Tottenham Hotspur have joined fellow Premier League club Newcastle United in choosing to cut the wages of its non-playing staff. According to a statement on Spurs’ website from chairman Daniel Levy, the club has cut the wages of 550 non-player staff by 20% for April and May, in some cases placing them on furlough, as a means of cutting costs in the wake of the coronavirus pandemic, which has led to the stoppage of football with no income coming.
The statement, which described the curtailing of sport and other social activities in the UK in order to curtail the spread of the virus and save lives as the right thing to do, called on other clubs, as well as players and managers, to “do their bit” to help football clubs survive an unprecedented financial crisis brought on by unforeseen world events.
The Club’s operations have effectively ceased, some of our fans will have lost their jobs and most will be worried about their future. Our sponsors will be concerned about their businesses and our media partners have no certainty when we may play games again or whether we will be allowed to play in front of our fans. In the meantime, the Club has an annual cost base running into hundreds of millions of pounds.
We have seen some of the biggest clubs in the world such as Barcelona, Bayern Munich and Juventus take steps to reduce their costs. Yesterday, having already taken steps to reduce costs, we ourselves made the difficult decision – in order to protect jobs – to reduce the remuneration of all 550 non-playing directors and employees for April and May by 20% utilising, where appropriate, the Government’s furlough scheme. We shall continue to review this position.
We hope the current discussions between the Premier League, PFA and LMA will result in players and coaches doing their bit for the football eco system.
— Daniel Levy, Tottenham Hotspur Chairman
The UK government has implemented a plan by which it will cover 80% of the wages of workers who have been placed on furlough. A careful reading of Levy’s statement suggests that the club has furloughed non-essential staff who are eligible for the government’s plan, with remaining staff having their incomes cut by 20% for the next two months.
But what about player salaries, which dwarf those of non-player staff? The Guardian notes that the PFA, the union that represents Premier League players, will resist efforts by clubs to impose a temporary cut on player salaries, which represents by far the highest operating costs for most football clubs. Setting the example of Barcelona aside, which Levy noted specifically and whose players voluntarily opted for a wage cut, it appears that most major clubs’ hands are tied when it comes to choosing to cut the wages of footballers.
Clubs are determined to act collectively rather than unilaterally but Gordon Taylor, the chief executive of the Professional Footballers’ Association, has said his union will block a blanket wage deferral for players.
Taylor suggested some owners could look to capitalise on the coronavirus pandemic by saving money on salaries, a view privately echoed by some agents, but clubs are worried about their income drying up.
— The Guardian
Tottenham and Newcastle are the first clubs to temporarily cut wages for non-player staff, but it is expected they will not be the last to do so. Even so, the optics of the wage cuts look bad when combined with the revelation, also announced recently, that Levy’s executive salary increased by £4m in 2019.
Tottenham chairman Daniel Levy announces pay of all 550 non-playing directors and employees cut by 20% and "where appropriate" furloughing.— Rob Harris (@RobHarris) March 31, 2020
Also today, emerges Levy's pay package in 2019 went from £3m to £7m, inc £3m stadium completion bonus
Wage cuts are never a good thing, clearly. Levy is making the case that failure to cut costs now could impact the club’s healthy financial situation in the long term, something that Levy has prided himself in creating and fostering. In his statement, he even obliquely hints that the ongoing crisis could impact Tottenham’s offseason spending on player acquisitions, but correctly notes that the impact on football pales in comparison with the human cost of the pandemic.
When I read or hear stories about player transfers this summer like nothing has happened, people need to wake up to the enormity of what is happening around us. With over 786,000 infected, nearly 38,000 deaths and large segments of the world in lockdown we need to realise that football cannot operate in a bubble. We maybe the eighth largest Club in the world by revenue according to the Deloitte survey but all that historical data is totally irrelevant as this virus has no boundaries.
There is, of course, another option rather than staff or player wage cuts. Tottenham’s owner, Joe Lewis, is a billionaire who has remained almost entirely hands-off in financially supporting the club. A cash injection from Lewis — perhaps by selling one of his numerous paintings — could mean the club could meet its financial obligations during this fallow period without having to take the onerous step of cutting wages for anyone. That step would be unprecedented from Lewis, however, and it doesn’t appear as though anyone should be waiting for that to happen.
These are unprecedented times. In some ways Tottenham are fortunate to be in as healthy a financial situation as they are currently, even with the new stadium, as it allows them to make painful decisions to weather the storm better than perhaps many other, smaller clubs. However, nobody could — or should — argue that cutting the wages of non-player staff is a good thing, even if doing so helps keep the club financially viable in the future.