Cash, Sinkholes and Sources [with video intro] Research Completed

Title

Cash, Sinkholes and Sources [with video intro]

Lead Author

Carolyn Cordery , Rachel Baskerville

Organisation(s)

Vicotria University of New Zealand for Sport NZ

Publication Year

2012

Publisher

Victoria University of Wellington

Contacts

Abstract

This study tackled the questions: How are community sport and recreation organisations funded and what are the implications for their future viability? by focusing on the sports of golf and football. This study builds on earlier research (2008) into the financial health of sports clubs conducted across several sports (golf, squash, hockey, rugby, cricket and netball).

 

The practical aim of the study was to help sports clubs to detect when they are in financial distress, by isolating key indicators that can warn of impending financial difficulties (essentially develop an early warning system), so that clubs can benchmark and monitor their financial performance and be in a position to respond and develop strategies to manage their financial performance to ensure their future viability.

 

The findings from the 2010 study are not surprising. They suggest that the financial position of many clubs is sobering, with many (but certainly not all) in relatively poor financial health and with limited planning for the future. 

 

The research suggests that sports clubs should assess their financial sustainability, including:

 

·   Ensuring members’ contributions to the club’s revenue is appropriate and that they don’t solely rely on grants and other external revenues.

 

·   Keeping expenditure within the club’s revenue parameters, as opposed to drawing on reserves.

 

·   Keeping debt within manageable levels and not increasing over time. Further, the relationships between debt, equity and revenue must be managed carefully to ensure net assets are used efficiently.

 

Clubs need to monitor their performance against these key indicators and identify strategies to manage their financial performance to ensure their financial sustainability and longevity.

 

Keywords:

Financial sustainability, revenue, expenditure, debt, financial ratios

Areas of Focus

Settings (location)

Provision (delivery type & infrastructure)

Topics

Sport and Recreation Types

Views

1428

Added

October 15, 2012

Last Modified

September 1, 2014