Tottenham Hotspur Stadium: Why don’t Spurs have a naming rights deal? | City A.M.
Back in October 2008, when Tottenham’s new stadium project was still in its infancy, chairman Daniel Levy addressed the opportunity to sell the naming rights to their proposed new ground.
“It’s a necessary and critical component of financing a modern football stadium,” he said.
Yet six weeks out from the £850m venue’s official opening, Spurs are still without a naming rights sponsor and today confirmed that their new home will be known – for the time being, at least – as the Tottenham Hotspur Stadium.
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Tottenham’s naming rights are worth upwards of £15m a year – behind only Manchester United, Manchester City and Chelsea in England – according to a report by Duff and Phelps last year.
Some sports industry experts say that the Premier League club’s proposal has suffered from a slowing of the market amid more general economic uncertainty.
Title sponsorship for the Six Nations remains unsold, for example, while England cricket chiefs are said to have faced difficulty selling commercial deals for Test matches.
“Market stagnation has been particularly acute on some of the bigger-ticket sponsorships and longer-term, high-value ones – which is absolutely where the rights sit,” says Tom Gladstone, director of consulting at Synergy.
“It’s hugely expensive, but also the long-term nature of the deal really limits the number of potential buyers who’d be willing to commit to that kind of investment.
“Tough macroeconomic conditions, the nature of the opportunity being long-term naming rights deal are two key points. But I think the other one is very high revenue expectations from Mr Levy.”
Industry sources believe Spurs want at least a 10-year deal worth £20m a season and only with the right brand – likely to be consumer-facing rather than financial services or business-to-business.
“He’s pretty set on getting the money he thinks it warrants, the right brand partner and the longevity of deal. If one of those three conditions isn’t met, he’s not prepared to budge,” says Gladstone.
Levy has previously made clear that the 62,000-seater stadium’s imminent completion is in no way dependent on revenue from naming rights, putting Tottenham in a strong bargaining position for now.
Spurs chairman Daniel Levy appears to be waiting for the right deal (Source: Getty)
“Daniel is a smart operator so I’m sure he’s got all bases covered and contingency plans in place,” says Trevor Birch, managing director at Duff and Phelps and former chief executive of Chelsea.
Gladstone says: “Clearly in the future the loans they’ve taken out and the financing of the stadium will have that commercial revenue baked into their business plan, but at the moment it doesn’t feel they’re under financial pressure to take the deal so they’re holding out for the right partner, the right price over the right term.”
Other factors that may have affected the appetite of would-be sponsors include Tottenham’s location – more distant from the centre of London than the likes of Arsenal or Chelsea – and the need for buy-in on their hosting of an annual NFL match, says Gladstone.
Timing an issue
There are encouraging signs, though. Despite lingering Brexit uncertainty, Gladstone says big deals such as Gallagher’s title sponsorship of Premiership Rugby suggest the market is “warming up”.
For Birch, the pinch was being felt further down the table and not by blue-chip teams such as Spurs.
“Big global brands want to be associated with other global brands at the top of the Premier League,” he says.
“It’s probably a rarefied market in terms of those brands that are in the sports arena, but it shouldn’t be impossible to achieve what he [Levy] is looking for. Theoretically, it stacks up.”
Timing is an issue. Spurs risk the value of the naming rights depreciating the longer it is known as the Tottenham Hotspur Stadium, as sponsors prefer properties without previous names that can be hard to shake off.
That is believed to have been a factor in Newcastle owner Mike Ashley’s failure to attract an unaffiliated naming rights partner for St James’ Park and the ongoing absence of a sponsor for the former Olympic Stadium, now known as the London Stadium, although Italian champions Juventus rebranded their home the Allianz Stadium 12 months ago – six years after it was opened as the Juventus Stadium.
Newcastle found it difficult to sell naming rights for St James’ Park (Source: Getty)
Ultimately, the sight of Harry Kane and colleagues in situ – Spurs host Liverpool in their opening first-team match against Liverpool on 15 September – may be what it takes for potential partners to sign up.
“The longer it goes unsponsored the more difficult the job of an incoming brand to stamp their name on it,” says Gladstone.
“The flip side is that as much as sponsorship is increasingly a strategic buy and underpinned by business case, it is an emotional sell in a lot of cases.
“And when you’ve got this incredible stadium up and running, state of the art, with the England captain playing for the team and they’re playing great football and competing for the Premier League, senior decision-makers being hosted at that venue and seeing the magic live will have an impact. And that could be the thing that tips it over.”
Sponsors may warm to the stadium once Kane and Spurs are in situ (Source: Getty)
For the time being the delay has had no impact on budgets, sources close to Spurs insist, with the club’s day-to-day running and stadium finances separate projects.
Transfer policy has not changed and, while Tottenham are yet to sign a player this summer, the rising cost of the stadium was no impediment to them signing Davinson Sanchez from Ajax for a record £42m last year.
Birch is relaxed about the situation. “At some stage I’m sure a deal will be done,” he says. “It’s what I’d call premium rights content. All things being equal they should be able to get a decent price for it.”