🏟️ Why on earth did Tottenham Hotspur Spend £1.2bn on a New Stadium?

I remember being in the pandemic and learning about the soaring costs of the new Tottenham Hotspur Stadium.

It started at £350m. Then it became £750m. Not long after it had reached £1bn!

Tottenham had to re-shape their entire finance facility. I then read that they borrowed money from the Bank of England!

I often wondered if it was worth it. Why cripple the club financially to press forward in building this stadium?

Well, it all makes sense to me now.

The Tottenham Hotspur Stadium is a masterpiece. It’s also an economic powerhouse. Today, we break down the economics behind that incredible building - and why Daniel Levy is a living genius.

It was more than a decade ago now but many people forget that Tottenham Hotspur put in a very strong bid to be the recipients of the Olympic Stadium after the 2012 London Games.

Had they won that bid there is a strong chance that the Tottenham Hotspur Stadium may never have been constructed.

West Ham United pipped them to the post however and thus construction started in 2015 after several years of delays.

The first game was held on April 3 2019 in a 2-0 win against Crystal Palace and immediately the financing, the stress and the toil made sense to many.

There are 4 key reasons why:

1. Matchday Income

2. Commercial Opportunities

3. Valuation of Tottenham

4. Desirability of Tottenham

Matchday income is a massive factor. Lets simply look at the attendance difference from White Lane to the new stadium.

• 31,848: Last game at White Hart Lane (vs Manchester United)

• 59,215: First game at Tottenham Hotspur Stadium (vs Crystal Palace)

Tottenham now claw in over £4m per home game! It was nowhere near this much before.

In their latest set of company accounts they claimed £106.4m of revenue came from Matchday income - comfortably the highest they have ever commanded. Only Manchester United had a higher cume in the Premier League.

Infact if you compare this to the reported matchday income in 2017 you see the clear difference:

• £53.7m: 2017 Matchday Income

• £106.4m: 2022 Matchday Income 😮‍💨

Whats fascinating to me is if you take the most reported matchday income of the Top 6 Premier League clubs and divide that by their average attendance it shows that Spurs now claim more money per attendee than any other club in the country.

They invested a lot in a fantastic suite of corporate boxes and have state-of-the-art seating allowing for a greater per-person spend than usual.

Daniel Levy is no fool though. Even though this is the home of Tottenham Hotspur, this is a multi-purpose facility. There have been several concerts hosted at the stadium to date:

• Guns & Roses x2

• Beyoncé x5

• Lady Gaga x2

• Red Hot Chilli Peppers

• Wizkid

There are 2 NFL games per season at the Stadium. There is Go-Karting. There is Rugby League.

Not to mention Anthony Joshua fought Oleksandr Usyk there. Tyson Fury fought Dereck Chisora there.

Tottenham make a lot of money from site fees being paid for other sports to use the facility.

This increase in revenue does two things:

1. Makes Spurs more desirable to play for free agents

2. Increases the company valuation

Despite having the biggest debt burden of any team in the country, a report from Statista currently values Spurs at 2.78bn EUR a 45% increase on last year.

The final piece of their jigsaw is naming the stadium. Despite some heavy rumours the building is still called the Tottenham Hotspur Stadium.

It is widely expected that Tottenham will soon announce the naming of the stadium selling the rights to an org in a lucrative deal.

To put things into perspective, Arsenal signed a reported £100m/13yr deal for the naming rights to their stadium in 2006.

You can expect Spurs to 4x that amount with their deal when they get one!

It’s been a long and arduous journey, but in just a few years post-completion the vision is already bearing fruit. It will only get better in years to come.

Well played Daniel Levy, well played.

leave you this week with an unfortunate situation in the NFL. Amon-ra StBrown is a receiver for the Detroit Lions and in the last week of NFL games he was fined $43,709 for what appears to be a very harmless block.

Infact, if you watch the above video you can barely see where the foul is!

Click on the original tweet and the first reply will show a clearer shot of the incident.

He didn’t hold back from expressing his frustration on Twitter ha!

As always, I’ll see you next week.

Salud.