Exectuive Summary
Tottenham Hotspur Football Club
Tottenham Hotspur Football Club founded in 1882 and this is one of the oldest teams in the Premiership. The club had an old stadium called White Hart Lane with a capacity of 36,500 fans. The club had good successful and winning records in past six decades. The club also becomes the first public-owned football club in England and in 1983; it listed on the London Stoke Exchange. ENIC international Ltd., an investment company established by Joseph Lewis is the main shareholder of the team since 1981.
Source Of Revenue For Football Clubs
Main source of revenue for a football club's comes from winning prize of a championship. UEFA Cup and UEFA Championship League are the two football tournaments has high value of prize money and England's football clubs always want to participate and would like to win the championship cup. Another source of revenue is the broadcasting rights, which comes from the agreements, signed between the clubs and the league or tournaments organizers. Therefore, if the club will play and win more matches so they will receive more broadcasting revenue. In addition, the sales of tickets of the matches as well as selling of merchandize and transfer fee of players.
Decision Of Building Stadium
In early 2008, Daniel Levy, chairman of Tottenham Hotspur Football club announced plan to build a new stadium with a capacity of up to 60,000 fans where as club's old stadium capacity of hosting 36,500 fans. During games at White Hart Lane all the tickets was sold out and over 20,000 people are on waiting list. The old stadium maintenance capital expenditure was £3.5M in 2007and expected to grow at 4% and depreciation cost was £2.2M in 2007 and expected to grow at 4%. There is no revenue generated from the stadium except matches. On other hand the key competitors such as Arsenal, Manchester United and Chelsea had newer and larger stadium with a capacity of above 50,000 fans. Robbie Keane and Dimitar Berbatov, leading goal scorers of Tottenham decided to move high profile clubs i.e. Liverpool and Manchester United respectively.
Levy felt that a significant investment needs in physical assets, which could be development of new stadium was a crucial component of long-run success in the premiership and leads to future success of the club. The proposal will be good news to the fans but it could also create financial pressure to the club. They mainly finance the establishment of new stadium by loan. They have to limit the budget for signing players carefully in the next few years implying probable drop in the team competitiveness.
Case Analysis
Tottenham Hotspur Football Club one of the oldest teams in the Premiership and founded in 1882. It's a successful history of winning trophies in the past six decades. Tottenham currently played at their own old stadium called White Hart Lane with a capacity of hospitality of 36,000 fans. The club becomes the first public owned public-owned football club in England and it was listed on the London Stoke Exchange in 1983. ENIC International Ltd has been the main shareholder since 1981. ENIC International Ltd is an investment company established by Joseph Lewis and Daniel Levy is partner at ENIC and had served as chairman of the club since 2001. Later, by June 2007 ENIC had acquired share of 82% of the club and take the management control of the club.
Denial Levy, chairman of Tottenham Hotspur Football Club, in early 2008 announced plan of developing new stadium for the club beside the old stadium “White Hart Lane”. The new stadium will be complete in 2 years with estimated cost of £250M. Stadium will be able to accommodate up to 60,000 fans. He felt that a significant investment needs in physical assets, which could be development of new stadium was a crucial component of long-run success in the premiership and leads to future success of the club. This is a strategic move and a long-term plan to be top team in the premier league and be successful champion club.
Many Factors Are Involved To Take A Decision For Denial Levy To Build A New Stadium Beside White Hart Lane.
Conclusion
Bibliography:
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Brigham, E. F., Ehrhardt, M.C., Financial Management, Text and Cases. Cengage Learning (I) Pvt. Ltd (2008)
McKoen, P., Gough, L., The Financial Manual for Non-Financial Managers. Pearson Education Limited (2000)
Webpage
Tottenham announce plans for new 60,000-capacity stadium (AFP) Oct 30, 2008, http://afp.google.com/article/ALeqM5jrJ00xQQxOGQ6Zde3-nA9ejAaDlg8
Bose, M., Struggling Spurs still attract financial interest, September 30, 2008, http://www.bbc.co.uk/blogs/thereporters/mihirbose/2008/09/struggling_spurs_still_attract.html
Tottenham Hotspur to build new 60,000-seater stadium close to White Hart Lane, Oct 30, 2008,
Is Tottenhan's new stadium just a part of Levy's grand plan? November 28, 2009, http://www.footballfancast.com/football-blogs/tottenhams-stadium-part-levys-grand-plan
Credit crunch not all bad as Spurs save money on move, http://www.dailymail.co.uk/sport/football/article-1165009/Credit-crunch-bad-Spurs-save-money-move.html
Collomosse, T., Spurs aim for 60,000-seat White Hart Lane by 2012, December 16, 08, http://www.thisislondon.co.uk/standard-sport/article-23602454-spurs-aim-for-60000-seat-white-hart-lane-by-2012.do
Tottenham's stadium plans criticised, Jan 28, 2010, http://www.sports city.org/news_details.php?news_id=10668&idCategory=72
Tottenham Hotspur still seeks stadium as profit tumbles, Mar 31, 2008, http://www.eufootball.biz/finance/5337-3103087-Tottenham-Hotspur-profit-tumbles.html?print
