The introduction of Financial Fair Play underlines our focus on investing in young talent and our Academy facilities, it necessitates the need for a new stadium... and it underlines our decision to work within our historic operational cash flows. We are well placed to meet the challenges of the future.
Risks and opportunities
The Group is exposed to a range of risks and uncertainties which have the potential to affect the long-term performance of the Group. Risks are monitored by the Board on a continual basis and the Group seeks to mitigate the risks wherever possible. Looking forward, the next major challenge our industry will face, from a financial perspective, will be the inevitable change that ‘Financial Fair Play’ will bring to the game. The essence of the change is to balance revenues and expenses. It was inevitable that UEFA would bring further control to the game and the Premier League has embraced these changes taking the view that it is better to be involved in a process than pushing against the inevitable. From the Club's perspective it vindicates our consistent approach to invest in the Club. It underlines our focus on investing in young talent and our Academy facilities, it necessitates the need for a new stadium, which is now more important to drive revenues to the next level, and it underlines our decision to work within our historic operational cash flows. We are well placed to meet the challenges of the future. There is always continued upward pressure on player costs and salaries, which continue to require significant cash outflows. Accordingly, the challenge for the Group continues to be to locate players of both quality and value through the transfer market and Academy, the importance of this will be further highlighted by the introduction of Financial Fair Play.
Off the pitch
The development of the new stadium will expose the Group to additional risks. The risk that we might not obtain the necessary financing would have a significant negative impact and require a write-off of some of the planning and professional fees paid to date. There is also a risk that the market value of the property held may reduce, however we are confident there are appropriate contingency plans in place to safeguard against this risk. We continue to explore new opportunities in order to broaden our range of income streams both nationally and internationally. This continued diversification of our income streams will help to ensure the Group is financially robust and increases our stability. The Club is reliant on the Premier League brand and exposed to external governing bodies of The FA, UEFA and FIFA. Clearly any changes in these bodies can affect our business model.
On the pitch
As we invest for the future the continued success of the First Team in the league, European and cup competitions remains an important part of our progression, particularly as we head off on a Champions League adventure which will test players and staff alike, as we raise our game to football’s most elite competition. Our ambitions in these competitions can be achieved with the continued commitment of the playing staff, the football management team and supporters. Our successful approach to nurturing both home-grown talent and acquisitions through the transfer market will help the team to secure future success on the pitch.
Finance Director 10 November 2010
Tottenham Hotspur plc
Annual Report 2010