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This assignment requires you to determine the viability of a proposal, critically evaluate the results of your calculations and make recommendations, in the form of a written report, to your general manager.

Marking scheme

The following marking scheme provides an indication of the criteria used in the marking

process. Generally, papers will be assessed against the following:

? presentation, which should be both logical and well structured;

? conclusions well drawn based on the data collected, computations performed

and results obtained; and

? indication that you show a clear comprehension of the subject matter.

Details

Chris Christodoulou, general manager of the struggling premiership football side Chesterfield

Rovers, is considering the acquisition of Joey Fortune to help improve his team’s sagging

performance. Joey has played in Singapore for the last two years and is coming to the end of

his contract so there would be no transfer fee involved if he was to be hired. Joey, a prolific

goal scorer, is holding out for a ten year contract with demands of an immediate and onetime payment of €200 000 as a signing on fee and €1 000 000 salary in the first year. Joey

expects his salary to increase by 10% each year.

Chris figures that hiring Joey will increase ticket sales by 35 000 each year. Tickets sell for

€20 per game and the total variable costs associated with each spectator amount to about

€5 per game. In addition, Chris is certain that, with Joey, his team will have a good cup run

each year. A good cup run means sales of at least 50 000 additional tickets that will sell for

€30 each. The variable cost is unchanged from a normal match. Because Chesterfield Rovers

have the highest ticket prices in the league and would operate at capacity if Joey were

signed, Chris does not expect these numbers to change over the life of Joey’s contract.

Chris’ only concern is that Joey is demanding a guaranteed contract – that is, he will be paid

whether he plays or not. Chris is virtually certain that Joey will play for seven years.

However, he is uncertain of the possibilities after that but certain that ticket sales will revert

to their current levels whenever Joey stops playing.

Skills: Technical Writing

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