Exclusive: Tottenham to wipe out debts with major deal amid £3.5bn takeover links
Tottenham have a way to wipe out their stadium debt making them a more attractive proposition to prospective buyers.
That is the view of football finance expert Dan Plumley, who explained to Football Insider how Daniel Levy may be able to drive up the value of Spurs in order to sell the club at his asking price of £3.5billion.
Sources told Football Insider on 5 June that Tottenham were edging closer to selling a stake in the club that would put their valuation at £5bn, amid links to a sale to Qatari investors, with ex-Newcastle chief Amanda Staveley and US-based MSP Sports Capital among those linked with a part-takeover in recent months.
That figure is £1.7bn higher than Forbes’ independent valuation of the North London club, which sits at £3.3bn.
Plumley previously told Football Insider that he could see Tottenham being worth in the region of £3-4bn.
Tottenham stadium debt could become a sticking point
The Athletic revealed that Levy had negotiated a club-friendly financing agreement on the debt used to pay for Tottenham’s new stadium to be built.
Spurs are paying an interest rate that is lower than inflation, meaning the club are “not really paying any interest at all”, in financial terms.
However, if Levy sells the club, the debtors can exercise their “change-of-control clauses”, meaning new owners would have to pay around £20million more a year for the next 19 years than current rates.
Stadium naming rights deal can make Tottenham debts ‘net neutral’
Speaking exclusively to Football Insider, finance expert Plumley revealed that new owners can offset this additional cost with a stadium naming rights deal.
Barcelona, for instance, reached a four-year agreement with music streaming platform Spotify to rename their iconic Nou Camp for €290m (£235m) in 2022 [BBC Sport].
Football Insider revealed in February that Tottenham had turned down offers for the naming rights to their new stadium.
However, with Levy looking to sell the club for £3.75bn, selling those rights could offset the increased payments new owners would need to make, and allow the current chairman to sell the club for a fee closer to his current asking price.
Plumley said: “I think [a sale price] probably could be both and everything in between.
“And this is the thing with valuation. I’ve always had Spurs in that benchmark of, you can get it to £3-3.5bn, that’s a valuation range or you can look at the lower side of that.
“But then we have to look at what’s driving that valuation. The Champions League will tick that up a little bit on a revenue basis, so you can argue for a bit of an uplift there.
“The new stadium, as an asset value, will be in that mix, which is where, again, you can push it higher and into the valuations that Levy is talking about.
“The debt association with that stadium is a big factor as well, a new owner’s got to come in and take on some of those interest payments.
“There’s a counter scenario to that where you could wipe some of those out by a good stadium naming rights deal, so that becomes kind of net neutral.
“You’ve got the pros and cons all the way through.