Spurs bid lacks credibility

How credible is Jahm Najafi’s reported intention to bid for Tottenham Hotspur.   His group MSP were interested in purchasing a minority stake in fellow Premier League side Everton.

Talks about acquiring a minority stake in Everton have continued since then. Buying Tottenham for £3.11bn would be an altogether different level of financial commitment, so much would depend on the funding of the other partners in Najafi’s consortium.

An MSP deal for Spurs would be a blow to Everton and in particular owner Farhad Moshiri’s hopes of bringing additional capital into the club.

The expectation according to multiple sources is that Spurs would want far more than the £3.11bn reported as Najafi’s planned offer.

Clubs are often valued in terms of the sale price as a multiple of the revenue. And while European clubs have traditionally been sold for three to five times their revenue, Premier League owners are well aware of the fact that in the US, teams often go for eight, 10 or even 12 times their revenue.

So hypothetically, if Spurs were to be sold for $3.75bn (£3.11bn) that would represent almost exactly seven times their 2021-22 revenue. But Tottenham are likely to value the club at far more than that. At least eight times the club’s revenue (£3.5bn), more likely nine (£4bn) or even ten times (£4.4bn).

On top of that, Spurs’ revenues for the 2022-23 season are likely to be significantly higher thanks to the club’s return to the Champions League and the growing number of non-football events held at the stadium. They might even hit £500m. (The Beyonce concerts alone are set to rake in millions of pounds for the club.) So by this equation, the asking price for the club would likely be even higher, and further away from £3.11bn.

There is a view that the Chelsea sale effectively reset the market for what a top club should be sold for. And that, while Chelsea have an old ground with an expensive stadium renovation project ahead of them, Tottenham opened their new stadium in 2019 and it is already bringing in far more in matchday and event revenue.

With that in mind, the expectation is that Tottenham would command a higher sale price than Chelsea did last year, despite the club’s relative lack of success on the pitch.

It remains to be seen when Najafi will make an official approach to Tottenham, but the indications are that his move is unlikely to succeed, certainly at the reported figures. And even if ENIC do decide to sell to Najafi’s consortium, that does not necessarily mean that Levy would leave the club.