Tottenham Hotspur announced on Tuesday afternoon that they have agreed a £150 million capital increase from majority shareholder ENIC. In effect, this is Spurs’ owners putting £150 million into the club’s bank account in what is a major show of strength ahead of the summer transfer window opening. It’s the owners’ first cash injection since 2004, and is being labelled a “statement of intent” by football finance experts.
The money could have major implications for Tottenham’s medium-term future as they look to consolidate their place back in the Champions League and in the immediate term convince head coach Antonio Conte that their ambition matches his.
So what does it all mean? The Athletic breaks down the key questions arising from Spurs’ announcement…
What does this mean?
This is a very significant moment in the modern history of Tottenham Hotspur: ENIC has made a £150 million equity injection into the club, essentially writing them a cheque for that amount. In very simple terms: Spurs have issued another £150 million of shares, which ENIC will buy.
This is a huge break from how Tottenham have operated throughout the ENIC era, which started when it bought Alan Sugar’s stake in 2000. Throughout that time, Spurs are proud of the fact they have operated on a strict profit and loss basis — with no big benefactor injections — and always staying within FFP guidelines. They have had to compete with Roman Abramovich’s Chelsea and Abu Dhabi-backed Manchester City, as well as building their £1.2 billion new stadium, without that level of external help. So this is a serious change in direction in terms of the funding of the club.
The last time Tottenham did any sort of fundraising like this was even before they de-listed from the stock exchange in 2012. It was all the way back in January 2004, when Daniel Levy and ENIC raised £15 million through a share issue, with Levy stating the club needed more investment to sign better players and recruit a new manager. That met mixed success: weeks later, Spurs bought Jermain Defoe from West Ham United for £7 million, but the big-name manager who replaced David Pleat was Jacques Santini.
Daniel Levy and ENIC raised £15 million through a share issue in 2004 (Photo: Getty)
So is this good news for Tottenham?
This is a huge commitment from ENIC, which has just given Spurs considerably more financial muscle, and with no tax or borrowing implications. In their accompanying press release with the announcement, the club said the £150 million will be released “in tranches until the end of the year”, but there would appear to be no reason why the money cannot be used in its entirety this summer.
Tottenham also explained in their release that “the investment represents permanent capital, with no ongoing interest cost to the club”. They also referenced that the club “have benefited from its majority shareholder’s ability to invest directly, swiftly and without the extensive due diligence and documentation involved in third-party funding”.
Tottenham then are not saddling themselves with debts and interest payments, which should be to their benefit.
There is a theory that properly-managed debt can be more cost-effective in the long term, but what we can say in this instance is that this appears to be unequivocally very good news for Spurs fans. This is the owners ploughing in cash in a way that has been pretty much unheard of during ENIC’s stewardship. The Athletic understands that ENIC borrowed this money, but that is still good news for the club, as in that case ENIC is taking the risk and paying the interest, not Tottenham. Not that the risk is particularly great for ENIC, as interest rates are still low and the imminent sale of Chelsea would suggest that Spurs are an appreciating asset, should ENIC ever wish to cash in.
It’s important to note as well that ENIC is able to pump in this money because Spurs have so much headroom when it comes to UEFA’s Financial Fair Play rules. Clubs that sail closer to the wind when it comes to spending are not able to receive top-ups like this. Of the Big Six, Tottenham always have the smallest wage bill and they don’t splurge on transfers (often recouping as much as they spend). Most of their spending over the last decade has been on infrastructure, principally the new training ground and stadium, and that doesn’t count towards a club’s outlay under FFP rules.
What is ENIC and where has this money come from?
Tuesday’s club statement refers to the shares being bought by “ENIC Sports Inc”, which itself is owned by ENIC International Limited. According to the Tottenham website, Joe Lewis owns 70.6 per cent of ENIC while Levy owns 29.4 per cent.
Lewis is billionaire former currency trader who lives in the Bahamas. He recruited a young Levy to run ENIC for him in the mid-1990s, back when ENIC was starting to build up a family of football clubs around Europe before it focused on Tottenham (and long before City Football Group, Red Bull or anyone else tried to do this.) For the last 20 years, Levy has run Spurs for Lewis.
While Lewis watches the games on TV in the Caribbean rather than in person (though he did fly over to Madrid for the Champions League final against Liverpool three years ago), he has not been keen to invest much extra money into the club since ENIC bought it. While some have heralded Tuesday’s news as proof Lewis has finally put his hand in his pocket and forked out for the club, it is unlikely to be that simple. As mentioned above, this development was driven by Levy rather than Lewis, and The Athletic understands ENIC has borrowed the money on favourable terms.
Why has this happened now?
Given Spurs’ self-sustaining model, Tuesday’s announcement raised a lot of eyebrows, and one of the salient questions was what has changed to prompt ENIC to make this investment?
As one observer put it, the story here is really: What is ENIC thinking? And the sense is that the clouds are starting to clear and it wants to capitalise on a confluence of events that presents a real opportunity.
The last few years have not been easy for Spurs. The hugely expensive stadium build was supposed to propel the club into the realm of Champions League regulars, but when the COVID-19 pandemic hit two years ago, they effectively lost their main source of income. In addition to that, a number of poor decisions saw them move further away from Europe’s elite competition and their revenues took a big hit.
But, as of Sunday’s season-ending hammering of Norwich, they are back in the Champions League and there’s a sense that opportunity knocks, a chance to once and for all shake off the perception that they are the sixth-ranked club of the Big Six. Chelsea face a massively uncertain future, Manchester United are in a state of disarray, and no one really knows what the Kroenke family’s end game is down the road at Arsenal.
Spurs have the opportunity this summer to take big strides away from those clubs and re-establish themselves as Champions League regulars — especially important with Saudi-backed Newcastle United primed and ready to turn the Big Six into the Big Seven.
The landscape is also set to change with the implementation of the reforms to the Champions League from 2024-25 that will most likely see the Premier League have five clubs rather than the current four in the competition each season (though this should be to Tottenham’s benefit).
The feeling, then, is that Spurs will speculate to accumulate this summer — especially as they are acutely aware that one of their biggest assets in Conte will walk if they don’t. And that with only a couple of years left of peak Harry Kane and Son Heung-min, now is the time to try to capitalise on their advantages, relative to their domestic rivals, and nail down a place on Europe’s top table.
“The long-term strategy was to get the stadium up and running, and get it generating lots of revenue,” says Kieran Maguire, a lecturer on football finance at the University of Liverpool and author of the Price of Football blog. “Get the infrastructure sorted, get revenue on the back of that, and it looks like they’ve done an assessment that there’s now an opportunity to become a more regular Champions League participant and all the huge benefits that brings.”
Tottenham’s £1.2 billion new stadium has been a key element of ENIC’s vision (Photo: Getty)
Will the money actually be spent on players?
This is the £150 million question, and the expectation is that the answer will be: Yes. As The Athletic reported on Monday, Spurs’ intention when they sit down with Conte this week to discuss his future is to inform him of their plan to back him substantially in this summer’s transfer market. They will pledge to try to sign at least half a dozen new players, and that will include more experienced, established names.
Tuesday’s announcement would appear to support that, and if Tottenham are serious about establishing themselves as a top-four club then surely the most effective way they can invest is in new talent. The message coming out of the club this week is that everything they do is geared towards sporting success.
It is worth saying, though, that Spurs have substantial payments to make this summer already on players such as Cristian Romero and Rodrigo Bentancur. That’s around £50 million that they will have to cough up, even before any new signings walk through the door. They also have a decision to make on whether to pay to make Dejan Kulusevski’s loan deal permanent now or wait until next summer to do that.
Maguire also points out that clubs will now know when negotiating that Spurs are cash-rich and this could lead to them asking for higher prices. “That said, Tottenham have always been pretty canny in getting value for money when it comes to recruitment,” he adds.
All things considered, it would be a major surprise if, after Tottenham’s promise to back Conte and this cash injection, they didn’t spend significantly on new signings this summer.
On the topic of bringing in new players, Levy says in the press release that: “The delivery of a world-class home was always a key building block in driving diversified revenues to enable us to invest in the teams and support our ambitions to be consistently competing at the highest levels of European football. Additional capital from ENIC will now enable further investment in the Club at an important time.’’
Jonathan Turner, an independent non-executive director of the club, adds: “It is a timely injection of funds to ensure we can continue to grow the club we all love and underlines the Board’s continued ambitions for success.”
There could also be more investment in infrastructure this summer, with talks on possible upgrades already having taken place.
Why have Tottenham announced this publicly?
The point about selling clubs taking advantage of Spurs’ new-found wealth has led some to question why they have been so public with their announcement.
Tottenham are no longer listed on a stock market, so it is not easy to buy or sell their shares, but nearly 15 per cent of the club is still owned by small shareholders. The club could have made a small announcement on the investor relations section of their website and posted the relevant documents at Companies House, rather than issue a press release, but doing so would be a strange way for a big club to behave — especially as the news would have quickly got out anyway.
Some sources have suggested it is very understandable for Spurs to be as public as possible about the announcement.
Yes, there is a risk that selling clubs might hike up their prices, but it’s also a way of sending a message to Conte and the supporters that Tottenham are serious about strengthening the squad this summer. For Conte to still walk away after all this there would surely be quite a bit of sympathy for Levy, who it would seem couldn’t have done much more to keep the Italian.
Great. So what’s the catch..?
There isn’t a catch as such, but it’s worth considering the longer-term implications of Tuesday’s announcement.
Tottenham would not describe themselves as being for sale, and there is certainly no urgency to find a buyer or to sell up, but whatever the long-term plan there’s a real chance that if this £150 million is invested properly it will massively increase the value of the club.
If Spurs really can establish themselves as Champions League regulars then that, combined with infrastructure such as the stadium and training ground and their very-well-managed debt, would make them an extremely enticing proposition to potential investors.
And the timing is significant, too — as the recent Chelsea bidding process has shown, there is a huge demand for London clubs who play in the Champions League, with all but one of those bidders still potentially looking for a football team to buy.
This could be the final bit of polish to what is already a very attractive offering, especially now that live, non-football events are back up and running and the Tottenham Hotspur Stadium is returning to being the all-singing, all-dancing, multi-purpose venue it was built to be.
Additional reporting: Matt Slater
(Top photo: Tottenham Hotspur FC/Tottenham Hotspur FC via Getty Images)
