So Tottenham are in the Champions League.
Well, not quite. They are not yet qualified to the group stage, which is what most people tend to mean by the Champions League, but for arguments sake let’s assume they are. What does it actually mean?
An increase in revenue, indeed. By qualifying and participating in the group stage Tottenham will bank €5 million. With three home matches they will also count on another €5 million in extra gate receipts. A similar amount, around €5 million, will be due to Tottenham because they will have a share of UEFA’s commercial revenues. Another €3 million, more or less, can be added courtesy of increased sponsorship opportunities. All in all that is 18 million Euros more simply by being in the Champions League group stage. That is an increase in revenue of nearly 20%. These are the types of numbers that have businessmen salivating.
There is even more.
For every match Tottenham win they will be rewarded with €800,000 and half of that for a draw.
Make the quarter finals and with prize money, gate receipts and commercial revenue Tottenham will be looking at another €7 million.
Before the tournament begins a sum of the money expected is likely to be reinvested in the squad. Another part of it will be set aside for bonus payments due to the current squad for actually making the Champions League. This is the nature of the business and obviously not unique to Tottenham.
The true beneficiary is likely to be the brand. Tottenham Hotspur plc. Being in the Champions League will increase turnover and improve the EBITDA (the all important figure) but it is the concomitant association with the likes of Barcelona, Real Madrid, Inter Milan and Bayern Munich on those midweek nights where the true value of the Champions League rests for Tottenham. The clubs financial figures are already fairly healthy and prosperous. Tottenham even announced a fiscal 2009 pre-tax profit of £33 million in January 2010. Tottenham are moving forward financially with Champions League football but they will be making giant strides when they have their new stadium. The clubs share price was at its lowest figure for a year on 05/05/2010 but the reason for the fall was probably related to the delay in developing that very same new stadium. Perhaps investors are also wary of the total amount that will now be paid in bonuses affecting their earnings per share for the year. Ultimately, investors are counting on Tottenham Hotspur having a new stadium. It would be more beneficial to the club in the long run than Champions League football is in itself. Arsenal sell out almost every week and there are more than enough Londoners to go around. Having the stadium that Arsenal do makes Champions League football less of a necessity, not more. Liverpool’s position, having neither the new stadium or Champions League football, is disastrous. The plan in the Spurs boardroom was probably for the stadium to come first and then the Champions League after but Daniel Levy, the chairman, will hardly wish to complain.
Incidentally this will be the first time a single city will have three participants of its own. Three London clubs in the same year that the final is going to be in London.
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