Qatari money is everywhere in London – and the Tottenham Hotspur could be the Gulf state’s latest enclave in the capital, with Daniel Levy and ENIC looking for new investment.
Spurs’ search for a new equity partner is taking place against a backdrop of the club’s worst season on the pitch in 20 years, when Levy and Joe Lewis had only just taken over.
Last night’s 1-0 defeat to Manchester City leaves them 13th in the Premier League table, with their only realistic route to European football next season now the Europa League.
Triumph in that competition would represent Tottenham’s first silverware since 2008 and only the second major trophy in the ENIC era.
And yet, the club’s enterprise value has gone stratospheric under the regime. The owners paid less than £50m to take full control the club from Alan Sugar. Now, Levy values Spurs at £3.75bn.
After Sugar had sold the club, he compared Premier League cash to ‘prune juice – in one end out of the other. That is not the case at Tottenham, whose balance sheet is among the very best in world football.
However, the very reasons that the financials are so strong are the same that fans insist are holding the North Londoners back on the pitch.
Spurs are fixated on commercial income, have the lowest wages-to-turnover ratio in the top flight, and their stadium is geared towards day trippers who spend more than bedrock fans.
The accusation from the terraces is that Spurs is a business with a football club attached. The sport itself is secondary.
The possibility of Levy launching Europe’s first NFL franchise at the Tottenham Hotspur Stadium is case in point, though it also demonstrates just how far their ‘brand’ has come under Levy.
The quantum leap financially was the move to the new stadium, yes, but ENIC’s £3.75bn valuation isn’t based just on bricks and mortar.
Levy understands the value of IP, monetises the Tottenham brand extraordinarily well, and from ENIC’s perspective more than justifies his enormous salary.
Tottenham’s commercial strategy is ultra sophisticated – probably the best in the world in a highly competitive industry. Revenue has nearly tripled since their last season at White Hart Lane.
Why, then, have the owners been unable to find a buyer despite the club having been on the market – either for a full or partial takeover – for several years?
Some believe Levy’s appraisal is simply too high, though not Liverpool University football finance lecturer and industry insider Kieran Maguire, who told TBR Football last year that £3.75bn is fair.
“Chelsea was £2.5bn and they were a distressed asset. If you are looking at Chelsea and Spurs, it’s a bit like if you’re buying a house.
“If I’m looking at two houses side by side and one needs a new kitchen, the windows done etc., whereas the other one has been fully refurbished by the owner, that second property looks more attractive.
“For Spurs, the infrastructure commitment has already been undertaken by the owners, both in terms of the stadium and the training facilities.“
Another school of thought is that Premier League club value is a bubble, and a bubble bursts when the price surpasses its inherent value.
Spurs hasn’t yielded a penny to Levy yet besides his salary, while ENIC’s payday will only come when the club is sold. It’s a capital appreciation model, not one that skims profits off the top.
Selling a club basically relies on the next guy thinking he’s smarter than you and can make more money from the business. But where is the value?
Taking dividends is taboo in football. Manchester United’s Glazer family are the only Premier League owners who do it, and even they have relented recently.
But at some point in the chain, football needs to normalise this strategy in order to be financially sustainable. That isn’t the case at present and football has an exit problem as a result.
Alternatively, owners are relying on dumb money in the market or, as we’re seeing at Spurs, the continued interest of sovereign wealth.
For Gulf states with practically limitless petrodollars to spend, a football club is a trophy asset, a loss leader and a vehicle for political and economic integration rolled into one.
Tottenham could be the next club to get the sovereign wealth treatment – but there are a number of hurdles to jump before they get there.
Qatar Investment Authority not interested in Spurs; Daniel Levy’s deal structure explained
In 2023, the Qatari banker Sheikh Jassim bin Hamad Al Thani was in a battle to take over Manchester United. He lost, with the Glazers pivoting to a minority sale to Sir Jim Ratcliffe instead.
Jassim, whose investment would have been made through the Qatar Investment Authority (QIA), the state’s sovereign wealth fund, was subsequently linked with Spurs.
A separate entity, Qatar Sports Investment (QSI), has also reportedly held talks with Levy, although their ownership of Paris Saint-Germain would complicate things.
Now, Bloomberg is reporting that QIA have previously held talks with Spurs regarding a deal but are not currently interested. The article from David Hellier does not rule out a move from QSI, however.
Furthermore, it is said that Levy wants a ‘lucrative contract’ to remain in charge of the club as chairman.
Private equity funds and US billionaires are also believed to have held discussions with Levy, but ambiguity around the management structure and ENIC’s valuation has seen talks fail.
Private equity firms now have full control over Chelsea and Wolves, while 10 Premier League clubs – including Liverpool and Manchester City – have minority investment from the PE sphere.
Todd Boehly, who is the chairman of private equity firm Eldridge Industries, is also known to have spoken with Levy about investment in Spurs before taking over at Chelsea alongside Clearlake Capital.
TBR Football understands that MSP Sports Capital, another PE firm, has also previously conducted due diligence around Spurs.
How much are Tottenham really worth to ENIC?
Most analysts place Spurs’ enterprise value around the £3bn mark, but the pool of investors who have both the money and the inclination to pay that much is vanishingly small.
That is why sovereign wealth funds, who aren’t particularly fussed about generating a financial return on investment in football, are considered the dream ticket for many fans and owners looking for an out.
There is interest in Tottenham but seemingly not at the price Levy wants, and his intransigence could hurt the club going forward, with sustained success on the pitch a remote possibility at present.
Amanda Staveley, formerly of Newcastle United and an expert in Middle Eastern finance, has also been linked with a £500m investment in Spurs.
But she has her eyes on other targets too and has said she wants an active role in the club she buys, which might not be realistic at Tottenham, where Daniel Levy is omniscient.
It seems likely that if the North London club is to attract investors with deep pockets, Levy may need to be more flexible with his valuation.
A phased takeover – i.e., a minority investment with a view to a full buyout – has also been mooted, although how workable that is remains to be seen.