Tottenham Hotspur is in talks to secure a “significant increase” in equity as the football club seeks to compete with deep-pocketed rivals in the English Premier League. Rothschild & Co, which has long-standing ties to the club, was advising on the talks, according to Spurs chair Daniel Levy, who noted that Spurs has invested more than £600mn in its men’s and women’s first-team squads since opening its new stadium in April 2019.
“To capitalise on our long-term potential, to continue to
invest in the teams and undertake future capital projects, the club requires a
significant increase in its equity base,” said Levy. Spurs would be just the
latest Premier League club to raise cash to fund the need to compete in a
division of rivals owned by billionaires, private equity and sovereign wealth.
Spurs were ahead of many rivals in building a modern arena
that helps to diversify its revenues, bringing in star music performers such as
Beyoncé as part of a wider events business. The stadium has transformed the
club’s fortunes, increasing match day revenues and helping to draw in new
partners such as global car racing series Formula One. The duo opened an
F1-themed electric karting attraction at Spurs’ stadium in February, in another
sign of how the club was trying to diversify its revenues and become an
entertainment hub.
The club has planning permission for a 180-room hotel and
about 50 apartments to the south of its stadium campus. Other Premier League
clubs are playing catch-up with Spurs. Petrochemicals tycoon Sir Jim Ratcliffe,
who completed the acquisition of a 27.7 per cent stake in Manchester United in
February, has set up a task force to build a “world class” stadium and
regenerate its Old Trafford home.
Levy confirmed talks with investors as Spurs reported that
its annual revenues jumped to £550mn in the year to June 2023, from £444mn a
year earlier. The increase was driven by match day revenue, prize money from
participating in the elite Uefa Champions League, and commercial income that
includes sponsorship and third-party events.
Tottenham said its highest-paid director — assumed to be
Levy — was paid £6.6mn in the year, including £3.6mn in pay and £3mn in
bonuses. The club declined to confirm the director’s identity. Chairman Daniel Levy defends his increase in
pay from £3.265m to £3.581m PLUS a £3m bonus by saying “have you seen the
increase in ticket prices for next season? They’re brutal”
Operating profit increased to £139mn from £112mn. However,
the club reported that its annual net loss widened to £86mn in the financial
year from £50mn, citing “significant and continued investment in the playing
squad”.
The efforts to secure new investment come after Joe Lewis,
whose family is connected to a trust that has a majority stake in the club, in
January pleaded guilty to insider trading in a US federal court. The
Bahamas-based British billionaire had owned Spurs for about two decades until
giving up control in October 2022. The Premier League side has previously
described the charges against Lewis as a “legal matter unconnected with the
club”.
Football finance guru Kieran Maguire notes: ‘Whilst Spurs losses over last three years are high
at £232m the annual depreciation charge of £72m for stadium etc are exempt
under Profitability and Sustainability Rules so no worries about a Premier
League charge for beaching the limits.’
Spurs matchday income for 22/23 was a record £117.6 million.
With an average home attendance of 61,605 and 24 home matches including cup
games this means that the club generated an average £79.61 per fan per match
pre VAT, which works out at £95.53 after adding VAT.
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