No Punishment for Tottenham Hotspur Despite Owner Joe Lewis’ US Indictment for Insider Trading
The recent indictment of billionaire Joe Lewis, owner of English soccer team Tottenham Hotspur, on charges of insider trading has sent shockwaves through the sports and financial communities. As the news of the indictment broke, experts and sports bankers speculate that a sale of the prestigious club may be on the horizon. Despite the legal troubles surrounding Lewis, the club’s soaring valuation and ownership structure add complexity to the situation.
Joe Lewis and Tottenham Hotspur’s Journey:
In 2001, Joe Lewis purchased a controlling stake in Tottenham Hotspur from Alan Sugar for a mere $28 million (£22 million). Fast forward to the present day, and the English club’s value has skyrocketed to $2.8 billion. A significant factor in this surge is the ownership of its state-of-the-art stadium, valued at an impressive $1.3 billion, which was unveiled in 2019.
Ownership Structure and the Trust:
Notably, Lewis is no longer a person with significant control of Tottenham Hotspur Limited (THL) as of October 2022. Presently, the owner of Tottenham Hotspur Football Club is ENIC Sports Inc., with majority control vested in a family discretionary trust, in which Lewis is not a beneficiary. This trust is managed by two independent professional trustees on behalf of its beneficiaries.
Potential Beneficiaries and Ownership:
While Lewis is not a beneficiary of the trust, some members of his family are potential beneficiaries of the discretionary trust that ultimately owns a substantial 70.12% of the share capital of ENIC. ENIC, in turn, possesses 86.58% of the total issued ordinary share capital of THL, along with a THL convertible A share.
Sports Team Valuations in the Limelight:
The world of sports team valuations has witnessed remarkable growth, both in North America and across the pond. Buyers have been increasingly willing to offer higher multiples of revenue for acquisition opportunities. Notably, the English soccer team Chelsea was sold for a staggering $3.09 billion last year, while the NFL’s Denver Broncos went for a then-record $4.65 billion. Recently, the NFL approved the sale of the Washington Commanders for a record-breaking $6.05 billion, valuing the team at an incredible 11 times revenue.
Potential Impact on Tottenham Hotspur’s Sale:
The indictment against Joe Lewis has fueled speculation that Tottenham Hotspur might be put up for sale. With several highly-priced transactions in the sports world already realized or in the pipeline, the market seems ripe for further big-ticket deals. Michael Jordan has been given the green light to sell the Hornets for $3 billion, while the sale of the NHL’s Ottawa Senators awaits approval. Manchester United, with a valuation of $6 billion, has been on the market for months, with the Glazer family’s reluctance to sell as the main obstacle to the sale.
Conclusion:
The indictment of Joe Lewis on insider trading charges has raised eyebrows, leading experts to ponder the potential sale of Tottenham Hotspur. The club’s remarkable valuation and intricate ownership structure add intrigue to the situation. As the sports team valuations continue to surge, Tottenham Hotspur’s fate remains uncertain, and only time will reveal the path it takes in the ever-changing landscape of global sports ownership.
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