Tottenham could agree £3.3bn takeover price as US document reveals all
The takeover value of Tottenham could soar to £3.3billion if they show would-be investors their capacity to further exploit the US commercial market, Football Insider has been told.
MSP Capital, a private equity firm fronted by Iranian-American financier Jahm Najafi, is working on a £3.1bn offer to buy Spurs in full.
Analysis by industry experts CLV Group meanwhile has found that Spurs are missing out on £28m in annual revenue from three key growth areas – digital membership schemes, streaming services and virtual matchday experiences.
The Fan Relationship Index zeroed in on the US market to illustrate how clubs can maximise revenues by using data and insights on their global fanbases.
CLV Group CEO Neil Joyce told Football Insider that the potential £28m upswing identified in the report could add £150-£200m to Spurs’ enterprise value.
“US fans are increasingly interested in the Premier League, but the affinity in a lot of cases stops there,” he explained.
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“They haven’t necessarily made their mind up about which club they are going to follow and engage with. Tottenham have a third less US fans than Arsenal and around 50 per cent less than Man United. That impacts revenue opportunity.
“On the surface, the opportunity for Spurs looks quite narrow compared to other Premier League clubs. But everything is still up for grabs in the US at the moment.“
Investment groups across the pond – such as MSP Capital – are uniquely suited to realising new-age revenue opportunities, Joyce insists.
“American owners have been predicated on investing in the big NFL and NBA franchises. It’s a model they are used to. But the Premier League is big, big money for an investment group from anywhere in the world.
“We looked at the traditional benchmarks that go with private equity and return-on-capital ratios. They typically look for two to four times returns. It’s highly attractive on that level right now.
“The US owners understand average revenue-per-fan. The Dallas Cowboys’ average $64 per fan. For most Premier League teams, the average is usually less than £5. But they have these huge global following that the Dallas Cowboys don’t.
“They can see huge upside, combined with digital propositions – fan tokens, virtual matchday experiences, and live streaming. It’s totally uncapitalised.“
And focusing their firepower on the US market could see Spurs’ market value skyrocket, and that is before the money-spinning potential of India and the Middle East are taken into consideration.
“Spurs’ revenue opportunity of just less than £28m purely in Europe and the US, that alone will give you an incremental enterprise value of about £150-200m in market valuation.
“The people buying into the club would realise immediately that they can generate at least the same if not more if they tap into India and the Middle East.
“Spurs are renowned for being commercially savvy in terms of the way they have looked at the value of the club. I’d be surprised if they weren’t looking at the opportunity to monetise the global fanbase as part of takeover negotiations.
Joyce claims there is particular value in streaming if clubs were in a position to sell their own media rights, while data insights into their supporters are equally lucrative.
“If you could stream your own matches, you have a value proposition that will bring infinitely more fans directly to the club.
“In the US, we’ve identified around 2m Spurs fans who don’t spend anything on the club. If 2m Spurs fans subscribed to a service for for $10 per month, that’s $20m right there.
“Spurs have an advantage in terms of capitalising on digital opportunities There is no silver bullet that says ‘if you do X, you generate Y’, but they have future-proofed the new stadium.
“They have the ability to communicate on a second screen while you’re watching the game in the stadium. They could, in theory, send a message to your phone saying ‘there is no queue, so come and get another drink’.
“There are missed opportunities on pre-season tours. It would be a quick win if they created more digital ticketing facilities because they would get access to fan data themselves rather than handing it to a third party.
“With Web 3.0, you can use fan tokens to create an engagement mechanism to tell you what they care about and are interested in. You can test these initiatives and align them with some of the brand partnerships these clubs have.
What practical steps do Spurs need to take before they can exploit these untapped growth areas? It’s about long-term vision, says Joyce.
“It’s a test-and-learn approach. They need to not just look at the initial payment from these sponsors and instead focus on global commercial activations that they can put in place.
“Beyond a time-cost investment, there needs to be a commitment from the clubs to capture the opportunity in the long term. The Fan Relationship Index is about relationships and the correlation of those relationships with value.
A lot of clubs are beginning to look at fan lifetime value rather than focusing solely on those who spend money to watch games or are part of a ticketing membership programme.
“It’s about a wider engagement metric, direct and indirect revenue that can be generated over the lifetime of a fan. That mindset shift is going to be really important. The clubs that embrace it the most are going to be the most successful.
“But one of the most critical elements is the recruitment of people to do this. Clubs recognise the importance of this. They need to invest heavily in data and content expertise.
“Many clubs have access to or are in the process of implementing a lot of the technology platforms that are out there right now. The lead time shows that these increases in revenues could be achieved within 12 months.”
In other news, major update on Tottenham bid to sign Wilfried Zaha.