Tottenham hotspur Plc

Harvard Business School Case No. 209-059

Courseware No. 222-708
REV: April 18, 2022

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Table A Valuation Data

20-Year Risk Free Rate 4.60%

Tottenham Equity Beta, 2004-2007 1.3
Tottenham Debt Beta 0.2
Company Tax Rate 35%
Historic Leverage Ratio, 2004-2007 20%

Source: Casewriter estimates

Exhibit 1 Team Valuations, Revenues, and Records (December 31, 2007)

Enterprise Avg. Points Avg. Net Goals

Team Revenue Operating Income
Value (EV)a (1998-2007) (1998-2007)

Manchester United 934 169 50 82 42.7

Arsenal 588 134 11 77 38.1
Chelsea 345 154 -20 74 33.9
Liverpool 291 123 20 67 24.6
Newcastle United 167 87 6 53 2.3
Everton 106 58 -8 49 -4.9
Aston Villa 90 50 -11 51 0

Tottenham 75 5 51 -1.9

a Enterprise Value = Equity + Debt - Excess Cash.

Source: Compiled from Forbes.com, “Soccer Team Valuations,” http://www.forbes.com/lists/2007/34/biz_07soccer_Soccer-Team-Valuations_Rank.html, accesse

eam-Valuations_Rank.html, accessed August 2008.
Exhibit 2 Tottenham Balance Sheet (millions of pounds), 2007

Assets

Current assets:
Cash and equivalents 26.3
Investments, available for sale 0.6
Inventory - Merchandise 1.2
Accounts Receivable 20
Total current assets 48.1

Property and equipment, net 55.8

Intangible assets, net 49.4
Total assets 153.2

Liabilities and Stockholder Equity

Current liabilities:
Accounts payable 64.4
Total current liabilities 64.4

Long-term debt and deferred interest, net of current portion 43.1

Total liabilities 107.5
Total stockholders’ (deficit) equity 45.7
Total liabilities and stockholders’ equity 153.2

Market Data

Share Price £13.78

Shares Outstanding (millions of shares) 9.3
Market Capitalization 128.2

Source: Company Reports

Exhibit 3 Tottenham Pro Forma Income Statement (millions of pounds)

Current Forecast
Forecast Year 0 1 2 3 4 5 6
Year 2007 2008 2009 2010 2011 2012 2013

Revenue

Attendance 17.4 19 20.7 22.5 24.6 26.8 29.2

Sponsorship 15.7 17.1 18.7 20.3 22.2 24.2 26.3
Broadcast 28.7 31.3 34.1 37.2 40.5 44.2 48.1
Merchandise 5.2 5.7 6.2 6.7 7.3 8 8.7
Other 7.1 7.7 8.4 9.2 10 10.9 11.9
Total 74.1 80.8 88 96 104.6 114 124.3

Operating Costs

Payroll 50.9 56 61.6 67.8 74.6 82 90.2

Stadium Operating Expenses 16.4 17 17.7 18.4 19.2 19.9 20.7
Other 1.8 1.9 2 2 2.1 2.2 2.3
Total 69.1 74.9 81.3 88.2 95.8 104.1 113.2

EBITDA 5 5.9 6.8 7.7 8.8 9.9 11.1

Depreciation 2.2 2.3 2.4 2.5 2.6 2.7 2.8
EBIT 2.8 3.6 4.4 5.3 6.2 7.2 8.3

Source: Compiled from company annual report 2007, http://admin.tottenhamhotspur.com/uploads/assets/docstore/old/tottenham_ar07.pdf, accessed A

 7 8 9 10 11 12 13
2014 2015 2016 2017 2018 2019 2020

31.8 34.7 37.8 41.2 44.9 48.9 50.9

28.7 31.3 34.1 37.2 40.5 44.2 45.9
52.5 57.2 62.3 67.9 74.1 80.7 84
9.5 10.4 11.3 12.3 13.4 14.6 15.2
13 14.2 15.4 16.8 18.3 20 20.8
135.5 147.7 160.9 175.4 191.2 208.4 216.8

99.2 109.2 120.1 132.1 145.3 159.8 166.2

21.6 22.4 23.3 24.3 25.2 26.2 27.3
2.4 2.5 2.6 2.7 2.8 2.9 3
123.2 134 146 159 173.3 188.9 196.5

12.3 13.6 15 16.4 17.9 19.5 20.3

2.9 3 3.1 3.3 3.4 3.5 3.7
9.4 10.6 11.9 13.2 14.6 16 16.6

tore/old/tottenham_ar07.pdf, accessed August 2008, as well as internal company reports.

Exhibit 4 Tottenham Games and Stock Market Reaction

Game Date Win Loss Draw Points Tottenham FTSEa

1/31/2004 0 1 0 0 0% 0%
2/7/2004 1 0 0 3 0% 1%
2/11/2004 1 0 0 3 12% 0%
2/22/2004 0 0 1 1 0% 0%
3/9/2004 0 1 0 0 0% 0%
3/14/2004 1 0 0 3 10% -1%
3/20/2004 0 1 0 0 0% -2%
3/27/2004 0 1 0 0 -3% 1%
4/3/2004 0 1 0 0 0% 0%
4/9/2004 0 1 0 0 0% 0%
4/12/2004 0 0 1 1 9% 1%
4/17/2004 0 1 0 0 9% 0%
4/25/2004 0 0 1 1 -3% 0%
5/2/2004 0 1 0 0 0% -1%
5/8/2004 1 0 0 3 8% -2%
5/15/2004 1 0 0 3 0% -1%
8/14/2004 0 0 1 1 -4% 1%
8/21/2004 1 0 0 3 0% 1%
8/25/2004 0 0 1 1 2% 1%
8/28/2004 1 0 0 3 0% 1%
9/12/2004 0 0 1 1 0% 0%
9/19/2004 0 0 1 1 0% 0%
9/25/2004 0 1 0 0 0% -1%
10/2/2004 1 0 0 3 -4% 0%
10/18/2004 0 1 0 0 3% 1%
10/23/2004 0 1 0 0 0% -1%
10/30/2004 0 1 0 0 2% 1%
11/6/2004 0 1 0 0 0% 0%
11/13/2004 0 1 0 0 0% 0%
11/22/2004 0 1 0 0 -3% 0%
11/28/2004 1 0 0 3 0% 0%
12/4/2004 1 0 0 3 -4% -1%
12/11/2004 1 0 0 3 4% 1%
12/18/2004 1 0 0 3 5% 1%
12/26/2004 1 0 0 3 0% 0%
12/28/2004 0 0 1 1 4% 0%
1/1/2005 1 0 0 3 0% 0%
1/4/2005 0 0 1 1 7% -1%
1/15/2005 0 1 0 0 5% 1%
1/22/2005 0 1 0 0 -3% 0%
2/1/2005 0 1 0 0 0% 0%
2/5/2005 1 0 0 3 13% 1%
 2/26/2005 1 0 0 3 5% -1%
3/5/2005 0 1 0 0 0% 0%
3/16/2005 0 1 0 0 1% 0%
3/19/2005 1 0 0 3 0% 0%
4/2/2005 0 0 1 1 -5% 0%
4/10/2005 1 0 0 3 -5% 0%
4/16/2005 0 0 1 1 6% -1%
4/20/2005 0 0 1 1 -4% 0%
4/25/2005 0 1 0 0 -8% 0%
5/1/2005 1 0 0 3 0% 0%
5/7/2005 0 1 0 0 1% 0%
5/15/2005 0 0 1 1 1% 0%
8/13/2005 1 0 0 3 0% 0%
8/20/2005 1 0 0 3 5% 0%
8/24/2005 0 0 1 1 0% 0%
8/27/2005 0 1 0 0 0% -1%
9/10/2005 0 0 1 1 -1% 0%
9/17/2005 0 0 1 1 0% 0%
9/26/2005 1 0 0 3 -1% 0%
10/1/2005 1 0 0 3 0% 0%
10/15/2005 1 0 0 3 0% 0%
10/22/2005 0 0 1 1 0% 1%
10/29/2005 0 0 1 1 0% 2%
11/7/2005 0 1 0 0 8% 0%
11/20/2005 0 0 1 1 -2% 0%
11/26/2005 1 0 0 3 0% -1%
12/3/2005 1 0 0 3 0% 0%
12/12/2005 1 0 0 3 -4% 0%
12/18/2005 0 0 1 1 -5% 0%
12/26/2005 1 0 0 3 0% 0%
12/28/2005 0 1 0 0 -1% 0%
12/31/2005 1 0 0 3 0% 0%
1/4/2006 1 0 0 3 3% 0%
1/14/2006 0 1 0 0 -3% 1%
1/21/2006 0 0 1 1 -2% 0%
1/31/2006 0 1 0 0 1% 1%
2/5/2006 1 0 0 3 1% 0%
2/12/2006 0 0 1 1 1% 1%
2/19/2006 0 0 1 1 5% 0%
3/5/2006 1 0 0 3 0% 1%
3/11/2006 0 1 0 0 3% 1%
3/18/2006 1 0 0 3 -2% 0%
3/27/2006 1 0 0 3 3% -1%
4/1/2006 0 1 0 0 -5% 1%
4/8/2006 1 0 0 3 0% 1%
 4/15/2006 1 0 0 3 0% 0%
4/17/2006 0 1 0 0 -1% 0%
4/22/2006 0 0 1 1 2% -1%
4/30/2006 1 0 0 3 0% -1%
5/7/2006 0 1 0 0 -4% 0%
9/9/2006 0 1 0 0 0% 0%
9/17/2006 0 0 1 1 0% 0%
9/19/2006 0 1 0 0 -1% 1%
9/23/2006 0 1 0 0 8% 0%
9/26/2006 0 1 0 0 -3% 1%
10/1/2006 1 0 0 3 0% 0%
10/14/2006 0 0 1 1 0% 0%
10/22/2006 1 0 0 3 0% 0%
10/28/2006 0 0 1 1 2% -1%
11/5/2006 1 0 0 3 4% 1%
11/12/2006 0 1 0 0 0% 0%
11/19/2006 0 0 1 1 -1% 0%
11/26/2006 1 0 0 3 2% -1%
12/2/2006 0 1 0 0 -1% 0%
12/5/2006 1 0 0 3 4% 0%
12/9/2006 1 0 0 3 -1% 0%
12/17/2006 1 0 0 3 7% 0%
12/26/2006 1 0 0 3 0% 1%
1/1/2007 0 0 1 1 -1% 1%
1/14/2007 0 1 0 0 0% 0%
1/20/2007 0 0 1 1 -2% 0%
2/4/2007 0 1 0 0 -2% 0%
2/10/2007 0 1 0 0 -1% 0%
2/21/2007 1 0 0 3 0% 0%
2/25/2007 1 0 0 3 -1% 1%
3/4/2007 1 0 0 3 0% -1%
3/17/2007 1 0 0 3 -1% 1%
4/1/2007 1 0 0 3 0% 0%
4/7/2007 0 1 0 0 -1% 0%
4/15/2007 0 0 1 1 0% 1%
4/21/2007 0 0 1 1 9% 0%
4/28/2007 1 0 0 3 8% 0%
5/7/2007 1 0 0 3 -4% -1%
5/10/2007 0 0 1 1 6% 1%
5/13/2007 1 0 0 3 3% 0%

a
The FTSE is the UK equivalent of the S&P 500.