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Senior Tottenham sources very confident about £100m off-pitch deal
From a business perspective, Tottenham rarely put a foot wrong.
Since moving to the world class Tottenham Hotspur Stadium in 2019, chairman and co-owner Daniel Levy has overseen a virtually unprecedented upturn in sustain financial performance.
Revenue has almost doubled, with matchday income now twice what it was before the move and expected to rise further, while commercial income has trebled and continues to soar.
And make no mistake, these achievements correlate with the club’s long-term prospects on the pitch in terms of investment in the playing squad.
Spurs fans are sometimes frustrated with what they perceive to be a conservative approach in the transfer market.
But the club’s amortisation bill (the cost of transfers in the financial accounts) has risen every non-Covid year since the move to the new stadium and was just shy of £110m at the last count.
However, there is one area that the club have failed to squeeze maximum value from the new stadium.
To explore this topic, TBR spoke exclusively to Liverpool University football finance lecturer and Price of Football author Kieran Maguire.
Spurs will take confidence from big new naming rights deal in London
When Spurs moved to the Tottenham Hotspur Stadium in 2019, a naming rights deal was an A1 priority.
Levy has since distanced himself from this stance, although now-former chief commercial officer insisted that it was his mission to secure a naming rights deal in his time at the club.
In a significant new development, Twickenham, home of the England rugby team, has struck a £100m, 10-year deal with German financial services company Allianz.
How will Spurs react to this new deal? Will it provide a benchmark for the value of their own rights?
“They will greet this with mixed emotions,” said Maguire.
“We now have two large stadiums in London, the Emirates and Twickenham, which have naming rights.
“Senior sources at Spurs were very confident that they would be looking at somewhere in the region of £20m per year.
“It has all gone very quiet since then. Whether there was a misalignment in terms of expectations and reality or whether negotiations collapsed because of Daniel Levy’s negotiation style is unclear.
“People are prepared to walk away from the table because there are other options.
“It is a bit like a half-life on an isotope. The longer it takes to get a deal over the line, the more the value decreases.
“But the fact that Twickenham is an established stadium and is not used very frequently for high-profile events and they managed to get £100m for it will give Spurs a degree of comfort.“
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Spurs naming rights market saturated as Man United now in the hunt for deal
Spurs, West Ham and Everton have all been known to be on the lookout for a naming rights partner in recent years.
However, Man United have now become the biggest new name to also join the collection of clubs seeking to monetise their brand at their home ground.
Snapdragon, who are United’s front-of-shirt sponsor, are reportedly interested in the naming rights for Old Trafford and, potentially, the rights for a planned entirely new stadium for United.
United will be the biggest ticket in town, claims Maguire:
“If you’re a blue-chip company, you’re looking to partner with a blue-chip club.
“There is nothing more blue-chip than Man United. The level of interest in Premier League football is universal. It is the most popular sport.
“Getting your brand into the discussion is the difficult bit. Provided it is dealt with sensibly, this is a big opportunity.
“From the club’s point of view, it is free money for the likes of United and Spurs.
“There are almost zero costs involved. You may have to reconfigure a few seats to accommodate more signage or whatever, but that is relatively painless and cheap.
“You would also expect that to be factored into the price that a sponsor pays.”
Spurs naming rights get boost after official announcement
Matchday income has been the biggest individual driver of growth since the move to the new stadium, but commercial revenue is not far behind.
Spurs have used the stadium to host concerts for pop superstars, as well as blockbuster sporting events like the NFL London Games and heavyweight boxing prize fights.
Now, Tottenham have been officially granted permission to nearly double the number of non-football events they can host per year, from 16 to 30.
“This is fantastic news for Spurs,” said Maguire.
“If we take a look at where they were at the old White Hart Lane, they generated £73m in commercial income in 2016-17.
“They have managed to treble that already by moving to the new stadium. That is a testament to the vision of Daniel Levy.
“Hosting football matches is a dumb game in the sense that you have a huge piece of real estate which is effectively closed 11 months out of 12.
“By having this policy where you can host lots of events in the stadium, Spurs are vindicated in spending so much on it.
“We are in the 21st century, and people have far broader interests than just football. Having the ability to capitalize on that through the stadium with events makes a hell of a lot of sense.
“In a PSR environment, having a multi-use, multi-function stadium with a retractable pitch simply makes sense in the modern era.“
What will new investors’ view be on Spurs naming rights?
Levy has long said that he would listen to offers for investment in Spurs, and he revealed earlier this year that he had engaged the Rothschilds bank to seek out new capital.
It is believed that Spurs value themselves at around £3.75bn and would be open to selling a 10-15 per cent stake.
The likes of Amanda Staveley have been linked with a minority investment in Spurs.
Would a new investor want a say over the naming rights of the club’s greatest asset, the stadium?
“There is the issue with minority investors perhaps coming in,” suggested Maguire.
“Daniel Levy is the chairman, and it is his job to deliver the wishes of the shareholders.
“I am sure he will listen to them as attentively as he presently listens to them.”