Why Tottenham Hotspur’s $1bn Stadium Will Be The Last Of Its Kind

What a time for Tottenham Hotspur to start paying off the mortgage on a brand new £850m ($1.08bn) home.

Harry Kane barely gets used to where the locker room is in the 60,000 capacity stadium, when the Premier League
PINC
season is thrown into an abrupt hiatus due to the coronavirus pandemic.

Yesterday, the first signs of the financial implications of investing in a sparkling new soccer and NFL facility in the era of COVID-19 emerged. 

Spurs confirmed it had been accepted for £175m ($224m) Bank of England finance facility to help cover estimated future revenue loss of £200m ($256m).  

The club made no bones about it, when it came to income, it was banking on the Tottenham Hotspur Stadium being a money-spinner.

But as the statement from Spurs which announced the loan warned “it is unclear when there will be a return to spectator-attended live events.”

The ramifications of the revenue hit go beyond the North London soccer team, this could burst the stadium bubble once and for all.

The peak of the boom

Tottenham Hotspur’s glass and steel colosseum, with its microbrewery and heated seats, will come to represent the high watermark of European soccer stadium development. 

It represents the peak of a building boom which began in the U.K. in the 90s after rules insisting top-flight clubs play in all-seater stadiums were introduced. 

From the Emirates pioneering a full tier of corporate hospitality to the Eithad stadium’s glass box players tunnel. The revolution in fan experience and match-day revenue generation has been remarkable.  

However, things were beginning to change even before coronavirus put a stop to large gatherings for the foreseeable future.

The escalating cost of building a new stadium and marginal financial gains from doing so saw Chelsea abandon the idea, even before coronavirus hit.

Since then Liverpool has also put a planned upgrade of its Anfield home on ice.

But the implications of the currently empty Tottenham Hotspur Stadium might be the most profound.

Betting on live events 

Tottenham chairman Daniel Levy rarely gets a bad deal. His negotiating skills are world-renowned and when it came to the stadium things were no different, ever angle had been considered.

The new ground is designed to maximise revenue at all times, not just match-days.

Levy understands there is little point investing a billion dollars in an asset which only brings in cash every two weeks.

Engineers were challenged to build a venue with as much earning potential as possible. The stadium has the world’s first three-piece movable soccer pitch, with an American Football surface beneath it for holding NFL games. While the concourses are pillar-less so they can host conferences with ease.

Or as Spurs’ statement confirming the loan puts it “the club has opened a multi-use venue designed to deliver diversified revenue streams.”

The trouble is, that income is from industries hardest hit by coronavirus. 

Entertainment sector turnover has halved and food services is down by two thirds, according to the latest official British government statistics.

It’s a trend which doesn’t look like changing in the next few years at least.

For a venue which has been criticised for focusing on high-end corporate clientele, this is devastating. 

And that’s before you factor whether there will be the same appetite for such services amid in the anticipated global financial downturn. 

Although, there is one way having a new home could help Spurs.

Socially-distanced stadia

The U.K.’s chief medical officer has said social distancing measures could remain in place until the end of the 2021 soccer season. 

If spectator sport does make a return, it will likely be at a greatly reduced capacity.

The London Underground transport network is expecting to run at 15-20 per cent the volume it normally does for a while. So you can hardly see Spurs squeezing 60,000 fans into its ground.

But, a possibly advantage could exist for which clubs with new stadiums. 

Teams like Tottenham, Arsenal and Manchester City have spacious modern homes which simply have more room to practise social distancing than their rivals.

If fans can return, they will probably be able to welcome more of them.

Tottenham Hotspur chairman Daniel Levy is certainly hoping a safe way of bringing fans is found soon.

“It is imperative that we now all work together – scientists, technologists, the Government and the live events sector – to find a safe way to bring spectators back to sport and entertainment venues. Collectively we have the ability to support the development of new technologies to make this possible and to once again experience the passion of fans at live events”, he said. 

Whether the demand is as high as it was before the crisis is another matter altogether.