Credit ratings agency tips more top football clubs to ‘do a Tottenham’
More European football clubs will follow Tottenham Hotspur’s lead by investing in stadiums as broadcast revenues plateau, credit ratings agency Morningstar DBRS has forecast.
After decades of strong growth, most top leagues have seen a fall or only marginal increases in the value of their TV contracts – the source of the majority of their income.
That is forcing clubs to look to other revenue streams for growth, and Spurs have shown the way by turning the Tottenham Hotspur Stadium into a money-printing machine.
The £1bn venue generates around £5m per home game and matchday takings have rocketed more than 150 per cent since moving from White Hart Lane in 2019.
In addition, the state-of-the-art stadium attracts third-party events such as NFL games and major concerts, which have helped to treble commercial income post-relocation.
Other clubs have taken note, with Real Madrid’s revamped Santiago Bernabeu helping it to become the first club to break €1bn in operating income last year.
Rivals Barcelona are in the midst of their own rebuild of Camp Nou, while Manchester United are exploring their options for transforming Old Trafford into a more lucrative venue.
Everton, meanwhile, are poised to move next season Morningstar DBRS’s Global Sports Finance Outlook predicts that more clubs will look to make similar plans in 2025.
“Following decades of consistently increasing media rights values in Europe, the latest round of renewals has disappointed,” the report says.
“Most notably, the recent Serie A and Ligue 1 domestic rights deals have shown decreases of three per cent and 33 per cent, respectively, versus their previous deals.
“In addition, the English Premier League’s domestic rights were renewed with only a marginal increase that is approximately 20 per cent below the previous cycle on a per-broadcasted-match basis.
“The German Bundesliga also announced recently the renewal of its domestic TV rights for the next four seasons, showing a mild two per cent increase versus the previous cycle.
‘Many more clubs’ to copy Spurs, says Morningstar DBRS
“European clubs are focusing on stadium upgrades and redevelopment, which should allow them to increase matchday and commercial revenues.
“Recently built/renovated stadiums of Olympique Lyonnais, Tottenham Hotspur, and Real Madrid are having a profound impact on the teams’ financial results.
“Many other clubs, including Barcelona, Everton, Manchester City and Liverpool, are in the midst of similar projects.
“We expect many more clubs to attempt to replicate this success over the coming years in order to maximize revenue generations at their stadiums, including Real Betis, Valencia, Sevilla, Manchester United, Roma, AC Milan/Internazionale Milano, and Porto.”
More broadly, Morningstar DBRS expects the credit ratings of sports teams, leagues and stadiums to be “relatively insulated” from economic uncertainty following the US election.
Its other predictions include increasing greater financial stability in European sport due to tightening regulation and continued growth for both Major League Soccer and women’s sports.
“Our stable outlook is based on contractually obligated revenue streams from broadcasting, sponsorships, and premium seating,” said Michael Goldberg, sports finance lead.
“Credits are further supported by the historically resilient consumer demand for sports-related products driven by the strong attachment that fans have with sports brands.”