Tottenham Hotspur is once again the subject of a potential purchase, this time by an Iranian-American billionaire. According to the Financial Times (£), Jahm Najafi, the Chair of MSP Sports Capital who was most recently a minority owner and vice chairman of the NBA’s Phoenix Suns, is preparing a consortium bid of around £3.1b to purchase the club. Though he has yet to make a formal offer, the report says that one is expected to come within a few weeks.
The offer reportedly values the club at around $3b (£2.5b) before factoring in the club’s current debt. Najafi’s MSP Sports Capital would front the majority of the cash needed for the purchase, with the remainder coming from investors tied to Abu Dhabi. Sheikh Mansour, a member of the Abu Dhabi ruling family, currently owns fellow Premier League club Manchester City.
The Najafi and MSP-led offer would value the club’s equity at approximately $3bn before adding about $750mn of debt on the club’s books. The bid is structured so that MSP and its partners will put forward 70 per cent of the purchase price, while backers from the Gulf, mainly from Abu Dhabi, will contribute the remaining 30 per cent.
This is a confusingly-worded paragraph that had some (including myself) wondering if the bid would be a leveraged buyout that would essentially double Tottenham’s existing debt, but one of the article’s co-authors took to Twitter to clarify that this is not the case.
Spurs' net debt (loans - cash) was £626mn at the end of June 2022. The price we report is the equity value of Spurs (as valued by the prospective bidder) plus the net debt already on the club.— Samuel Agini (@SamuelAgini) February 15, 2023
The story reports in dollars. pic.twitter.com/UvmwxogQUe
Tottenham has positioned itself as a very attractive salable asset since the opening of the Tottenham Hotspur Stadium, and there have been numerous murmurs that Joe Lewis and ENIC would be open to discussions about a possible sale. To that end, there have been rumors about various individuals and consortiums interested in purchasing Tottenham over the past few years. None of them have ever come particularly close to happening, and there are suggestions that this bid is also unlikely to happen. Spurs have denied that there has been any approach at all from Najafi for a potential bid.
Writing about this story in the Daily Mail, Sami Mokbel says that the bid is very likely to be less than what Lewis and ENIC would want to entice them to sell the club. For context, Chelsea was sold to a consortium led to Todd Boehly in May 2022 for a reported £4.5b.
Jahm Najafi's planned £3bn Tottenham offer will FALL SHORT of the club’s valuation and a deal at that price is labelled ‘impossible’ | @SamiMokbel81_DM https://t.co/0I4S3CcpX9— MailOnline Sport (@MailSport) February 15, 2023
Matt Law, writing for the Telegraph (£), concurs, noting that Daniel Levy rejected a similarly priced bid of £2.9b for Tottenham Hotspur just last year, and that ENIC values the club at more than £3.5b. Law also suggests that any takeover bid acceptable to ENIC would also likely result in Daniel Levy remaining in a chairman position, at least in the short term.
Daily Mirror Chief Football Writer John Cross also writes that the current ownership is more interested in continuing to develop the land around the stadium in the short to medium term than in selling the club.
Tottenham own huge areas of land around the stadium which they are looking to redevelop and transform the local area with new housing, industry, leisure projects and other developments.
That is at the heart of why Tottenham have been courting potential investors rather than takeover bids but it would take a mega offer to make them consider anything else. A Qatari consortium was recently linked with an investment but again Spurs dismissed reports of a potential takeover.
Sources suggest they are focused on developing the club - not selling it and especially after putting so much recent work into the project.
– John Cross, Daily Mirror
This line of defense, however, feels more like it is leaked by the club as a means of deflection away from the fact that the bid is simply not large enough to be feasible to current ownership.
Najafi has experience with a prominent NBA team which speaks well of his potential to manage the affairs of a large football club, even if he has not owned a sports team directly. It also suggests that he would at least be familiar with, if not amenable to, the use of analytics in the operations of a sports organization. However, Najafi is also a billionaire and there are no doubt some skeletons in his closet. Notably, his Wikipedia page states that in 2014 Najafi invested between $75-100m to Paula Deen and her company to aid the rebranding of her public image after the former Food Network star was sued for racial and sexual discrimination by a former employee of one of her restaurants in 2013. Deen was fired by Food Network that same year for a past use of a racial epithet. The employee lawsuit was eventually dismissed.
There’s a lot to unpack here, and with a formal approach apparently not expected to come for a couple of weeks, we likely won’t know for a while whether this potential bid will have any teeth, or if it will go the way of Cain Hoy and any other number of failed Spurs bids over the past decade. It is curious that this is apparently happening publicly and in real time, when we have normally only heard about past bids for Tottenham Hotspur retroactively and after they have already failed. Stay tuned.