The reasons that Tottenham and Daniel Levy are yet to finalise their search for fresh equity investment are becoming increasingly clearer.
Spurs officially announced that they were open to a takeover earlier this year, with chairman and co-owner Levy using language that left the door open for majority or minority investmen
Having raised £500m for a new football acquisition, former Newcastle United supremo
Previously, Formula 1 owners Liberty Media have reportedly shown an interest, as have MSP Sports Capital, who recently failed in a bid to buy Everton.
But there has been next to nothing in the way of reliable reports suggesting that any investment is imminent – experts believe that may be because Tottenham’s £3.75bn valuation is too high.
What’s more, Spurs have actually been on the market for several years. The announcement in April merely confirmed what was already widely known within the industry.
Levy and ENIC’s stewardship of Spurs over the last two decades has been controversial among fans, but from a business perspective they are considered one of the best run clubs in the world.
So why have the hierarchy failed to get a deal of any description over the line?
Cost control a major hurdle to Spurs takeover
In recent years, US private equity funds have tightened their grip on football, investing en masse in the Premier League and further afield.
However, in the first genuine development in the investment saga in months, it was reported last week that private equity’s interest in the likes of Spurs is decreasing.
There are a number of factors at play here, but perhaps the most significant is the perception that cost control in the Premier League is almost non-existent.
Spurs are in the minority in that they live within their financial means.
Increasingly, clubs are spending as much as possible within the spending regulations. And that means that profitability is nosediving across the division. Not ideal for investors.
In a second development that illustrates this trend, FIFA have confirmed that almost £5bn has been spent this summer on international transfers, the second most of all time.
Unsurprisingly, the Premier League was by far the biggest individual driver even in a relatively fallow year by its own opulent standards.
The last thing would-be investors want from a club like Spurs is to get into an arms race. That is why the NFL or NBA, where costs are essentially fixed and predictable, are more attractive.
Champions League revolution could breathe life into Tottenham auction
The US investors that own more than half of the Premier League’s clubs are banking on there being a big bang moment in terms of revenue.
Otherwise, clubs will continue to sustain losses and owners will be unable to realise any value.
For clubs like Spurs, the previous solution had been the European Super League.
That would have transformed the North London club’s finances overnight, but the monumental fan backlash coupled with mounting legislative hurdles mean that is a near impossibility at present.
FIFA have promised that the expanded Club World Cup can bring revenues north of £35m per tournament, but that will be a sporadic financial uplift at Spurs because of the qualifying criteria.
The Champions League, however, has moved permanently to an expanded model that UEFA thinks can deliver 25 per cent more income for top clubs each year.
Spurs missed out on the inaugural edition of the revamped tournament in 2024-25, but they see themselves as regulars in the competition going forward.
As many as six Premier League clubs could qualify for the Champions League in future years, so investors might see these near-guaranteed revenues as the golden goose in terms of investing in Tottenham.
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