Tottenham Hotspur F.C. Case Study

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MFE, Ecole Polytechnique Fédérale de Lausanne Introduction to Finance

Tottenham Hotspur F.C. - Case Study

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Name:

Frej Håkansson

Hallgerður Helga Þorsteinsdóttir

Léo Lenel

Thibaud Vincent

Tristan Buchs

Professor:

Teaching Assistant:

Prof. Dr. Rüdiger Fahlenbrach

Christoph Herpfer

Date of submission:

23. October 2015

Tottenham Hotspur F.C. - Case Study        Frej, Hallgerður, Léo, Thibaud, Tristan

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• Introduction

It is early 2008 and the Tottenham Hotspur F.C. has some decisions to make about its future. It is considering four options. It could continue with the current system, invest in a new Russian striker, invest in a new stadium or do both investments concurrently. Using the nancial in-formation available at the time, we aim at evaluating the dierent options and nding the most prosperous one(s). We start by showing our approach to the problems at hand and follow by displaying our results. In addition, we tried a more involved and less fruitful method, which is described in the Appendix.

• Approach

We decide to adopt a structure where we explain our steps for the dierent options in a centralized manner, as they share a good portion of the reasoning. We structure our report to follow the logic adopted in our spreadsheets to allow the reader an easier understanding of the choices we made. We separate the dierent future projects when necessary using No Changes, New Stadium and New Striker.

2.1        Revenues

No Changes:        The total revenue is calculated using: T otalRevenue = Attendance+Sponsorship+

Broadcast + M erchandise + Other.

New Stadium: The new stadium brings changes to the revenues from 2010 on. The at-tendance is rising by 40% and the sponsorship in increasing by 20%. The total revenue is:

T otalRevenue = N ewAttendance + N ewSponsorship + Broadcast + M erchandise + Other.

New Striker:        First of all, the new striker acquisition is expected to increase the net number

of goal per season by 12. Tottenham Hotspur has been averaging 1:9 net goals and scored an average of 51 points. Using the provided data, we ran a linear regression on the net goals linked with the points. We ended up nding a regression line of: P oints = 0:675 (N etGoals) + 51:62. The addition of the new striker would increase the number of points by: 12 0:675 = 8:1, bring-