Chelsea and Man United show how much Spurs are really worth – Finance expert says
Football finance expert Kieran Maguire believes that the reported £3.75 billion valuation of Tottenham Hotspur is well within what investors would be willing to pay, given the club’s revenue-earning potential.
Tottenham are open for business
There has been a lot said and written about a potential minority takeover of Spurs over the last year, with Daniel Levy and co reportedly looking to bring some investment into the club.
TBR Football backs up what we have already heard, stating that the Lilywhites are open to finding new shareholders, with a 10 to 20 per cent takeover on the cards.
However, the outlet questions if the £3.75 billion valuation of Spurs is realistic, pointing out that potential investors would get an excellent return if they were to put their money in the S&P 500 instead.
Maguire is in no doubt that there will be interest in the price, pointing out that many will view Tottenham as a great investment.
He told TBR Football: “Chelsea were acquired for around five times annual revenue. Jim Ratcliffe’s acquisition of Man United meanwhile was based on a revenue multiplier with a factor of seven.
“If this was applied to Spurs, who had revenue of £550m in 2022-23, the £3.75bn price being discussed does not look overly excessive given that Spurs have such tight cost control.
“They also don’t have to go and pay many bonuses for winning trophies. Put all those together and they are an appealing franchise. The infrastructure costs have already been incurred. They have borrowed at very favourable rates.
“They also have a global fanbase who want to come the stadium to see Son and other stars. This all attracts investors.”
Spurs could charge fans who don’t even attend
It has been reported that Cosm, an immersive reality experience that went viral after screening Man United’s season opener against Fulham in August, also aired the North London derby on Sunday (TBR Football).
Maguire believes that augmented or shared reality experiences could be the future, predicting the rise of mini stadiums across the world to screen matches.
He added: “There is no doubt that investors and American investors in particular are very bullish about the utilisation of the metaverse to expand the fan experience.
“The mantra is: ‘we can’t get enough fans in the stadium, so can we get more stadiums to fans?’ This can be one of two ways. For one, the creation of purpose-built stadiums that hold thousands of fans who can consume the product as if they were at the Tottenham Hotspur Stadium.
“Anyone who has seen the ABBA Voyage show knows avatars can be very realistic and the technology is getting better all the time. That is one way the product can be consumed. Private equity is certainly willing to back this venture. But it’s high-risk, high-return.
“From an owner’s point of view, you don’t need to pay matchday costs to the same extent. As well as having a stadium in North London, you can have these venues in Melbourne, Milan and Miami.
“You could have 20 stadiums dotted around the world each holding each holding 12-20,000 and all of a sudden you’ve got 250,000 people paying top dollar to watch matches take place.
“After Spurs against Arsenal, you could have other big matches and you can effectively just treat the venues as you would a cinema. From an investment point of view, it’s very attractive.
“The other way to approach this is to use a virtual reality approach and have an immersive experience using a headset. That is probably not as attractive as what Cosm are offering, which is a shared experience. And everyone knows that these things are better as shared experiences.”
Spurs Web Opinion
The Premier League has certainly not reached the limit of its growth yet, with the competition continuing to get bigger in markets like Asia and the United States.
There will always be plenty of investors ready to pay a fortune for a stake in the top sides of the division, something Levy will be very aware of.
Considering the Tottenham Hotspur Stadium has become something of an entertainment destination with A-List music concerts, NFL, rugby and other events taking place there, it is a true money-spinner.
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