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Case Study on Football PDF

Added on - 24 Jan 2022

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Football, or also known as soccer, has been one of the most popular sports activities in the
world. In fact in most parts of the world, it is the most well-known and played sporting event
among people. This popularity has gradually turned the football into a business industry that
is worth billions of dollars. In the twenty-first century, football is considered as one of the
biggest business sectors in the world, which drew the attention many large companies as well
as entrepreneurs who aim to generate profit by running the football clubs as business entities
(Chadwick & Hamil, 2010). These days, football is considered as a very profitable industry
that can easily return the investment back to the companies and entrepreneurs. Consequently,
more and more companies are interested in owning a football clubs, which has turned football
clubs into brands. Thus, they need to be managed as businesses so that they can generate
more profit and do not get affected by the negative developments in world economy (Moore
& Levermore, 2012). However, the current issues, such as Covid-19 pandemic, that have
caused major drawbacks in the world economy have also affected the football industry
creating losses for the clubs. These developments are forcing even some of the oldest sports
clubs to close down or down-size their operations in order to cope with the financial
difficulties (Galariotis et al., 2018). Nowadays, it is suggested that football clubs can
overcome these issues if they are run as business entities rather only sports clubs. This essay
will discuss the possible applications of business management strategies while running a
football club, provide some recommendations that will help the football clubs to resolve their
managerial issues and conclude by stating that in the modern world, football has become a
major industry, thus the football clubs can no longer be solely considered as sports clubs as
they are now businesses in this competitive environment. Therefore, not only they can be
managed as business entities but also they should be treated as businesses that aim to
generate income and profit for sustainability.
Good corporate governance in football is now essential.
While the economy of football is growing at a great pace, unfortunately football is having
difficulties in overcoming its own problems. Although football clubs have huge budgets, they
still try to rule themselves in feudal or conventional ways. The monetary development of
football goes ahead of the managerial development of football. For this reason, football clubs
cannot get rid of problems. So the monetary development in football is ahead of the social
awakening of football (Hamil et al., 2004). Most of the clubs around the world are still trying
to save the day by postponing the problem or by palliative solutions instead of keeping up
with changing and developing conditions. However, as the turnover of even an ordinary
business increases, the management style starts to change in accordance with the market.
Otherwise, that business cannot compete with its competitors and has to withdraw from the
market (Tricker & Tricker, 2015). If we have to give an example from Turkey, today's Super
League, which annually creates a value reaching 725 million euros, is actually forcing clubs
in a way to get themselves in order. Because, the transfer of this money to the clubs has to be
made in relation to the compliance with the UEFA criteria. Otherwise, the failure of Turkish
clubs to comply with the required criteria will cause them to be excluded from the race. For
this reason, clubs have to review their economic, financial and managerial configurations and
turn to the organizational structures required by modern football, even in order to spend these
money (Devecioglu et al., 2012).Nowadays, it is on the agenda that corporate governance
principles are put into practice in family companies, public institutions, political parties and
sports clubs as well as in public companies, taking into account their direct effect on the
stable continuity of their activities (Hamil et al., 2004).In this context, the "Governance: A
Guide for football clubs" study was prepared in 2005 in England offers us a content that will
guide the studies carried out for sports clubs. This study, which sets criteria for the ideal
management, audit, compliance with laws, transparency, and reporting, is a guide. This guide
basically expects clubs with different legal statuses, budgets and management models to take
appropriate systems and put them into practice in a certain process (Football Association,
2005). In this context, the urgency and importance of the issue is self-evident when the legal
framework formed within the framework of corporate governance principles and different
stakeholder expectations of clubs with public company status are taken into consideration.
Clubs must fulfill the requirements of modern football!
Even though, it is widely accepted in the modern world that football clubs must be run as
business entities, it is also suggested that a football club is not similar to other businesses.
One of the major differences is that the stakeholders, in the case of football clubs the
stakeholders are mainly the fans, as they make not only the biggest investment to their clubs
(Parnell et al., 2020). The fans get the emotional satisfaction from their clubs’ success and
continue to invest more by purchasing their clubs’ licenced products and tickets to the games.
In order for the football clubs to ensure this investment and support from the fans to continue,
all they need to do is continue their existence. Although it may sound a very easy to task to
accomplish, considering the current economic crisis in the world, it is not as easy as it sounds
because many clubs today are having problems with paying for the wages of their employees
(Riberio et al., 2019). It is claimed that in order to ensure the existence of a football club in
the future, it is essential for the worlds of football and business to combine their forces and
find a solution that can ensure sustainability in the sector (Soderman, 2013). Parnell et al.
(2020) suggest that football clubs have ignored the basic principles of business management
strategies such as employing a capable manager to run the club as a business entity, ensuring
continuity in the management team of the club, using all generated income to run the club
and find ways to generate additional income. Among all these simple management principles,
the investing all the generated income into developing the club can be named as the most
important of all, as it can both increase the credibility of the club, which is very important in
the business world for any company, and allow the club to invest in new areas that can
generate more income. It has been observed that many football clubs that are not managed by
a professional management use the income of the club to finance unrelated debts that have no
relation to the club (Galariotis et al., 2018). One of the best income generating activity for a
football club is selling players to other clubsafter the income generated by the contribution
of the fans by purchasing licenced products and game tickets. The transfers can be used as an
income generator in both ways. By transferring a famous footballer the fans would feel more
emotionally satisfied and purchase more products and seasonal tickets to watch the famous
player (Moore & Levermore, 2012). Additionally, this would increase the brand awareness of
the club which can help them gain more fans around the world, which in return increase the
investment made by the fans. Similarly, by selling the talented players from the team can also
generate a large amount of income which can be used to transfer more players that can both
increase the popularity of the club and can be sold for more money in the future to make
profit (Galariotis et al., 2018). However, this is hard to achieve without a proper management
style as it requires outstanding management skills to perform these kinds of profit generating
activities, as they require absolute professionalism, a skills many football club directors lack,
as they approach the management of the club more emotionally. However, the in successful
businesses the emotions do not have any role to play as the actions the managers should take
must depend on logic and actuarial data rather than feelings. Only then the management team
can make sound decisions about the future of the club (Chadwick & Hamil, 2010). Overall, it
can be said that the fans are the biggest investors of the clubs and they will continue to invest
in the club as long as the club satisfies them emotionally. In today’s modern world this can
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