckets. You get something they call the equal share, which is all the TV money comes in from the different rights, the Premier League rights and the rights abroad and everyone gets the exact same amount. So I think it's around 100 million, just under 100 million. Everyone gets that anyway. So clubs that go down still get 55 % of that.

8:08So you're still going to get over 50 million pounds from the Premier League revenue, even though you've come down to the championship. So that's there. That sort of takes the edge off. What you will miss out on is their other two bits. So they give you merit payments based on what you finish. So you finish half the league, you get an extra, I think it's like two and a half million per position. And also facility payments, which are how often you're on TV, you know, for having all the Sky Sports cameras or that sort of business in the stadium, you get another maybe 20, 25 million. So there are those three.

8:36It adds up to somewhere between that 150 to 200 million, depending on the club. Yeah, we would lose all of the merit, all of the facility, and 45 % of the equal share. So it does cost you a fair chunk, but it's not all of it. So what are the immediate revenue hits for Spurs? like it's broadcasting, it's match day, it's commercial. What drops and roughly how much have you calculated? Yes, this is where we have to make a few sort of assumptions. So we were looking at this recently and the fairest assumption, because you'll see a lot of headlines like Spurs are going to lose 300 million, 400 million.

9:19That's not true. Our revenue that just came out for the accounts for 24-25, so the Europa League season last year, those were revenue was up to about 5, 6, 5, I think it was. A lot of that is not made up of the Premier League revenue. So we're not going to lose over, we're not going to lose 60 % of that revenue. But where we've got to break it down to is we know the hit to the Premier League revenue. We know that's going to drop by probably 100 million. So that's going to cost us when you take away those merit payments, those facility payments and a chunk of the equal share. so yeah we lose that that's 100 million definitely where we have to make some guess work is the other areas so match day revenue anyone's guess what they'll do with their tickets whether we'll fill the stadiums there's more games but we're going to make a lot less per game so we get 100 and I think it went up in the last accounts from 106 to 126 obviously that's helped with the Europa League extra games but you know you can probably take off let's say 40 % you know that might be too much might not be enough but say they reduce the ticket prices by 40 but still pack the stadiums to have the extra games you're losing 40 million there as well um and then commercial is the one we really have to guess because that includes like your sponsorships um your merchandising your events the events realistically shouldn't be touched that much by this you know you can still do your non-sporting events the nfl don't care if we're in the premier league or not that we've got a 10-year deal with them so that happens regardless you make the same money regardless so So those things in theory, non-footballing events, are a little bit of a saviour for us because we have such a big...

10:55We have more money from that alone than most championship clubs, if not all championship clubs, made at all this season. So our revenue just from that stream dwarfs everyone else in the championship. And then you've got all your other revenues on top. So we will be financially a giant, but with much bigger operating costs as well. So the way we have to guess really is the sponsorships. We don't know what's built into those. if we estimate 30 % reduction. And again, this is on the numbers where we didn't have Europe. So three years ago, 23, 24 accounts, that to me is the fairest benchmark because there was no Europe.

11:30We're not going to have Europe next season, regardless of whether we start up or not. So it makes sense to compare to that season. There were 145 million at the time. You take 30, 40 % off that, you're losing another 40 million. um altogether i think if we're sort of doing a few finger in the air 30 to 40 reductions um you probably are losing 200 million to 250 million so it's a lot but it's not 60 of our revenue okay um i just want to take a moment here to say that this isn't we're not doing this podcast because we think we're going down and therefore we need to to sort of understand that the situation or think that the position is it is precarious and it is we do have a massive risk of being relegated this isn't a podcast about the fact that we meet ben and i and anyone in the fighting court think we're going down it's just the amount of questions that we get asked about whether or not you know it would how significant this would be if it should it happen that's what this podcast is about i meant to say that at the beginning um so i actually wind a lot of people up with my optimism i've not won so i wavered till we're getting relegated so so i go too far the other way i still think i still think i've always i didn't think we'd get this close i always thought we'd be palace to be honest uh and i thought we'd get something out of newcastle man united at home but um so i had us on maybe five points more than we've got and fairly comfortable at this stage but or more comfortable than we are.

13:00But I still think we're staying up, personally. We're going to get 12 points from the last seven games, guaranteed. So, yeah, we need to debunk the idea that Spurs could go out of business if relegated. Is it even remotely realistic? I mean, no, not really. We've got options. So, yes, we could lose 200 million, 200 million off of what we would have made next season. but we're not in a, in a lead situation where we've massively overextended ourselves. Like West Ham, for example, would, if they do go down, they, they are in much, much bigger trouble than we would be. Why is that? That's because they, I mean, recently they've had, they've had to take out loans to cover operating expenses at high interest rates.

13:48I don't know if you saw the story. It was, they've taken out loans, basically a payday loan, a football club payday loan. They're struggling with operational expenses. they've obviously overextended I didn't realise the extent to which they've overextended themselves on signing players and wages it'll be players and wages yeah and they don't make much obviously they make they've got a good stadium deal but it's not their stadium so there's only so much they can do with it what is it that we can do with our stadium because we own it that they can't do with theirs well we get all the revenue events basically so any events we can host as many as we want subject to the council approval and we get we can control those deals as well West Ham can't do that West Ham can't do that yeah so West Ham haven't got their leasing the stadium there's only so much they can do with it there's also a lower licence for events in that stadium as well than we've got so what's the approximate value of the events that have been held at Tottenham for the last year so in those accounts it was 74 million in the 23-24 I need to check what it was in the it's been ramped up since then though isn't it it's ramped up since yeah so I need to check what that went to but there's no real reason to think those would take a big hit with a relegation.

15:00If anything, they might continue to rise because they're not really tied to Premier League. So yeah, the only argument you could make is that we might have more games, so there might be less opportunity to squeeze it in at the weekends, but I can't see that it's going to make a huge difference. So yeah, I think it would at least stay steady. And like I said, that revenue alone is more than the entire revenue of any championship club this season. So, yeah, it's a big difference to other clubs. So imagine a world where Tottenham Hotspur go down. What kind of built-in protection is there at Spurs?

15:35What would Daniel Levy have done when employing Tottenham Hotspur players to play for the football club, putting in safeguarding into the contracts like relegation wage reduction clauses and that sort of thing what do you think exists like there's been a much touted figure of 50 relegation clauses across the board like this is a standard clause that all players sign when they come to Tottenham and you don't and no one knows the individual nature of all of these players contracts but if there is a 50 clause that takes our wage bill down from 200 is it 220 at the moment It went up to 2.56 in the last accounts.

16:18But yeah, I mean, if that clause exists and if we go down, we need to build Daniel Lillian's statue. I know he's not everyone's favourite person, but that alone would cut, what,£128 million from the cost base, which if you're losing£200 to£250, half of your losses immediately are mitigated through that clause alone. So that really takes the edge off if we go down. If that doesn't exist, we've got more of a problem with player sales. If that does exist, we've got so many options after that. So we're working on something that does. Sorry, Ben. But when you say we've got less of a problem, is that in that we don't necessarily have to sell to get wages off the books or loan players out with full wage accounted to the team that's taking them on?

17:09there'll be opportunities that we can kind of maybe keep players if they're willing to stay.

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18:19So you'll know how to take the quality of your sleep from okay to very high. Know your sleep score with Apple Watch. iPhone 11 or later required. Yeah, so... Sorry, a massive sneeze there. Yeah, so we'll have more freedom to... Yeah. That's not taking into account how a player might feel, obviously. Exactly, yeah. So it's the size of the hole we've got. If we're saying, let's say,£250 million, we're saying with fairly high assumptions on hits to 40 % of match day, 30 % to sponsorships, which might not actually be as severe as that. But as a finger in the air, sort of broadly sensible finger in the air, let's say it costs us£250 million on what we would have earned next season.

19:03that's the hole we've got a plug in our accounts 125 million immediately is made up for with this wage clause assuming it exists so hopefully it does exist if we do go down it feels like a Levy thing to do doesn't it he's the most risk averse person yeah you can imagine it he'd have said like it's not going to happen but we just put in all our contracts yeah and obviously Romero when he signs his new contracts he's not thinking about relegation at all he just won your own belief you know so and look it's fair like i wonder what it would do to the morale of the squad because you're cutting in the wages in half yeah it's a big cut um i think there would be some that maybe would be looking to go anyway and that's that's where really say you're down to a gap of 125 million a whole of 125 million your your top earning players are there on around 100 grand a week say you sell five of those that's 25 more million in wages gone before you factor in any transfer fees so say you sold a romero a van der ben um who else you know vicario you might sell a gallagher might move on i don't know someone like simmons so so you sold those players you're then also probably getting you're not getting top dollar for fees because you know you're in a weak position but you might be getting another 200 million in fees so immediately you've all you've more you've more than made up for that hole can i um so so you say say this 200 million 250 million figure is right right um so we have the relegation clauses in the means that wages are reduced by 50 or 25 whatever it is 50 feels massively harsh even even though these are the players that sent us down it felt like halving their wages seems crazy because they live lifestyles and spend money and and no one's going to give any sympathy to them honestly but i i think we all can appreciate that if we all had our wages reduced by half, we'd be in big, big trouble.

20:58Not that they will, but it's significant. So there's that. That's a way of saving money. And then if it doesn't cover the deficit, which it won't, then you'd look to raise around 200 million. Sorry. Say, realistically, we save 80 to 100 million pound in wages. We still need to find 150 million pounds so that we break even going into the championship. yeah as a worst case you would still need to make up a hole and and obviously there's sort of we won't get into but there's gray areas around what's uh pure profitability and what's cash so cash is sort of a bit of a problem for us for now but that would solve both issues really so the player sales assuming we would sell the sort of premium players if you like that we've got in the squad what players do you think they would look to move on but like financially what players would be why i think you'd do both center backs i think you'd probably get a 50 million from marrero maybe more for van der van um and as you say you're then clearing off two of your top owners as well so say you do five of players in that sort of bracket you might bring in let's let's call it an average of 40 million a piece you might bring in 200 million in fees plus you're saving yourself 25 million more in wages so you're you're reducing that wage bill again and we're talking about accounting here aren't we we're not talking about real no are we are we are we like So is that an immediate£250 million gone in revenue by getting relegated?

22:25It's, yes. I mean, it's money in the door. So yeah, Premier League revenue, matchday revenue. So the sale of these players, when you receive the money from a transfer, in terms of accounting, is that a lump sum that you can put on your books? Or is the fee amortised based on how often you receive the payments for each player? No, so yeah, sales all goes on straight away. but it's based on their value so we've had Romero for a while now so he won't have a big book value we sell him for 50 60 million most of that's going to go straight into your profit but the cash flow as you say might be staggered so you might not get that 50 million cash up front so where we will need to make sure we can sell enough players is to make up that cash flow high and we know we've had a bit of a problem with cash flow this season as well because we took a we took some of the Premier league revenue early with that Macquarie deal so that that's I think our biggest headache like it's been this season would be cash flow again next season well you know you know when you hear Venkatesham talk about changing the way we pay wages and we're going to start to compete with other teams that we consider to be our peers and we'll be more active in the Toronto market that isn't necessarily spending more money but offering more money to players better players to sign for Tottenham that what what does that mean when it looks like the accounts are in a precarious position not necessarily going down but but right now I think something came out the other day when we were what were the financial results that came out the other day yeah I mean there was some there was some concerning bits in them um they weren't the best set of accounts they were I mean revenue was up but costs were massively up and there are a couple of weird little bits in there like um so the operating expenses shot up by 80 million odd which you know will be a little bit inflation but also and holding more events you know they cost money to hold so your operating costs go up but 80 million is a lot for your operating expenses to have gone up and player sales dropped obviously because Kane dropped off the books so we don't get as much back in on player sales on the accounts and then the interest there was a weird one on interest it was something around And warrants, which are, all warrants are, is the right to buy a share in the future for a certain price.

24:42Because I get to buy BP shares for£2 in 2027 if I want to. You don't have to do it, but you've got the right to. But there were some of these apparently on some Spurs shares that were revalued. And that's spiked our interest by£23 million. And I'm not sure, I haven't dug into it yet to work out why that is. So I don't know if that's going to apply next year as well, in the next accounts, or whether that's a one-off event. but yeah that was a strange one so all in all our our interest went up again our interest up to sort of 70 80 million which is obviously a lot so so hopefully that's not a recurring thing hopefully it's a one-off revaluation doesn't apply next year but um they weren't the great our operating expenses shot up which is a bad thing but our revenue went up as well and our EBITDA which is sort of your it's a view of it's like a proxy for how profitable you are without all the accounting stuff it's like your cash profitability is still the best in the league it's like a hundred and i can't remember what it was 110 million or something so so it's still pretty good it's third behind man united and someone else um so we're we're still a profitable business a lot of those losses are depreciation for the stadium um where we've got a little bit of concern is a that interest because we'd still have to pay that regardless and b the amount we owe on player sales so we still owe a lot for players we've already bought so so they're the two things we need to just be mindful of when we go down and then they're the reason we will need to sell players if we can just keep the squad if we go down you said when when we go down it does say when yeah you might not but maybe that's just what my brain heard which we won't of course we'll be absolutely fine and this complete podcast will be redundant um i hope so i hope that we've wasted our time here ben i really do um do you think that um Do you think that those, the accounts that were published, the reports, the financial reports that were published, would they have been the same if Daniel Levy was still here?

26:38Yeah. Yeah, that was all for the Europa League season. So yeah, no change from... So it's not a case of he's left and we've lost financial control of the football club? No, no, not yet. We'll find out in the next accounts what, but obviously we won't see those until this time next year. but we'll find out in the accounts that end in June coming up what's happened in the season since he's left. So you've got Champions League money as well, right? Yes, yeah. So do we have money to spend? Should we go down or if we look optimistically to the future? When Venkatesman says we're going to spend more on wages and we're going to continue to recruit in the way we do, where's that money coming from if it isn't borrowing or if it isn't putting ourselves in further debt?

27:23Yeah. There's been a lot of talk about how the stadium is going to set us up for the future and the revenue is massively important. I want to actually ask you a question about revenue in a second, but where do you think that money would come from, from an accountant's perspective? If Enconception is going, we need to spend£200 million this summer and Matthew Collicott is going, what do you want to say? Where are you getting that from? Is that likely to be a conversation? Yeah, so I mean, our costs are high. We have a lot on players. our wage bill has climbed um yeah like i say so 250 million now so that's up 30 40 million from last accounts um well we're not we we're not in a terrible position so assuming we stay up we can spend money um but we do need to get better things like player sales to balance those books a bit more um brennan johnson would be a good example of that yeah exactly yeah so obviously we go down that's a terrible decision but assuming we stay up that's exactly what we need to do more of is when there's a market for our players that we don't really use we need to sell them for good money and put a profit on the books and get cash coming in because cash has been a problem the last year so we need to make more player sales that's the best way to obviously stadium generates a lot of cash but player sales would be how most clubs would generate that cash so we're not overextending the wage bill so that's good news like villa really snooker themselves every summer because they've got such a high wage bill that's taking up all of their psr and scr room so they can't and then go and buy loads of players.

28:51They have to loan players, as we've seen. Or sell players and then buy. Okay, I want to ask you a question about Villa and I want to ask you a question about Newcastle because I'm sick of hearing them moan about their inability to spend. But the revenue. So why is it so important that it's not profit, right? It's not generating us... No, is it generating an ability to spend? like how how important is revenue and the fact that the new stadium and all of the fiance concerts and all the things that we're much derided for putting on the go-kart track why is that revenue so important like we're ranked ninth we had we previously were ranked ninth across football as in terms of the most or the the ability to generate the most amount of revenue why is that important because it isn't profit like i thought revenue was vanity profit is sanity that's what i thought yeah i mean it's it's important because it's as you say it's not strictly profit it's not strictly what scr and psr are based on but everything is your revenue is how much you can bring in so it's your money in the door and then you take obviously all your expenses off of your revenue to give you your profit so it's vital that to continue to increase that is a really good thing and in an scr world it's a vital thing so so yeah we need to keep doing that is that the SCR as opposed to PSR SCR is the yeah the squad cost ratio so this is the UEFA one that we're now going to mimic we're going to do like a watered down version of the Premier League that to me looks largely pointless but in the European version they've actually seemed to have UEFA are actually enforcing this obviously I slapped Chelsea on the wrist Chelsea could end up getting a European ban when they miss this season as well because they're going to and Villa are the same yeah Villa are on watch as well so what so the Chelsea situation explain that last year I can't remember the details of what they got but UEFA basically put them on probation for two years, they said you've gone over, you're allowed to spend I think at the time it was like 80 % of your revenue, they've simplified it so they've said you make 100 million, you're allowed to spend 70 % of that now on player wages, transfers managers, so on your football spend so they've put this relatively simple model in, Chelsea went above it i can't remember how much buy but um they got a fine and they got a bit of a probation thing to say you do this again in the next two years and these are your list of punishments um so they have done it well they will do it again because they've just posted massive massive 245 million pounds 245 and then they're not allowed to under ser they've actually closed some of the loophole so you can't recognize like intra club sales of hotels and things like that to sister parties so they've actually done it properly um and chelsea as a result are probably in trouble with UEFA.

31:41So it wouldn't surprise me if they get something more serious, whether they'll go all the way to Champions League ban, I don't know. Transfer ban? Transfer ban, maybe. Yeah, and they could, I don't know how it interacts with it. I think they can impose that with FIFA, but I'm not sure. But yeah, they could certainly kick them out of Europe if they wanted to. They could withhold European revenue and also Chelsea, if they don't get Champions League anyway, they've got big headaches. So yeah, Chelsea are struggling. Villa are struggling. You live to see it, don't you? I'd love it. Expedia. Hey you.

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33:36marvel televisions wonder man all eight episodes now streaming only on disney plus i know you would because you love the numbers so to punish chelsea through the numbers that's like your dream that's yeah that's that's what drinks um so i want to take us back because obviously we we're supposed to be talking about um tottenham and the the risk of relegation and the financial implications attached and a lot of people think back to Leeds. And I remember this because I was, I mean, I'm not sure how old you are, Ben, but I remember this vividly. What did you say? 39. 39, right, right. So we're almost the same generation.

34:15Almost, I don't know if you remember the capitulation of Peter Reesdale's Leeds. What Leeds did was incredible. It really was. And it was the envy of many Tottenham Hotspur fans. and they built a team that really did compete. It was almost comparable to Pochettino's Tottenham side, but we did it in a different way. And Riesdale was a local man who just pumped tons of money that perhaps he couldn't sustain or shouldn't have done. And Leeds were great. They got to the semi-final of the Champions League and then it all sort of started to fall apart and then they got relegated. Now, a lot of people say there's a bit of a cliche and if it can happen to Leeds, it can happen to Tottenham Hotspur.

34:59What happened with Leeds and can it happen to Tottenham Hotspur? So, I mean, you could, in theory, say we went down once, stayed down, went down again. Yeah, you'd be in trouble. But the difference, I think, I mean, Leeds, as you say, what they did, they did really well, but they banked on that continued participation in Europe. They thought they were going to always be in the Champions League moving forward because they had that good a team. Yeah, they should have stayed in it, really. So, yeah, I think around the 70th century, they're in Europe every year when they saw the 2000s, maybe late 90s, early 2000s.

35:35They did well in the Champions League as well. And they actually borrowed money, I think, against future Champions League revenue. So they said, look, we're going to get this money in. And so give us the money now. We'll take a loan and we're going to spend it on players. We're going to get players on high wages. But, you know, not only did they not have that money yet, they weren't even guaranteed to get it um and then they didn't get it of course so so before you know it they had put themselves over a barrel they couldn't afford their wages they had high wages they had high player player fees owed um and they can afford it and then they went down which you know exacerbates it i think champion i think parachute payments had come in then but then they went down again so they just they overextended they had a period under performance and they went down the difference is we haven't overextended you know we're not a villa or a west ham we are in thank you to Daniel again we're in the draw of our costs we don't have a sky high wage bill that's 90 % of our revenue we're down at the 50 % as everyone knows and complains about but that will actually serve us pretty well when we go down because it's not a huge chunk we're not spending 90 pence of every pound we earn on wages so we don't have to do that next year either so if Villa were to go down next season and you know anything can happen we've seen what happened at Spurs right and we haven't gone down we're going to stay up but they would be in dire straits right they'd be in big big trouble yeah because they spend they spend still they brought it down a bit but they spend most of their revenue on their wages like at one point it was mad wasn't it's like 95 pence every pound they earned when went away straight out the door on wages which is that wages is that including transfer fees or is that on pure wages yeah pure wages and that's why they can't spend much on transfer fees so you'll always see the moaning when they can't buy a player they want to buy and their fans will start moaning because and are typical they want to keep us down it's the it's the the big six elite is to try to keep the little man down it's just a poorly run club like i mean if you could argue a well-run an ambitious club and some people some of our fans do because i say look yeah but they've gone out they've got these players in they've now got into the champions league but the problem is they're now like leads they're banking on staying there they're banking on doing well every season like chelsea as well if they suddenly have a couple of years where they're not like we we would we would not so assuming we stay up we can still spend in the summer we can still go again man united could as well chelsea aston villa they can't weather they couldn't weather two seasons with no europe they would then have to have fire sales they would they would then be in trouble even if they stayed in the league if they went down even more so so they have put themselves at much more risk than we have so yeah we've been conservative but in the event of a relegation that would actually you know serve us pretty well for those that don't know um the sort of key figure in in in the conversation around what went wrong at Leeds United wasn't necessarily what was happening on the pitch.

38:19David O 'Leary was their manager when they were flying towards Champions League glory. They signed a player called Seth Johnson, who was decent at the time. He played for Derby, he was on about five grand a week. And what the agent demanded to move to Leeds was a£13 ,000 pound week contract which was sizable at the time what Peter Riesdale did was give him a 30 ,000 pound contract that went up to 37 ,000 pounds which meant that the he was one of the highest played players in Premier League overnight it's like signing it'd be like signing uh maybe maybe signing Balaba from Brighton and putting him on 250 grand a week that's what that's what that was like so you have there was many sort of criticisms of daniel levy perhaps in terms of negotiating the value of a player into to the club rather than the amount another club wants for you to sign him he had the club in his best interests perhaps um so yeah there are structural differences but from in modern football there's uh the psr or there is the uh SCR as well.

39:42How impactful would that be for Tottenham Hotspur going down? Do we not have to acknowledge it because it's a Premier League rule or does this impact EFL clubs as well? Yes, the EFL have a slightly different system. So you can make losses, smaller amounts of losses. You can make losses of £40 million, I think, or£39 million over three years. Some of that has to be guaranteed by owners. I think it's only 5 million as standard per season but you can do up to 13 million per season if your owners guarantee 8 million of it which means they sort of say we're gonna take that hit ourselves we're not right so you can lose money if the if it's coming from the owners yeah and the premier league is in the sort of structure but it's just higher higher limits of 105 um so yeah it's um it's smaller um but like the premier league system you can deduct cost related to infrastructure so our depreciation would be stripped out um for the stadium you can deduct costs for youth development for women's teams things like that so they've got similar carve outs so we look like yeah we made a big loss in our last accounts a pre-tax loss but once you take out things like depreciation things like that we're fine for psr and likewise we would be okay under the championship rules again we we would we would need to regardless we'd need to make some sales but um yeah our losses aren't as big as they look like in the headlines because you take out all these sort of accounting things that actually wouldn't be accounted for within those rules we discussed those previously um and they are interesting but they're just not real yeah yeah we met we made a profit of 66 million in 23 24 but you know on on the headlines we made a loss but underlying we made a profit because you take off all these other things so so we made a profit of 66 million but if we hadn't accounted for it correctly, we would owe the tax man a significant amount of money, I'd imagine.

41:32Yeah, it's all these things you can bond. Like we said before, depreciation on the stadium is the big one for us. You know, we can, I can't remember how much we write down a season, but we say the stadium is worth £7 million less a season and that counts as a loss on your accounts because your asset is less valuable every year on paper, but really it's, you know, it's not. It's, you know, we're going to go sell it next week so it doesn't matter, but we get to do that to our accounts every year. Ben, I just want one final question stripped of exaggeration what is the absolute worst case scenario if Spurs do go down we're not going down we're staying up easily we're going to stay up but I think yeah I think we start I think 250 million let's say hits the hits the accounts we're at 550 now so yeah you're talking 40 % let's say 45 % of your revenue down personally I think even if we went down and we sold 7-8 players we would I think we would have quite a lot of fun in the championship, I think we would win almost every week.

42:30I know people want to scalp and stuff like that, but I think we're just out of quality deficit to a lot of the teams there. And I think we'd come back out of Leeds and Burnley can get 106 points, then we're going to get 100 points plus as well. So, aren't you great at Boston? So, yeah, I think it'd be fun. So, the absolute worst-case scenario is we get 106 points next season. Worst-case scenario, if we go down and we have a lot of fun and then we come back with a younger, hungrier squad that then goes and wins the league. So worst case scenarios, we'll win the Premier League in two years rather than one year, I think.