A football finance expert has revealed why the Manchester United owners may have to pay £11m to Tottenham Hotspur, but it has nothing to do with any transfer dealings between the two clubs.
Man United have seemingly won a decisive battle against the Lilywhites already this summer, with Bryan Mbeumo expected to snub Spurs in favour of a move to Old Trafford.
However, Tottenham are now looking to score a big win over the Red Devils in court after INEOS, who own a minority stake in Man United, reneged on a multimillion-pound, five-year deal with Spurs.
INEOS Grenadier car became Tottenham’s ‘official 4×4 vehicle partner’, but after the company ran into some financial trouble, they decided to end the sponsorship agreement with Spurs two years before the deal was due to run out.
Man United expected to reach a settlement with Tottenham
Earlier this month, Spurs took High Court legal action against INEOS and it has since emerged that Tottenham are seeking as much as £11m from INEOS Automotive as compensation for discontinuing the agreement.
Football finance expert Stefan Borson has now explained that the £11m figure is due to the estimated revenue Spurs have missed out on over the length of the contract.
He pointed out that Tottenham Hotspur have not been able to secure a sufficiently lucrative sponsorship to replace their agreement with INEOS.
Borson told Football Insider: “You have to understand what that £11million is.
“The first thing is it’s a very odd situation because I seem to recall that when it came out that that agreement had been terminated, the parties said that they basically agreed a settlement in respect of it, and that obviously seems not to have been true.
“INEOS effectively owe Spurs the payment for the rest of the season in which they terminated, and then the claim is for the two years left of the contract now. Of course, Tottenham will have a duty to mitigate that loss by going and finding a replacement sponsor.
“So, the way it works is this is a contractual claim and they will effectively have to show the court that they tried to mitigate the £11 million of lost revenue by trying to find a replacement.
“I think it’s interesting that they’ve not yet been able to. I think it’s also interesting that it’s about a £5 million-a-year contract. It’s quite a lot. It’s pretty sizable given the properties.
“I think INEOS were the official vehicle partner and obviously also had the pitch side sponsorship, so that’s what they bought for £5 million. I think £5 million a year for that feels like quite a lot, but we know that’s what it was. It’s probably quite hard for Spurs to find a replacement.”
Every penny counts for Spurs amidst cash flow problems
It has been well documented that Tottenham have cash flow problems due to their outstanding transfer debt.
Some sources have suggested that the only way for Spurs to spend big this summer is for ENIC to invest cash into the club, which is not something they have been keen to do since taking over the North London side back in 2001.
This additional £11m from Man United could thus make a big difference for Tottenham as they look to rebuild their squad at the start of the Thomas Frank era.
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