FanPost

The business of football at THFC

Hello fellow Spurs! I'm a long-time reader of CFC and just recently signed up because I love the banter so much. I'm from Newfoundland, Canada, home of exactly 1 Spurs' fan (so far as I can tell). Multiple trips to pubs have proven this, everyone wearing red or royal blue. I fell in love with Spurs from age 11 thanks to Gazza's blast against Woolwich ('91 FA Cup). This is my first fan post.

I'd like to talk about the direction of THFC as a business. It's something I think about often, and I wonder about others' thoughts (but don't get to hear them on my lonely Spurs' island). Aspects of the business strategy are often discussed here, but rarely together. I believe Daniel Levy is following a specific strategy, one that is centred on growth. Levy is trying to create a cycle of value creation that will allow Spurs' to change its competitive landscape. This cycle involves several key components of the business, and I believe it is the path Mr. Levy is following in trying to elevate Spurs in what is largely a static PL hierarchy.

In general, most businesses are looking to do 1 of 2 things, and often both: Profit and grow. Professional sports teams are more successful in creating wealth through growth by increasing the value of the overall business. Valuations of sports franchises/clubs are complicated and depend on several factors. For the sake of simplicity, let's take assets & revenue.

Assets can be divided into 2 categories: Infrastructure and personnel. Our stadium is inferior to several others in both estimated value and gate revenue potential. Our training ground has become the best in the PL (by all accounts). Our personnel, and specifically our players, have less transfer market value than the top 3, but my guess is we may even better Le Arse thanks to Bale's perceived value. Player assets also indicate the likelihood of competing in the future. I feel Levy's dealings in the transfer market indicate his awareness of perceived vs. actual value, and we have rarely paid an inflated price. Bentley taught him this lesson.

We cannot compete on revenue. Our gate revenue is inferior. So is our marketing revenue, including sponsorship deals. Int'l exposure is also paramount, and we all know he don't have CL this year to help. We will likely never compete with ManU's marketing juggernaut, but we certainly need to make up ground on the likes of Chelski and Le Arse. We need more revenue, and to get it we need on field success.

Our competitive position is also a product of our assets and revenue, and so it is inferior. Levy & Co. are working on upgrading the stadium and the revenue stream, and in the meantime have developed a world class training facility to attract youth with the promise of player development (asset procurement and developing investment). Levy is trying to (at least) maintain our squad strength and value through on-field performance. He is trying to build revenue streams and tap new ones through several means, including infrastructure development and marketing. Affiliation with FIFA '14 doesn't hurt.

Everything is connected. Marketing brings added revenue and exposure, accelerating the arrival of the stadium. It also adds value to player assets. The training facility is an investment in our assets, to help grow their value; just sound business sense. We are not buying Belgians and Brazilians by happenstance. Nor the French national keeper, or the American captain. Being linked with strikers exclusively from WC nations. Levy is building an international squad to bring to a growing Int'l TV audience, one that will be filled with household names after next year's WC. One with great players whose perceived value will surely grow. He's assembled a management team capable of the strategic leadership we need.

I know this is a little all over the place, but hey, I don't get paid for this and my guess is it's pretty obvious. I don't want to exhaust the discussion, and I'd love to hear what other Spurs think about where Levy is taking us. Cheers.

Before you write a FanPost: Lurk! Comment! Talk with your fellow members! If you've been here for more than a couple of days and you know what's up, write away!

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