Totenham Hotspurs Case

Tottenham Hotspur plc.

Financial Management

Syafri Rakhmat

Tottenham Hotspur Football Club, one of the oldest football team in English Premier League, through its chairman, Daniel Levy, Tottenham plans to make a brave move to help leap it into an upper echelon. The chairman felt that a significant investment in physical asset would help the team to reach its future success.

Daniel Levy, a formal director of Glasgow Rangers and a life-long Tottenham fan, focused on the pillars to help establish the future success of Tottenham. The three pillars are:

1. Development of a new stadium

2. Enlargement of a new training ground

3. Improvement of starting squad through prudent player acquisition.

One of these three pillars, enlargement of a new training ground, was already in agreement to be built just outside of London. This facility would help to improve the quality of the team and to develop young players and acquired star-players from other clubs.

One of the main reasons for Levy want to build the new stadium is to increase more revenue as a leverage to gain a competitive advantage in the cutthroat player acquisition market. The current stadium, White Hart Lane, has only 36,500 seats capacity which is lower that competitor’s such Arsenal, Manchester United and Chelsea. This limitation made Tottenham to have a waiting list for season tickets of over 20,000 people. In the United Kingdom, Tottenham had a passionate fan base for about 2.1 million people. This huge fan-base is an opportunity for Tottenham to expand its stadium.

An improvement in the starting squad is also important for Tottenham because a team’s performance record would affect its revenue sources. For example a higher ranked in the league would help the team to earn a greater share of television broadcast with each move up in the standings worth an estimated £760,000. Furthermore, a final standing in the top four teams will worth the team to play in the Champion’s League which means...