In short
```markdown Rule The Roost - Episode Summary
Episode Title
Are Spurs Sponsors Pulling Out? | Matt Law's Report, Stadium Naming Rights & Commercial Chaos
Description
Jack is joined by Sean Connell, Editor at The Sponsor, to explore the commercial reality surrounding Tottenham Hotspur amid fears of relegation and declining performance. The episode dives into the implications of stadium naming rights, the influence of sponsors, and potential financial challenges ahead.
Key Topics Discussed
- Stadium Naming Rights
- Current Situation: Discussion on the elusive nature of Tottenham's stadium naming rights and the fair market value concerning European stadiums.
- Valuation Insights: Sean shares research on how sponsorship valuation is determined and the various factors influencing it (e.g., stadium infrastructure, geographical demographics, historical significance).
- Tottenham's Scorecard: Spurs score well on infrastructure but struggle with exposure and quality metrics compared to top clubs like Bayern Munich and Barcelona.
- Sponsor Relations and Contractual Concerns
- Matt Law's Report: Recent reports indicate that long-term sponsors are reconsidering their partnerships due to Spurs' poor on-pitch performance.
- Sponsor Power: Sponsors like AIA have break clauses in agreements that allow them to exit if performance metrics fall below expectations.
- Negotiation Challenges: Spurs’ negotiating position is weakened by their lack of high-profile sponsors and the perception of a toxic commercial environment.
- Financial Implications of Poor Performance
- Loss of Sponsorship Value: Spurs might face significant losses in sponsorship revenue if they fail to secure a new front-of-shirt sponsor, particularly with AIA stepping back.
- Market Conditions: The episode highlights a competitive market for sponsorships, exacerbated by an impending gambling ban in the Premier League, leading to further financial strains.
- Long-Term Strategies and Hope
- Future Management: Discussion on what Spurs' hierarchy can do to reassure sponsors, including the potential hiring of a top manager and investment in player acquisitions.
- Commercial Team's Role: Sean emphasizes the importance of Spurs’ commercial team in navigating this crisis, promoting the full value of the club beyond on-field performance.
Key Takeaways
- Valuation Beyond Performance: The episode underscores that sponsorship value is not solely tied to a club's performance; community engagement, infrastructure, and global reach also play significant roles.
- Reputation Management: Spurs must work to manage their public and commercial reputation amidst ongoing media narratives and fan sentiment.
- Navigating Crisis: While the club faces immediate challenges, proactive strategies and a focus on long-term value could help stabilize and potentially enhance their sponsorship appeal.
Closing Remarks
Jack and Sean wrap up the discussion with reflections on the precarious state of Spurs' sponsorship landscape and the importance of understanding market dynamics as they seek to recover from recent setbacks.
Theme Music
Ghost Cat by Gillen
Additional Information
For more insights and detailed analysis on sponsorship valuations, visit [The Sponsor](http://www.thesponsor.com).
--- *These notes provide an overview of the key discussions in the podcast episode, summarizing the challenges faced by Tottenham Hotspur and potential paths forward as highlighted by the guests.* ```
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOSean Connell's Background and The Sponsor
1:50 to 2:26
Learn about Sean Connell's expertise and the publication he represents.
Valuation Methodology Explained
2:26 to 3:21
Understand the fair market valuation methodology for sponsorships.
Factors Influencing Stadium Sponsorship Value
3:21 to 4:25
Explore key factors that affect the sponsorship valuation of the Spurs stadium.
Comprehensive Analysis of Spurs' Stadium Value
4:25 to 7:20
Learn how Tottenham's stadium compares on the European stage and its sponsorship challenges.
“And, you know, when we think about why, if you've ever seen any sort of press release of a brand that partners with Topham, you know, yeah, okay.”
Conjecture on Spurs' Naming Rights Valuation
7:20 to 8:23
Discuss the speculation around Tottenham's high valuation for naming rights.
“And then we essentially evaluate every single stadium against how they score against all of those different measures.”
The Impact of Exposure on Sponsorship Deals
8:23 to 10:58
Understand how international exposure affects sponsorship deal values.
“that's not the case so that's what's predominantly pulling their value down from from being at the higher levels.”
Intangible Values of Sponsorship
12:28 to 14:05
Explore the intangible benefits of having sponsors associated with the Spurs.
“Like the late-breaking F1 podcast hosted by Ben Hocking, Harry Ede and Sam Sage.”
The Intangible Value of Sponsorships
14:05 to 15:00
Explore how sponsorships can uplift a club's prestige and fan morale.
“The fact almost that there hasn't been a sponsor for so long surely plays into the hands of prospective sponsors.”
Impact of Sponsorship on Club Negotiations
15:00 to 16:16
Learn how the absence of sponsors affects a club's negotiating power.
“I guess that's speculation on my part, but still.”
Sponsorship Break Clauses and Legal Power
16:16 to 18:22
Understand the implications of break clauses in sponsorship agreements.
“So I guess on this note, earlier on this week, we heard a report from Matt Law essentially saying that a number of Tottenham sponsors were starting to get cold feet.”
Show all 20 chapters
Spurs' Management Response to Sponsorship Concerns
18:22 to 20:23
Discuss how Spurs' management could address sponsor concerns amid poor performance.
“But in terms of hard break clauses, obviously, yes, relegation would be the big one, I'm sure.”
Market Value of Sponsorships in Sports
20:23 to 22:51
Examine how market value affects sponsorship deals in sports contexts.
“And for some of Topman's sponsors, so if you take Kraken, for example, you know, big crypto exchange or crypto firm for a company like that, brand awareness and exposure is absolutely everything.”
The Effect of Media Coverage on Sponsorship
22:51 to 25:17
Analyze how media coverage impacts club reputation and sponsorship value.
Evaluating the 'Spursy' Reputation
25:17 to 27:58
Investigate how the perception of being 'Spursy' affects sponsorship appeal.
“But ultimately, even within that, you know, what sponsors are telling us is there are three things that they care about most, reputation, audience and sort of community stuff.”
Sponsorship Value and Club Challenges
28:00 to 35:40
Explore the impact of Spurs' current form on sponsorship value and market conditions.
“Yeah, the front of shirt and the sleeve.”
Impact of Gambling Sponsorship Ban
40:41 to 42:01
Discuss the implications of the gambling sponsorship ban on club finances and market dynamics.
“Tax Act understands you haven't memorized the tax code.”
Gambling Sponsorship Dynamics in Football
42:01 to 43:30
Explore how clubs may adapt to gambling sponsorship changes.
“And actually for those clubs, I believe that they'll end up in a net positive position because they'll dramatically increase the value of the sleeve and they'll recruit some of the value of the front-left shares.”
Assessing Tottenham's Commercial Strategies
43:31 to 46:19
Discuss the commercial strategies Tottenham can use to navigate challenges.
“So for those clubs, I think it's going to be a really perilous situation.”
The Importance of Brand Value Beyond Numbers
46:20 to 49:19
Understand the significance of overall brand value for club sponsorships.
“But of course, the Super Bowl wasn't just about eyeballs.”
Conclusion and Guest Plug
49:20 to 50:29
Summarize key insights and share where to find more from the guest.
“So we say we can pitch them the rollercoaster idea, Sean.”
Transcript
Automatic transcript. May contain errors.0:005 a.m.
0:01Matt Law:I'm up with a crisp Celsius energy drink. Running 12 miles today. Grab a green juice, quick change, and head to work.
0:07Sean Connell:Meetings, workshops. One more Celsius, no slowing down. Working late, but obviously still meeting the girls for a little dancing. Celsius. Live. Fit. Go. Grab a cold, refreshing Celsius at your local retailer or locate now at Celsius.com.
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1:43Jack:hello everybody welcome back to rule the race podcast it's uh it's an impromptu one today but it will make it will all become clear in a moment i want to introduce to the show uh an old friend of mine um sean connell how you doing mate hi good to see you man and i've invited sean to the show because sean actually works for a publication called the sponsor and you know if unless you've been living in a cave or whatever as people say there's a lot of talk at the moment about spurs their commercial value and the ramifications of this couple of poor seasons that we've had on say our commercial value um sean i guess let me let me throw to you first and foremost mate give us a bit of an outline on on the sponsor and what it is that you do exactly yeah sure so
2:32Sean Connell:the sponsor is a publication for brand and marketing leaders so we do research into sponsorship valuations we interview global brand leaders of international sponsors and we essentially share this information around what sponsorship should cost and how to activate it and measure it in the best way possible with our audience of brands um so my background is i actually started working in brands and intangible asset valuation and then i've focused more on sort of sponsorship valuation uh over the last sort of five seven years or so
3:08Jack:so i i we first you know obviously we've spoken for many years but we started talking recently because you've you've recently published your report right on this on the sponsorship valuation of stadium naming rights um can you can you take us into a bit of of the sort of the info that
3:30Sean Connell:you've plucked out around spurs at the moment yeah i mean so you know fair fair market valuation is actually it's a very simple valuation methodology it basically says that something is only as valuable as what somebody else is willing to pay for it so if you've ever you know rented or purchased a house or you've ever bought a second-hand car it's the same methodology it's what have comparable versions of this thing sold for on the market except for when we're looking at houses we might be looking at number of bedrooms and how it poses it to a school and when we're looking at stadium sponsorship we're looking at capacity attendance population of the city gdp how close is other stadiums to to uh the stadium that we're valuing how involved in the community and all of these different measures so when we look at topnum hotspur stadium it actually scores unsurprisingly top in terms of our infrastructure scores so the first thing that we need to do when we're valuing a sponsorship is look at how strong is this asset compared to other sponsorship opportunities so the way that we do that is we are the sponsor we have an audience of sponsors so we interview them and conduct a survey to say what is it you value in a stadium naming rights opportunity so it's not what you and i as fans would say oh you know having a great atmosphere or this or you know these sort of things it's from a commercial branding point of view what is the most attractive opportunities and so can i just ask on this it's
5:00Jack:So we're just suggesting it's not intrinsically tethered to the fortunes of the club on the pitch, if you like.
5:07Sean Connell:No, it's a range of things. And, you know, when we think about why, if you've ever seen any sort of press release of a brand that partners with Topham, you know, yeah, okay. Part of it is because they're perceived to be a successful winning team. But it's also things like history. It's the infrastructure. It's the cultural relevance of star players. It's the work in the community. It's the environmental support. It's the support of the women's team. It's the support of the youth team and all of these things. The demographics, you know, it scores highly in demographics with an afterward North London, you know, area, as opposed to some of the other clubs in different geographies.
5:48Sean Connell:So it's all of these things. And importantly, it's not just media value, i.e. the number of eyeballs and impressions. it's the all holistic 360 value of what Tottenham offers to potential partners
6:04Jack:so this is the aesthetic of the stadium that how modern it is the flexibility of it to host various different events all of this stuff is factored in right all of this stuff is factored
6:17Sean Connell:in but the important thing to note is that not all of it is as important to sponsors as some other areas so we as i say do this survey to our sponsors what is it that you look for and then we also did a big piece of research into all of the stadium value naming rights deals that have been done in europe and what is the correlation between what these stadiums have to offer sponsors and the deal or the value of the deal they achieve so some things come out very clearly and is always the case in sponsorship is exposure and awareness is the primary driver of how valuable a stadium is. So if you are a team that has a global fan base, you're playing in the Champions League latter stages all the time and you play in the Premier League, for example, you score very highly on awareness.
7:06Sean Connell:And then as we move down, there are other measures around the quality of the products and, you know, the on the pitch, what's going on on the pitch. There's the infrastructure, there's environmental scores and we go all the way down and as I say each of these sort of scores has within them different data points around proximity to other stadiums you know when Taylor Swift or Coldplay turn up in London they have five or six venues to choose from but when they go and do the eastern leg of the tour it's their PGE stadium in Warsaw I think is you know that's the only viable opportunity for a major stadium so there's all of these different things And we put all of them into a scorecard depending on how important they are to a sponsor.
7:47Sean Connell:And then we essentially evaluate every single stadium against how they score against all of those different measures. So in the case of top, it scores top on infrastructure scores. And it is in the top 10 most valuable stadium naming rights opportunities in Europe, the value being 11.2 million. but what significantly lets the the score down is is of course the quality and the exposure metrics you know when when the rest of the top 10 are made up of teams like Barcelona and Bayern Munich Real Madrid who are all playing in the in the top end of the Champions League season in season out without fail that's a guaranteed sort of sponsorship investment and with Tottenham that that's not the case so that's what's predominantly pulling their value down from from being at the higher levels.
8:36Jack:There's been a lot of conversation about Tottenham trying to get naming rights for the ground. How much of a concerted effort they've actually been making. There's often been some talk that Daniel Levy, when he was in post, had a very, very high valuation of that opportunity and that put some people off. You know, that's just conjecture on my part. I don't have any hard evidence to suggest, but that's what the talk has always been.
9:02Sean Connell:I don't think it is conjecture, actually, because if this is exactly why fair market value exists, if we look at the European stadium naming rights market, and even if we just look at the top end, we've got Allianz Insurer, one of the most sort of competent acquisition, purchasers of naming rights in the world. they spend and they value by Munich Stadium at around 13 million it's one of the biggest stadiums in Germany you know Harry Kane and playing in the Champions League and all of those kind of things and then you've got Spotify who are looking at Barcelona and the Camp Nou the biggest stadium in Europe again guaranteed Champions League European global exposure star players they value that at 20 million euros so the idea that we can then say even with the best will in the world that a topman hotspur stadium as beautiful and fantastic as it is but one that that doesn't show and doesn't expose its sponsors to european uh audiences on a on a on a regular stage could ever be worth you know almost more than sort of double in in some cases what some of these other stadiums are worth is you know i think it's a stretch to say the least and and this is what spurs wanted
10:22Jack:allegedly right they wanted 30 reportedly that that was the 25 million pounds was reportedly
10:29Sean Connell:um the the fee but i i believe that they have since uh taken a step back from that in order to pursue trying to acquire a partner for each of the individual stands which is a model that the new chief commercial officer has found to work well in the States. So that's the approach. But whether the valuation of each stand is still a sort of sum of its parts of the 25 million, we don't know.
10:58Jack:Do you think in that sort of instance, then they would still keep the naming right, the Tottenham Hotspur Stadium? Because, again, it had been posited that that was actually quite valuable to Spurs to have their name out there. when you're seeing international events being held there, gigs, fights, well, those two primarily, that the name Tottenham Hotspur being attached to that is good for the club, is good for the overall value of the club, of the Tottenham Hotspur brand. Is there anything in that?
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12:55Sean Connell:Well, I'm sure there is something in that. How much that's worth, I wouldn't be able to say. but what I can say is that if Topman were to secure a naming rights partner at the fair market valuation and that was to be over a typical 10 year agreement, financial terms would be worth over 110 million to the club so whatever kind of brand equity you think we might be getting maybe we can sell lunchboxes or some merchandise for a bit more money because the Topman brand is slightly stronger, slightly more well-known in some international audiences sure but i think what we're dealing with with stadium naming rights is cold hard sort of cash on on the in the pnl that you know many clubs across the bundes league have recognized now the interesting thing with bundes league is three quarters of that league have sold their stadium naming rights they sold them on average for six to eight million euros which you know daniel levy might not think is very much but at least it's been sold at least it's cash in the bank and that translates to to you know on the pitch transfers players and and
14:04Jack:one view there's there's there's surely as well i would say there's an intangible value to having sponsors attached to your stadium as well in respect to that it just i i feel that like as a fan it would give you a lift it gives the club a lift to know that there are people that want to be associated with the club the fact that we've kind of had this i don't know this this i don't want to say redundant but we've had this sort of empty slate for quite some time now you know the the ground opened in 2019 um it won't be far off a decade old which is which is which is crazy but in that time we we still don't have a a naming right sponsor um and it it almost feels a bit like we're a pariah in a way i guess and yeah and that again yeah that's that's your way yeah sure but you know it it almost feeds into some of the stuff you were saying at the top when when And we're breaking down how a club is valued.
14:59Jack:The fact almost that there hasn't been a sponsor for so long surely plays into the hands of prospective sponsors. I guess that's speculation on my part, but still.
15:09Sean Connell:Yeah, I think certainly, I mean, ultimately it weakens your negotiating position because everybody knows that you haven't got a queue of brands waiting outside the door to sign on the dotted line. But also, you know, to your point, I think certainly once you have a big name sponsor involved, it increases the value of all your other sponsorship and sets. And we see that across not just football, but Formula One. You know, you take, I'm sure if you're familiar with it, but SailGP is a new sort of sailing Grand Prix style format race. And, you know, all it takes is to get a sort of a Rolex and an Emirates on board and everybody else looks at it and says, you know, there's quite a bit of value.
15:47Sean Connell:and so when you have these assets and i think equally that's something that a lot of the lower clubs in the league struggle with you know gambling sponsors and that sort of thing is that when you when you're a club that is able to attract big name uh sponsors from non-gambling industries you know from tech or airlines or um wherever it may be that increases the perceived value as well in the eyes of sponsors it's it's quite important company you keep as a sponsor
16:17Jack:So I guess on this note, earlier on this week, we heard a report from Matt Law essentially saying that a number of Tottenham sponsors were starting to get cold feet. They were starting to have concerns about the club's form, about the noise around the club. that sort of manifested in the in the last couple of days into saying like quite tangibly there is one long-standing partner that wants to end their agreement with Spurs at the end of this season due to Spurs's poor performances on the pitch I guess first and foremost you know I'm not asking you to delve into the minutiae of contract law at this point but still like overall what What sort of actual power do sponsors have in these scenarios?
17:03Jack:Do they have a legal position by which they can, say, cancel a sponsorship deal early over bad performance, bad PR, toxic atmosphere, relegation, that type of thing?
17:18Sean Connell:Well, I think that last one is the key one. And, you know, any smart sponsor will have had a number of break clauses concerned with things like relegation, more so than sort of, you know, just poor league performance. And so there are many things that can cause a break clause. But really, I mean, sometimes, you know, with these legal sponsorship contracts, you need to apply an element of common sense. And this is something that the New Zealand rugby team found out recently with INEOS, is that ultimately when a sponsor turns around with all of their financial power, you know, often sort of companies worth billions of dollars turn around and say, you know, we wish to end our agreement due to unforeseen internal whatever the excuse is.
18:08Sean Connell:you know you can take them to court or you can try and do but ultimately all it ends up in is an out-of-court settlement and that's exactly what happened with INEOS when they turned around to New Zealand rugby and essentially said uh you know we're not going to do this anymore probably because they'd allocated a lot of money to go into Manchester United and said you know it's it's a it's a situation that any small business owner has probably found themselves in when you know trying to chase a settlement with a much larger client there's there's kind of not that much you can do in theory. But in terms of hard break clauses, obviously, yes, relegation would be the big one, I'm sure.
18:47Although that said, five, ten years ago
18:50Sean Connell:when some of these deals were signed, the word relegation probably wouldn't have even entered that discussion. It's probably something that is very much in the clauses of the sponsorship agreements that clubs have been promoted for the championship into the Premier League. but I'd be very surprised if Manchester City have a relegation clause with their Esiad.
19:12Jack:Well, it's funny, isn't it? It's one of those things that, like you say, you wouldn't have even considered. When we open up this ground, this was supposed to be the gateway to Spurs going on and winning a Premier League or something. And here we find ourselves maybe, you know, questioning our Premier League survival right now. I guess on this, what could the Spurs hierarchy be doing at this point? The Lewis family, Enoch, whatever we want to call them now. What can they actually do behind the scenes to placate, say, perilous commercial deals, angry commercial partners? Is this the sort of scenario where they can say, look, summer comes, we are going to be hiring a top manager.
19:54Jack:If we stay in the Premier League, we're going to be hiring a top manager. We're going to give him 150 mil to spend. And we guarantee you we're not going to have a seat. I mean, they can't guarantee, but, you know, still, we're going to make every effort to guarantee this is a blip. This isn't going to happen from this point. We've got our ducks in a row. We're back on the right track again. Is that the sort of thing they surely will be doing behind the scenes right now?
20:17Sean Connell:I'm sure that's exactly what they're doing right now. But the difficulty of the situation, and this really comes into fair market value again, And then for anyone at home who sort of maybe is involved in the sports world will know that a lot of these deals are done around what's called media value, which is essentially how much exposure am I getting for this sponsorship? And for some of Topman's sponsors, so if you take Kraken, for example, you know, big crypto exchange or crypto firm for a company like that, brand awareness and exposure is absolutely everything. so they want to make sure that all of their sponsorships are delivering maximum impressions and actually all of this stuff around you know topman's work in the community or you know these kind of other what much softer measures they are insignificant in comparison to the sort of the exposure value that a brand like that gets so when that exposure decreases suddenly all the value ceases to exist in in the contract and for for a sponsor like that you know you're left simply holding a very expensive ticket with and not getting very much in return now there are other sponsors like aia who actually have bought more into who topnam are as a as a holistic club you know as we were talking before about what sponsorship value is it's not just about the on the pitch it's all the other softer measures really it depends per sponsor so we're gambling all these gambling companies that sponsor the premier league teams at the bottom of the league they don't really care too much about whether they're sponsoring Everton or Burnley or whoever it is they just want the premier league global eyeballs and so when you're no longer a premier league team and those eyeballs don't exist then suddenly the value falls through the floor and So I'd imagine that some Topland sponsors are very concerned about this and others have hopefully bought into the wider brand and everything that it has to offer.
Read the full transcript
22:29Sean Connell:So, yeah, I think that there's certainly conversations going on to promises and what have you and that sort of thing. But I think really sponsors need to think about what their sort of thresholds are for how low things can go before they do want to, before ultimately it no longer makes commercial sense. You know, fair market value was brought in by the Premier League to deal with situations like Newcastle and Manchester City, where there was a bit of a conflict of interest in ownership and sponsorship coming from the sort of the same entity. but you know in all these other deals these are these are not the same entity these are commercially minded brands that are looking to maximize their return so when they're presented with a sponsorship that no longer makes sense for what their brand objectives are then the right thing for them to do is to is to step away and and that may be what what what we're seeing you know gradually happen even with aia moving from the front of share to the training ground and do they
23:32Jack:move down again after that no i mean it's really quite fascinating because obviously spurs haven't helped themselves the the past few years but equally and you know forgive me if i'm starting to sound like i've got a bit of a victim complex at the moment sean but i would say that not i i don't feel that like the coverage of spurs say for example is always held in the in the best faith by say like their i don't want to start using terms like the mainstream media but let's just say the the popular media there's sort of the sky sports if you like you know need to remind you that just last week we had our our former manager on there talking about the fact we're not a big club anymore yeah um obviously that you know you might say that the club have some control over that they have to manage their relationships better and and what have you but still there's only so much you can do there's only so much the club can control when you talk about say turning on the darts which is you know i'm sure i don't need to tell you which is fastly growing into probably the nation's second sport in terms of popularity the amount of eyeballs on it right every time you turn on the darts you'll be hearing tottenham get battered everywhere they go which is yeah it's kind of fun it's rival fans having a laugh but again it plays into this narrative this spursy stuff this sort of aura around the club which is generally speaking ridicule and and it's quite funny when you when you really think about it you know it's spurs are they're mainly ridiculed for the fact that more often than not we're the team that fails to beat a arsenal manchester city or chelsea to winning a title something like that which is you know that that seems to be like the the height of our crime um and and i would say from our perspective you know we look at we look down the road to like a villa or a newcastle the excitement that those clubs get when they start to pick up form and we're sat here being like these are clubs that haven't won anything for decades now um yeah here are spurs that seem to be in the ire now i guess the point i'm driving at sean is like how much do you think that type of stuff that the spurs eora if you like plays into it plays into this type of thing do you think sponsors can say well you know look we do want to be on board with you you are a big london club you do you know you you have x y and z going for you but at the same time we're sort of going to be associated with the spursy thing you're the club that everyone
25:56Sean Connell:makes fun of right yeah i mean ultimately you're right you know these um sponsorship is it's a human business right there are there are humans on on the other end of this boardroom table making decisions when we look at what the value is in our in the sponsor's fair market valuation We deal in the hard facts that we measure. But ultimately, even within that, you know, what sponsors are telling us is there are three things that they care about most, reputation, audience and sort of community stuff. So, yeah, when we look at reputation, we look at the factual history of the club, the infrastructure of the stadium, the players, this, that and the other.
26:35Sean Connell:But the softer measure, really, which you can't measure in reputation is some of those sort of things. um now how much that plays into the actual the value and sponsor i mean that from a sponsor's point of view um i think all of the noise that goes around football is kind of part of the enjoyment and actually part of the value of it being mentioned in that conversation is is is partly why they pay so much money to even be in in mentioned in that way um so i think you know it probably does have a bit of an impact but it's sort of you know in similarly with formula one you know you have the the partners come in and then there's a lot of talk about all the technical specifications of the car and this that and the other and these you know that's all just part of fun of the sport itself and i don't think sponsors get too impacted by the spursy effect if you like
27:33Jack:even if you feel it very very deeply i was gonna say that's good to hear so it's mostly just one
27:39Sean Connell:for us techie fans i mean you know what what does impact it though i mean it's being right down the bottom is because that is that is that is not now just spurty stuff that's proper bbc news kind of lead story stuff this is this is actual impact on brand reputation um which is you know that does have an impact on the value of the sponsorships um and that is at the moment very very real
28:09Jack:well jamie jamie currig has just led out of a piece in the telegraph today basically saying that he thinks spurs are going to go so you know really yeah that's his big opinion so cheers to
28:18Sean Connell:that one jamie thanks a lot yeah well i think as i was saying to you just before off air i'm as you know i'm an everton season ticket holder um we had a very difficult time not not too long ago where we were sort of sleepwalking into a relegation we were lucky and the fact teams that came up were you know not not great and went straight back down i'm not sure that that's the
28:41Jack:case this year no and uh i have injury problems and i can't i can't start i can't stop going into this one and catastrophizing about this one sean got to stay stay on stay on point which you mentioned the uh the the front of shirt sponsor um just anecdotally there now i know that every single season, the sponsor, you actually do your valuations of the front of shirt sponsor and sleeve as well, is it, I believe? Yeah, the front of shirt and the sleeve. So what was it for Spurs June 2025 and what are we looking at going into the new season? I guess if we stay in the Premier League, which hopefully we will, but I'm sure things will have still taken a knock, right?
29:25Sean Connell:Yeah, and I mean, with last season, So we, as you say, we value every year at the end of the season, the fair market value of every Premier League front shirt and sleeve sponsorship. Now, last year of June 2025, Tottenham actually performed very well in that. They had a fair market value of 49.1 million and the sleeve was valued, which actually was a show that the current AIA deal was undervalued. um aia should be paying top more um and the sleeve was 13.1 million now of course the the league form that year wasn't very good but what happened that year and what is what is still sort of happening is that there is european exposure so that front of shirt position is being shown to audiences all over europe in the champions league and that is worth a lot of money in terms of sponsorship value what so essentially the the value of the sponsorship has been propped up by that european exposure unfortunately what's going to happen now is that that european exposure is going to disappear and the one thing that sponsors care about most the one thing that our data shows they care about most and the one thing they tell us they care about most is awareness you know you can have all the great community campaigns and this that and the other but ultimately it is the the exposure how much of our target audience are you putting our brand in front of and for Tottenham next year their ability to do that is going to be severely diminished and we reran the valuation um just a couple of days ago now this is based on a point in time valuation so this is what Tottenham is worth if the season was to effectively end today and if the season was to effectively end today the top and front of shirts sponsorship would have lost 40 million pounds per year and the sleeve would have lost 3.5 million pounds a year so that you know that's nearly a 30 percent loss in sponsorship value due to poor league form combining with a lack of exposure on the continent also less games right so we you know the great thing about european football is it shows your brand the sponsor's brand to a big audience but it also shows your brand regularly you play on a saturday and you play again on a wednesday that won't be the case for top them uh next year and there's also some other you know areas this is going back a little bit now but you know obviously star players play a big role and people like harry kane and song you know sponsors build entire campaigns around these people um they're almost you know part of the value you get as a sponsor is having some of these global football stars as brand ambassadors and and you know so that value has gone as well so i think unfortunately what we're going into with top at a very precarious time is is that aia as we know is going to step away from the front of share so from next year topnum will need to be looking for a new front of shirt at a time when their value has decreased quite significantly if current form continues but also at a time when the gambling ban comes in and what this is going to do is create an intensely fierce competitive environment for sponsors um sorry for football teams to it to try and get new sponsors so over half of the league is currently looking for a new front of shirt part and you know there aren't that many brands out there that are willing to stump up 10 20 million you know on on or more on these sponsorships and those that are are being called and and and you know brought in as much as possible by just about every other premier league football team going so it's a real could be a real sort of perfect storm where spurs's sponsorship value has decreased they're having to go back into market at the most competitive time that I think there's been in sponsorship in the Premier League since its formation.
33:38Sean Connell:So it really could be a difficult time for the club. And just to put it in context with that gambling, I have it on very good authority speaking to the commercial director of a Premier League club that the highest offer they had for their front of shirt sponsorship from a non-gambling brand was less than half of what the gambling brand was willing to pay. And indeed, when we last year, when we published our values of the Premier League clubs, we reran the model, but we took out all of the gambling sponsorship to see what would happen. And the average fair market value of everyone's sponsorship, particularly at the bottom end dropped by 40 percent so this is this is a really significant so what we're having at the moment when i say that topnum's value has dropped by 14 million that is what it has dropped by 14 million just because of things that are happening with top less european exposure and less frequency staff out these kind of things but when we combine that with what is going to happen to all clubs the the value drop is compounded so all clubs are going to lose millions off their spot front of shirt sponsorship value um topnam might just be a sort of double factor where they're already losing a lot of money just because of what's going on in the in the club as a whole so you know i don't want to be too doom and gloom but it is a very difficult time um the only thing that i would say um and i know this from personal experience the only thing i I would say to alleviate some of your fears as Tottenham fans is that actually Tottenham have a really good commercial team, really strong commercial team, very knowledgeable.
35:28Sean Connell:And so, you know, if anyone can sort of do it, I think they're in a good position in that way to do it. If they can, you know, realise the sort of the situation that the club's in. But it's certainly very challenging. and I don't envy anybody that has the job of trying to sell Premier League front of shirt sponsorship. You know, football clubs have known about the gambling ban for a number of years now. None of them have been able to secure a non-gambling sponsor. The clock is ticking. We only have a few more months to go until the new season starts. And I suspect that we will see a number of Premier League football clubs playing with no front of shirt sponsor next year.
36:11Sean Connell:unlike Chelsea, who do this out of choice because they don't want to undersell theirs, I think many of these clubs were doing it simply because they couldn't find a sponsor that was willing to pay them anywhere near what a gambling brand was willing to pay.
36:25Jack:And I guess a lot of this is, is this purely because clubs don't want to be tied into a long, because most of these shirt sponsorship deals will be for, what, a decade or so? I don't know if it's usually that long, but let's say at least four or five years. is it simply that clubs don't they would rather wait and see if there's a better opportunity than say jump in with somebody that that wants to i don't know lowball them if you like
36:50Sean Connell:yeah i mean it's i think it's twofold really because one i i still think that maybe commercial teams at premier league clubs have this idea that they will be able to get a new deal that is similar to the gambling brands and now i think what's happening is that they're going to market and saying you know this is what we got last year um you know we're looking for something in a similar ballpark this year and it just doesn't exist the demand doesn't exist the economy is in a very difficult position marketing directors are under incredible pressure to justify their marketing spend um so you you know you you have that position i think is going to be a very um difficult one but but there is a very real danger for football clubs as well that if you do accept a low offer one that under undervalues your sponsorship um and you are tied into it you know it's very difficult to then rise increase the prices from that point on so in the going back to our stadium report and this isn't football one so apologies but the Principality Stadium, you know, the old Millennium Stadium in Cardiff, the Welsh Rugby Union has a deal with Principality that undervalues that stadium, did have a deal that undervalued that stadium by about 4.5 million a year.
38:12Sean Connell:Now, that was a 10-year deal. So that's 45 million of sort of lost value. And I think what's going to be really important here in the coming months and it is fair market value because this is what we're essentially saying is this is what is happening in the market this is what other sponsors are willing to pay the difficulty is at the moment is that there are really no non-gambling sponsors at the bottom end of the premier league so until somebody starts signing deals we don't really know what the value of it is post gambling um so i i think what will what we'll start to see over the coming months is that one or two teams will break cover and we'll start signing deals and then the rest of the market will say ah okay that's where that's where the fair market value has landed and i'm as much as anyone or perhaps more so i'm genuinely interested to see where that that ends up uh the only sort of non-gambling partnerships at the bottom end of the market at the moment.
39:18Sean Connell:Leeds United and Red Bull, I think, and Brighton and Amex. So, yeah, it's going to be a really difficult time for Tottenham to come into that market. It's kind of like the worst possible time to be losing your front of shirt sponsor and to be having such a dramatic drop in your on-the-pitch performances.
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41:02Matt Law:But that might be hard to accomplish before tax day. So maybe just stick with Tax Act. tax act let's get them over with yeah i was just having a look now i mean this is a slightly
41:13Jack:outdated uh article that i'm looking at from the bbc but at that time i think this is last season they're saying there's 11 of 20 clubs that have gambling companies that have sort of uh front of shirt sponsors and it is you know villa notwithstanding now uh it's majority all clubs down at the the lower end of the table so i mean it's it's one of those things isn't it where it's a move for a societal good, I'm assuming. But in a footballing sense, it again acts to concentrate power, doesn't it, at the top end of the table for those bigger clubs that can demand larger sponsorship deals from non-betting entities, right?
41:55Sean Connell:Yeah, I mean, it's going to increase the divides again. what I think is quite interesting and what I suspect will happen is many of these clubs at the bottom half of the table will negotiate a deal with their existing front of shirt gambling sponsor to come onto the sleeve position where the gambling brands are still allowed and the gambling brands when they come onto the sleeve they will pay well above the current sleeve sponsorship value to achieve that position why because just like crack and you know they they desire and they need more than anything brand awareness they need mass amounts of brand awareness at all times so they will pay well above the odds to go on sleeve what i expect will then happen is there may be one or two clubs that do manage to you know secure a front of shirt sleeve sponsor for a decent amount of money.
42:56Sean Connell:And actually for those clubs, I believe that they'll end up in a net positive position because they'll dramatically increase the value of the sleeve and they'll recruit some of the value of the front-left shares. I think those two things together actually could be a good thing for clubs. I believe it's going to be a real sort of winners and losers environment where clubs that do that will be okay and there will be some that are unable to convert their gambling sponsor to the sleeve, usually because of an existing sleeve agreement they may have. And they will be unable to attract a new front of shirt for anything remotely near what they were getting for the gambling sponsor.
43:39Sean Connell:So for those clubs, I think it's going to be a really perilous situation.
43:45Jack:I guess just bringing things together now, coming back closer to where we started. what what can spurs do right now sean like what how can we how can we spin this you know you've sort of nodded to the fact that we have a very good commercial team i assume that their line of attack will be look we've had a we've had a bad couple of years but we're still spurs we still have loads of money we still intend to compete at the very top you know there is there is an opportunity here but but how much longer in your opinion anyway do you think that type of talk can last because I'm sure there is still something in that right you wouldn't be I'm sure you know like you say from your position you wouldn't be overly surprised if Spurs you know we get a couple of our injured players back we get a good manager in in the summer we stay up we we sign a couple of good players you wouldn't be overly surprised to see Spurs back in the top five top six next season right still really really yeah well I don't know about that Jack but come on come on play along
44:49Sean Connell:yeah i mean absolutely what we're dealing with here is what the situation is today some sponsors will come in and look at this opportunity and say actually spurs are going to bounce back and have every confidence in that um if you're looking for reassurance then look at manchester united i mean obviously it's a very strong brand but that is essentially what has happened with manchester united the the exposure and the sponsorship value of manchester united's front of share over the last few years has dipped quite significantly, but it's held relatively firm because of all the other benefits that Manchester United offer sponsors.
45:28Sean Connell:And the same is true of Tottenham. You know, Tottenham is still, despite the poor form, you know, even at the current valuation of£35 million for that front of shirt, still, you know, that's a fantastic sponsorship opportunity with a huge club in um you know the capital one of the biggest capitals in europe uh global reach the premier league it's a fantastic sponsorship opportunity okay it's it's come down a little bit but i think all of this really goes to show the power of fair market valuation again because what we're saying is listen don't sponsor us because we're going to win this day and lose the next and what have you sponsor us because you buy into who we are as a club sponsor us because of our fan base sponsor us because of our fantastic stadium sponsor us because we offer reach to a affluent global audience we have the fantastic business community around the stadium we're a huge part of the community you know this is why clubs you know need to highlight these these areas so much more when they're selling sponsorship because if you say okay sponsor us because we get this size audience well you're always then going to be beholden to keeping size audience um you know i had an interesting conversation with the commercial team of um a very big spanish club and i was saying to them you know it's interesting because from if from a media value point of view i.e from like exposure points of view i'd rather sponsor you know west ham united or something like that because the reach of the premier league is so huge but of course real madrid is so much more than just its audience it's a winning team it's the galacticos it's it's and and and and that all of these kind of things uh another example you'll have seen that the super bowl um you know we had this huge moment in the Super Bowl, but actually West Ham versus Man United offered more eyeballs, better global reach.
47:36Sean Connell:But of course, the Super Bowl wasn't just about eyeballs. It was a cultural moment that spanned the globe and that has value. So if teams like Spurs sell off the back of their softer values as well as their audience, then they're really truly valuing that they're sort of the 360 offering that they provide sponsors. And then the big mistake that many teams have made in the past, all of these lower Premier League teams, they've gone to gambling firms and had those conversations and said, listen, this is the size of our audience. It's almost like a formula. This size audience equals this size value, and they've done deals on that.
48:20Sean Connell:Speaking about my own club at Everton, we have a gambling sponsor, but the value of Everton is more than just the eyeballs of the people who might watch the games. It's the community. It's all of these kind of things. And that's why Hill Dickinson, taking it back to stadiums for a second, that's why Hill Dickinson have partnered with Everton, not because of some audience in China, but because of the fabric of the community, the hospitality, the bringing people along, the client entertainment, all of these kind of things. so my advice to any football club spurs or anyone else listening to this is is to truly value the entirety of your offering to sponsors because that's what a lot of them care about as well um it's you know when sponsors sign up they often talk about being a partnership in the community shared attributes innovation this that the other that's what sponsors hang their hat on um so that's what you should be valuing and that's what you should be putting forward and And ultimately, that's what will see you through when the chips are down.
49:21Jack:So we say we can pitch them the rollercoaster idea, Sean. Like we might get relegated, but we might win the Champions League as well. So, you know, you're in for excitement if you jump on board with the Hotspur Football Club. Sean, it's been an absolute pleasure talking to you today. I found this a really, really fascinating discussion. If anybody listening to this has been particularly struck by this and they want to learn more, where can they follow you? where can they read more, listen to more of your work? Please tell us.
49:51Sean Connell:Yeah, sure. So we're www.thesponsor.com. So you can go on there, you can research. It's all free to look at the valuations of the Premier League stadiums, the Premier League front shirt and sleeve assets. So all of that is on the sponsor. So yeah, enjoy and feel free to send over any questions that you may have. Sean, thank you very much, mate. Cheers, Jack. Take care.
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From the publisher
Jack is joined by Sean Connell, Editor at The Sponsor, to dive deep into the business and commercial reality of Tottenham's current existential spiral.
We start by looking at the elusive stadium naming rights. Following Sean's recent research on the fair market value of European stadiums, we ask if Daniel Levy and the current hierarchy missed the boat by holding out for unrealistic valuations while producing inconsistent results on the pitch.
The conversation then tackles the recent bombshell report from Matt Law, suggesting that long-standing commercial partners are cutting ties due to the ongoing chaos and relegation fears. We get Sean's expert view on what actual power sponsors hold in these scenarios. Can they force the club into making better footballing decisions, and what can the likes of Vinai Venkatesham do to repair the toxic commercial environment?
Finally, we discuss the front-of-shirt dilemma and the massive financial hit Spurs might take if they had to renegotiate their prime real estate in the current climate.
Theme is Ghost Cat by Gillen
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