Daniel Levy - Chairman

[Raziel]

Sorry, I don't think I am displaying any bias at all.... There is nothing in my post that points at a dislike of the current administration, if that is what you see then I think you are trying to find that. I was simply trying to make a completely dispassionate valuation of THFC.

I think if you were to ask 100 people (with no affinity to Spurs or Arsenal) which of the two sporting institutions was the more prestigious to own then more than 50 of those people would say Arsenal. I don't like that being the case and get no joy out of it, I just think that reflects reality.

Yes, I value Spurs at £1.5 billion and Arsenal at more than £1.8 billion. Arsenal do not have £1.4 billion of gross debt on their books. Arsenal also have a considerably larger number of supporters than we do (and thus more potential to realise increased commercial revenue). If you believe that having a level of gross debt that is more than 3 times larger than turnover has no bearing on the asset value of a company then please can you explain how that is as it is the inverse of everything that I have experienced throughout my business life. Additionally if the vast increase in the valuation of football clubs is likely to be driven by broadcast revenues (as I think you believe will be the case) then the stadium that a club operates in becomes less and less of a factor. It would actually likely be a far better investment for me to buy (e.g) Saudi Sportswashing Machine or Leeds or Aston Villa for a fraction of the purchase price of Spurs or Arsenal and then I could sink the rest of the money into players, vastly increasing the likelihood of on pitch success that in turn would drive more interest and fans and then improve commercial revenues and the number of streaming viewers.

Any investment company will sell when they believe the value of their asset is no longer growing at a higher rate than they could achieve by putting their money into another asset. This is no slight on ENIC, I have owned a majority stake in many assets over the years and disposed of them when I felt the value was no longer there, that is just business. You do not (well I certainly do not) choose to sell and asset after it has made you a specific amount of money, instead you sell an asset when you believe the money that you will realise by selling that asset can be put to better use in another investment. Surely you understand that? If I were lucky (or I guess I should say had the foresight) to own an established premier league team right now then I wouldn't sell it unless I felt the bid I received factored in more than I perceive the future value of streaming/social media income increases to be (or more prudently if I felt I could take that money put it into a different industry (or even a different business in the same industry) and it would make me a bigger return) Those numbers can only be forecast right now. I'm factoring in the fact that our fanbase will mean we would be about 6th in line in England for this revenue. At my £1.5billion valuation this means that ENIC have a paper profit of about £1.3billion from their investment in Spurs (based on £45m purchase price and them owning 90% of the club. That is a return of 29 times on their original investment, with growth like that you're not going to sell are you?.... well at least not until you think the growth is done/slowing/lower than something else that you think is a sure thing.

US sports make a huge amount of revenue because they do not have anywhere near the same number of professional clubs as there are in football. Every single person in the US (and beyond) has a single NFL team that they follow, whereas there are literally thousands of professional football teams dotted around the planet. The US leagues are close to having a monopoly on American football, Basketball and Baseball. Football instead has many different countries selling their product and even different divisions in the same country selling their product and then the regional associations such as UEFA also selling their product. This puts football in a weaker position than the US franchised sports.

It's easy to pick apart somebody else's valuation of an asset mate. Much harder to provide your own valuation to be picked apart. People's ideas also tend to change when real money is suddenly involved.

- Mate, public perception of a company is not valuation, from a book asset perspective (and this is independently verified) Tottenham Hotspur is a more valuable asset than Arsenal
- I'd also argue Arsenal are "yesterday's brand" at this point, supporter gap between the two don't mean much unless it's really significant and you actually have a way to monetize those additional supporters
- Arsenals debt is lower but at worst interest rate
- Debt has nothing to do with asset valuation outside of if you are talking about final purchase price, high debt ratios are common in football, so you have to factor in industry, comparison to peers vs. talking some blanket view of turnover/debt ratio.

Now is Spurs worth £1.5B vs. £2.0B vs. £2.5B? like most things it's what someone is willing to pay for it (e.g. part of the Scum offer is supposedly the guy is a fan, would a non fan value them anywhere near there?), hard to value football clubs when the last big purchases were several years ago and nowhere in the £1B+ range (so no precedent)

And the US sports comment is off mate
- Most people in the US follow multiple sports (i.e. multiple teams) plus major leagues and college sports (very divided)
- There may be thousands of football clubs in the world but from a commercial perspective, there are very few relevant (Brighton as example is an irrelevant brand for all intents and purposes, in a cable subscription they would be a bundled free channel). You are actually looking at perhaps 50 clubs globally (and that is a stretch)

American sports work because they marketed/sponsored/commercialized way more than other global sports, we can get into the demographics differences as well.

 

[SpurMeUp]

Bloodyhell - that's a hard one....

I would say something like £1.5 billion factors in the anticipated 'known' revenues (stadium, extra events, NFL, potential for a realistic naming rights deal, current broadcasting revenue and recent trends along with our £1.4b+ of gross debt) with there being a fair amount of padding there for the potential of increased revenue from streaming/social media monetisation.

Quite telling that Daniel Ek's bid for Arsenal was £1.8 billion (similar sized stadium, similar revenues, larger current fan base, a (seemingly) more prestigious asset, and vastly lower gross debt than THFC). Though it is also telling that Kroenke rejected this offer out of hand. I think at present PL club owners think the streaming/social media revenue will be huge in (say) a decade's time. In the interim I think sales of football clubs are only likely to occur if owners get into money trouble. Though once the promised land of streaming/social media revenue arrives I still don't really see how owners can make a profit out of running a club (other than through selling up and realising the asset price increase) as clubs would still need to be operating near the top of the pile to gain/maintain fan interest and that will see the clubs competing with each other by spending more and more money on transfer fees and wages.

Of course the key to any good investment is knowing when to get in and when to get out. ENIC certainly got in at a good time. I'm sure they will get out at a good time as well, they are run by very clever men. My thoughts are that somewhere around the 5th year of large growth in streaming revenues might be the sweet spot here. The potential of this growing forever will still be priced into the asset values and the transfer fees and wages may not have initially kept pace with that steep growth. As the revenue growth starts to slow and the fees and wages catch up then we may start to see the trend slowing and the same level of upside is unlikely to be priced in. That's just my opinion though, it could be that this revenue stream is still growing at a massive rate a decade or more after it initially booms or that something completely new comes along that we haven't even considered yet that blows existing revenue streams out of the water. There is also the fact that the World's population is growing at a fast rate and the World is becoming a smaller place so that clubs can attract far flung fans on a much wider scale (as things like streaming and social media will hugely enable, especially with the ability to get online improving in every single far-flung corner of the World).

I actually tried to put a consortium together to buy Leeds many years ago. I thought that football as an entertainment business was still vastly undervalued and the upside for a reasonably big one club city was large. I hadn't factored in the potential for streaming and the World becoming smaller back then and couldn't raise enough capital from private investors to make a go of it. I think if I had considered that and made it part of the pitch then I may well be sitting here today running Leeds, almost as rich as Daniel Levy.... Oh for a time machine!... Though I'd probably have a bunch of Leeds fans griping about how much I had got wrong at the club just as happens on here with Levy.

Maybe the one thing you're missing is that these businesses are more accessories than earners for their owners. More like a billionaires version of owning a Ferrari. Its a trophy and keeps them entertained. All the ITK they could want To Ek (what kind of name is that!), Lewis etc they are not in football to make money. Therefore valuing a club as a business in a conventional sense...makes no sense. Unless there are wage caps, elite football clubs tend to be billionaire play-things, not so much money-making enterprises. If you were to value clubs purely as a business with no prospect of attracting billionaires, then you could make a case for them being far less valuable. They are vanity projects. We are slightly different. Levy is not mega rich. But the club are not paying dividends, so he takes a decent salary. It is quite possible that Levy is holding up Lewis from backing Spurs with his own investment (as Levy would have to match it proportionally). But I don't think that is the case. Lewis and Levy are playing the game without cheat mode. Lewis could easily get one of his companies to become the short sponsor or training ground sponsor. But that is not our style.

So I'd say your valuation is both too low and too high! As Ek showed, to the right solvent person, the club is worth £2b, as the debt is long term and manageable. The new owner wouldn't leverage a buy out so they wouldn't want to add more debt, a la United. But listed on a stock exchange, the clubs prospects for turning a profit are not great. There have been no dividends and wages are a massive issue. You wouldn't see many analysts suggesting a 'Buy' rating with the cold reality of the business.

 

[Diamond Lights]

Actually our run between Harry and Poch is the best run in the history of the club in terms of league finishes

Add in the 21 Cup QF, SF or Finals in the ENIC timeframe and the story looks very different.

The issue has been crossing the final hurdle, which repeatedly I've said cannot be all ENIC (yes, they can own some, but it's a it more than that when you look at the above).

Not really sure what proves. Ultimately we won more in the 10 years before ENIC than 20 years thereafter if you want to hold an opposing view. And that would extend to other decades too.

 

[Gazza]

- Mate, public perception of a company is not valuation, from a book asset perspective (and this is independently verified) Tottenham Hotspur is a more valuable asset than Arsenal
- I'd also argue Arsenal are "yesterday's brand" at this point, supporter gap between the two don't mean much unless it's really significant and you actually have a way to monetize those additional supporters
- Arsenals debt is lower but at worst interest rate
- Debt has nothing to do with asset valuation outside of if you are talking about final purchase price, high debt ratios are common in football, so you have to factor in industry, comparison to peers vs. talking some blanket view of turnover/debt ratio.

Now is Spurs worth £1.5B vs. £2.0B vs. £2.5B? like most things it's what someone is willing to pay for it (e.g. part of the Scum offer is supposedly the guy is a fan, would a non fan value them anywhere near there?), hard to value football clubs when the last big purchases were several years ago and nowhere in the £1B+ range (so no precedent)

And the US sports comment is off mate
- Most people in the US follow multiple sports (i.e. multiple teams) plus major leagues and college sports (very divided)
- There may be thousands of football clubs in the world but from a commercial perspective, there are very few relevant (Brighton as example is an irrelevant brand for all intents and purposes, in a cable subscription they would be a bundled free channel). You are actually looking at perhaps 50 clubs globally (and that is a stretch)

American sports work because they marketed/sponsored/commercialized way more than other global sports, we can get into the demographics differences as well.

Also, America is a very unique country when it comes to being patriotic and American ... I have lived there for about 12 years previously. They are ferocious in media marketing games and American clubs in general (Borderline suffocating). They marginalize world wide sports and even have the cheek to say "World Champions" when a trophy is lifted, even when it's pretty much an American competition.

I would say in 50 odd years' time, the MSL will be as big as the premier league in America. You will see less and less EPL kits being worn around town and replaced with stupid team names like the Sounders, "Real" Salt lake, Fire, Inter Miami ... its cringe to fudge but they lap it up as we do in general. The only difference is we watch to complain and shout, they watch to get giddy as fudge for no reason with their boring "Let's go!" chant in any sport.

 

[Raziel]

Not really sure what proves. Ultimately we won more in the 10 years before ENIC than 20 years thereafter if you want to hold an opposing view. And that would extend to other decades too.

I'm not holding an opposing view, I'm showing different data points

- Spurs until the 60's were a 1 or 2 trophy a season club
- The 60's were our big decade
- Since then, each decade has been less successful re trophy count (so in your example, the ten years before ENIC were less successful than the 10 years before, and same the 10 before)

Based on that, simply saying ENIC is the sole cause of lack of success simply isn't backed by data, a trend has been there for a long time (you could even say decades of success of more than 2 trophies are the exception).

Now add in the additional data points

- We have continued to get to cup QF, SF & Finals to pretty much the same rate as at least the previous decade to ENIC
- We have achieved our best consistent league run in the history of the club under ENIC and specifically recently
- Since the advent of EPL/CL, trophies have gone to a smaller group of clubs due to the larger monitory gap

I'm not trying to prove anything, look at ALL of the data and make your own opinion, however randomly picking any one of those points without considering the others is simply not accurate and smacks of trying to find the data that aligns with your viewpoint.

 

[Finney Is Back]

- Mate, public perception of a company is not valuation, from a book asset perspective (and this is independently verified) Tottenham Hotspur is a more valuable asset than Arsenal
- I'd also argue Arsenal are "yesterday's brand" at this point, supporter gap between the two don't mean much unless it's really significant and you actually have a way to monetize those additional supporters
- Arsenals debt is lower but at worst interest rate
- Debt has nothing to do with asset valuation outside of if you are talking about final purchase price, high debt ratios are common in football, so you have to factor in industry, comparison to peers vs. talking some blanket view of turnover/debt ratio.

Now is Spurs worth £1.5B vs. £2.0B vs. £2.5B? like most things it's what someone is willing to pay for it (e.g. part of the Scum offer is supposedly the guy is a fan, would a non fan value them anywhere near there?), hard to value football clubs when the last big purchases were several years ago and nowhere in the £1B+ range (so no precedent)

And the US sports comment is off mate
- Most people in the US follow multiple sports (i.e. multiple teams) plus major leagues and college sports (very divided)
- There may be thousands of football clubs in the world but from a commercial perspective, there are very few relevant (Brighton as example is an irrelevant brand for all intents and purposes, in a cable subscription they would be a bundled free channel). You are actually looking at perhaps 50 clubs globally (and that is a stretch)

American sports work because they marketed/sponsored/commercialized way more than other global sports, we can get into the demographics differences as well.

I was interested to see how my own valuation (that you have shouted down) stands up to something likely to be a little more balanced so I went to Forbes:

https://www.forbes.com/soccer-valuations/list/#tab:overall

Forbes list Arsenal as being worth $2.8b and us $2.3b..... So £1.63b for us and £1.98b for Arsenal.

I'd say my initial thoughts were therefore pretty good (within 10% with my valuations).... Man, I really should do this sort of thing for a living!

Like I say - much easier to shoot down somebody else's valuation on something than make a valuation yourself.

Regarding Arsenal's debt being on a worse interest rate than ours. I know that Arsenal did have the remaining portion of their stadium debt on high interest rates but Kroenke actually paid this off last year (believed to be about £180 million for the debt and early payment penalties). Kroenke made a new loan to Arsenal for the combined amount. Previously Arsenal were paying £20m interest a year on this loan that had a final maturity date of 2031. It is rumoured that Kroenke's loan is on much more favourable interest rates (though as it is a private loan we will not know the rate until their 2022 accounts). Since then Arsenal have also taken out a £120m BoE loan (same interest terms that we took ours out on) and they also have some debt to Barclays and transfer debt. I think Arsenal's total gross debt is about a third of ours.

Regarding supporter gap.... Here is real time Twitter followers:
https://footballpredictions.net/social-rating/world/top-20-football-clubs
17.5million vs 6million - I'll let you spin up a yarn as to why that is insignificant.

 

[Robspur12]

I'm not holding an opposing view, I'm showing different data points

- Spurs until the 60's were a 1 or 2 trophy a season club
- The 60's were our big decade
- Since then, each decade has been less successful re trophy count (so in your example, the ten years before ENIC were less successful than the 10 years before, and same the 10 before)

Based on that, simply saying ENIC is the sole cause of lack of success simply isn't backed by data, a trend has been there for a long time (you could even say decades of success of more than 2 trophies are the exception).

Now add in the additional data points

- We have continued to get to cup QF, SF & Finals to pretty much the same rate as at least the previous decade to ENIC
- We have achieved our best consistent league run in the history of the club under ENIC and specifically recently
- Since the advent of EPL/CL, trophies have gone to a smaller group of clubs due to the larger monitory gap

I'm not trying to prove anything, look at ALL of the data and make your own opinion, however randomly picking any one of those points without considering the others is simply not accurate and smacks of trying to find the data that aligns with your viewpoint.

So Enic have pretty much kept up our mediocrity. Not really a ringing endorsement.

 

[SpurMeUp]

Regarding supporter gap.... Here is real time Twitter followers:
https://footballpredictions.net/social-rating/world/top-20-football-clubs
17.5million vs 6million - I'll let you spin up a yarn as to why that is insignificant.

I blame @parklane1

 

[billyiddo]

So Enic have pretty much kept up our mediocrity. Not really a ringing endorsement.

The obvious big positives at this stage are the stadium and closing the financial gap that developed between ourselves and the CL clubs during the late 90s/early 00s - i think some of our supporters tend to take it for granted that we've got ourselves on an equal footing with the likes of Liverpool and Chelsea off the pitch, i understand on the pitch is where it ultimately matters to fans and until that success is delivered the owners will be questioned, but it has to be recognised that we're now in a position off the field to demand that success on it and the owners played their part in getting us to that position.

 

[thfcsteff]

Tielemans

Poch wanted Mane. We wouldn't pay the wages. Mitchell quit. Levy gave him Sissoko saying he was 'the same sort of player'...as mental as it is when written down (and I agree, it is!) Sissoko was signed to fill the squad gap Poch wanted Mane for.

(This is what was said at the time, and repeated in the press since, albeit I should note Mane's agent denied wages are what suppered our signing him but I would not expect him to confirm it!!!!)...

 

[Bedfordspurs]

Poch wanted Mane. We wouldn't pay the wages. Mitchell quit. Levy gave him Sissoko saying he was 'the same sort of player'...as mental as it is when written down (and I agree, it is!) Sissoko was signed to fill the squad gap Poch wanted Mane for.

Yep
The club offered Poch Tielemans
Poch turned him down
He kept on playing sissoko (this was sissoko at his best for us)

 

[thfcsteff]

Yep
The club offered Poch Tielemans
Poch turned him down
He kept on playing sissoko (this was sissoko at his best for us)

Ah gotcha. You're referring to not signing Tielemans and why that might've been. Got it now. I suspect that money might've been a factor (i.e. not having enough to make what he might've considered a gamble)? Of course, there is always the possibility that he didn't, indeed, want him for whatever reason. So yes, maybe it was a straight choice. Not sure if it ranks as a disastrous decision if that is the case TBH. I think Tielemans is good but not amazing?

 

[Gazza Dazzla]

Yep
The club offered Poch Tielemans
Poch turned him down
He kept on playing sissoko (this was sissoko at his best for us)

At a time when the only fit CM’s we had were Sissoko and Winks. Even if Poch clearly didn’t rate Tielmans himself surely he would have realised the benefit of another CM body in the squad?

 

[Bedfordspurs]

Ah gotcha. You're referring to not signing Tielemans and why that might've been. Got it now. I suspect that money might've been a factor (i.e. not having enough to make what he might've considered a gamble)? Of course, there is always the possibility that he didn't, indeed, want him for whatever reason. So yes, maybe it was a straight choice. Not sure if it ranks as a disastrous decision if that is the case TBH. I think Tielemans is good but not amazing?

It was a loan
Just an odd call. The guys going this summer for £50m plus and our alternatives were poor
I genuinely think Poch started to panic about signings because of the ones that failed and started to focus more and more on what he had
Also Tielemans hadn’t been a success at Monaco

 

[Danishfurniturelover]

Poch wanted Mane. We wouldn't pay the wages. Mitchell quit. Levy gave him Sissoko saying he was 'the same sort of player'...as mental as it is when written down (and I agree, it is!) Sissoko was signed to fill the squad gap Poch wanted Mane for.

(This is what was said at the time, and repeated in the press since, albeit I should note Mane's agent denied wages are what suppered our signing him but I would not expect him to confirm it!!!!)...

You do wonder whether Levy is on the spectrum.

 

[parklane1]

I blame @statlover1

Shows we have not got as many idiots who use T w a TT er as a lot of other clubs?

 

[Finney Is Back]

Shows we have not got as many idiots who use T w a TT er as a lot of other clubs?

That logic works well until you realise that West Ham have less than half our number...

 

[parklane1]

That logic works well until you realise that West Ham have less than half our number...

Can they use phones? most of them are still living in caves.

 

[SteveAWOL]

Actually our run between Harry and Poch is the best run in the history of the club in terms of league finishes

Add in the 21 Cup QF, SF or Finals in the ENIC timeframe and the story looks very different.

The issue has been crossing the final hurdle, which repeatedly I've said cannot be all ENIC (yes, they can own some, but it's a it more than that when you look at the above).

Yup, I posted this list of average placing by decade a few weeks ago and was surprised at how mediocre we were in the league even back during Nicholson’s heyday

1950s = 9th
1960s = 5th
1970s = 13th
1980s = 6th
1990s = 11th
2000s = 9th
2010s = 4th

Guess we just have to accept that since the advent of tactical substitutions first being permitted back in 1960s, those clubs who traditionally finish above us in the league have expanded their squads meaning that cup competitions which were once Spurs forte are now tasty little morsels for them to gobble up too; so that even their fringe players know what it’s like to win silverware.

Hopefully once the pandemic is over and our snazzy new stadium is able to help us bridge that financial gap to the likes of ManU and the Lott£ry winners we’ll finally get that bespoke furniture and cross the winning line again.

 

[Raziel]

I was interested to see how my own valuation (that you have shouted down) stands up to something likely to be a little more balanced so I went to Forbes:

https://www.forbes.com/soccer-valuations/list/#tab:overall

Forbes list Arsenal as being worth $2.8b and us $2.3b..... So £1.63b for us and £1.98b for Arsenal.

I'd say my initial thoughts were therefore pretty good (within 10% with my valuations).... Man, I really should do this sort of thing for a living!

Like I say - much easier to shoot down somebody else's valuation on something than make a valuation yourself.

Regarding Arsenal's debt being on a worse interest rate than ours. I know that Arsenal did have the remaining portion of their stadium debt on high interest rates but Kroenke actually paid this off last year (believed to be about £180 million for the debt and early payment penalties). Kroenke made a new loan to Arsenal for the combined amount. Previously Arsenal were paying £20m interest a year on this loan that had a final maturity date of 2031. It is rumoured that Kroenke's loan is on much more favourable interest rates (though as it is a private loan we will not know the rate until their 2022 accounts). Since then Arsenal have also taken out a £120m BoE loan (same interest terms that we took ours out on) and they also have some debt to Barclays and transfer debt. I think Arsenal's total gross debt is about a third of ours.

Regarding supporter gap.... Here is real time Twitter followers:
https://footballpredictions.net/social-rating/world/top-20-football-clubs
17.5million vs 6million - I'll let you spin up a yarn as to why that is insignificant.

And here are two that contradict that

Brand value ranking football clubs worldwide 2020 | Statista
Tottenham crowned Premier League's most valuable club over Manchester United and Emirates Marketing Project - study | London Evening Standard | Evening Standard
And of course from a Deloitte money league we have been ahead for some time as well.

We can play this game all day mate, but let's keep it simple (to make real evaluation you would need access to the books and plans, you know that)

- Do you really think someone will pay (assuming debt pay off is part of deal) £300/£400M more for one vs the other? and if they did, Arsenal? (I still think you are missing the potential of NFL)
- Book value at it's best is flimflam because it comes down to what someone is willing to pay, based on your Forbes numbers a billionaire fan underbid for the Scum by £1B ..

And please mate, I'll accept Forbes (and we can argue Forbes, vs. Deloitte vs. lesser sources) but please don't quote twitter subs as any real measure of fans (twitter is bot infested and even if it wasn't, the connection between twitter follows and monetizable fans would be a long conversation).