Finance Insider Column: Tottenham takeover – Daniel Levy following Real Madrid model as talks revealed
Daniel Levy has been tinkering under the bonnet at Tottenham for over two decades – and the club’s new commercial deal with Formula 1 might just be the chairman’s ultimate champagne moment.
The partnership, which will run for the next 15 years, aligns Spurs with one of the world’s most illustrious sports brands and nearly half a billion potential new consumers.
And while only a small fraction of Formula 1’s audience is likely to engage with Spurs as a direct result of this deal, the ambition has to be respected, as do the club’s forays into American football, rugby and boxing.
Commercial expert Richard Busby, CEO OF BDS Sponsorship, has read the tea leaves and told Football Insider that he forecasts that the club could eventually become a multi-sport institution.
It’s an approach that Real Madrid, a club admired by Daniel Levy, have employed with a parallel basketball team since the 1950s. The revamp of the Santiago Bernabeu meanwhile will also have facilities for tennis, NFL and eSports.
It will be something to think about for Levy while he swaps stories with other bigwigs from the world of sports business at the Bahrain Grand Prix this weekend. Sources have told this site that he will be in attendance.
It was reported that the deal with Formula 1 might indicate the desires of F1 owners Liberty Media to eventually take over Spurs, although those reports were quickly – and, it is understood, accurately – kyboshed by Sky Sports.
However, as Football Insider revealed earlier this week, MSP Sports Capital’s interest in the club is genuine.
The New York-headquartered private equity firm has enlisted the help of a consultancy firm to conduct due diligence on both the club and the governance models of the Premier League and Uefa.
But industry experts have told this site that this is usually one of the earliest stages of a would-be takeover process, before a concrete plan has been constructed.
In any case, it is understood that MSP are still interested in a minority stake – around 20 per cent – in Everton. And conflict-of-interest rules mean that any such deal would preclude them from a Tottenham takeover auction.
Football Insider has consistently been told that, while neither Levy nor Joe Lewis is actively seeking investment, they would always listen to offers.
Levy met with Qatari representatives for explorative talks in January, as was widely reported. But that group has now decisively pivoted to Man United, for whom they have submitted a circa £4.5billion offer.
MSP reportedly value Spurs at approximately £3.1bn. While Football Insider is unable to verify that figure, it does seem astonishingly high for a club whose brand, even with blue-chip commercial deals aplenty, is dwarfed by United’s.
The stadium is a considerable factor, of course. But the global earning power of Spurs remains the lowest of any of the so-called ‘Big Six’ sides.
Figures collated by the agency CLV Group show that Spurs could are missing out on an extra £28m in annual revenue from the US market across three growth areas: digital membership schemes, streaming, and virtual experiences.
That, claims CLV Group CEO Neil Joyce, could add an extra £150-200m to the enterprise value of Tottenham.
But the £28m figure was the lowest of any of the 12 teams presented in the analysis, which included clubs from England, Spain, Italy, France and Brazil.
Levy still believes there are major gains to be made in the sponsorship racket. He and commercial director Todd Kline had negotiated a three-year £42.5m deal with the South Africa tourist board before the company was forced to renege on the agreement because of a domestic backlash.
Speaking about that deal, sport and geopolitics expert Professor Simon Chadwick has insisted that the Premier League is now “the most cost-effective advertising platform in the world.”
Plenty of room for growth then. And it is this columnist’s considered opinion that Levy will want to oversee it himself before eventually cashing out and joining business partner Lewis in the Bahamas.
In other news, Tottenham step up Alex Scott chase after Man City masterclass amid “£20m” update.