It is common to hear or read news about the difficulties that sports clubs are going through, whatever their size. From professional clubs to small neighborhood clubs, many are the institutions that have manifested various economic-financial problems.
In this work we try an approach to this reality from the cost analysis, although we do not intend to exhaust the questions that can be answered, but rather to ask them in order to make them visible, and to answer only some of them, the basic ones, that will serve to be able to analyze in depth the rest.
We consider that in our country there is a long tradition in sports clubs. Between the end of the 19th century and the beginning of the 20th century, many sports institutions were born; some in the heat of the diffusion of sports that brought immigrants and foreign workers. However, many maintain precarious administrative structures and face serious difficulties when making decisions, which inexorably leads them to find themselves in problems that, in more than a few cases, become insurmountable or, at least, difficult to resolve.
Finally, and by way of illustration, we mention that in the city of Buenos Aires alone, to date there are 277 sports clubs registered by the city government, according to its website.
Proposal of guidelines for decision-making in sports clubs
The definition of the offered product
We believe that the first step in determining a model for presenting information for decision-making is the definition of the products that the organization under analysis offers. In the case of sports clubs, there is an important differentiation between recreational and competitive sports. The first is related to the satisfaction of needs by those who practice it: health, physical well-being, pleasure, etc. While in the second the competitive aspect stands out, that is, the need to confront, on the basis of established rules, with peers in order to establish a winner. This differentiation must be duly represented in the cost system, and it is what we will analyze next.
Implications for cost analysis
Recreational sport
Each institution offers a set of recreational activities, which are financed in part with the payment of specific tariffs and in part through social fees. These activities can be: swimming pool, tennis, soccer, gym, paddle ball and other sports, and it can be the mere rent for a certain time of the facilities, or it can be classes with specific teachers. In any case, the product would be the hours of each activity, either with a teacher (classes) or not (rental of facilities). Here appears as a cost measurement variable the number of hours spent practicing each sport.
Competitive sport
Competitive sports have as characteristics the need to finance participation in tournaments. In the case of team sports, these are usually tournaments that take place over a season (one year), and there may also be other tournaments in which you must eventually compete, generally of shorter duration. Professional soccer belongs to this type of competition, but it adds to the complexity of managing a professional team: Players must be hired, federative rights must be bought or sold, the school's remuneration expenses must be managed, etc. As a counterpart, it has greater possibilities of generating income than amateur sports, whether through advertising contracts, television rights to meetings, ticket sales, etc. Amateur sport is less complex,but it also has few sources of income, having to pay for participation in championships in a shared way between clubs and players.
What both agree on is that it is necessary to analyze each sport individually and, within each of them, each tournament must be identified as “object of costing”, since participation is planned before the start of the season: hiring of players and coaching staff, payment of participation fees and tariffs, etc., so that we could consider each tournament as an “order”, in which the income and costs generated will be accumulated. There will be as many "orders" as there are categories in which the club must or wants to participate. A second level of analysis within tournaments is constituted by "matches".
Proposal for a new cost information model
With the present work we only try to achieve, in a first stage, a different ordering of the information of costs and income in the cases studied, in order to facilitate decision-making, planning and management control in these sports entities, but also to serve as a basis for developing similar models in all kinds of sports and social clubs.
For this purpose, the proposal for the generation and presentation of cost information is based on the following parameters:
- Cost model = variable costing Cost system for competitive sport = by orders, where the cost unit is the tournaments and the cost measurement variable is the matches and the hours of use of the facilities owned or contracted by the club. costs for recreational sports = by processes, where the cost measurement variable is the hours of use of the facilities owned or contracted by the club. Classification of costs by directionality and variability Classification of income by directionality
The general model of the results table to be presented would be assembled, as an example, as follows:
| COMPETITIVE SPORT | RECREATIONAL SPORTS | ||
| Tournament A | Tournament B | ||
| Direct tournament earnings | one | ||
| Direct variable costs per tournament | two | ||
| Cont. Marginal 1st level | 3 | ||
| Direct fixed costs per tournament | 4 | ||
| Marginal contribution 2nd level | 5 | 6 | |
| Joint marginal contribution 2nd level | 7 = 5 + 6 | ||
| Direct income to the section | 8 | 9 | |
| Section direct variable costs | 10 | ||
| Marginal contribution 3rd level | 11 = 9 - 10 | ||
| Direct fixed costs to the section | 12 | 13 | |
| Marginal contribution 4th level | 14 = (7 + 8) -12 | 15 = 11-13 | |
| Joint marginal contribution 4th level | 16 = 14 + 15 | ||
| Direct income to the entity | 17 | ||
| General fixed costs | 18 | ||
| Final score | 19 = (16 + 17) - 18 |
We understand that the initial effort would not be much to adapt and implement the new parameters indicated to develop the new cost and income exposure model, and thus begin to generate information to facilitate the rational management of sports entities.
For example, with the new informative opening, cost analyzes could be developed to:
T oma decision: Analyzing the performance and cost level to decide, for example, services or develop activities (product decisions), level of quality performance (quality decisions), activity level or amount of hours available for the development of the various disciplines (capacity decisions), when, where and how to develop them (process decisions), etc.
Cost planning and management: Preparation of the cost information necessary for preparing the entity's economic and financial budgets. Projection of costs and income. Application of management tools such as planning of results, sectoral and general equilibrium point, financial equilibrium point, optimal mix of services to be provided in the face of scarce resources.
Cost control and management: C omparison of what is planned with what is real, detect and analyze causes of deviations. Application of management tools such as the dashboard
Development of cost reduction strategies: Analyze cost information to detect opportunities to improve productivity and take advantage of resources (facilities, human resources, materials, etc.). Application of management tools such as target costing and cost avoidability analysis
Determination of prices: Set tariffs, tariffs and quotas. Identify and analyze costs and profitability by sports discipline and its impact on the entity's general profitability, for the process of setting tariffs and the definition of customer service strategies.
Questions to solve
We said at the beginning of the work that our intention was to ask questions and only solve the basic ones, in order to establish a starting point from which to continue studying the problems of sports clubs. Below we present three topics that we believe are important to continue this path, and that each deserve a specific analysis on their own.
Allocation of income
There are general club revenues that cannot be directly allocated to final objects (competitive sport and recreational sport). For example, social fees. Although in general each activity has its own financing, and the fees are primarily intended to cover administration costs, we believe that this is an issue on which the analysis should be deepened.
Valuation of professional athletes and activation of training costs
It is also an issue that deserves to be analyzed in depth, given its complexity, including both the rights of passes of professional footballers acquired and those trained in the club. In this sense, Bursesi and Carratalá (2203) have made an interesting contribution.
Proposals for income generation
We believe that contributions can also be made in this regard from our professional perspective. Pereyra and Faccone (2008) point out that most clubs do not have a long-term action plan, and they do not ask themselves what services they offer or to whom. While more and more people carry out physical activities and practice sports activities such as gymnastics (in its different variants), aerobics and foot races, soccer, paddle tennis, tennis, etc., neighborhood clubs are increasingly less associated. Perhaps part of the explanation is that they have less investment capacity than large gym chains. In any case, it is a subject on which it is necessary to reflect.
Conclusions
Any organization, large or small, requires the appropriate information for decision-making. Sports clubs, often without professional management structures, generally follow paths that have not been established based on previous analysis or planning.
If the institutions that we present had the management tools mentioned in this work , they could begin to analyze alternatives for offering services that they do not currently provide and eventually rethink those that already exist, in order to increase their income to face more easily. obligations.
Planning results and establishing management control systems are not options but a necessity. The relatively few success stories in sports management rely precisely on these tools and they do so with suitable human resources. On the contrary, those who live organizing the "day to day", deciding based on intuition or doing it based on the opinion of the supporters, who, logically, only evaluate the sporting results, cannot aspire to sustainable successes over time. and they are exposed to the emergence of "miracle solutions" (unscrupulous leaders, middlemen eager to transact, outsourcing of services without technical and professional evaluation, etc.).
Bibliography
- BURSESI, Néstor and CARRATALÁ, Juan M. "Valuation of intangible assets in sports entities: Soccer clubs", work presented at the VIII Congress of the International Cost Institute, Punta del Este, Uruguay, 2003.PEREIRA, Fernando and FACCONE, Bruno. "Analysis of management alternatives in sports and social clubs, work presented at the CEMA University, 2008.
