scholarly journals Too big to fail? Accounting for predictions of financial distress in English professional football clubs

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Daniel Plumley ◽  
Jean-Philippe Serbera ◽  
Rob Wilson
Keyword(s):  
Financial Distress ◽  
Statistical Tests ◽  
Team Sports ◽  
Evidence Base ◽  
Specific Reference ◽  
Professional Football ◽  
Too Big To Fail ◽  
Content Type ◽  
Professional Team Sports ◽  
Football Clubs

PurposeThis paper analyses English Premier League (EPL) and English Football League (EFL) championship clubs during the period 2002–2019 to anticipate financial distress with specific reference to footballs' Financial Fair Play (FFP) regulations.Design/methodology/approachData was collected for 43 professional football clubs competing in the EPL and Championship for the financial year ends 2002–2019. Analysis was conducted using the Z-score methodology and additional statistical tests were conducted to measure differences between groups. Data was split into two distinct periods to analyse club finances pre- and post-FFP.FindingsThe results show significant cases of financial distress amongst clubs in both divisions and that Championship clubs are in significantly poorer financial health than EPL clubs. In some cases, financially sustainability has worsened post-FFP. The “big 6” clubs – due to their size – seem to be more financially sound than the rest of the EPL, thus preventing a “too big to fail” effect. Overall, the financial situation in English football remains poor, a position that could be exacerbated by the economic crisis, caused by COVID-19.Research limitations/implicationsThe findings are not generalisable outside of the English football industry and the data is susceptible to usual accounting techniques and treatments.Practical implicationsThe paper recommends a re-distribution of broadcasting rights, on a more equal basis and incentivised with cost-reduction targets. The implementation of a hard salary cap at league level is also recommended to control costs. Furthermore, FFP regulations should be re-visited to deliver the original objectives of bringing about financial sustainability in European football.Originality/valueThe paper extends the evidence base of measuring financial distress in professional team sports and is also the first paper of its kind to examine this in relation to Championship clubs.

Scoring goals in multiple fields

2017 ◽  
Vol 7 (2) ◽  
pp. 197-215 ◽  
Author(s):  
Petros Parganas ◽  
Roman Liasko ◽  
Christos Anagnostopoulos
Keyword(s):  
Team Performance ◽  
Statistical Tests ◽  
Profit Maximization ◽  
Economic Research ◽  
Professional Football ◽  
Linear Modeling ◽  
Data Set ◽  
Content Type ◽  
Professional Team Sports ◽  
Football Clubs

Purpose Professional football clubs currently strive for a number of concurrent goals, ranging from on-field success to profit maximization to fan expansion and engagement. The purpose of this paper, theoretically informed by the social penetration theory, is to analyze the economics behind such goals and examine the association between team performance, commercial success, and social media followers in professional team sports. Design/methodology/approach A data set relating to 20 European professional football clubs that combines financial (revenues and costs), sporting, and digital-reach measures for three consecutive football seasons (2013/2014 to 2015/2016) was used. In addition, to elaborate on this data in terms of a descriptive study, the study constructs a range of correlation statistical tests and linear modeling techniques to obtain quantitative results. Findings The results indicate that all the three main sources of club revenues (match-day, commercial/sponsorship, and broadcasting) are positive drivers for Facebook followers. Staff investments (staff costs) are also positively related to Facebook followers, albeit to a lesser extent, while higher-ranked clubs seem to follow a constant approach in terms of their revenues and cost structure. Originality/value This study seeks to bridge the communication and sport economic research, providing evidence that Facebook followers are part of the cyclical phenomenon of team revenues and team performance. In doing so, it initiates a debate on the relationship between the digital expansion of a football club and its sports and financial indicators.

scholarly journals Regulatory intensity in English and German professional football

2018 ◽  
Vol 8 (3) ◽  
pp. 276-297 ◽  
Author(s):  
Birgit Bachmaier ◽  
Joachim Lammert ◽  
Daniel Plumley ◽  
Robert Wilson ◽  
Gregor Hovemann
Keyword(s):  
Financial Stability ◽  
Qualitative Content Analysis ◽  
National Level ◽  
Team Sports ◽  
Special Focus ◽  
Professional Football ◽  
Content Type ◽  
Premier League ◽  
Professional Team Sports ◽  
Assessment And Monitoring

Purpose In order to secure a proper execution of sporting competitions, national governing bodies of professional football leagues apply specific regulatory procedures. In this context, special focus is placed on requirements that are supposed to ensure financial stability of clubs. They, in turn, help avoid negative economic externalities, i.e. the problem that financial difficulties from one club can affect other clubs and stakeholders due to the interdependent relationships of the competition. These regulations on a national level in European professional football leagues show several significant differences. Therefore, the purpose of this paper is to comprehensively analyze financial regulatory procedures of professional football leagues to generate possible improvements of the regulations in detail. Design/methodology/approach Using a document analysis of the regulation books of the English Premier League and German Bundesliga (BL), this study compares the regulatory procedures of those important European professional football leagues. Further evaluation was performed through a qualitative content analysis to develop a category system including six categories with 72 criteria from deductive and inductive procedures. For more advanced coding, an assessment scale was integrated. Findings Compared to the Premier League, the regulation of the BL points to a more intensive regulation in all categories and across all analyzed indices. The results of both leagues partially reveal that assessment and monitoring requirements tend to be ineffective, which can substantially endanger the achievement of the whole monitoring process’ aims. The intention to ensure the financial stability for securing the league competition can be missed in such a situation and negative economic externalities cannot be prevented effectively. Originality/value For the first time, this study includes all relevant requirements of financial club assessment and monitoring. Thereby, an abstract comprehensive and systematic structure for professional team sports leagues is described and allows for a concrete international comparison of two European professional football leagues. At the end, several approaches to improve the regulatory framework are provided.

The financial impact of the financial fair play policy on Spanish football

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Roberto Fernández-Villarino ◽  
J. Andrés Domínguez-Gómez
Keyword(s):  
Financial Performance ◽  
Fiscal Year ◽  
Professional Football ◽  
Content Type ◽  
General Terms ◽  
Football Clubs ◽  
Before And After ◽  
The Law ◽  
Compliance With The Law ◽  
Positive Effect

PurposeThis study aims to explore how responsible corporate behaviour, specifically self-imposed financial regulatory control, might subsequently be reflected in the financial performance of companies subject to such regulation.Design/methodology/approachIn this study, the authors aim to explore how financial compliance in the form of the Economic Control Regulation (ECR) has impacted on the financial performance of professional football clubs in Spain. To this purpose, the authors adopted a quasi-experimental before and after study design. This type of design assesses the object of study before and after a specific event in order to determine whether this event has had any effects on the object. In this case, the event was the coming into effect of the ECR in the fiscal year of 2012, and the object hypothetically affected was the clubs’ economic performance.FindingsThe authors can confirm that in general terms and for the whole set of clubs analysed, the ECR has had a strong and positive effect on financial performance.Research limitations/implicationsIn this study, the authors wish to establish a link between the idea of “compliance” and that of “responsible corporate management practice”. It is not just a matter of compliance with the law. The fact of complying with certain laws could, in general terms, or from the point of view of common sense, be qualified as “responsible behaviour”. However, under the contemporary concept of corporate responsibility, compliance with the law is a behaviour that must be taken for granted. Responsibility, therefore, would entail going beyond such expected behaviour to one that exceeds the environment's expectation of the corporate actor.Practical implicationsWhat extent improvements in financial performance have also boosted social performance. Confirming such a positive effect endorses the argument that ethical improvements in corporate culture have a general effect on business sustainability in its different aspects: economic, social, environmental and in governance.Social implicationsThe authors may foresee that the culture of compliance will spread from the finance departments to other management areas. Its connection with ethical business practice is directly linked to the more complex concept of the “citizen company”. There are suggest interesting bases on which professional football clubs might move from a traditional profit-oriented company model towards a more contemporary one oriented towards relationships of integrity with the sport's environment. This study shows that the ECR has been a starting point for the development of Spanish professional football clubs towards this type of “citizen company”.Originality/valueIt was a single-sector study whose principal value lies in the verification of whether responsible economic management (the main consequence of applying the ECR) had any effects on company profits, financial results and other important indicators. In addition to fostering responsibility, this new management model involves a special innovation, as it is based on self-regulation (i.e. on regulations not imposed by national or supranational states), designed and implemented to ensure the sector's viability.

The value of having a first-tier football club in the municipality (even) when tangible benefits are absent

2019 ◽  
Vol 9 (3) ◽  
pp. 222-238
Author(s):  
Christian Gjersing Nielsen ◽  
Line Bjørnskov Pedersen ◽  
Rasmus K. Storm
Keyword(s):  
Contingent Valuation Method ◽  
Team Sports ◽  
Binary Logistic Regression ◽  
Economic Benefits ◽  
Content Type ◽  
Factors Affecting ◽  
Football Club ◽  
Sports Clubs ◽  
Public Subsidy ◽  
Professional Team Sports

Purpose The purpose of this paper is to examine citizens’ willingness to pay (WTP), in relation to having a professional first-tier football club in a medium-sized Danish municipality, when tangible economic benefits such as economic growth and/or inbound migration produced by these are absent. Design/methodology/approach Using the contingent valuation method on survey respondents, the study examines factors affecting WTP using binary logistic regression and interval regression and further extrapolates the WTP from the sample to the municipal population. Findings Citizens significantly value having a first-tier football club in their municipality even when tangible benefits are absent, although a large proportion of respondents stated to be against the municipality being financially involved in professional team sports clubs (PTSC). WTP is largely driven by interest in sports and the local football club. It is argued that the findings cannot be generalized across contexts. Research limitations/implications There can be circumstances where public subsidy of PTSCs is beneficial to economic welfare. However, authorities should be careful in their evaluation of whether to subsidize PTSCs. Originality/value The study expands on existing research by informing respondents about the lack of tangible benefits produced by PTSCs, hereby focusing on WTP on an informed basis.

Internationalisation and branding strategy

2020 ◽  
Vol 23 (4) ◽  
pp. 747-766 ◽  
Author(s):  
Robert E. Hinson ◽  
Ellis Osabutey ◽  
John Paul Kosiba ◽  
Frederick O. Asiedu
Keyword(s):  
Brand Equity ◽  
Developing Economies ◽  
International Markets ◽  
Professional Football ◽  
Structured Interviews ◽  
Foreign Markets ◽  
Content Type ◽  
Market Expansion ◽  
Football Clubs ◽  
English Premier League

Purpose The purpose of this study is to analyse how professional football clubs have attained success with internationalisation and branding strategies in foreign markets. Design/methodology/approach Based on an inductive approach, 27 semi-structured interviews were conducted to analyse the perceptions of Ghanaian fans of four English Premier League teams. Findings The findings of this study highlight that the strength of professional football brand equity is jointly determined by the level of brand awareness, brand loyalty and perceived quality. However, increasing competition in international markets require professional football clubs to clearly define their marketing strategies to improve how fans perceive them. Originality/value This paper is one of the few studies to use country-of-origin paradigm and signalling theory to explain football brand equity building, thereby extending the earlier work of Chanavat and Bodet (2009). Its empirical focus on Africa is also unique and provides evidence to suggest that global marketers have the opportunity to capitalise on market expansion opportunities in developing economies.

scholarly journals Sustainable value creation? Entrepreneurial orientations in the football industry

2020 ◽  
Vol 27 (1) ◽  
pp. 27-44
Author(s):  
Mike Bull ◽  
Geoff Whittam
Keyword(s):  
Value Creation ◽  
Research Question ◽  
Professional Football ◽  
Content Type ◽  
Secondary Sources ◽  
Business Interests ◽  
Football Clubs ◽  
Sustainable Value ◽  
Context Specific ◽  
Football Industry

PurposeIn this paper the authors investigate precarious value creation in English football clubs. They examine strategic, economic, cultural and social capital to analyse the orientations of legal owners of football clubs (entrepreneurs) and the implications for moral owners (the fans). Their research question is not if entrepreneurs create value – but whether the value created is productive or destructive.Design/methodology/approachThe research design is a case study of the professional football industry, specifically 44 football clubs in the top two professional divisions in England, namely the English Premier League and the English Football League Championship. The authors’ methodology is secondary textual data. Their approach is to examine official club statements, triangulated with regional and national press reports, fan accounts and narratives from published artefacts; fan blogs and websites.FindingsThe “opening up” of the professional football industry in England to market forces in 1983 has subsequently attracted entrepreneurs that use football clubs as artefacts to pursue other business interests. Over-grazing on strategic and economic capital at the expense and exploitation of social and cultural capital exists. As entrepreneurial opportunities to exploit a football club's assets becomes more apparent, the unique relationship between club and fan is being strained. The authors observe detachment, disenchantment and protest.Research limitations/implicationsThe data sought for this study design was necessarily in the public domain and therefore drawn from secondary sources. The scope was English football and the top two divisions, thus the findings are context specific to that region and level.Practical implicationsFor policy, the authors call for a new government inquiry into football ownership in English football, re-examining heritage, purpose and value creation.Social implicationsFootball fans are the majority stakeholder in the football industry but are under-represented in English football because of the private ownership of football clubs. Fans are, however, a barometer for how their owners are acting as custodians of their clubs and if the value created by entrepreneurs is productive or exploitative.Originality/valueThis paper has value in drawing attention to this unique and ignored industry from an entrepreneurship perspective, provoking a call for further research to explore this phenomenon. Sustainable value creation may be a useful framework for further research in this and other industries.

scholarly journals The New Business of Football: A Study of Current and Aspirant Football Club Managers

2014 ◽  
Vol 28 (5) ◽  
pp. 515-528 ◽  
Author(s):  
Stephen Morrow ◽  
Brian Howieson
Keyword(s):  
Research Methodology ◽  
Organizational Structures ◽  
Specific Reference ◽  
Professional Football ◽  
Business Context ◽  
The Past ◽  
Body Of Knowledge ◽  
Football Clubs ◽  
New Business

Professional football (soccer) in Europe has changed dramatically in the past two decades, largely due to the escalation of media rights deals. Many professional football clubs are now complex businesses, intrinsically concerned with financial matters. Within the rapidly changing business context of football, the aim of this research is to further understand the main issues that are related to a career as a manager. This paper has five sections: (1) we offer an appraisal of the general literature as it applies to professional football management; (2) we introduce the theoretical focus of the article with specific reference to the “career” and describe the context and background to the research; (3) we describe the research methodology and present and discuss the research results, which center on the career development of the manager; the position of a manager in organizational structures, and how the changing organization affects the role of manager; (4) we set out the conclusions and implications of our research; and (5) we offer our plans to progress this research, enabling a new body of knowledge to be developed on this specialized role.

Top European football clubs and social networks: a true 2.0 relationship?

2014 ◽  
Vol 4 (3) ◽  
pp. 250-264 ◽  
Author(s):  
Noelia Araújo ◽  
Pablo de Carlos ◽  
Jose Antonio Fraiz
Keyword(s):  
Social Networks ◽  
Statistical Tests ◽  
Effective Interaction ◽  
Research Literature ◽  
Content Type ◽  
General Terms ◽  
Football Clubs ◽  
Significant Difference ◽  
European Football ◽  
Facebook Pages

Purpose – In the scenario of today's Information Society, social networks are powerful promotional tools that football clubs can use to their own advantage by managing efficiently and effectively their image so as to enhance their appeal to sponsors and firms looking for marketing and advertising for their products. By analyzing a series of items that appear in the foremost European football clubs’ official Facebook pages, the purpose of this paper is to provide both descriptive and quantitative accounts of the extent to which those football clubs succeed in managing the potential for interactivity that their official Facebook profiles provide. Design/methodology/approach – The authors take as the basis of the quantitative analysis the volume of reactions from the fans of the clubs’ official Facebook pages displayed in the form of comments or clicks on the button “Like,” taken as a function of the type of posts published under the Facebook “Timeline” tag. Besides elaborating upon the data thus collected in terms of a descriptive study, the authors conduct correlation range statistical tests (Spearman's ρ coefficient) and an analysis of variance in order to obtain quantitative results on which the authors support the concluding statements. Findings – There is a mild positive correlation between a club's ranking according to UEFA and both the number of fans and the degree of effective interaction displayed in the club's official Facebook pages. Regarding the different types of content to be found in the posts, there is also a significant difference between the important volume of reactions to those most frequently posted and the very limited response displayed to the least frequently posted types. In this sense, it is to be stressed the moderate response obtained by the content openly demanding the users’ interaction (polls, contests, greetings, or encouraging messages, etc.). Research limitations/implications – The authors believe that the most important limitation is the small size of the sample, having a scope of 20 European football clubs, and its short time frame, since the data referred only to March 2013. Nonetheless, these are the most representative clubs in the European scenario, since they comprise UEFA's top 20 ranking. Practical implications – It is interesting to study, as the authors do in the contribution, different aspects regarding the design of football clubs Facebook pages and the activity shown therein, so as to learn how to improve their effectiveness in providing for a true interactive experience. Research on the types of content to be found in the posts available on Facebook's “Timeline” tag that can contribute to establishing a deeper engagement on the part of the fans can thus be very useful to anyone devising marketing strategies for a football club. Originality/value – The research literature on the use of social networks such as Facebook by sports organizations and, more particularly, by football clubs, is still very scarce. Past contributions have been focussed on the presence of football on the Web 2.0 in general terms, and on comparing different online interactive tools. Nonetheless, they do not tackle the questions related to the types of content provided by a particular social network, the response to them by the users, and with it, the characterization of their effectiveness as communications, marketing, and promotional tools.

Professional football clubs and sustainable success

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Keyword(s):  
Case Studies ◽  
Design Methodology ◽  
Reading Time ◽  
Professional Football ◽  
Content Type ◽  
Football Clubs ◽  
Pertinent Information ◽  
Key Drivers ◽  
Performance Dimensions ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. 10; Findings Having to balance key sporting and business variables often makes it hugely challenging for professional football clubs. But appropriate emphasis on four performance dimensions and key drivers within them can make sustainable levels of success more attainable. Originality/value The briefing saves busy executives and researchers’ hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Management quality of professional football clubs: the Football Management (FoMa) Q-Score 2018

2020 ◽  
Vol 10 (5) ◽  
pp. 567-598
Author(s):  
Henning Zülch ◽  
Moritz Palme ◽  
Sébastien Pierre Jost
Keyword(s):  
Balanced Scorecard ◽  
Success Factors ◽  
Sport Management ◽  
Professional Football ◽  
Content Type ◽  
Four Dimensions ◽  
Management Quality ◽  
Football Clubs ◽  
Management Literature

PurposeThis study derives a new framework that comprehensively assesses management quality along four dimensions, namely Sporting Success; Financial Performance; Fan Welfare Maximization; and Leadership and Governance. Filled with measurable key performance indicators (KPIs), these dimensions serve the purpose of objectively quantifying the relevant success factors. Ultimately, the performance in all dimensions indicates a football club's management quality.Design/methodology/approachThe study relies first on a review of the literature in the field of both general management and sports. Second, the authors adapt the balanced scorecard framework to the field of professional football and use a set of KPIs to assess the management quality of the Bundesliga teams over the seasons 2016/17 and 2017/18. Third, the authors validate the relative weights of the four dimensions composing the so-called “Football Management Quality score” (i.e. FoMa Q-Score) using expert interviews.FindingsTwo movements characterize the score development in 2017/18 compared to 2016/17: first, scores appear more contracted than previously. Second, both average and median scores improved, suggesting a general improvement in the management quality within the Bundesliga.Originality/valueTo the best of the authors’ knowledge, this is the first exploratory study deriving and measuring relevant key criteria for managing football clubs and illustrating the findings in a ranking. The aim of this study is to establish a model that impacts both academia and practice. By utilizing existing management literature and adjusting it to football particularities, the newfound knowledge begins to close the gap in sport management literature.

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