In his most recent survey of Premier League club valuations, the University of Liverpool’s finance
expert Kieran Maguire gave Tottenham Hotspur top spot, valuing Spurs at 2.7 billion pounds.
Forbes, in their annual ranking of the world’s most valuable football clubs,
broadly concurred – placing Spurs tenth on the list valued at roughly 2 billion pounds.
A big driver of this enormous valuation is the massive revenue growth and income
generation potential that sits in the multi-award-winning new Tottenham Hotspur
Stadium. So, how much did it cost to get made and how much income can it really generate?
The Tottenham Hotspur Stadium was part of a broader Northumberland Development Project,
plans for which were first announced fifteen years ago in 2007. The project centred around
replacing White Hart Lane (then Spurs’ home stadium) with a new, larger capacity successor.
The development plans also included 585 new homes, a 180-room hotel, a Spurs museum and
club shop, a sixth form college and the club’s headquarters (Lilywhite House). In June 2021,
planning permission was won to build a community health centre and an extreme sports hub and,
in January 2022, also to build a further 72 homes and cinema,
The original 2007 plan had estimated the total cost at roughly 300 million pounds,
which was revised to 400 million pounds by 2009. Costs escalated during construction and by 2018,
the total estimated cost was 850 million pounds – a significant contributor here being higher import
costs due to the negative impact of the Brexit vote on the currency exchange rate. In April 2019,
Spurs’ Chairman Daniel Levy announced that costs had exceeded 1 billion pounds.
The final total cost is estimated at between 1.2 and 1.3 billion pounds,
roughly 4 times the initial estimate of 300 million pounds.
Spurs also incur annual finance costs to pay off debts to fund stadium construction.
Spurs’ gross debt stood at roughly 850 million pounds in June 2021, by far the highest in the
Premier League (the second highest was Manchester United at 530 million pounds). Loan repayment
terms however have been extended to 2051, at a 2.7% interest rate. Tottenham’s annual finance
/ interest cost is still roughly about 20 million pounds, amongst the highest in the Premier League.
It’s clear this stadium cost a lot of money and was constructed well over budget.
However, now that it is in place and the impact of the pandemic has passed,
we should see it achieve full potential from a revenue perspective.
And this is precisely what Daniel Levy and the Tottenham Board are counting
on to turn Spurs into a footballing powerhouse.
So, what are the various revenue generation
streams from the stadium and how impactful are they likely to be?
Well, there are four major arms:
Matchday Income
Stadium Tours and Experiences (outside matchday) C) Non-football use cases (concerts, NFL, boxing,
rugby union, business events & conferences) D) Naming rights. Additionally, the stadium
will theoretically provide upliftment to the local Northumberland economy through
creation of thousands of jobs and higher spending in the local area.
The pandemic affected Spurs disproportionately compared to other football clubs because closed
door matches meant millions of pounds of lost revenue. The Athletic estimates that Spurs’ new
stadium brings in about 6 million pounds in each Premier League home game and the annual
matchday income potential alone is upwards of 120 million pounds. This translates to about 200
million pounds of lost revenue between March 2020 and August 2021 – or the core pandemic months.
These matchday income numbers are the highest in the Premier League, with only Manchester
United and Arsenal also earning upwards of 100 million pounds annually from matchday income.
Spurs deserve credit for innovation and creativity in designing fun and novel experiences for fans
and visitors to the stadium. The standard stadium tour is available for 15 pounds, with options for
family and group packages. The Dare Skywalk and Skywalk Edge experiences are the true highlight,
though – ranging from 30 (just the Skywalk) to 50 pounds (Skywalk and Skywalk Edge) and
offering fans a chance to climb to the top of the stadium, enjoy breath-taking views
of the city and the pitch below, and then rappel down 42 meters to the south podium.
It’s a unique stadium experience and one that’s been quite popular with visitors.
There are also guided ‘Legends Tours’ for 55 pounds with former Spurs players.
While exact numbers should be available soon as part of the 2022 financial reports,
initial feedback on non-matchday visitor experiences at the stadium is very positive.
Most significant here are sporting events, especially boxing, rugby union and NFL games.
NFL income is estimated to be 10-million-pounds a year but
could be much higher if an NFL team made the ground their home stadium.
Growing awareness and interest in the NFL in the UK will only serve to drive this further.
Concerts are another growing use case – both Lady Gaga and Guns N’ Roses performed
earlier this year to a packed stadium. Conference facilities are also available in the East Stand.
Finally, naming rights could be another significant income source.
It has never been confirmed, but it is believed that Spurs would seek in excess of £20m/year for
any such deal and, while there haven’t been any takers yet, the Athletic’s David Ornstein reported
recently that tech giant Google is in discussions with Spurs regarding those naming rights. Google
has done multiple sports partnerships and deals in recent years – including commercial agreements
with both the NBA and the MLB in the United States. This would add much needed easy cash
to Spurs’ coffers as they continue to strengthen the team on the pitch and grow their brand off it.