Bosman ruling costs Spurs pounds 7.3m

Alan Sugar, chairman of Tottenham Hotspur, said yesterday that the company had taken a pounds 7.3m provision to adjust the balance sheet value of the football club's players in the light of the Bosman ruling. The club's wage bill would rise by 20 per cent to pounds 10m a year due to the renegotiation of some player contracts.

This followed Manchester United's statement earlier this week that its wage bill would rise by pounds 5m a year due to the negotiation of longer player contracts.

Mr Sugar accompanied his announcement with a coruscating attack on the finances of football, which he said had not yet absorbed the full implications of the Bosman ruling. This ruling means that players can move without a transfer fee at the end of their contracts.

"This [the Bosman ruling] is a devastating blow to the football industry," Mr Sugar said. "People have not fully adjusted to the implications. It is a real setback."

He said that larger transfer fees, such as the pounds 15m move of Alan Shearer from Blackburn Rovers to Newcastle, could not be sustained in the future though higher wages were likely to result.

"It will be important to sign younger players on longer contracts and develop your youth policy. Otherwise we might as well put the padlock on White Hart Lane and get the property developers in and put a supermarket there."

Spurs has amortised the value of its players down to zero over the course of their contracts. The current value of its playing staff is pounds 10.2m in the balance sheet.

He was speaking as Tottenham announced pre-exceptional profits of pounds 11.9m for the year to 31 May. The club is changing its year-end to the end of July to bring it into line with the football season.

The club has set aside pounds 8m of April's pounds 11m rights issue to develop the north stand. Work should start at the end of this season and take the capacity to 36,000. Cash balances stood at pounds 12.3m and Mr Sugar said funds were available for new players.

Group sales increased to pounds 37m from pounds 25m. Sponsorship revenues were 55 per cent ahead, largely due to the new deals with Pony and Hewlett Packard. Stripping out player trading, underlying profits almost doubled to pounds 8.9m

The company said the main contribution in the current financial year would be increased revenue from the new television deal with BSkyB. The shares fell 2.5p to 439p.