Tag Archives: NFL

Building a brighter future, on and off the pitch: Analysis of THFC’s accounts for the 2016 financial year

By Charles Richards / @spurs_report

(Update 21/04: Per ESPNFC, the £10m figure identified in this piece as a potential upfront NFL contribution to the stadium project has been confirmed. The mysterious £45m in accruals and deferred income remains in question. Answers on a postcard!)

Tottenham Hotspur’s newly published accounts for the 2016 financial year show a club in transition, still hamstrung by the constraints of White Hart Lane but moving clearly towards the altogether grander future that beckons.

Spurs chairman Daniel Levy has described the club, in its current state, as essentially two businesses — a football club, and a stadium development. This appears to be a useful mechanism for digesting the swathes of information contained in this annual insight into Tottenham’s finances.

In this analysis, I’ll focus on the football first, and then talk about the stadium. I’ll also talk about the NFL partnership — and ask whether the financial terms have finally been revealed.

For those new to this blog, I wrote a similar analysis last year. You can read my recent piece on stadium costs here, and my analysis of club spending through the construction phase here.

The club’s statement with the key figures is here, and you can find the full accounts in the Investor Relations section of the club website. Bear in mind, the accounts cover the 2015/16 season only — they end on June 30, 2016 and anything that has happened since then will be included in next year’s edition.



Cost controls

Spurs achieved something rare in 2015/16, particularly in the inflationary environment of the Premier League: the club lowered football costs and improved on-field performance.

However, if Spurs were hoping for any credit for finishing third in the Premier League on a budget dwarfed by the five wealthier clubs, this was dashed by Leicester’s remarkable title win and the limp finish.

What Spurs achieved in 2015/16 was highly impressive. While Leicester have fallen back to earth and mounted a title defence even limper than Chelsea’s in the previous season, Spurs have kicked on another gear since. There is a sustainability to what Mauricio Pochettino, Daniel Levy and others in the Spurs brainstrust have built, and that’s why the mood among Spurs fans is so positive. We see it, even if others don’t.

Once again, these accounts show Daniel Levy’s tight grip on the club’s finances. Net profit increased from £9.4m to £33.0m.

Spurs managed to reduce wages slightly, from £100.8m to £100.04m. Revenue, meanwhile, increased from £196.4m to £209.8m, an increase of 6.8%. As a result, wage to turnover ratio dropped from 51.4% to 47.4%. This continues the sharp downward trend — in FY 2014 it stood at 55.6%.

How did Spurs achieve this? A look at transfer activity and new contracts in the period shows how:

PLAYERS OUT: Paulinho, Holtby, Capoue, Kaboul, Stambouli, Chirches, Soldado, Lennon, Adebayor

PLAYERS IN: Wimmer, Trippier, N’Jie, Alderweireld, Son

NEW CONTRACTS: Dembele, Onomah (x2), Winks (x2), Alli, Dier, CCV, McGee, Pritchard, Bentaleb

Spurs managed to get rid of a lot of high earners — including a lot of flotsam from the failed Bale money splurge — while of the new signings, only Alderweireld and Son commanded “big” wages.

Meanwhile, Dembele was the only senior player to sign a new deal in the period — the rest were part of the “contract escalator” Spurs have in place for young players to increase their earnings as their role grows. Both Alli and Dier, for example, have signed new contracts in the current financial year, and will soon join the very top earners.

Crucially, with the old Premier League deal in its final season, Spurs were able to hold off on pay rises for all other senior players. This prevented “double dipping” — players seeking new contracts, then demanding another new one the next year citing soaring revenues.

Here are the players who have signed new contracts in FY 2017 so far: Lloris, Kane, Dier, Eriksen, Rose, Walker, Alli, Vertonghen, Winks, CCV, Wimmer, Carroll and Vorm.

That’s a lot of new deals — probably in the region of £15-20m of additional salary, by my estimates. But with Premier League TV income jumping by around £40m next season, it’s the perfect time to do it.

Looking at the ins and outs, you may be wondering why wages didn’t decrease further. Without transparency on player contracts, it’s hard to know — there may well have been some Champions League-related bonuses that kicked in.

Meanwhile, transfer spending ticked down. The “net spend” picture is confusing from accounts: the accounts reported a £27.1m profit from the “disposal of intangible assets”, but this isn’t a true picture of player trading.

I prefer to look at amortisation, the measure of the cost of new signings spread over the length of their contracts and reported on annual basis. A full explanation is in the notes of this story, but in the simplest way: If Spurs sign a player for £10m on a five-year contract, that equals £2m in annual amortisation cost.

For Spurs, amortisation dropped from from £38.6m to £31.8m, thanks to a large number of expensive failures leaving the club and mostly cheap replacements coming in.

If you combine wages and amortisation, you get a good measure of “real football spend” — how much clubs are actually investing in their playing squads. For Spurs, this decreased from £139.4m to £131.8m.

Here’s how Spurs compare with selected other clubs:

image (4)

As you can see, not only is the gap between Spurs and the wealthier five clubs growing, the gap between Spurs and the clubs below is narrowing. Spurs, simply put, are defying gravity — and no club better demonstrates the value of homegrown talent.

Revenue roadblocks

Revenue was a mixed picture, and further underscored what by now barely needs stating — Spurs need a bigger stadium and new sponsorship deals.

Matchday revenue was essentially flat, down from £41.2m to £40.8m, while commercial revenue dipped from £59.9m to £58.6m. If there is one area that will disappoint, it is the latter.

Spurs are stuck in the tail-end of the Under Armour kit deal (expiring at the end of the 2016/17 season) and are midway through the AIA deal, which ends in 2018/19. With each year, these deals grow less competitive. But success on the pitch failed to boost merchandise sales (which declined slightly from £12.3m to £12.0m). Lack of Cup success also hit commercial and matchday income.

As far as I can tell, Spurs did not sign any major new sponsorship deals in FY 2016. The partnership with Kumho Tyres started in FY 2017, and certainly, just comparing the “Partners” section of the club website compared with similar sections for other clubs, and you can see that Spurs are far less active.

Does it matter, given how tacky this stuff gets? Ultimately, if Subway want to offer £2.5m a year to be official sandwich partner, that’s the easiest money a football club will ever make. There’s significant room for growth in this area.

The bulk of the revenue growth came thanks to the increase in Europa League prize money. Previously an irritation, the Europa League is far more valuable now. Prize money increased from £4.7m to £15.5m due to the largesse of BT Sport. That’s a lot of money for not very many viewers, but Spurs aren’t complaining.

Premier League revenue also increased thanks to improved on-field performance. 21 games were selected for UK broadcast, compared with 18 in the previous season — under the old TV deal, each extra selection above the minimum 10 was worth around £750,000, while performance-based prize money jumped by around £2.5m for finishing 3rd compared with 5th.

In a previous piece, I noted a development whereby revenue and spending, previously moving in concert, were starting to diverge.

image (2)

As you can see, this divergence was amplified in FY 2016. I like this chart as I think it tells a story, of Spurs shifting from the “wheeler dealer” mentality to a more sustainable approach as the club enters the stadium build phase.

In the coming three years, this trend is only going to increase. Next year, Premier League revenue should increase to around £140m, while the brief Champions League campaign should bring in around £35m. In the following year, pending the official announcement, Spurs will have much higher gate receipts due to playing home games at Wembley. The financial year after that, we’ll be into the new stadium.

These are exciting times for Spurs: it feels like things are falling into place. We’ve got the right manager, the best core of players in years, and a boardroom focused — almost to the point of obsession — with delivering a world-class stadium. It’s going to be fascinating to see how we manage to screw this up.



Stadium developments

Arguably the most important disclosure in the annual report concerned the stadium: the borrowing has officially started.

The first £200m portion of the bank finance Spurs have sought is in place, £100m of which was drawn as of June 2016. Interestingly, this facility was entered into on December 10 — six days before Spurs secured planning permission for the new stadium from Haringey council.

This is the “bridge” portion of the £350m loan Spurs will seek to cover a chunk of the construction costs. There has been public posturing over the finance of the project amid negotiations on public sector contributions and infrastructure delivery, but the annual report shows that financing is moving forward broadly as the club said it would in the planning process.

This £200m facility cost £855,000 in arrangement fees, but we don’t yet know the annual finance cost. The first £100m is repayable in December 2017 — or to put it another way, in December this year it will be refinanced into a bigger and longer-term facility. It may be that Spurs are able to borrow more than the planned £350m, given the increasing revenue and rising construction costs.

Overall, spending on the project has increased from £59m to £115.3m, per the club.

Meanwhile, two other unusual items, a long way down the accounts, caught my eye.

The first was a payment of exactly £10m, received from “a company, which is not a related party, as a contribution towards future construction expenses related to the Northumberland Development Project.”

Who is this money from? Public sector contributions have been a matter of contention, and do not extend to the stadium itself — certainly no agreement was reached before June 2016. If it were Tavistock Group — Uncle Joe — injecting money, it would be listed as a related party contribution.

The second, found in the non-current liabilities section, was a disclosure of £45m, again an exact amount, in “accruals and deferred income”. In 2015, the club recorded £0 in the same category, likewise in 2013 and 2014.

Screenshot 2017-04-02 at 8.22.51 AM

Deferred income is income received for services that will take place beyond the period covered in the balance sheet. Season ticket income and payments received for commercial deals that stretch beyond the reporting period are listed in the current liabilities section.

While it has been reported that Spurs have agreed a deal with Nike as the next kit supplier, this has yet to be officially announced, and certainly wasn’t announced during the previous accounting period.

So what is it?

While no major new sponsorship deals were announced during the period, there was one major new commercial partnership: the 10-year, 20-game NFL deal. If there was a payment, it would be reported in these accounts — with stadium completion date yet to be confirmed, it would be deferred income.

No financial terms were announced, but it seems likely that Spurs would seek money “up front” from the NFL to at the very least cover the additional costs of installing NFL facilities within the stadium. Likewise, expect Spurs to see at least a portion of naming rights income up front to help with cash flow when a deal is agreed, and advance ticket sales income.

A concern has grown among some Spurs fans that the NFL may be “using” Spurs, in the same way the organisation brazenly exploits local taxpayers in the USA. But, in reality, trying to gauge the additional costs incurred by the NFL elements is hard.

Once the project stalled amid the legal dispute with Archway, the stadium design was always going to be tweaked so that Spurs could get as much into the site as possible. To make it a true NFL stadium, additional work had to be carried out to basement areas, plus there was the need to reconfigure the interior to allow for enlarged locker rooms and media facilities. The sliding pitch sums up how tricky it is to put a value on the NFL additions: it is a new and expensive piece of technology that, while useful to Spurs when hosting concerts and other sporting events, feels like an extravagance too far if there were no NFL contribution.

So can we now put a price on this partnership? A one-off £10m payment, plus a 10-year, £45m hosting arrangement that has been paid up front. In total, a £55m ($69m) contribution to the £800m or so total cost.

It certainly sounds reasonable, and realistic. For the NFL, it gives them the stadium they desire in London for future growth plans. For Spurs it is money that can be used to turn the stadium into the world-class venue the club has always hankered to build.

I can’t confirm this — any journalists looking for a story could do worse than run this up the flagpole — but it certainly seems possible. Certainly, there have been suggestions that the NFL is putting money into the stadium — including recently by MMQB journalist Albert Breer.

I welcome any other suggestions on where this £10m construction cost and £45m in deferred income may have come from. But my hunch says NFL.

Other business

Away from the stadium, Spurs are continuing to invest in the training centre with construction of a new player accommodation facility. The £16m loan facility for the training centre was expanded to £25m, at a cost of £265,000.

Spurs being Spurs, there is a commercial element to this. In addition to providing accommodation for the first team and youth teams, and players visiting for medicals ahead of signing, the facility will also be used by other teams. An agreement is in place with England to use it before games at Wembley — all those times England train at Hotspur Way isn’t an ad hoc arrangement — while it is also available to European sides ahead of midweek matches against other London sides. Both Barcelona and AC Milan even provided letters of support in the planning process.

The planning agreement makes clear this isn’t a hotel, but no doubt visiting teams and England will pay handsomely for the privilege. Speculation that NFL teams may use the facility is wide of the mark — at 45-rooms, it is simply too small.

There are a couple of other lines of note.

The first is exceptional items of £9.6m in “commercial and employment contract costs”. In the previous year, £6.5m was reported in “redundancy costs and onerous employment contracts”.

My assumption was that at least a part of last year’s exceptional items referred to Emmanuel Adebayor, who at some stage stopped being a footballer. More likely any payoff was included in this set of accounts. But as for commercial costs, it is hard to understand what that may be. £9.6m out of £209.8m total revenue is not an inconsiderable sum, and I’d welcome any suggestions. If there is an inference from the new description, I’m missing it.

Second is £500,000 paid by Spurs to Melix Financial Services, another Tavistock Group company, for “commercial advice on global sponsorship opportunities”. Melix, like much of Tavistock (the investment umbrella for Joe Lewis of which Spurs is just one part), is Bahamas registered — but beyond that, there is no public profile. If you Google the name, you’ll get a few links to a late 2000s Romanian property scandal, and that’s about it.

There may be a perfectly reasonable explanation, but it beats me. Answers on a postcard – preferably with a nice picture of the Bahamas on it.

Thanks for reading. Please follow me on Twitter for more Spurs chat. Comments welcome, either below or to spursreport at gmx.co.uk.

New stadium update: ‘More or less’ on time and budget, 500 White Hart Lane, the NFL gamble explained, and more


Given the recent flurry of news and public comments, it is high time for another update on where things stand with the Spurs stadium project.

In recent weeks, the installation of dozens of giant “rakers” have started to finally give the structure that unique stadium shape, while along the High Road the stadium is starting to rise up high above the hoardings.

In this post, I’ll talk timelines, the NFL, training centres, housing and various other things. My last stadium update, from June, is here.

Timeline and costs

The regular board-to-board meetings between the club and the Tottenham Hotspur Supporters Trust have proven useful in gaining insight into the state of the project.

Per the minutes of the last meeting, released on Friday, Daniel Levy confirmed that the project is “more or less” on time and budget.

Crews are working seven days a week, with the aim of being ready to move out in the summer and ensure that only one year away at Wembley is needed.

Cost-wise, “the financial model is in good shape”, Levy said, but he noted the impact of the weakened pound and 7-day work schedule. “All possible resources” were being put into construction to ensure deadlines were met, Levy said, a hint the project is currently at the higher end of its budget.

What does “all possible resources” mean, in practice, beyond extending the hours worked on site to the permitted maximum?

Earlier this month, industry website Building.co.uk published a story stating that Spurs had purchased the five cranes that are being used on the site, as they were unable to hire any when required. Obviously the increased cost of purchasing cranes, rather than waiting for rented cranes to come available, was something the club was prepared to bear in order to ensure deadlines were met.

Given the fact that crews are on site seven days a week, and are even working during matchdays when there are 32,000 fans in the vicinity, it is safe to assume the pace of work is at the absolute maximum, and there is little to no leeway for delay.

Less positive are “considerable” delays to the rebuilding of White Hart Lane station, as well as Haringey’s High Road West regeneration plan. I’m not immediately clear what impact this will have on the club and matchgoing fans when the new stadium opens. Presumably insufficient public transport capacity may require some alternative arrangements on matchdays to ensure safety, but I am speculating. I’d welcome any insight on this.

The NFL explained

Earlier this month, ESPN published the rarest of things: a Daniel Levy interview.

It was fascinating as finally, among other things, Levy’s rationale for building a stadium with NFL facilities was revealed.

Previously, I’ve had fun trying to divine what the rationale may be, but now we know — there is no clear commitment from the NFL, just a considered gamble from Spurs that ultimately, when the NFL is ready for a London franchise, the league will select New White Hart Lane as its home.

“If it ever got to a stage where the NFL decided it wanted to have a permanent team in London, this stadium could literally be, whatever the team was, it would be their stadium as opposed to an NFL team feeling they’re renting Tottenham’s stadium.

“We would welcome very much close cooperation with the NFL and a dedicated team. Obviously a decision is entirely theirs whether they do bring a team to the UK, and where it would be located is something that would be talked about. But yes, we would be very much welcome to that scenario.

“Clearly we wouldn’t both be putting all this into this stadium if there wasn’t the prospect of one day a team eventually coming to London. But there are certainly no guarantees that A) a team comes to London, and B) they have to use our stadium. I think we’re all putting the effort in in the hopes that they will do it.”

Of course, there may be more to the 10-year, two-game agreement that can be currently disclosed, but these comments are the clearest indication of the state of affairs so far.

As far as I have seen, there have been no new comments from senior NFL figures since my last piece on the subject of a permanent London franchise. New London mayor Sadiq Khan expressed support for the idea after a trip to the US, where his meetings included one with Shahid Khan, the owner of the Jacksonville Jaguars, widely seen as the most likely franchise to relocate.

However, Spurs are finding other ways to make themselves useful to the NFL.

In subsequent excerpts of the interview, Levy essentially pitched the club’s services in providing training facilities for the NFL should a team be relocated.

“The NFL, a number of times when they’ve come to the UK, has used our training facility and, when a foreign organisation goes to another territory, I think being in partnership with a local operator brings enormous benefits.

“We’re going into this, hopefully the intention is our relationship will expand over time and we’re working very closely together. But I think in terms of training facilities and things like that, we have discussed that with the NFL, but again that’s something for the NFL to decide upon.”

The training facility of a London NFL team will be one of the knottiest issues for the NFL. It’s not like in most US cities where facilities can be thrown up very quickly — in London, it takes years to acquire land and gain consent. Spurs have a huge training facility, and there may be ways of reconfiguring what is there for NFL use, or even expanding slightly such has been done with the new player accommodation. See this thread for more details:

Spurs have a chance to make themselves very useful to the NFL here, and are smart to exploit this angle. It should be noted, NFL commissioner Roger Goodell visited the facility last autumn so will know just how impressive it is.

One final thought: this was a great interview, and Daniel Levy should do more.

I’m not saying he should take to tweeting like an idiot or start Kardashianizing himself like Jose Mourinho, but rather in a targeted way, get out there a little bit.

Raising the profile of the club now may have benefits in the search for stadium sponsors. So go and have “Lunch with the FT”, talk to AdWeek, get Gary Lineker around for some multi-channel PR schmoozefest as he does so effectively with his Goal Hanger productions.

The football media narrative is stuck on Jose, Jose and more Jose, with an occasional bout of Klopp-itis or Pep-worship. Mauricio Pochettino, when he’s not going rogue and comparing academy prospects to Lionel Messi, is circumspect in his dealings with the media and his English is still limited in terms of expressing himself fully.

There’s a great story to tell about Spurs at the moment, and it’s not really being told, in my opinion.

The club is producing more homegrown talent than anyone and is the major contributor of English players to the national team. It is building a world-class stadium without any assistance from the taxpayer. In general terms, the club is punching wildly above its weight in on-field performance, as the recent Manchester United financial statement highlighted.

If ever there was a time to talk about Spurs, it’s now.

Pictures — then and now

Construction is advancing rapidly, but what is it going to look like come the final farewell to old White Hart Lane in May next year?

I first saw this picture posted by @HotspurSam, and it is well worth showing again. It’s just an impression, but you can see how progress will need to be seriously rapid over the next seven to eight months. The picture in the top-right corner is the most eye-grabbing — that’s what we should see in May.


As I’ve said previously, it is going to look absolutely bizarre.

On the subject of progress, here are a couple of photos. The first is from June 2015, and the second is the latest aerial shot from the club (with blue lines and tint, but you get the picture).


Pretty cool, huh?

The other White Hart Lane development

On September 12, Spurs received approval for its 500 White Hart Lane development, subject to a Section 106 agreement.

The industrial site was bought for the relocation of Archway Sheet Metal, but they did not take up the offer and ultimately moved elsewhere. The club then marketed the site to other occupants, unsuccessfully, before deciding to turn it into housing. It is a major project, with 144 residential units and (some) retail space.

The vote by the Haringey planning sub-committee was a close one — a motion to reject the proposal was lost by five votes to six, and then the project was approved by six votes to four with one abstention. There was noisy opposition to the project, per video of the event.

This is an interesting project in so much as Spurs are doing it at all. After Archway opted against taking the site, the easiest thing to do would have been to sell it on (no doubt at a nice profit given ever-rising land values in London). But, clearly, Spurs have a taste for property development and opted for the more ambitious option.

What Spurs do with 500 White Hart Lane — develop it themselves, or sell on a consented scheme to another developer — may offer hints for what will happen to the final stage of the stadium project.

Once the stadium itself is completed in (hopefully) the summer of 2018, attention will turn to the “Southern Development Land”. This in itself is a huge development, including a 180-room hotel, 585 housing units and other facilities.

While the stadium itself will cost around £500 million, this final phase will take the bill for the project to the £675m-£750 million figure. It is a huge challenge, and the general assumption is that Spurs will ultimately sell this off as a consented scheme and allow someone else to take the risk on it. It may not be that easy, though, as the scheme has a low “internal rate of return” — a measure of the appeal of a potential development to investors.

Either way, it’s one to keep an eye on — the focus at the club now will be firmly on getting the stadium done on time.

Until a decision is made, I am going to keep using the £675m-£750 million figure for the project. Ultimately, the hotel and housing has to be built, and currently the obligation to do so lies with the club.

And finally

I’ve written a couple of pieces recently related to the stadium — this one on naming rights, and this one on the challenge of balancing spending between the stadium and the team.

Do have a read if you’ve not already done so — they are detailed pieces, and should be of interest to those following this project.

Meanwhile, over at Chelsea, the club is now in a second period of public consultation due to changes to its plan to redevelop Stamford Bridge.

There’s a Twitter thread here with various links.

I wrote in May that this second consultation would be required — so I’m pleased that what I reported proved to be accurate.

However, from my initial reading of Chelsea’s changes, I’m not entirely clear how the concerns raised by Network Rail about safety and access to the railway that will run under the West Stand have been assuaged.

Any journalists or bloggers interested in a story could do far worse than give Network Rail a call — this stadium simply won’t be built until they sign off, and they were far from happy with the initial plans. My blogging time is limited now so I can’t follow this project as closely as I have done previously.

Thanks for reading, please follow me on Twitter for more stadium chat. Comments welcome, in particular on issues concerning delays to public infrastructure and the plans for the Southern Development Land.

As Spurs stadium rises, NFL moves closer to announcing London team

You can read my previous coverage on Spurs and the NFL here. My “deep dive” on the gamble being taken by Spurs with the NFL is here.  You can follow me on Twitter here.

Is London ready for some (American) football? The NFL appears to think so.

Comments in the off-season from Commissioner Roger Goodell, who described a London NFL franchise as a “realistic” prospect, and public support from the league’s powerful owners, indicate a decisive shift taking place, in which an idea is starting to turn into a reality.

If the NFL has not quite “pushed the button” on launching its first international franchise, the Commissioner’s finger is hovering above it.

Meanwhile, in recent weeks clearly visible progress has been made on the potential new home of a London NFL team, with Spurs’ spectacular new stadium finally starting to emerge from the ground.

The sense of momentum was crystallized in a report last week by CBS “insider” Jason LaCanfora, who stated that a London franchise was a “major topic of conversation” in a meeting of NFL owners in late May.

According to LaCanfora, Mike Waller, the NFL executive in charge of international matters, gave owners a “detailed progress report and presentation” which “led many teams to come away more convinced than ever that this is something (the NFL) very much wants to happen.”

The presentation detailed concerns over timing and travel requirements for playoff games, particularly if a London franchise drew a team on the US west coast.

LaCanfora connected the dots:

“Yes, that’s how far down the line the NFL is in addressing London contingencies, and these are the types of things owners are being asked to consider as further preparations are made toward moving a team to England.”

Crucial to any forward progress for a London team was finally sorting out a franchise for Los Angeles. The league couldn’t seriously move ahead with a franchise in London before placing one in the USA’s second-largest media market. This anomaly was rectified in January when it was announced that the Rams would be moving from St Louis to LA.

(There is no pretty way to move a franchise, and the people of St Louis were royally screwed. The outrage if a team is taken from a US city overseas will be even more vociferous.)

With this resolved, attention at the league’s Annual Meeting in Florida in late March could turn to other things. Judging by the comments by owners, it is clear that London was a topic of conversation. I counted four owners — the Dallas Cowboys, Cincinnati Bengals, Baltimore Ravens and New England Patriots — who discussed London in positive terms with reporters.

Jerry Jones, the Cowboys owner who is considered one of the most influential in the league, was asked by SI’s Peter King where was “next” after LA.

Jones replied: “We don’t get many opportunities to say “this is what we give back to fans, this is a wow”. Los Angeles was that. What else could we do that with? London looks like that to me.”

Jones also mentioned Mexico City, which will host its first regular season game next season, as a possible destination.

The importance of these comments can’t be stressed enough given how decisions are made in the league. It is the 32 owners who will ultimately decide on a London franchise.

A few days later, at a townhall meeting with members of the Jacksonville Jaguars, Goodell stated, clearly, that he felt London was ready for a franchise.

“As a market, I believe they (London) can support a franchise,” he said.

“I actually believe that a franchise in London is realistic.”

According to Goodell, his concern was ensuring a London team wasn’t at a competitive disadvantage due to logistical issues such as flight times and scheduling.

“I think we can find solutions to those issues,” Goodell said. “The way we schedule and the way we do things, those are things we’re still focused on.”

I don’t think the importance of these comments can be stressed enough. Before a franchise is placed in London, the league has to be comfortable with several pivotal things:

  • The London market can support an NFL franchise
  • A London franchise has a stadium to play in
  • There is a suitable candidate for relocation to London, or viable plans for expansion
  • US broadcasters are happy (London games would never be played in primetime Sunday, Monday or Thursday evening slots)
  • A London team, with logistical issues, would be competitive and schedule integrity would not be affected

Stating that the London market is ready for a full-time franchise is a HUGE statement, as without it, the rest is moot. Again, if the question now is the brasstacks of how the games are scheduled, then it is hard to argue against the idea that we are “almost there”.

If the market was the most important, second is the stadium. An NFL standard facility is required, and Spurs are delivering it. The Spurs stadium will feature a retractable pitch as well as NFL-size locker rooms and media facilities.

Huge steps have been taken by Spurs in the past few months in terms of receiving key permissions and commencing full-scale construction.

The NFL is in regular contact with Spurs and feels fully engaged in the stadium construction process, an NFL UK source told this blog. The relationship was characterised as “excellent” and “ongoing”.

(And yes, if this had been “terrible” and “dead in the water”, I might have a story)

A couple of weeks after Goodell’s comments, ESPN ran a long primer discussing the remaining hurdles for London — for example whether an expansion or a relocation was more likely, the issues facing players, and logistical matters. It is worth a read.

The final comment from an unnamed team executive summed up the mood:

“It’s one of those things where I know all the problems,” said the team executive. “But one of the things you learn in this league is it doesn’t matter what the problems are, you better figure them out because if it’s going to happen, it’s going to happen, tough crap.”

The setting for Goodell’s comments was interesting, given the Jaguars are widely assumed to be the most likely franchise to move to London. Goodell tweaked the franchise, stating the growth of the market in northeast Florida was “below expectation.” Another contender is the Oakland Raiders, although a move for them to Las Vegas seems more likely.

The “magic date” (albeit never an official target) for an NFL franchise has always been 2022. In January, Mike Waller was quoted as saying by the BBC that plans were “on track” for a London team by this date. In my Q&A with Sky Sports NFL presenter Neil Reynolds, he said 2022 was “very realistic”.

Is the league on course for 2022? It would seem so. Judging by the comments from owners in recent months, London is at the forefront of their thoughts and discussions. I can’t recall an owner trashing the idea of a London franchise, or at least not in recent years. (Please point out these comments if they do exist, I’m interested to learn)

“Pushing the button” on an NFL franchise in London doesn’t mean it will materialise overnight. Instead, it will trigger the start of an ignition sequence preparing for launch to the next footballing frontier.

If the NFL put it to a vote and announced the establishment of a London franchise by the time of its next Annual Meeting in 2017, that would give the league five seasons to launch in time for 2022/23. Five years to build the hype, five years to find a team, five years to resolve any lingering logistical issues, five years to experiment with new timeslots in London that appeal to US broadcasters.

I’m biased on this because I’m a huge NFL fan and would love to see a team in London. The fact that it would most likely use New White Hart Lane as its home only adds to the appeal.

But I’m pretty sure that interest would grow rapidly across the Spurs fan base and beyond once a London team was announced and became “real”. To quote Buddy Garrity in Friday Night Lights, everybody loves football, they just don’t know it yet.

If the league hasn’t formally decided on bringing the NFL to London on a permanent basis, it is getting close to the point of no return regardless.

Thanks for reading. Please follow me on Twitter for more Spurs (and NFL) chat.

The state of the stadium naming rights market, and what it could mean for Spurs: An expert view


If there is one aspect of the new Spurs stadium scheme that generates more debate than any other, it is the question of naming rights.

This is understandable — the naming rights partner will become indelibly linked to the club, in the same way that, say, Emirates is now a piece of Arsenal’s fabric. It will become part of the daily conversation that we have as fans, and our matchday experience, and therefore it will matter profoundly to us.

As such, many Spurs fans dread that the naming rights partner may be somehow embarrassing (Pizza Hut Park), ethically questionable (say a badly behaved bank), or simply something that we don’t like, for whatever reason.

Ultimately though, there is no way that we are all going to be happy with the eventual partner, short of Harry Kane buying up the rights himself in lieu of taking a salary.

When I wrote extensively about the financing of the stadium earlier this year, the majority of comments I received were about my assertions on naming rights. I said that putting a value on a potential naming rights deal was like guessing the length of a piece of string, based on the wide range of income from previous deals that have been struck in the US and UK.

It is fair to say that a lot of people questioned this. Many claimed expertise in the sponsorship area — more, frankly, than I believed.

A frequent comment went: The NFL deal, and the potential of the stadium to be both an NFL and Premier League stadium, were a game changer in terms of securing a lucrative naming rights deal.

With naming rights a key part of the club’s funding strategy for the stadium scheme, Spurs will have conducted (or rather commissioned) a detailed analysis of the naming rights market, and come up with a figure that they can use in the projections for funding the project.

But how feasible is it really to put an accurate figure on what Spurs may get? How “real” will the impact of the NFL deal be when the club eventually puts the rights to market? And what is the state of the sponsorship market at the moment, particularly in the US where new stadiums are regularly built?

I wanted to get some expert opinion. So I got in touch with Michael Colangelo, the Assistant Director of the University of Southern California’s Sports Business Institute, and the Managing Editor of The Fields of Green, a website covering sports business. He very kindly agreed to answer my questions.


It appears that every year, there is a spectacular new stadium built for a franchise across the US major leagues. How crucial is a naming rights partner in terms of funding these projects?

Naming rights are extremely crucial, especially because they are used as a funding mechanism to build a stadium. Every time a new arena/stadium is built, one of the ways teams gain extra funding (through debt) is listing its projected income on naming rights. It’s all factored in. It would be very difficult to build a new stadium without projecting naming rights income into the capital structure.

How lucrative are these arrangements? For new projects, such as the Minnesota Vikings stadium, what sort of amount are NFL franchises bringing in from their naming rights deals?

Naming rights are the most lucrative form of sponsorship for most stadium construction projects. Naming rights deals are typically 20-25 years in length with a total of $100+ million at least for newer stadiums. The Minnesota Vikings deal with US Bank has been reported at 20 years at $220 million cost. Levi’s Stadium (49ers) is reported at $11 million/year. MetLife Stadium in New York is reported at $16 million/year.

Obviously the deals change on the size of the market, exposure, if the stadium will hold marquee events (Super Bowl, National Championships etc.)

How “easy” is it to strike these deals? By which I mean, is there a broad array of different businesses — not just finance industry, say — interested? And is there a “meeting of minds” between sponsors and franchises over how long these arrangements should last?

No deal with this much money involved is “easy.” There are multiple things to take into account when working with a naming rights partners. Many times teams want a naming rights partner who is also invested locally in their community. Levi’s has a San Francisco HQ. Target is HQ-ed in Minnesota and has naming rights for Target Field (Minnesota Twins). Gillette has the naming rights for the New England Patriots and is a local company.

As you can see there are a broad array of industries. Airlines, car companies, food/quick service restaurants, banks, financial institutions, and other companies see different benefits of being a naming rights sponsor. If there is room in the marketing budget then a major company could be a naming rights partner.

As for length of arrangements, they are generally long (20 years is typical). In some cases companies change names, are purchased, or no longer operate. Often times teams will then have to find another naming rights sponsor.

The new Spurs stadium will host two NFL matches per year initially. How appealing is this exposure to the US market to a potential sponsor, on top of exposure through association with a Premier League club? Or is two NFL games simply not enough?

Any company that is purchasing naming rights to the new Spurs stadium would be buying them for the entire benefit. Two games isn’t enough for a return on investment. It would make the most sense for a global company that wants exposure in the European market to partner with the stadium owners for naming rights. The more events/exposure the better for the naming rights partners. AT&T benefits from naming rights on Cowboys Stadium from every event held there, not just the 8 home NFL football games.

The stadium is widely seen as a home for a future NFL franchise, should the league opt to push the button on an expansion to London. How valuable a sponsorship opportunity would this be? And if so, how would this potential upside affect the club’s negotiations?

The NFL is doing the right thing by taking its time to expand outside of the U.S.. It has to make sure it has a viable market before putting a team in any major city, and the NFL is trying to build the game more every year by adding extra games in London. If it is financially viable (as well as competitively viable with travel etc.) the league will move to put a term permanently in London, but there is no rush to “push the button” so to speak.

NFL games at the venue still adds to exposure, so it should still be taken into account. Especially if its a Euro-based company trying to gain exposure in the US market. London games are often played early enough where it is the only game being shown on TV (or it is the nationally televised game). That potential upside could push the price of the naming rights higher than a normal stadium deal.

With audiences for the Premier League growing in the US, how appealing is the prospect of sponsoring a team such as Spurs? We’ve had Chevrolet, for example, spending big on Man Utd shirt sponsorship — is that considered a success, and sign of things to come?

This speaks more to the globalization of industry more than it does to just the world of sports. Every company is trying to gain exposure to international markets and sports is one of the easiest ways to do so. The Chevrolet deal is something people in the United States noticed. It is also helpful that Man Utd is one of the most well known teams in the world. Fans in the U.S. knew about Man Utd before the Chevy deal was signed.

Obviously the expansion of soccer fans in the U.S. is something Tottenham should take into account with any deal. The team has been shown more on NBC this year because they have been at the top of the table. As with anything in sports, teams get more exposure the more they win. If Tottenham is going to continually be at the top of the table it is better for their sponsors that want exposure in the U.S. market. It would not be surprising for more global companies to get involved in sponsorship/partnership deals outside of their market if they see a return on investment.

Spurs have talked about bringing in around £30 million per year in additional commercial income from the stadium, much of which will be from a naming rights deal. How realistic does this seem to you?

It’s important to note that not all of the deals will come directly from naming rights. A new stadium generates income in multiple ways outside of the just naming rights, although that will definitely be a part of it. New LED screens allow for more effective partnership deals and brand exposure. Boards around the stadium can have signage for the official car, bank, beer, soda, etc. of the team. Those partnership deals will also create revenue.

New stadiums also have more options for food, beverage, concessions, and apparel. There could be an increase in average ticket prices. The £30 million is achievable but the team will have to work hard with its partners to find the right deals.

About mechanics of these deals: The club has said that naming rights deals are normally struck mid-way through construction. Is this accurate, or are naming rights deals in US often struck before ground is broken?

It often depends on the market, but it is more likely that the deal is in place during construction than before the venue is built. There are multiple reasons for this — the design of the stadium may change, it is easier to price out a deal while the stadium is being built as naming right prices fluctuate (aka closer to the actual deal signage/activation happening), it allows for negotiation of the deal — and it isn’t rare for a deal be put into place a year before the stadium actually open.

Finally, just a bit of fun: can you give some names of potential sponsors who may have an interest? The two biggest naming rights deals in the EPL currently are Etihad and Emirates, but it’s surely time for something different. Can you think of any US corporations that may look it at it and think it of interest?

I try and stay out of the prognosticating business with deals like this. It’s tough to know where the global economy is going to be once the stadium is done being built. If banking is struggling those companies are less likely to sign deals. If the energy sector is down due to cheap oil prices it could take out energy companies.

In any case there will surely be interest. The Spurs new stadium will be hosting multiple events that provide sponsors with great exposure.


Thanks to Michael for taking time to answer my questions. For those interested in the business of sport, do check out The Fields of Green. For more Spurs chat, please give me a follow on Twitter, email or share your thoughts in the comments section.


New Spurs stadium the “front-runner for an NFL franchise”: Q&A with Sky Sports presenter Neil Reynolds


Of all the aspects about the new Spurs stadium scheme that interest me most, it is the NFL connection. I’ve written extensively about it: just why on earth are Spurs, a club with no knowledge or experience of American football, going to considerable effort and expense to install NFL facilities in the new stadium?

Since publishing my last piece, there has been a steady stream of news underlining the effort the NFL is making towards international expansion. Just this week, it was reported that the NFL is seeking to take games to Germany and China in the coming years. At the annual meeting of NFL owners and powers-that-be, Dallas Cowboys owner Jerry Jones was asked “what’s next” for the league, and said it would be a London franchise, or one in Mexico City. This is important: ultimately, the NFL is run for its owners, and Jerry Jones will be one of the people who decide when a London team happens.

On the Spurs stadium itself as an NFL venue, there hasn’t been much news of late. The stadium is still a large hole in the ground, and until it is completed we are unlikely to hear much. But I’m curious to find out more, and so decided to seek out some expert opinion.

When you are British, and you have questions about the NFL, there is only one man to ask: Neil Reynolds, Sky Sports NFL presenter and host of the Inside The Huddle podcast.

I got in touch with Neil and sent him some questions about Spurs and the NFL. And being a quality bloke, he came straight back to me with answers.

First some links: To see the stadium scheme, click here. To subscribe to the Inside the Huddle podcast, click here. My latest stadium news piece is here, and you can hear me talk about Spurs and the NFL in glorious detail on the Football and Football podcast here.


What are you views on the new stadium Spurs are building, and how does it compare with other new NFL facilities? Does it “look” like an NFL stadium to you?

The new stadium absolutely looks like a first-class NFL facility and I think its size and design will be very attractive to the NFL, as well as the fact that Spurs are committing to giving the NFL their very own field. That shows a real commitment and desire for Tottenham Hotspur to be involved with the NFL in the long term and that is exciting.

Spurs and the NFL signed a 10-year, two-game per year arrangement. Do you think this is likely to be the extent of the hosting arrangement, or do you feel that, ultimately, the Spurs stadium is viewed as the home of an NFL franchise in London?

This is only my opinion as a reporter covering the NFL, but I think this is a partnership that is going to grow considerably over the years. As the NFL adds more games to its London schedule in the coming seasons, having multiple stadia will be useful so expect to see contests spread across Tottenham, Wembley and Twickenham.

But if we are fortunate enough to get to the point where we have an NFL franchise in London, I would expect one stadium to be used extensively in order to create a level of comfort for the players and to create some form of homefield advantage.

With Spurs offering an NFL-specific field and a capacity in the region of 60,000, I would say that venue would be the front-runner for an NFL franchise. It is certainly easier to sell out a 60,000-seat stadium eight times per year as opposed to a venue in excess of 82,000 seats.

Do you think, at this point, an NFL franchise in London is a matter of “when” not “if”? And what sort of timeline do you feel we are working on — 2022 is often is batted around. Is that realistic?

I think it is a matter of ‘when’ and the NFL will build towards that in the coming years with four, five and even six games per year being played in London. And I would say that 2022 is a very realistic time frame given the growing fan and government support, as well as outstanding stadia availability.

Momentum for the NFL in the UK continues to grow and I wrote a few years ago that I felt we would have a London franchise before a star player like Aaron Rodgers retired. Rodgers looks good for playing another six or seven years so he could end up making me look very clever on that front!

How would adding a team in London work? It is normally assumed that a team such as the Jaguars will relocate — is this the most likely scenario? Or will the NFL add an expansion team?

I personally think the talent pool would be spread too thin if the NFL added a couple more teams so had initially been leaning towards a re-location of a team like the Jaguars or the Oakland Raiders, who are having some issues in their home market at the moment.

But money talks in the NFL and if adding two more teams adds billions of dollars to the coffers, the league probably wouldn’t shy away from that. In turn, more dollars flooding into the league eventually finds its way into the pockets of the players so I would imagine them being in favour of expansion, especially as it essentially opens up an additional 106 roster spots through two new teams.

In the club’s planning documents, it was stated that Spurs may seek to secure an NFL franchise. The language was intriguing: do you think a clear relationship between a Premier League soccer club and NFL franchise makes sense from a marketing and commercial standpoint?

It would certainly help in terms of promoting the NFL in the UK and in promoting Tottenham Hotspur in the United States but I had not previously heard of such talk and I don’t think such a partnership is one hundred per cent necessary in order to secure a London NFL franchise.

How is the prospect of a London franchise viewed in the US? Is it just an inevitable next step for a league that needs to broaden its global appeal, or some sort of quixotic misadventure that frustrates many fans?

There are certainly some narrow-minded fans and media who want their game of American football to stay strictly ‘American.’ But there are also a growing number of media who recognise that the game is growing internationally and that the future of the sport – which couldn’t be more popular if it tried in the United States – is overseas.

At the end of the day, money talks and if the current NFL owners feel expanding into the UK is best for their business, they are going to do it, regardless of the blowback in the United States.

Let’s talk fan experience: a lot of Spurs fans who hadn’t previously thought about attending an NFL game will be tempted to try it out. How would you compare the experience of watching an NFL game in London, and a Premier League team?

I would say that there is not much in it in terms of noise and atmosphere, which is impressive from an NFL point of view because the league sends different teams into the London market year after year. If London had its own franchise, the passion for that team would build even more over time.

Personally, as a father of three, I think there is a much nicer family atmosphere at an NFL game and they are great days out. I have worked at every single NFL regular season game in London and have enjoyed seeing how the fans mingle without a hint of trouble or aggression. I have happily worked either in a TV studio or down on the field, knowing my entire family is sitting in the stands in a perfectly safe and enjoyable environment.

I would certainly encourage Premier League fans with families to give the NFL a shot – they won’t be disappointed.

Harry Kane, star striker for Spurs and England, is a huge NFL fan. How useful is that in terms of promoting the NFL to the Spurs fanbase? And on a related note, are there any NFL players you know who are Spurs fans? So far, the only one that we know about is Tim Masthay of the Packers (and he’s a punter, which is hardly too exciting).

Punters are people too, you know! But I take your point. I don’t know of any Spurs fans but I will be asking that question as I make my rounds at NFL training camps this summer. The best I can offer is that the head of public relations for the Green Bay Packers is a big Spurs fan and maybe he can work on Aaron Rodgers!

As for Harry Kane, it’s great that he is a New England Patriots fan and can help promote the NFL to Spurs fans. I’m sure he could become a very valuable marketing tool for the NFL in the coming years.

Finally — do you have a Premier League team? Or is it oblong football for you only at this point?

I grew up marvelling at the likes of Kenny Dalglish and Ian Rush and revelling in all the silverware they picked up year after year. It’s been pretty slim pickings since I was a teenager but that will serve me right for being a glory hunter as a kid… YNWA!

Thanks for reading, and thanks to Neil for taking time to answer my questions. Please follow me on Twitter for more Spurs chat, and follow Neil for NFL news.

Spurs take a gamble on the NFL — New Stadium Deep Dive (Part 2)

[Part one of this series can be found here]

The most curious, and talked about, aspect of the new Spurs stadium scheme is the NFL connection. Why are Spurs, a prudently run Premier League club, going to what appears a considerable amount of trouble to incorporate facilities for American Football?

In part one of this series, I looked at the Viability Report for the scheme, and examined the huge financial challenge facing Spurs. The report also contains a couple of interesting references to the NFL provisions: I plan to explore these in detail.

While my last piece built upon what was stated in the Viability Report, this piece is inherently more hypothetical nature. Without wishing to come over all Donald Rumsfeld, there are a few “known unknowns” in play here

To repeat, the Viability Report is a document produced by KPMG for Haringey Council and the Greater London Authority. It does exactly what it says on the tin — assesses the feasibility of what Spurs are setting out to do with its stadium scheme. Its primary source is information provided by the club.

From the outset, it is important to make one thing clear: Spurs did not need to include NFL facilities in the new stadium. The club had planning permission for a 56,000 seater stadium in place, and was building a new stadium regardless.

Initial planning permission was granted back in September 2010, but as the project stalled amid the legal battle with Archway Sheet Metal Works, new plans were hatched. The first hints that something more substantial was being planned came in October 2013, when it was reported that Spurs had switched architects from KSS, which designed the training facility at Hotspur Way, to Populous, a major US architect which designed Wembley, The Emirates and 13 current NFL venues.

Spurs may well have wanted to increase the capacity from the original 56,000 before the NFL became involved. There’s the “willy waving” desire for a bigger arena than Arsenal, for one thing, but also the fundamental principle of maximising potential — if the site could, at a push, hold something bigger than 56,000, then it should be considered.

But going back for planning permission on a new stadium, and squeezing in even more into what remains a small site in a poorly connected, residential area of the capital, carried risks, in particular due to the need to demolish listed buildings.

The expanded scheme may never have been in serious danger of being rejected by the local authority. But, due to the heritage concerns and the technical challenge of incorporating a first-of-its-kind retractable pitch, there may be a risk of further delays. In 2014, Arsenal brought in £100.2 million in match-day revenue, while Spurs managed £43.9 million. Every home match, we fall further behind. Delays are seriously expensive.

In this article, I am going to examine the cost and potential benefit of Spurs having an NFL-equipped stadium, the rationale that led the club to take this gamble, and what the potential long-term implications could be.

A retractable revenue stream


From stadium plans, via Google Images

Even if Spurs were always eyeing a more substantial stadium, the scheme has become significantly more expensive with NFL provisions such as the retractable pitch.

How much more? It is very hard to say — I have not seen a breakdown of stadium expenditure that spells out exactly how much each part costs, and would welcome any input.

Retractable things are expensive though. The last time Populous attempted something of this nature in the UK, adding a roof on top of Wimbledon’s Centre Court, it ended up costing between £80 million and £100 million, way more than originally planned. A similar cost is expected when a roof is added at Arthur Ashe stadium in New York.

These are very different projects (and sports) of course — adding structures to venerable existing facilities — and Wimbledon’s spend included new corporate facilities and more seats. But it hints at the cost of such engineering.

Spurs aren’t sliding out a pitch into open space like has been done at the Populous-designed University of Phoenix stadium in Arizona. Spurs are sliding the pitch under the stadium and other parts of the development, where there is little or no access. Issues such as drainage and environment (ensuring the grass is not harmed while the stadium is in NFL mode) will be to the fore. Also, it fundamentally has to be a high-spec piece of retractable kit — or to put it another way, I can’t imagine it is going to be a case of sending someone under there with a wrench if it isn’t working properly.

In the deal struck between Spurs and the NFL, Spurs get to host a minimum of 20 NFL games at the stadium over the next 10 years. From the reports I’ve read, Wembley’s profit from the NFL games there is between £500,000 and £1 million per game. Let’s assume Spurs are able to strike a very good deal that enables the club to match what Wembley brings in, despite fewer tickets being sold. That would be £10 million to £20 million over 10 years. Is that enough to cover the cost of adding a retractable pitch? I strongly doubt it.

Even if the club has reasonable assurances that the 10-year deal would be extended, it feels like we’re talking about marginal amounts in a £675 million to £750 million project. Added to this is the risk, as stated earlier, that comes from installing a first-of-its-kind piece of technology, both in terms of cost but also from the potential for delays (should the technology not work as envisaged, say).

The Viability Report considers the NFL provisions, as they stand, a negative.

In a section analysing the “internal rate of return” (a measure of potential return for investors in development projects such as this), the IRR for the amended scheme is lower than for the original, smaller stadium. The NFL facilities are pinpointed alongside the larger stadium size and the high-specification corporate facilities as dragging down the expected return.

“This principally arise because capital costs have increased significantly between the two applications, partly because of the construction of NFL facilities, whereas income streams are not forecast to increase in the same ratio”, the KPMG report notes.

Per KPMG, it would appear that the additional cost of incorporating NFL facilities may not be worthwhile.

In reaching that conclusion, one imagines KPMG will have considered both the income from the deal between Spurs and the NFL, and the other revenue that may be derived due to the installation of a retractable pitch.

The Spurs stadium project has always been more than just a football stadium — it has long been sold as a multi-purpose venue that will bring visitors to Haringey year-round.* A retractable pitch may make the new stadium more attractive for hosting other events, such as boxing or concerts, or enable Spurs to host more events than could be hosted at Wembley, the Emirates and the Olympic stadium where there is concern over damaging the playing surface.  A sell-out title fight, or a sell-out Coldplay gig, could be just as lucrative an earner for the host stadium as an NFL game.

But this must be very difficult to accurately project, not least due to the incredible competition that Spurs face in luring stadium-filling acts. London is the stadium capital of the world: Wembley and Twickenham host over 80,000 people, the Spurs stadium and Emirates will both hold 60,000, the Olympic stadium 54,000. Other venues over 20,000 capacity include Stamford Bridge (which is about to get a lot bigger and no doubt plusher), Lords, The Valley, Selhurst Park, Craven Cottage, the new stadium in Brentford, and the Oval, not to mention the O2 arena. No other city in the world comes close.

A retractable pitch offers Spurs a competitive advantage in terms of the frequency it can host events — and a good thing too, as judging by that list Spurs will need an edge. Wembley has its own competitive advantage in terms of capacity, and the Olympic Stadium has an edge in terms of transport links and size of its in-stadium area (this is useful for things like Race of Champions, but is going to suck for football as West Ham may discover…)

There is one other revenue source that should be considered: additional marketing income. In my previous piece, I discussed naming rights, and several people pointed out that a deal with the NFL and exposure to the US market at least twice a year will enable Spurs to potentially command more. How much? Again, it is a “how long is a piece of string” assessment — the examples of previous NFL stadium rights deals I cited in my last piece may offer guidance, or they may not. Certainly, it is safe to say that once naming rights negotiations begin, the subject of the NFL deal will come up.

It was also suggested in feedback from my last piece that there may be additional marketing upside in terms of the exposure that an NFL stadium deal will give to Spurs itself. I’m sure there are very smart marketing people who can put a value on this, although personally I’m pretty cynical — this stuff gets tangential and fast. A more specific relationship between Spurs and an NFL franchise may have greater benefits, but we’re into fuzzy territory here.

In sum, Spurs appear to be making a considered gamble that the addition of NFL facilities will eventually bring in sufficient revenue, through hosting events and through a better naming rights deal, that it justifies the additional cost of installing them, and the risk from delays. The 20-game NFL agreement is a nice little hedge in case it doesn’t work out, and may be seen as a precursor to a larger hosting agreement if the number of NFL games taking place in London increases.

It is quite visionary, in its own way, and appears a reasonable roll of the dice.

So why then does a staid Viability Report produced by the accountants of KPMG hint that a bigger gamble is being made?

The London Spurs


When assessing how the rate of return for potential investors in the stadium development could increase, the KPMG report outlines five scenarios:

1 Reduced construction cost

2 Better than estimated on-field performance (all calculations, sensibly, are based on Spurs not participating in the Champions League)

3 The club spends less than the forecast 45 percent of revenues on player costs

4 The club secures an NFL franchise

5 Greater than forecast revenues from commercial development

Number 4 jumps out a bit, doesn’t it?

Yes, it is hypothetical, but the fact that it is was even stated as a potential scenario, and so specifically (the wording is not, say, “The stadium hosts an NFL franchise”) in this document suggests it has been discussed as a possibility between KPMG and Spurs. Remember, the primary source of this Viability Report is information from the club.

(More cynically, I’d also add this may prove a rather useful line in the smoke-and-mirrors world of naming rights negotiations, but for now let’s not disappear down that particular rabbit hole.)

Is THIS the play? It’s not that ENIC is gambling on Spurs hosting more NFL games, or even hosting an NFL franchise, but is instead gambling on actually owning an NFL franchise?

It is an interesting possibility to explore.

Generally, the assumption is that, if and when the NFL finally pushes the button on having a team in London, an existing NFL franchise will move. The most likely contender is the Jacksonville Jaguars — it is owned by Shahid Khan (think Fulham and moustaches), has agreed to play one game a year in London until 2020, and is a small-market team with a (by NFL standards) relatively old stadium.

But there is another possibility to be considered: the league expands, something it has continued to do through its history.

The last NFL expansion was in 2002 when the Houston Texans were added, making the league 32 teams. If the league does expand, London will be high on the list of potential cities. A crucial factor in deciding which city gets a team is stadia. Spurs will own an NFL-ready stadium, in a market the NFL has invested heavily in. This is quite an advantage.

NFL franchises, potentially, make a lot of money. In 2014, each franchise earned $226.4 million in “revenue sharing” — this primarily means income from the league’s TV rights sales. There is “local income”, or merchandising and ticket sales, on top.

For what it’s worth $226.4 million is around £154 million at current rates — under the next Premier League TV deal, the team that finishes first would receive £146 million.

There is a catch though: a wannabe owner can’t just stick its name in a hat, and hope it gets lucky. A franchise owner must pay a fee, and a potentially astronomical one at that.

When the league expanded in 2002, the owner of the Houston Texans, Bob McNair, paid a cool $700 million for his franchise fee — adjusted for inflation, that is $923 million in today’s money. Back in 2002, under the TV deal in place then, annual revenue sharing was $2.6 billion. The figure is now $7.3 billion. The Rams franchise owned by Arsenal’s Stan Kroenke is paying a $550 million fee to relocate from St Louis to Los Angeles. That is the relocation of an existing franchise: one can only wonder how much a new franchise would cost, but certainly the figure would be huge.

As mentioned in my previous post, ENIC (via Joe Lewis) surely has sufficient funds that it can fill any gaps in financing the stadium through equity investment. But securing an NFL franchise is a whole different ball game. ENIC, in the grand scheme of things, is small fry.

As for Lewis, Forbes list his net worth at $5.3 billion, and ranks him comfortably ahead of, say, the Texans owner McNair. But has there ever, in Lewis’ ownership of Spurs, been any suggestion that his net worth is there for the spending? Let alone to the degree required for an NFL franchise? Is his ambition, really, to become an NFL owner too?

I just can’t get there: Harry Kane probably knows more about the NFL than anyone does in the Spurs boardroom.

In fact, the more I think about it, the less likely it seems. But the idea that ENIC don’t really know all that much about the NFL leads onto another scenario, which is much less edifying for all concerned: Spurs are being played.

The fool’s errand


Stan Kroenke (Rams and Arsenal owner) with NFL Commissioner Roger Goodell, via Google Images

As I have stated, the NFL gambit has always struck me as an odd one for ENIC to take.

Daniel Levy, having been in charge of Spurs for 15 years, knows a tremendous amount about running a football club and the business of football (yes, there are plenty of jokes that could be inserted here, particularly during a transfer window). But it isn’t clear from what is known about his CV that he has any knowledge at all about the US sports business.

ENIC is in new territory here, and as smart a businessman as Levy thinks he is, it is at risk of being taken advantage of by a league, and a group of immensely wealthy owners, that hold all the aces in terms of awarding of franchises and making decisions on where games are played.

The NFL has made no secret of its desire to expand the league outside of North America, starting in London. Its International Series at Wembley has been a huge success: the games, now up to three per season, are generally sell-outs and earn an estimated £3 million a time. The league already sells season tickets for dedicated fans wanting to attend all games. Slowly but steadily, the league is building up its fan-base in London in preparation for adding a team in the city permanently.

It was reported that the NFL, in 2012, bid to become the anchor tenant for the Olympic Stadium, but were rebuffed. If true, this interest showed the NFL was aware that Wembley was not a viable long-term option.

With the Spurs project stalled due to the Archway dispute, but the club desperate to push ahead as soon as possible with a new stadium, could this be the opportunity the American league was looking for in terms of having an NFL-equipped stadium in London?

There is some debate over whether an NFL franchise will ever be located in London due to logistical issues such as travel and time difference. But personally, I think the NFL is sincere in wanting to expand to London and take the sport beyond North America — they’ve put a huge amount of effort into this project.

The NFL has tried to internationalize before, albeit unsuccessfully, with NFL Europe — in fact the now-defunct London Monarchs even played at White Hart Lane for a while. In a more globalised world, a sport like the NFL risks becoming parochial if it doesn’t reach beyond North America. The league must look on at the global TV rights secured by the Premier League with envy.

Arguably, the hardest step for the NFL in London was finding a stadium — it now has accomplished this through its deal with Spurs. As discussed above, the 20-game agreement is quite modest compensation in terms of the outlay Spurs are likely making. Did the NFL try to encourage Spurs into taking the risk by dangling the carrot of NFL ownership? It is hardly beyond the realms of possibility.

Nor is the idea that they appealed to the reptilian side of Daniel Levy’s brain — the part that thought spending £26 million on 28-year-old Roberto Soldado or appointing Juande Ramos, say, were good ideas — through some convincing talk of future marketing or revenue-generating possibilities.

Perhaps a gambler was encouraged to up his stake, and the NFL, London base achieved with minimal cost and effort, is rubbing its hands with glee?

Those who take a more negative view on Levy’s chairmanship may be inclined to agree.

But there is a counterpoint to this theory, which is only fair to suggest. Sure, Levy may have been naive, but he may also have been very smart indeed.

Levy the Investor vs Levy the Fan


Joe Lewis and Daniel Levy, via Google Images

In researching this article, I came across the Guardian’s original report on ENIC’s securing of a majority stake in Spurs back in 2000. ENIC paid £22 million for then plain old Alan Sugar’s 27 percent stake, taking its total shareholding to 29.9 percent. The deal valued the club at around £60 million.

“Levy hates publicity and has no desire to take on the chairmanship, preferring instead to find a figurehead and pull the strings in the background,” the report stated, before adding, optimistically, that Levy’s first priority would be “to put together the plan to bring the glory days back to White Hart Lane.”

Interestingly, the article also identified a dichotomy that has never really gone away throughout ENIC’s tenure. Describing Levy as a season-ticket holder, the Guardian noted he was “certain to invest in the club but will not let his passion for the team overrule his business sense.”

“Levy the Investor” versus “Levy the Fan”. We’ve seen the fruits of this conflict throughout the last 15 years. The long-term vision of, say, investing in a world-class training facility, versus the knee-jerk impulse to sack managers after a poor run and the manic switching between continental and English footballing philosophies.

For Levy the Investor, Spurs has been an incredible success. In 2007, ENIC brought out Sugar’s remaining stake for a further £25 million. This time, the deal valued the club at £209.5 million. Nothing that has happened recently suggests the investment hasn’t performed extremely well since. The £1 billion valuation put about by the club amid the Cain Hoy interest appeared purposefully high, but the idea that the club has at least doubled again in value since 2007 is hardly unlikely.

The biggest constraint on Spurs’ value has been the small stadium capacity that limits its ability to compete with rivals such as Arsenal. Right now, the club is making a huge, and risky, investment to change this. While debt will increase tremendously, revenues will increase once the stadium is built, and so will its value.

For Levy the Investor, it may be a tempting time to cash out. And in the NFL, he may have been handed the tools to cash out in a truly spectacular fashion.

Think of the pitch: with Spurs, you’re not just getting an established Premier League club (TV money ranging from £99 million to £150 million per season, at least the same again in match-day and commercial revenue). With an NFL-equipped stadium in a desirous market, you’re also getting the potential keys to an NFL franchise (revenue sharing £154 million, plus local revenue on top).

Your pockets are going to have to be deep, to cover both buying out ENIC and a potential franchise fee. But if it is within your range, and you are serious about investing in sports ownership, it’s not a bad play. My thoughts instantly go to someone like Guggenheim Partners, not just due to the Cain Hoy connections. Guggenheim Partners has $250 billion of assets under management, and in 2012 it was part of a consortium with Magic Johnson that bought the LA Dodgers baseball franchise for $2.15 billion. I’m not saying “it will be them”, but rather giving an example of the type of party that may be interested.

The NFL additions would make Spurs more appealing to US investors specifically — even more appealing than they already are as a highly profitable club in the Premier League. ENIC may not be able to realise the club’s maximum value as it lacks sufficient resources to secure an NFL franchise itself, but this is the sort of upside that may appeal to a group with deeper pockets and the right knowledge and connections.

The risk of installing a sliding pitch appears a very reasonable gamble from the view of significantly increasing the value of an asset before a sale, with a deliberate market in mind.

I don’t doubt that if ENIC wants to cash out after the stadium is built, it could. The question is whether Joe Lewis and Levy want to? With Premier League TV cash pouring in from all corners of the globe, it may be a tempting to sit back and count the money as it rolls in.

On a human level, Lewis is now 78. We really know very little about him, although this piece by David Hytner from the giddy summer of 2013 was an interesting glimpse. Is Spurs just a part of the Tavistock group, to be bought low and sold high, or is it more to him and his family than that? It is impossible to say.

And what of Levy? If Levy the Investor may be tempted to cash out, could he sell the idea to Levy the Fan?

Levy is 53, and has been running the club for 15 years, a good part of his professional life. Surely, you would think, there comes a point when he decides that he has had enough of negotiating with agents, firing managers and dealing with snotty fans. He has already made a fortune from his time with Spurs — both in salary and the fact that he and his family are “potential beneficiaries of a discretionary trust that ultimates owns 29.41 percent” of ENIC. Selling his stake would take him to the next level of wealth, and may significantly reduces his stress.

But does this quite match up with reality?

Love him or loathe him, Levy is at the Spurs games, home and away, week-in and week-out. Fifteen years on, he still appears to engage in transfer negotiations with relish, in particularly driving fellow executives such as Messrs Aulas and Peace to distraction. He is deeply involved in the stadium project — at the final planning meeting in December, which stretched late into the night, he was sat in the front row even though it was another Spurs executive, Donna-Marie Cullen, who was representing the club.

His son, Josh, who works as an investment banker, increasingly accompanies him at matches. Is Spurs going to go the route of many a sports team, and become a hereditary asset that is more than a mere investment? Levy is a Spurs fan, is getting to run Spurs, and is getting rich doing so — why walk away from that? Or to put it another way, what on earth would Levy do with himself if he wasn’t running Spurs?

Once the stadium is completed in 2018, by which time the NFL’s future in London may be more clear, the logical play from an investment standpoint may be to sell.

But this is football, where logic is generally checked at the door.


As stated, much of what I have discussed here is hypothetical. As the KPMG report itself notes, Spurs are investing up to £750 million in a new stadium development, but the “ever-changing nature of the industry in which it operates” poses inherent risks. Much of what is to come is unknown — including by those making the decisions.

By installing NFL facilities, Spurs are taking several risks. There is the increased cost of installing them, the potential for delays either in planning or construction, and the gamble that, once installed, the club can derive the anticipated benefits.

The 20-game NFL deal offsets some of the cost, and the planning permission has now been secured. The key now will be project management to ensure the stadium is built on time, on budget, and to specification.

Whether the ultimate goal is merely enhanced hosting and marketing revenue, as Occam’s Razor would suggest, or something altogether grander, will become clear in time. But to me, it appears Spurs are taking a calculated and reasonable gamble. It is certainly imaginative.

Whatever happens, Spurs are set for a fascinating period, both on and off the field. I’ll be watching both aspects, closely.


Thanks for reading, please follow me on Twitter for more Spurs chat, my handle is @spurs_report. I’d welcome any feedback on this article.

Part One of this deep dive can be found here.

* Update via HotspurSam, who has added some very insightful comments this series: “It is worth noting that in the old consented scheme there was only provision for to 4 additional events per annum. In this scheme it is for up 10 non-THFC sporting events and 6 non sporting events (concerts)”

** I’ve also changed the headline from “anatomy of a gamble” — it’s my blog, I can do these things