Yesterday it was announced that Tottenham had failed to secure naming rights for their new stadium.

Whilst calling their ground the Tottenham Stadium is more pure than the FedEx Arena, the lack of naming rights will push them into a financial melt down.

The stadium is already well over budget. It will cost nearly £1bn, with a couple of hundred million pounds worth of hotels and housing developments already cancelled to keep costs down.

The stadium is also set to be delivered at least 3 months late, the project has been a disaster. Were it a new hotel, supermarket or block of flats the investors would probably have ghosted the project a year ago and looked to sell out on to another party, such are the spiralling costs and delays.

The naming rights were key to the financing of the project.

When Arsenal signed their first deal with Emirates, a lot of the money was front loaded, to the extreme point that Arsenal got very little money from the airline in the last few years of the original deal.

The front loading of both the Emirates naming deal and Nike sponsorship allowed Arsenal to balance the books when loan repayments were at their highest.

Spurs had hoped for a 10 year £150m naming deal. Like the Arsenal deal, it would not be £15m a year over 10 years, but a heavily front loaded deal with Spurs receiving the majority of the money in the first 5 years.

That first 5 years is most important.

Tottenham took out loans with 3 separate banks. Each approved five-year loans worth a total of £400m. After five years the outstanding debt can be refinanced or put into longer-term bonds.

In the first 5 year repayments will be at their most aggressive until the club can refinance. As we saw with Arsenal, after 5 years (2011), we were able to renegotiate the terms of our loans – reducing payments dramatically.

In that first 5 years, Spurs are going to have to find in the region of £50m a year to repay the loan. They would have hoped that a naming deal front loaded for the first 5 years would have serviced a lot of the debt. No naming deal leaves them with £100m+ extra to find in the next 24 months.

Spurs are also yet to sell out their season long hospitality packages.

From memory, when Arsenal sold their hospitality boxes for the Emirates, you had to sign up to a 10 year deal. This freed up more money to pay off loans as it meant even more guaranteed income. Empty boxes will further push Spurs into financial difficulty.

You then have the NFL deal.

A lot of Spurs fans go on about the NFL deal like it is the golden egg.

The deal was reported as 10-year agreement between Tottenham and the NFL starting in 2018. Spurs to host 2 games a year.

To bring things into perspective, Wembley’s profit from the NFL games there is between £500,000 and £1 million per game. So without even considering that the Spurs stadium is 2/3’s of the size, Spurs will expect to bring in around £1-£2million for hosting the NFL.

It is understood that the Spurs deal with the NFL is not actually a straight 10-year deal. There have been mixed reports as to whether it is a 2-year deal with an option for a further 8, or a 4-year deal with a further 6-years.

Daniel Levy’s “end game” with the NFL was clearly for Spurs to host a London based franchise, so that from September – February, they could have football one weekend, NFL the next.

The entire NFL deal is in doubt with Wembley set to be sold to Jacksonville Jaguars owner Shad Khan.

It has been Khan’s long term dream to move the Jaguars to England – they have played at least one game at Wembley since 2013. If he does buy Wembley, a London franchise kill off any long-term deal for Spurs.

Spurs will also fail to attract future external income from concerts.

With Wembley, Twickenham, the Olympic Stadium, the 02, Emirates Stadium and Hyde Park, London is currently overly saturated for stadium arenas.

Arsenal have not hosted a concert since the Muse / Green Day double header in 2013 Muse. Since 2016, we have seen a huge rise in artists performing at the Olympic Stadium.

This summer along we have seen the Rolling Stones, Beyonce & Jay Z and the Foo Fighters host 6 nights at the London Stadium. Why would you perform elsewhere when iconic stadiums like Wembley, Twickenham and the London Stadium are available?

No artist will want to travel to Edmonton, with its lack of transport links and facilities for a gig.

Tottenham have bitten off more than they can chew with the new ground. Once they realise the fan base isn’t their to buy 62,000 tickets in the long-term, it will push the club further into obscurity.

Keenos

Follow @KeenosAFC