Daniel Levy set to make Tottenham announcement soon after what has just happened at Chelsea
11/11/2024 01:00 PM
Daniel Levy runs a tight ship at Tottenham and the club has made a quantum leap in the commercial department in recent years that Todd Boehly and Behdad Eghbali want to replicate at Chelsea.
Since the move to the state-of-the-art Tottenham Hotspur Stadium in 2019, Spurs’ have not only supercharged the money they take through the turnstiles but also tripled their commercial income.
The 62,850-seater arena is replete with facilities that are designed to empty wallets – and not just on the 25 or so days per year that Tottenham play at home.
Spurs’ partnership with the NFL, who contributed £10m to the construction of the stadium, is perhaps the apex of the stadium project’s commercial success.
That triumph has not not gone unnoticed by Chelsea’s owners given their background in American sport.
Since the consortium fronted by Todd Boehly and Clearlake Capital arrived in West London in May 2022, the new regime has attempted – with mixed results – to implement a US franchise model on the club.
Chelsea have inked ultra long-term contracts with new signings to assuage the club’s PSR burden and protect player value, to cite just one example.
That echoes Boehly’s approach at his Major League Baseball franchise, current World Series champions LA Dodgers, where Japanese pitcher Shohei Ohtani’s 12-year deal is the most lucrative in the history of sport.
Boehly, who has outsized influence at Stamford Bridge relative to his 13 per cent equity stake, is currently at loggerheads with Clearlake Capital supremo Behdad Eghbali over their diverging visions for the club.
But one thing the two private equity titans agree on is the need to massively increase commercial income in order to satisfy the Premier League and UEFA’s PSR enforcers.
Like Spurs have done in N17, Chelsea are also looking at what can be done at Stamford Bridge to unlock new revenues.
And that isn’t the only way that the Blues have been inspired by their rivals in the North of the city.
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Spurs poised to name new commercial chief after Chelsea poach Todd Kline
In February, Spurs announced that chief commercial officer Todd Kline was set to leave the club.
Kline – who also sat alongside Daniel Levy, Matthew Collecott, Donna-Maria Cullen, Rebecca Caplehorn and Jonathan Turner on Spurs’ board of directors – had been with the club since March 2021.
It later emerged that the former Washington Commanders and Miami Dolphins CCO was joining Chelsea.
And it appears that Kline’s decision to leave for a direct rival both in terms of their geography and ambitions on the pitch was not received well by Levy, ENIC and the rest of the Spurs hierarchy.
In its entirety, Spurs’ cursory statement read: ‘Todd Kline has resigned from his post at the Club and has been placed on a period of garden leave with immediate effect.’
However, Chelsea and Kline only announced today that he had started his new role with the club.
Spurs meanwhile have not yet officially named a new chief commercial officer, although TBR Football understands that an announcement is now imminent.
Curiously, information accessed by this site shows that ‘chief commercial officer for Tottenham Hotspur’ was among the attendees of Leaders’ Week, a high-profile sports business conference, in October.
It is also understood, as Liverpool University football finance lecturer and industry insider Kieran Maguire told TBR earlier this year, that a CCO has been active behind the scenes at Spurs for some time.
Todd Kline failed in naming rights mission
While Kline oversaw a number of commercial wins during his three years with the club, he failed in his self-professed number-one ambition, which was to secure a naming rights deal for Spurs.
Sources have also told TBR that despite Levy previously having said that it is no longer a matter of urgency for the club, Spurs do want a stadium naming rights deal in place before the end of the season.
That could prove tricky as the Premier League naming rights market is saturated at present, with Everton, West Ham and potentially Man United also in the hunt for a partner.
Industry experts Kroll recently valued naming rights for the Tottenham Hotspur Stadium at £15m per year, a healthy sum but well short of the £25m that Levy once had in his crosshairs.
Significantly, Atletico Madrid recently struck a naming rights deal with Riyadh Air worth approximately £27.5m annually, which could breathe new life into the market.
TBR understands that Google and Amazon are among the companies who have held explored a deal with Spurs in previous years, although if their interest has persisted.
The German financial services firm Allianz, who are a major player in the naming rights space, are no longer an option having recently committed to a £100m deal for England Rugby’s Twickenham Stadium.
If Amanda Staveley acquires a minority stake in Tottenham meanwhile, her almost peerless Rolodex of contacts could prove valuable in the search for a partner.
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Todd Boehly and Behdad Eghbali need to replicate Tottenham’s commercial success
Boehly’s Eldridge Industries and Eghbali’s Clearlake Capital collectively have billions of dollars of assets under management.
Compared to the markets they typically operate in, Chelsea and football clubs in general are not a typical asset class for these kinds of private equity firms.
PE firms are ultimately behold to their institutional investors and typically aim to deliver a return on their initial investment in cycles of up to seven years.
There is recognition within the industry that that timeline is not realistic in the world of football, especially at a club like Chelsea whose annual losses in recent years have stretched into the nine-figure bracket.
To justify the £2.5bn they paid to prise the club from Roman Abramovich in May 2022, commercial income will continue to be a key focus area.
The owners think that football clubs’ IP is a potential goldmine and that monetising the overseas fanbases of clubs like Chelsea can be the next panacea in terms of commercial revenue.
But unlike US franchise sport where costs are fixed and revenue is predictable, football is a volatile industry and not one wherein investment guarantees success.
Results on the pitch have improved for Chelsea recently, but for the new owners’ project to be viable in the long term, the club’s top brass need to replicate Spurs’ commercial trajectory.
The redevelopment of Stamford Bridge or perhaps the move to a new stadium altogether will take years, however, and will saddle Chelsea with a huge debt burden at a time when interest rates remain high.
There are more immediate concerns too, such as the search for a new front-of-shirt sponsor, which could be worth more than 10 per cent of Chelsea’s revenue and which will be Kline’s top priority in his new role.
