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The given case study is mainly concerned with the management decisions that are considered by the chairman of Tottenham Hotspur Football Club, Mr. Daniel Levy, in order to generate a steeper rise in revenues for the club. The major investments in question are the construction of a new stadium that is almost twice the present capacity, an improved practice facility and further improvement of the team through desired player acquisitions. But, Tottenham being a publicly owned club need to justify the time and resources that would be at stake in order to undertake this project.
The four major sources of revenue for the team include the number of fans attending the match, the sponsorship rights it receives from other companies, the sale of club merchandise and its broadcast rights sold to television channels. By building a new stadium, which has an estimated cost of 250 million spread over the next two years, Tottenham hopes to increase the current capacity of 36500 people to 60000 fans per match.
This is estimated to increase the revenues through attendance by 40 percent and considerable merchandise sale as well. The club also plans on investing in better practise facility and better players, thus increasing the odds of winning matches. This would not only increase the revenues from the matches but also increase the sponsorship amounts by 20 percent at the same time hiking the demandable price for broadcast rights. The collective rise in revenue is estimated to be around 9 percent.
He can be expected to work solely in favour of appreciation of his share value. His company ENIC has 82 percent overall beneficial interest in the club. One needs to determine whether this would negatively affect the decisions made by him.
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