2012 annual report - TLA Worldwide

22 TLA Worldwide PLCPrincipal risksand uncertaintiesThe management of the business and the execution ofthe Group’s strategic plans are subject to a number of risks.The key business risks identified affecting the Group are setout here.Reliance on key managersAthlete representation is a people business, which relies on its agents to remain within the structure tomaximise revenues by maintaining and attracting clients to the TLA roster. If key agents leave this mayplace risk on future revenues. The compensation structure of the key agents is aligned with the successof the venture. All current agents have been signed to long-term service agreements with restrictivecovenants. Principal agents also have a significant portion of their acquisition proceeds tied up in TLAWorldwide shares, which aligns their interest with that of the shareholders.Margin erosionThere is the potential for margin erosion through the reduction of agents’ fees. However, the recent MLBCBA agreement and the MLBPA’s stance on agents’ remuneration afford the business protection, as do themulti-year contracts already in place.Suitable acquisitions and access to capitalThe Group’s expansion strategy includes selective acquisitions and the availability of debt or equity tofund future acquisitions may be limited or difficult to obtain.ExecutionThe ability of the Group to deliver incremental revenues through the co-ordination of new business activityis dependent on the availability of senior personnel to help convert leads and cross-refer business.Look forward statementsStatements contained in these financial statements, including the business review, principal risks anduncertainties, the directors’ report and the directors’ remuneration report may constitute forward-lookingstatements that are based on the Board’s current expectations, assumptions and projections about thegroup and the sector, which contains risks and uncertainties. The Group’s actual results could differmaterially from those anticipated in these forward-looking statements as a result of other factors.