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stadium development plans made economic sense and how best to proceed in the player acquisition market as well. Table A Valuation Data 20-Year Risk Free Rate 4.6% 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) Avg. Net Team Enterprise Value (EV)a Revenue Operating Income Avg. Points (1998-2007) Goals (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 0.0 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, accessed August 2008. Exhibit 2 Tottenham Balance Sheet (millions of pounds), 2007 Assets Current assets: Cash and equivalents Investments, available for sale Inventory - Merchandise Accounts Receivable Total current assets Property and equipment, net Intangible assets, net Total assets Liabilities and Stockholder Equity Current liabilities: Accounts payable Total current liabilities Long-term debt and deferred interest, net of current portion Total liabilities Total stockholders' (deficit) equity Total liabilities and stockholders' equity Market Data Share Price Shares Outstanding (millions of shares) Market Capitalization Source: Company reports. 26.3 0.6 1.2 20.0 48.1 55.8 49.4 153.2 64.4 64.4 43.1 107.5 45.7 153.2 13.78 9.3 128.2 Exhibit 3 Tottenham Pro Forma Income Statement (millions of pounds) Current Forecast Forecast Year Year 0 1 2 3 4 5 6 7 8 9 10 11 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 12 13 2018 2019 2020 Revenue Attendance 17.4 19.0 20.7 22.5 24.6 26.8 29.2 31.8 34.7 37.8 41.2 44.9 48.9 50.9 Sponsorship 15.7 17.1 18.7 20.3 22.2 24.2 26.3 28.7 31.3 34.1 37.2 40.5 44.2 45.9 Broadcast 28.7 31.3 34.1 37.2 40.5 44.2 48.1 52.5 57.2 62.3 67.9 74.1 80.7 84.0 Merchandise 5.2 5.7 6.2 6.7 7.3 8.0 8.7 9.5 10.4 11.3 12.3 13.4 14.6 15.2 Other 7.1 7.7 8.4 9.2 10.0 10.9 11.9 13.0 14.2 15.4 16.8 18.3 20.0 20.8 Total 74.1 80.8 88.0 96.0 104.6 114.0 124.3 135.5 147.7 160.9 175.4 191.2 208.4 216.8 Operating Costs Payroll 50.9 56.0 61.6 67.8 74.6 82.0 90.2 99.2 109.2 120.1 132.1 145.3 159.8 166.2 Stadium Operating Expenses 16.4 17.0 17.7 18.4 19.2 19.9 20.7 21.6 22.4 23.3 24.3 25.2 26.2 27.3 Other 1.8 1.9 2.0 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 Total 69.1 74.9 81.3 88.2 95.8 104.1 113.2 123.2 134.0 146.0 159.0 173.3 188.9 196.5 EBITDA 5.0 5.9 6.8 7.7 8.8 9.9 11.1 12.3 13.6 15.0 16.4 17.9 19.5 20.3 Depreciation 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.3 3.4 3.5 3.7 EBIT 2.8 3.6 4.4 5.3 6.2 7.2 8.3 9.4 10.6 11.9 13.2 14.6 16.0 16.6 stadium development plans made economic sense and how best to proceed in the player acquisition market as well. Table A Valuation Data 20-Year Risk Free Rate 4.6% 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) Avg. Net Team Enterprise Value (EV)a Revenue Operating Income Avg. Points (1998-2007) Goals (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 0.0 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, accessed August 2008. Exhibit 2 Tottenham Balance Sheet (millions of pounds), 2007 Assets Current assets: Cash and equivalents Investments, available for sale Inventory - Merchandise Accounts Receivable Total current assets Property and equipment, net Intangible assets, net Total assets Liabilities and Stockholder Equity Current liabilities: Accounts payable Total current liabilities Long-term debt and deferred interest, net of current portion Total liabilities Total stockholders' (deficit) equity Total liabilities and stockholders' equity Market Data Share Price Shares Outstanding (millions of shares) Market Capitalization Source: Company reports. 26.3 0.6 1.2 20.0 48.1 55.8 49.4 153.2 64.4 64.4 43.1 107.5 45.7 153.2 13.78 9.3 128.2 Exhibit 3 Tottenham Pro Forma Income Statement (millions of pounds) Current Forecast Forecast Year Year 0 1 2 3 4 5 6 7 8 9 10 11 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 12 13 2018 2019 2020 Revenue Attendance 17.4 19.0 20.7 22.5 24.6 26.8 29.2 31.8 34.7 37.8 41.2 44.9 48.9 50.9 Sponsorship 15.7 17.1 18.7 20.3 22.2 24.2 26.3 28.7 31.3 34.1 37.2 40.5 44.2 45.9 Broadcast 28.7 31.3 34.1 37.2 40.5 44.2 48.1 52.5 57.2 62.3 67.9 74.1 80.7 84.0 Merchandise 5.2 5.7 6.2 6.7 7.3 8.0 8.7 9.5 10.4 11.3 12.3 13.4 14.6 15.2 Other 7.1 7.7 8.4 9.2 10.0 10.9 11.9 13.0 14.2 15.4 16.8 18.3 20.0 20.8 Total 74.1 80.8 88.0 96.0 104.6 114.0 124.3 135.5 147.7 160.9 175.4 191.2 208.4 216.8 Operating Costs Payroll 50.9 56.0 61.6 67.8 74.6 82.0 90.2 99.2 109.2 120.1 132.1 145.3 159.8 166.2 Stadium Operating Expenses 16.4 17.0 17.7 18.4 19.2 19.9 20.7 21.6 22.4 23.3 24.3 25.2 26.2 27.3 Other 1.8 1.9 2.0 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 Total 69.1 74.9 81.3 88.2 95.8 104.1 113.2 123.2 134.0 146.0 159.0 173.3 188.9 196.5 EBITDA 5.0 5.9 6.8 7.7 8.8 9.9 11.1 12.3 13.6 15.0 16.4 17.9 19.5 20.3 Depreciation 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.3 3.4 3.5 3.7 EBIT 2.8 3.6 4.4 5.3 6.2 7.2 8.3 9.4 10.6 11.9 13.2 14.6 16.0 16.6
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