Capacities underpinning sports clubs’ future viability

Carolyn Cordery , Rachel Baskerville

School of Accounting and Commercial Law, Victoria University of Wellington

2013

Victoria University of Wellington

Carolyn Cordery: E-mail: Carolyn.Cordery@vuw.ac.nz

This is the fourth in a series of reports presented to Sport New Zealand under the research project analysing how grass-roots sports clubs are funded and the implications for their future viability. Previous reports have analysed the financial viability of New Zealand’s golf clubs, its football clubs, and which components of clubs’ financial capacities are most likely to indicate financial vulnerability. In this report the answer to two research questions are provided:

1.    What other club capacities are less prevalent in clubs which have declining Financial Capacity (that is, clubs that are financially vulnerable)?

2.    How are human resource, structural and financial capacities inter-dependent?

It was found that there are close interdependencies between perceptions about board competencies and also characteristics of facilities. Specifically:

For Golf clubs

As noted in report 3 of this suite, financially vulnerable golf clubs have made a net loss over the past four years. Financially, they are likely to be heavily dependent on a small number of income sources, have high liabilities and under-utilised assets. They also have declining cash reserves and need to manage expenditure, especially on their players.

Golf clubs that are financially vulnerable (lack Financial Capacity) do not believe that their boards are efficient. They are also negative about the cost of their facilities. These clubs have declining membership.

This research found that financially vulnerable clubs are also likely to perceive ineffective boards that are not responsive to members’ needs and have poor quality facilities. In addition to declining membership, these clubs also have a low proportion of members that volunteer within the club.

For Football clubs

As noted in report 3 of this suite, financially vulnerable football clubs have made a net loss over the past four years. Financially, they are likely to be heavily dependent on external income sources, have high liabilities/debt and do not manage wisely their expenditure in the three major categories (administration, playing and property).

This research shows that the unavailability of facilities is the most common feature of financially vulnerable clubs. The lack of a business plan affects facilities’ availability. These clubs are also likely to feel that their facilities are of low quality and there is a low percentage of members volunteering within the club.

What next?

This research represents a unique analysis of New Zealand golf and football clubs which highlights their dependence on good governance, planning and volunteer input to club Financial Capacity. The statistical inferences are underpinned by the qualitative data collected from clubs and those closely involved with sport. We encourage clubs to utilise opportunities to develop capacity from the many resources available through Sport New Zealand and other providers.

Keywords:

financial capacity, financial vulnerability, human resource

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Mixed-method

National

Facilities, Sport

Adults, Young People

Clubs, Community

Accomodation and facilities, Amateur, Facilities (outdoor), Organised

Capability, charges, Delivery, Fees, Financing / funding, Governance, Impacts - economic, Management, Participation, Planning, Policy, user pays, Volunteers, Workforce

Football (soccer), Golf

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May 29, 2013

October 23, 2013