Tottenham Hotspur PLC

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Tottenham Hotspur PLC

Bill Nicholson Way
748 High Road
Tottenham
London,
United Kingdom
Telephone: +44 020 8365 5000
Fax: +44 020 8365 5005
Web site: http://www.spurs.co.uk

Public Company
Incorporated: 1882
Employees: 239
Sales: £70.6 million ($130.9 million) (2005)
Stock Exchanges: London
Ticker Symbol: TTNM
NAIC: 711211 Sports Teams and Clubs; 448150 Clothing Accessories Stores

Tottenham Hotspur PLC is the holding company for the Tottenham Hotspur Football Club. One of the oldest of Britain's Premier League football (soccer) teams, Tottenham Hotspur was also the first club to go public, in 1982. Tottenham routinely ranks among the United Kingdom's top soccer teams, and is one of a handful—alongside Manchester United, Arsenal, and Aston Villa—to enjoy international recognition. Based in northern London, Tottenham Hotspur PLC represents the operations of the football club, as well as its stadium, known as White Hart Lane, and related concessions, including sales of clothing and other memorabilia.

The largest part of the group's turnover, which topped £70 million ($130 million) in 2005, comes from television and other media rights. These represented approximately 36 percent of the group's turnover that year. Gate receipts, including competition cup receipts, added 25 percent to sales; sponsorships, including those of Puma, Thomson, and Carlsberg, added 20 percent to sales; and merchandising generated 7 percent of company turnover. These activities also combined to produce a net operating profit of nearly £13 million, which was supplemented by player trading profits of £5.6 million. That figure was generated in large part through the sale of just four players. Listed on the London Stock Exchange, Tottenham Hotspur PLC is controlled by investment group ENIC, which owns nearly 30 percent of the company, and which also controls sports teams such as Vicenza Calcio, Slavia Prague, AEK Athens, the Glasgow Rangers, and FC Basel. ENIC is in turn controlled by Daniel Levy and backed by Bahamian billionaire Joe Lewis. Levy is Tottenham Hotspur's chairman.

LONDON FOOTBALL ORIGINATOR IN THE LATE 19TH CENTURY

Like many of England's football (soccer) teams, Tottenham Hotspur originated as an amateur football club established by a group of school friends from the local grammar school in Hotspur. Similarly, the football club was originally associated with a more established cricket club, the Hotspur cricket club, reflecting the larger appeal of cricket over the relatively younger sport of football at the time. Established in 1882, Hotspur FC played its first games in 1883 on what was then known as the Tottenham marshes. In 1884, in order to distinguish themselves from another team playing at the time, London Hotspur, the club adopted the new name of Tottenham Hotspur FC.

Tottenham Hotspur entered its first competition play in 1885, for the London Association Cup. By 1888, the club had moved to a new field in Northumberland Park. The move also allowed the club to begin charging admission that year. By 1895, Tottenham Hotspur was ready to turn professional, and in 1896 the club joined the Southern League. With attendance topping 6,000 per game, and reaching as high as 14,000, the club incorporated as a limited liability company in 1898. The following year, Tottenham Hotspur moved to a new, and subsequently permanent, location on White Hart Lane. The property, attached to the White Hart pub owned by the Charrington brewery, had formerly served as a plant nursery. As such, the grounds provided fertile soil for the laying down of a football pitch.

The period also proved a successful one for the team itself. After winning the Southern League title in 1900, the club went on to win the FA Cup in 1901, becoming the only nonleague team ever to win that title. These wins helped establish Tottenham Hotspur as a name to be recognized within British football, and also established the club as one of the country's top attendance drawers. The company began expanding its stadium, and in the early years of the 20th century the White Hart Lane stadium boasted a total capacity of some 32,000, including seating for 500, and covering for another 12,000. The company's lease restricted further capacity expansion. In 1905, therefore, the company privately sold a series of shares in the club, raising the funds to buy its leasehold. This allowed the club to expand its capacity to 40,000, and then to 50,000 by 1912. By then, the club had joined the Football League, playing its first league games in the Second Division in 1908.

The following year, however, Tottenham Hotspur was promoted to the First Division. Although the club occasionally lapsed back to the Second Division (for example, in 1915, 1928, and 1977), Tottenham Hotspur FC became one of the leading fixtures of British professional football's First Division. Despite the club's ups and downs through the first half of the century, it also succeeded in developing a highly devoted fan base. By the late 1930s, before play was suspended for the duration of World War II, the club attracted as many as 75,000 spectators per game.

In the postwar period, Tottenham Hotspur began to distinguish itself as much for its style of play, particularly with the development of the so-called "push and run" attack. The tactic helped the club win its first First Division League championship in 1951. Two years later, the club began hosting its first night games after installing floodlights at the White Hart Land stadium. These were later upgraded in 1957, and again in 1961.

PUBLIC OFFERING PIONEER IN 1982

The early 1960s marked a new era of success for the club, with a series of championship victories including the Football League championship and the FA Cup win in 1961, making it the first club to complete the so-called "Double" in the 20th century. Other wins followed, including a new FA Cup victory in 1962, the European Cup in 1963, and the FA Cup again in 1967.

The club's winning record continued into the 1970s, with the Football League Cup win in 1971, the UEFA Cup in 1972, and the Football League Cup again in 1973. By the end of the decade, however, Tottenham Hotspur had stumbled again, and found itself relegated to the Second Division by 1977. Although the club managed to return to the First Division the following year, its financial situation had become increasingly unstable. Part of the group's financial difficulties stemmed from the construction of a new West Stand, which began in 1980 and was completed only in 1982.

The financial uncertainty surrounding the West Stand project attracted the interest of local businessman and longtime fan Irving Scholar. At first, Scholar, who had made a fortune as a real estate developer, offered to lend assistance to the club in order to sort out its financial tangles. Rebuffed by the club's directors, however, Scholar quietly began buying up shares in the team, offering highly attractive prices. Before long, Scholar had succeeded in gaining control of the football club.

COMPANY PERSPECTIVES

What is the Company's strategy for growth? To continue to strive for success in domestic and European football. Development of the Company's Principal Fixed Assets, being the Academy and the Stadium. Continue to build the Tottenham Hotspur brand both domestically and internationally.

Scholar's effort was soon joined to that of Paul Bobroff, also a property developer and loyal Spurs fan, who had been amassing his own block of shares. Bobroff initially offered to sell his shares to Scholar; by then, however, Scholar had control of the club and declined the offer. Instead, the pair took over as joint heads of the club in 1982. The following year, Scholar and Bobroff listed Tottenham Hotspur on the London Stock Exchange, and the club became the first sports team in the United Kingdom to convert to public company status.

Scholar became chairman of the football club, while Bobroff became chairman of its publicly listed holding company, Tottenham Hotspur PLC. The decision to accept Bobroff as a partner soon came to haunt Scholar and the Tottenham team. Through the 1980s, Bobroff launched an attempt to diversify the company's operations. At first, Bobroff sought to transform Tottenham Hotspur into a leisure-oriented company. By the end of the decade, however, Bobroff's diversification efforts had led the team into areas such as sportswear sales, a fashion company designing women's clothing, as well as ticketing operations.

In the meantime, Tottenham Hotspur FC appeared to be back on the winning track. In 1982, the team won its seventh FA Cup title, then qualified as one of four British teams competing in 1983's UEFA Cup. The following year, the team carried off the UEFA Cup victory. By 1987, the team competed in its eighth FA Cup final, though the team had to wait until 1991 to claim its eighth victory. In that year also, Tottenham Hotspur clinched the European championship as well.

Yet the company's business end was quickly approaching collapse. The diversification effort had proven to be a total disaster. The company had continued adding operations, including a retail travel agency, Spurs Travel, and, in 1987, two companies, Martex and Stumps, the former of which was an import agent to the latter's distribution of women's apparel and sportswear. The company also began developing restaurant and conference facilities at its stadium complex and, late in 1987, entered boxing promotion with the Bruno-Bugner fight of that year.

At the same time, Scholar and Bobroff had lost the favor of the team's fan base. This was especially exacerbated after the company launched plans to rebuild White Hart Lane's East Stand. The plans in particular included replacing the so-called "Shelf " standing area favored by many of the team's fans with executive boxes. Amid protests from the team's fan base, however, the company was forced to back down. In the end, the Shelf remained, although the standing area was replaced with seating in 1994.

By the beginning of the 1990s, the group's diversified operations became too heavy a burden for the company. At the same time, Scholar experienced his own financial difficulties as the British property market collapsed. In order to raise money, Scholar indicated a possible sale of his stake to media tycoon Robert Maxwell. When news of the talks with Maxwell leaked out, the team's financial situation also was exposed.

REBRANDING IN THE NEW CENTURY

In the end, control of the team was acquired by Amstrad Chairman Alan Sugar. While a Spurs supporter, Sugar made it clear that his interest in the club was in running Tottenham Hotspur PLC, leaving the direction of the team itself to then Managing Director, and former Spurs player, Terry Venables. Sugar worked on reducing the club's £20 million debt and selling off a number of the team's top players, including Paul Gascoigne. That deal, the largest for a football player at the time, raised £5.5 million for the company in 2002. Also that year, Tottenham Hotspur became one of the founding members of the new FA Premier League.

KEY DATES

1882:: A group of students found the Hotspur football club in association with the Hotspur cricket club.
1895:: Tottenham Hotspur, as the club is now called, turns professional.
1898:: The team incorporates as a limited liability company and moves to White Hart Lane.
1908:: The team joins the Football League Second Division.
1951:: The team wins the first First Division title.
1982:: Irving Scholar and Paul Bobroff acquire control of the company, take it public the following year, and then lead it on a diversification drive.
1991:: On the verge of financial collapse, the team is acquired by Alan Sugar, chairman of Amstrad.
2001:: Sugar sells control of the team to Daniel Levy-controlled ENIC.
2003:: Levy, backed by Joe Lewis, acquires a majority stake in the company directly.
2006:: Tottenham Hotspur unveils a new club crest and brand.

Yet the relationship between Sugar and Venables soon soured, and by 1993 Venables had been dismissed in what became a bitter legal battle. With the team struggling to maintain its place in the FA Premier league, the company became embroiled in a new league investigation accusing it of financial misdealings involving illegal loans made to a number of players in the late 1980s. Then the team's new managing director, Ossie Ardiles, went on a buying binge, buying a number of high-priced players, including Germany's Jurgen Klinsmann. Although Klinsmann became a fan favorite, the high ticket purchases, which continued into 1995 with the record signing of Chris Armstrong for £4.5 million, failed to turn the team's fortunes around.

Meanwhile, the company had continued investing in its White Hart Lane premises, rebuilding the North Stand and adding new hospitality sections to the South Stand. While these operations helped boost the stadium's capacity to more than 36,000, it also helped load the company with debt. Adding to the company's debt burden were several more high-priced player signings, including a £6 million deal for Les Ferdinand and, in 2000, an £11 million deal for Sergei Rebrov. These helped push the company into £70 million in debt, more than its total annual revenues. Meanwhile, as the team's division ranking continued to slide, Sugar became the object of personal attacks from the team's fans.

In 2001, Sugar threw in the towel, selling out his stake in the company to leisure investment group ENIC, led by Daniel Levy and backed by Bahamian billionaire Joe Lewis. In 2003, Levy increased his direct control over the club. By then, Tottenham Hotspur had also raised a £75 million loan to pay down the company's debts and launch a new investment program.

That program, which included plans to develop a hotel complex, was part of an overall team rebranding effort. Into the mid-2000s, the team, backed by new British legislation, moved to take tighter control of its trademark. This effort was linked to the increasing popularity of England's football teams on an international level, as clubs such as Manchester United and Arsenal had launched successful brand marketing campaigns. In 2006, the team's rebranding effort included the unveiling of a new club crest. Tottenham Hotspur also lined up a new series of sponsorships, including the signing of an agreement making Carlsberg the team's official beer in 2004. In 2006, the company signed a new sponsorship deal, for sports equipment from Puma. Tottenham Hotspur, which had seen its revenues jump to £70 million by then, hoped to score fresh victories as a global brand name in the new century.

PRINCIPAL SUBSIDIARIES

Paxton Road Limited; Stardare Limited; Tottenham Hotspur Finance Company Limited; Tottenham Hotspur Football and Athletic Co. Limited; White Hart Lane Stadium Limited.

PRINCIPAL COMPETITORS

The Football Association Ltd.; Manchester United PLC; Chrysalis Group PLC; Arsenal Football Club PLC; Chelsea Village PLC; Arsenal Holdings PLC; Newcastle United PLC; Liverpool FC; Leeds United AFC Ltd; Celtic PLC; The Rangers Football Club PLC; Burnden Leisure PLC; Aston Villa PLC; Manchester City PLC.