This morning Tottenham Hotspur made a potentially huge announcement. Beginning in January, 2012 the club will no longer be a publicly traded company and will return to being a private company. This decision is due largely to the need to expand White Hart Lane or build a new stadium. The return to being a private company will potentially help us raise more money from private investors. Spurs chairman Daniel Levy had this to say:
It is clear to us that increasing the capacity of the Club’s stadium is a key factor in the continued development and success of the Club and will involve the Company in considerable additional capital expenditure. Given this requirement, we believe that the AIM listing restricts our ability to secure funding for its future development. We are ambitious for the Club and have always taken the steps that we believe to be in its best interests.
This announcement came on the back of the the Club's financial statements for the year ending June 30, 2011. The club, for the second straight year turned in record revenues (£163.5 million) and profits (£32.3 million). The club earned £37 million from their UEFA Champions League campaign. However, operating expenses increased due to the increased costs of fielding a large squad and competing in the Champions League.At this point the delisting of the club is just a proposal, but it really seems like a formality because ENIC control 82% of the club. Thus, whatever ENIC (acting through Daniel Levy) want will be what goes. It seems as though Daniel Levy is taking the pursuit of a new stadium very seriously. We all made quite a few jokes early in the year about how stupid we were for pursuing the Olympic Stadium and not succeeding the Northumberland Development Project (NDP), but this delisting is going to be the impetus that propels the Club into a brand new stadium.
Some are speculating that the delisting could also help ENIC sell the club in the future. I'm not sure about that. Certainly a new stadium would really increase the value of the club, but the amount of debt incurred from building a new stadium, I would think, would make the sale of the club more difficult. It will however make investment in the club a little easier.
Don't be surprised if Tottenham get some investment from some wealthy sheik. I do think, for the foreseeable feature, ENIC will retain a controlling interest in the club, but the sale of portions of the club to other parties will be a big help to building a new stadium and buying new players. I would imagine that, on the back of a Champions League season, Tottenham would be very attractive to most investors. This would be especially true if the Club manages another top four finish this season.
The club should return to being a private company by late January and I would imagine that if ENIC are doing this now then they already have some investors lined up. Our best chance for truly big money investment, however, may well be after the season. Once investors know where we finished in the league and what to expect for the 2012-13 season we might see an increased interest in investment in Tottenham Hotspur.
I know many people here slag off Manchester City for their buying of players and the silly wages that they pay, but would you really object to some rich investor coming into Tottenham Hotspur and providing the club with the kind of money necessary to not only build the NDP, but buy Fernando Llorente, Leandro Damiao, and whatever other players we need/want? I certainly wouldn't complain.