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Influence of stakeholders' perception on value creation and measurement: The case of football clubs
Abstract
Purpose: The presented study aims to identify and classify the value factors that influence the value of football clubs from the stakeholder perspective, while also discussing how these factors can affect the choice of valuation methods. The paper considers how value should be measured from the perspective of stakeholders. Research focuses on clubs embedded deeply in a wide interrelated network of stakeholders.
Design/methodology/approach: A mixed research approach was established in order to obtain a more holistic understanding of value creation, value factors and measurement. The research builds on observational study with a mix of retrospective longitudinal study of Polish men's football clubs and interviews with stakeholders, which are then triangulated as part of a critical discussion on valuation methods.
Findings: The results show the most significant value factors determined by the stakeholders. The study discusses which performance and value measures should be used to measure value for the stakeholders of football clubs. Intellectual capital methods and asset-based methods should definitely be relied on as part of measuring the performance of football clubs within the stakeholders' network. All findings suggest the use of the multivariate valuation method in accordance with previous research.
Originality/value: The classified key value factors enable the management of football clubs to properly manage stakeholder relationships and address various stakeholders' concerns in a sustainable way. The paper proposes a research process, which may also be implemented in other studies in the non-profit sector and contributes to the literature in the fields of sports management.
... Investments and financial inputs, which affect the most, determines whether a team can enhance their competence by heading for suitable players in the transaction market. Still there are opponents that suggest which FCs aren't interested in acquiring important financial income, but the basic survival of the club [6]. However, both clubs expect the team to perform well, due to the proportional relationship between team's performance and financial income. ...
This article shows the whole process using known datasets to estimate two football teams up-coming performances. The math process (modeling) includes linear regression, probability expectations, and using graphs to express the modeling process. In this article, from the process of modeling, there are conclusive results and conclusions which is beneficial in researching sport management and football team management which includes basic two types of management structure and basic strategy in data analyzing of football financial expenditure. The whole research contains four parts, including introduction, methods, analytical conclusions, and applications. First, the article discussed some basic assumptions and preparations for modeling, and researched on some of the topics according to the whole theme. In the part methods, the research uses linear regression to fit a suitable relationship each between the factors that affect expenditure and rankings. In the part conclusion, which includes analytical conclusion and quantized applications, which can also be separated to two parts. Analytical conclusions state some of those findings depend on the previous research process, which those findings illustrate particularly kind of relationship. In the quantized applications, the research fit data into the model and acquire an intermediate result and some beneficial suggestions to each of the studies.
... These indicators have been refined using the opinions of experts and active coaches in the field of football. [13]. ...
Key performance indicators are actually measurable variables based on which we can measure the success rate of an organization in reaching defined key goals. In order to create key performance indicators, steps, and standards must be passed, each of which is of great importance. Based on how the key performance indicator (KPI) is defined and determined, it is possible to measure the performance of a person, department, process, campaign, or strategic goals of a brand. In fact, KPIs can be considered for different industries and for different levels of each business. Considering the importance of football clubs and their high social impact, the purpose of this research is to investigate these key performance indicators in order to grow and improve their comprehensive performance. In order to extract data, a literature review was used. Data refinement and prioritization were done using the fuzzy decision-making method, and the opinions of active experts in clubs and football players were used. The results show that indicators based on infrastructure development are among the most important indicators and should be given special attention.
... Some researchers have highlighted the importance of stakeholder management and inclusion in elite sports (De Bosscher et al., 2021;van der Roest & Dijk, 2021). Others have applied stakeholder theory in analyzing and classifying football fans' behavior and needs (Jaeger, 2021;Perechuda & Čater, 2022) and others to basketball (Leiñena & Merino, 2021). Neto et al. (2022) elaborate on the concept of stakeholder leadership in soccer clubs. ...
The results of a literature survey on the application of management science fields to sport management are presented. The most prominent Critical Success Factors and Enablers for their achievement, identified in the SM maturity assessment frameworks are specified. Existing published work in sport management per critical success factor and enabler category is also presented thus providing a theoretical basis for their significance in the sport management field. A novel holistic sports management maturity assessment framework is proposed. The framework is based on and includes, a ten-by-ten matrix, the most prominent critical success factors and enablers identified in the literature survey. The proposed framework is then applied to the most known sport management competencies accreditation framework called COSMA. The result of this application is a proposed novel “tracking matrix”. Both the proposed maturity frameworks and the tracking matrix can be used by both academics and practitioners in the SM field.
... It can be captured reviewing the value perception by stakeholders, looking at the outcome of the production of product or service instead of output and focusing on the role played by information in the relationships with stakeholders. Perechuda and Čater (2021) elaborated an analysis matrix to understand value creation in relation to stakeholder benefits, implementing stakeholders' perspective into value measurement. In other words, the key factors, which create the value for the firm, should be assessed in terms of respective importance from the stakeholders' perspective (also with the help of appropriate value metrics) and adequately communicated to them. ...
COVID-19 pandemic crisis threatened the stability of economy and the survival of many firms, but it has been also the chance to challenge the current economic development path and to rethink firms’ business models according to a more sustainable approach. Academic literature states that business model (BM) innovation is a driver for the transition to sustainability. Sustainable business models (SBMs) incorporate sustainability vision in the main components of business model, which are value proposition, value creation and value capturing. Nevertheless, the usual approach to business models, based on a positive concept of value, can underestimate some areas of potential opportunities to catch. For this reason, in this paper we suggest to adopt a novelty approach that emphasizes the negative concept of value (value uncaptured) to identify unexploited value opportunities. This approach can help firms innovating their BMs towards SBMs.
... The existing forward momentum presupposes the solidification of the existing business model (Buck and Ifland, 2022) through the appropriate synergies with the industry stakeholders (Perechuda and Čater, 2021). The relationship between a club and its stakeholders, and how it shifts in a specific context, is one of the main critical strategic factors, which is a great concern for football clubs (Cicut et al., 2017). ...
This article empirically explores the potential for enhancing sustainability through football, leveraging the sport’s widespread popularity and influence. Football functions in a dynamic, multi-stakeholder context, and this inevitably entails a wide range of challenges and considerations for all the industry actors. Football clubs and related entities possess unique platforms that can be harnessed to address environmental, social and economic challenges while simultaneously driving long-term business success. To maintain sustainability, every stakeholder needs to develop the necessary strategies to identify, interrelate and ultimately balance the value exchanges involved in the pursuit of a viable future. Methodologically, this research initially conducts a thorough theoretical analysis of the football industry to identify the stakeholders and then empirically applies a qualitative approach, gathering data through 33 semi-structured, face-to-face interviews with key stakeholders within the football industry, to recognize the distinctive values that each industry actor holds through the individual synergies within the football ecosystem. The findings underscore the significant potential for football to serve as a catalyst for advancing organizational sustainability on multiple fronts, and future research directions are presented, as well as contributions to theory and practice.
Purpose
This study aims to contribute to the analysis of the impact of financial control or “financial fair play” (FFP) regulations on the financial performance of the Spanish professional football league (LaLiga) by examining the moderating role of club size. The authors argue that introducing FFP positively impacted the financial performance of small clubs but increased the economic gap between large and small clubs.
Design/methodology/approach
A 12-year dataset covering 22 football clubs is used to test the hypotheses. Panel regression models are estimated for eight measures of financial performance indicators, comprising three financial dimensions: profitability, liquidity and solvency. The Gini index is applied to clubs' economic and sports variables to determine the degree of economic imbalance between the largest and smallest clubs.
Findings
The results show that FFP significantly and positively impacted the profitability of small clubs and the solvency of medium-sized clubs but has not impacted the largest clubs' financial performance. After these regulations, economic inequality in Spanish LaLiga increased.
Originality/value
The authors find evidence that club size moderates the effect of FFP on financial performance. The moderating role of club size may explain the mixed results found in previous research. The authors’ findings contribute to improving the literature on the impact of FFP on the financial performance of European football clubs.
Football clubs strive to remain competitive and sustainable in a multi-faceted industry which involves a plethora of stakeholders. Consequently, it is imperative to comprehend the industry structures, identify the stakeholders, and implement processes to manage every relationship. Although numerous studies have applied stakeholder theory in the specific field, they tend to focus on stakeholders as broad categories, overlooking the fact that various sub-categories exist as diverse entities. The aim of this study is to identify every football industry stakeholder and develop a strategic stakeholder framework from the club perspective. Methodologically the research relies on an extensive theoretical examination of stakeholder theory, through the explication and evaluation of its development over the last forty years. The findings enhance the theory itself in a context that until now was in its infancy and provide solid foundations to practitioners to delineate the synergies and implement principles on how to constructively manage these relationships.
This study perceives professional European football as one of the most relevant event-related entrepreneurial ecosystems (EEs) worldwide. It also identifies a healthy sporting competition in the five most popular European football leagues (Spain, England, Germany, Italy, and France), the “big five,” as a key pillar for the functioning of this ecosystem. By applying a quantitative approach, competitive intensity (CI) is measured for all big five leagues for 21 seasons (1998/99 to 2018/19). The chosen method does not only convey an overall indication of the competitive health of the entire league but also provides detailed information on the four important sub-competitions (championship race, qualification for Champions League or Europa League, and the fight against relegation). In all five leagues, seasonal CI tends to decrease over time, and especially over the last decade. The main reason is a decline in the intensity of the championship race while all other sub-competitions show relatively robust CI values. Overall, it can be concluded that the competitive health of the big five is intact, but the dwindling CI of the championship races can harm the EE of professional European football in the long run. Accordingly, it should be closely monitored in the future.
Introduction. Existing research on football economics mostly focuses on some key performance indicators’ influence on the profitability of clubs. This assumption is a bit misleading in the context of football business models which deliver various benefits other than profits to its stakeholders. In this research, the opposite question was asked: what can determine the intangible value delivered by a football business? This is asked in light of the fact that most of the value created by the football industry belongs to the category of intellectual capital.
Material and Methods. The study was based on the financial data of 33 European football clubs. Basic statistical analysis was carried out and regression analysis of chosen drivers influencing intellectual capital of football clubs in Europe was performed.
Results. Three of the four assumed hypotheses were not confirmed: higher value of intellectual capital is correlated with higher profitability, higher values of IC efficiency (VAIC) are associated with higher levels of player value and values of IC efficiency (VAIC) are significantly associated with levels of sports performance. Just one hypothesis was confirmed that values of IC efficiency (VAIC) are significantly associated with salary efficiency (S/R). Additionally, the study revealed that there are two important factors influencing the value added intellectual coefficient (VAIC): debt and salaries.
Conclusions. If we assume that VAIC is the goal of the managers, then the only two drivers which are significant for this value are salary ratio and leverage ratio. Moreover, we know that profit orientation of the football business in Europe is not the key goal in order to develop intangible values for the stakeholders.
Research question: National football leagues are organisations with multidimensional and idiosyncratic objectives according to one train of thought among the theories of organisational management. Starting from this standpoint, the paper aims at providing an analytical framework for empirically assessing sport leagues organisational performance across several European countries and comparing them in terms of their organisational efficiency.
Research methods: The novelty consists in using at league level a methodology – a Data Envelopment Analysis – which has been confined so far to the study of club efficiency in the existing literature. The league sample is limited to 36 observable leagues out of 55 UEFA member leagues over 2010–2015 due to data paucity.
Results and findings: Efficiency scores, checked with several robustness tests, exhibit a scattered efficiency across European football leagues. Part of the observed inefficiency is linked to decreasing returns to scale, the rest being due to purely inefficient management. The paper also provides a delineation of peer efficiency groups for each league under evaluation.
Implications: There is a managerial recommendation to use peer groups as international benchmarks for improving football leagues’ efficiency. Benchmarking best practices may assist the less well-performing leagues in signalling to them which other leagues’ experience could be an example to follow on their path toward organisational improvement.
The aim of this paper is to interpret and examine the exportefficiency of professional football clubs in the Central Eastern European (CEE) regionwithin the international players’ market. Some clubs in these countries realize higher and higher revenues from transfer activity, which can be interpreted as export of football clubs. The study investigates correlations between sport success and transfer revenues. CEE clubs produce nearly 100 million EUR profit annually, but there are huge differences between countries and clubs. Championships are also divided: those clubs participating in international tournaments have a powerful advantage compared to the other clubs.
The aim of this article is to investigate the explanatory variables of the number of Facebook fans and Twitter followers for professional sports clubs based on the financial value literature. Such explanatory variables are related to local market conditions and on-field and off-field performance. Based upon a sample of North American major league clubs and the most valuable European soccer clubs as evaluated by Forbes over the 2011–2013 period (423 observations), our results indicate a range of variables with a significant positive impact on the number of social media fans: population, no competing team in the market, current sports performance, historical sports performance, facility age, attendance, operating income, expenses/league mean, and being an English football club. An improved understanding of the effectiveness of clubs’ social media presence is important for contemporary sport managers in terms of enhancing supporter communication, involvement, and accountability, as well as maximizing clubs’ revenue generation possibilities. Our findings could help sport managers to realize their clubs’ social media potential in pursuit of these objectives, specifically to understand which variables are under-exploited and why some clubs over-perform, which will allow managers to prioritize decisions to increase their number of social media fans and financial value.
The European Directive 2014/95/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups is applicable by European Union-based entities starting with the financial year commencing on January 1, 2017. CEE countries are reported to face difficulties when implementing new European or global accounting regulations and models. We investigate the quality of non-financial disclosures in Poland and Romania, the biggest Central and Eastern European countries, prior to the European Directive's adoption and explain the diffusion of this type of reporting through the lens of the institutional pressures. We find that prior regulation, local institutional characteristics, ownership, industry and auditors have an impact on the quality of disclosures. Poland experienced a higher extent of voluntary reporting, but Romania faced prior regulatory demands for non-financial reporting. We find that the overall disclosure score is higher for Romania, which provides support for the importance of regulations to strengthen the spread and quality of non-financial reporting. The research findings are relevant to practice and policy. This ex-ante evaluation of reporting practices and of their determinants is useful to understand how change occurs in practice and how companies react to regulatory and other institutional demands.
The present paper aims at achieving a thorough analysis of the football phenomenon in Romania, assessing the sporting and financial performance of six football clubs (Astra, Cluj, Dinamo, Mediaș, Steaua and Viitorul) over a period of 5 years, between 2011 and 2015. In Romania, football clubs are organized either as joint-stock companies or NGOs, with strict rules and regulations for their organization. The research we conducted shows that most football clubs recorded impressive turnovers and significant expenditure at the same time, which resulted in low or no profit or even in bankruptcy and insolvency. The only football clubs that recorded outstanding sporting and financial performance are the private ones, which have professional managers. However, if football clubs are organized as NGOs, thus being financially-based on donations form public budgets, they are not sustainable on the long term, facing financial problems and thus affecting the sporting performance.
This paper aims to analyze how ownership influences the performance of European football teams. The study of efficiency allows us to identify relative performance in the achievement of several objectives, as is the case of football teams pursuing both financial performance and sports success. The analysis shows that football teams organized as members clubs, with dispersed ownership and uncontrolled by foreign investors perform better. Thus, property structures facilitating less control over managers relate positively to performance.
The aim of the paper was to assess and compare technical efficiency of two groups of football clubs in Poland with different legal form, which belonged to the first football league in the seasons 2013/14 and 2014/15. The first group was composed of the football clubs functioning as societies, while the second one included clubs acting as joint-stock companies. In order to assess technical efficiency of clubs in both groups, two DEA models have been used: CCR and BCC, assuming cost minimization for given effects. The results suggest that the clubs organized as societies attain a higher technical efficiency compared with the clubs acting as companies. The results also indicate a significant impact of remuneration costs on economic efficiency of football clubs.
The paper presents the results of theoretical discussions and research findings in the field of designing sustainable business models that support the creation of value at various stages of the business life cycle. The paper presents selected findings of extensive research into the business models of Polish companies listed on the Warsaw Stock Exchange. Companies which are at various stages of development should build and adapt their business models in order to maintain the ability to create value for stakeholders. Characteristics of business models at the early stages of development are different than at mature stages. The paper highlights the differences in business models in the context of the life cycle of companies and sustainability criteria. The paper presents research findings which show that the company's development can be seen from the point of view of the business model.Research on business models concentrated on identifying the key attributes and the configurationof the business models appropriate for the early stage of development as well as the maturity stage. It was found that the business models of companies at an early stage of the development of companies listed on theWarsaw Stock Exchange are oriented primarily to how the company shapes, delivers, and captures value from the market in order to generate profits for shareholders and increase the value of the company, while the business models of mature companies include the intentions of management used to balance objectives with respect to different groups of stakeholders, and to carefully formulate and implement business objectives with particular attention paid to preserving the sustainability of the business. The assessment of business models from the point of view of the life cycle proves that managers change their approach to configuring business models over time; at some point, they include management intentions aimed at a broader range of goals than merely generating profits. At the early stage, it is important to adapt the business model to the ability to create value for shareholders by actively searching for the optimal configuration of the business model. Here a component approach to making rapid changes in the structure of the business model is essential. The business model of mature companies is based on assumptions ensuring the long-term viability of the business and is holistic in nature. When the company moves from the stage of early development to the maturity stage, business models change in such a way that the assumptions of the Triple Bottom Line concept become increasingly important, as expressed in the joint implementation of Corporate Social Responsibility and Value-Based Management assumptions. At the early stage of development, the business model strengthens the need to create value for shareholders and is not as dependent on strong partnerships with a large number of stakeholders. At the maturity stage, it is important to balance the objectives of all stakeholders and to build long-term relationships with them. As regards relationships with the environment, business models at these two stages are different. The paper presents research on the business models of companies at their early stage of development as well as mature companies, taking into consideration the assumptions of the Sustainable Business Model.
The commercialization of Romanian football has gained momentum during the past decade, as local clubs increasingly focused their efforts on marketing. At the same time, Romanian customers' access to Internet has improved. The aim of this paper is to explore the nature of Romanian football club websites from a customer (fan) relationship management perspective. The research sets to investigate the level of customer-orientation embedded in the design of club websites and the opportunities of establishing long-term relationships with fans these websites provide. Therefore, the literature review tries to bring into foreground the importance electronic solutions play for CRM, and their applicability to the sports environment. A content research based on secondary data and website evidence, which were later integrated in computations so as to obtain quantitative evidence, has been chosen as a research method. Results show that while clubs use their websites as informational platforms, several issues have to be addressed regarding the use of websites as bonding factors between clubs and fans. Areas such as website functionality and emotionality could be improved so as to draw more attention from the fans. The research also reveals that Romanian clubs have failed to implement business solutions to help fans buy online merchandise products, which would also increase the revenues of the football clubs.
The constant increase in the importance and popularity of sports has created an industry of a scale of billion dollars. Lately, sports clubs have extended their views by opening sports schools, facilities, stadiums, merchandise stores and even restaurants in addition to their core activities in the area. This expansion makes for the need of a professional management for sports clubs, as they can immediately be considered commercial whereas, the structure of the value added factors is rather different than that of traditional enterprises. Given that, the principal elements of the sports are the human power as executives, players, and technical committee and traditional accounting methods are very inefficient to evaluate these valuable factors. Accordingly, the intellectual capital is far more important than financial capital in the case of the sports industry. The Value Added Intellectual Coefficient (VAICTM) method that quantifies and monitors the value creation efficiency in the company by using accounting-based figures is recognized as a potent instrument to assess the intellectual capital efficiency. This work points to explore the intellectual capital performance calculated by the VAICTM method for the sports clubs along the Istanbul Stock Exchange Market in Turkey namely; Fenerbahce, Galatasaray, Besiktas, and Trabzonspor. Additionally, the impact of VAICTM on firms’ leverage ratio, size, market value, profitability, and efficiency is investigated. To determine the effect of independent variables for the explanation of each performance indicator, six different multiple regression models are generated for twelve different hypotheses. Accordingly, it is found that, there are statistically significant relations between the size of the enterprise, market value and ROA; efficiency, VAICTM, and firm leverage. Finally the ordering with respect to the intellectual capital efficiency of the sports clubs is gathered. By this study it is aimed to create a map that shows the effects of the sports clubs’ qualifications on the intellectual capital efficiency, on the purpose of generating suggestions that ensure development on the clubs’ performance.
This study is positioned within the nonprofit sport context and builds on an emerging body of work in sport
governance to investigate how nonprofit sport organizations can develop their governing capability. A rich
data set derived from a 2-year action research study in an Australian state sport organization revealed a lack of
stakeholder engagement underpinned by confusion about stakeholder-governing responsibility as the central
issues in developing governance capability. The lessons drawn from the Squash Vic experience integrated
with sport governance literature and stakeholder theory show the need to embed the notion of stakeholder
salience or primacy to explain and clarify the dilemma of multiple stakeholders and the lack of stakeholder
engagement in the governing process. We introduce Fassin’s (2012) notion of “stakeowner” and associated
ideas of reciprocity and responsibility as a helpful characterization of the legal members in the stakeholder governance
relationship.
This paper introduces an experimental model to measure the holistic performance
of professional football clubs. The model utilises a selection of established financial and
sporting indicators, which are weighted in accordance with their perceived relative
importance and in relation to components of financial management and governing body
regulations. The paper uses data pertaining to clubs competing in the English Premier League
to demonstrate the outputs of the model. The authors argue that although the model is
experimental, it still provides a useful platform to analyse performance of football clubs
through further scientific investigation.
Most human beings have empathy, even those who are business owners. Some theories of the firm obviate the fact that the real gain is the increased satisfaction no matter how this satisfaction is achieved, either through a monetary amount or otherwise. The emotional dividend is generated by those actions undertaken by the company in order to increase the satisfaction of its owners, regardless of the monetary amounts that these actions will bring them. Thus, this way we proceed to reconcile the empathy of the human being in business and the private property system that allows a correct calculation of the decisions of economic agents.
Research question: Sports economic theory and management models have frequently been criticised for not sufficiently explaining phenomena in sport management. This article addresses this gap by proposing a conceptual framework that can be used to understand sport management problems and derive appropriate strategies. Research methods: The framework proposed in this conceptual article has been developed through a critical review of existing literature on sport management and theoretical considerations based on the service-dominant logic. Results and findings: The sport value framework (SVF) provides 10 foundational premises on value co-creation in sport management and suggests three levels for its analysis. The main contribution is a new and better theoretical basis for explaining phenomena in sport management compared with traditional sport economic thinking. Moreover, the SVF provides guidance in structuring research in sport management. Implications: The framework encourages researchers and practitioners to rethink their strategies by applying a different logic that captures the complexity of sport management.
Since 2004, Forbes has proposed a list of the most valuable soccer clubs. One year later, Transfermarkt began to estimate European soccer players’ value. This article estimate the determinants of firm values in European soccer over the period 2005-2013 incorporating player valuations, clubs’ operating income, and new ownership, three variables not included previously. The results of this study demonstrate that these variables are significant factors in club valuations. More generally, club assets including stadium age, club ownership type, supporter numbers and income, and past sports performances all have a significant impact.
Since the beginning of the nineties, professional sports firm values have been estimated by American newspapers. In 2004, Forbes proposed for the first time a list of the most valuable European soccer teams. In this article, we compare the determinants of firm values in MLB, the NBA, NFL, NHL, and European soccer over the period 2004- 2011. The results show only one variable for which the sign and significance are the same for all the leagues: historical sports performance, with a significantly positive impact in each league. The comparison between the United States and Europe reveals that a majority of differences seem to indicate that the determinants of team values in the United States are not the same as those in Europe. Lastly, we proposed avenues for future research: integrating an international dimension that could be measured through the number of fans on social media and player values
Despite being professional and managed by professional entrepreneurs, and frequently owned by successful ones, football clubs tend to present unsatisfactory financial performance. A possible explanation lies in their complex environment. It is indeed usually admitted that professional football clubs in Europe are utility maximisers, in contrast to US professional franchises which are usually organised to maximise their economic performance. Behind this concept of utility lies a complex set of goals, not always fully compatible, shared and defended by the various stakeholders of clubs.
1. Rationale/purpose
Recent transfer periods clarified that the transfer fee paid for football players is a subject of social, economic and financial matter. This paper seeks to provide a comprehensible valuation method for athletes.
2. Design/methodology/approach
The aim of this paper is to provide an approach to determine the financial value of a player based on future payment streams. A theoretical model following the investment theory is presented and the results are illustrated within a fictitious case study.
3. Findings
The subjective value of an athlete is determined by club-specific expected future payment streams which require especially financial determinants. The value can be influenced by several factors: share of sporting success, merchandising potential or salary. Historic data can be used at best as an indicator.
4. Practical implications
The approach can serve as economic benchmark to calculate a club’s individual price limits for player valuation and provides managers an initial direction in transfer negotiations.
5. Research contribution
Recent models are missing factors such as future-orientation and subjectivity of a player’s value. This paper tries to add these elements to the existing literature. Moreover, it seeks to cushion the problem of uncertain valuation at the decision situation. Nevertheless, this study focuses on financial variables which must be supplemented by clubs with sporting factors.
Purpose: The aims of the research are twofold: (a) Exploring whether football club stocks can be considered an asset class of their own. (b) Investigating whether football stocks enable well-diversified investors to achieve more efficient risk-return combinations.
Research methods: Using efficient frontier optimization, a base portfolio, with standard stocks and bonds, and a corresponding enhanced portfolio, which includes football stocks in the investment opportunity set, are defined. This procedure is applied to four portfolio composition rules. Pairwise comparisons of portfolio Sharpe ratios include a test for statistical significance.
Findings: The results indicate a low correlation of football stocks and standard stocks; thus, football stocks could be considered an asset class of their own. Nevertheless, the addition of football stocks to a well-diversified portfolio does not improve its risk-return efficiency because the weak performance of football stocks eliminates their advantage of low correlation.
Originality and value: To the best of our knowledge, this is the first study to analyse the risk-return efficiency of football stocks from the perspective of a pure financial investor, i.e., an investor in football stocks who does not earn side benefits, such as strategic investors or fan investors.
Research implications: This study contributes to the evidence that investments in football are different from “ordinary” investments and need further research, particularly into market participants and their investment motives.
Practical implications: Football stocks are not attractive to pure financial investors. Thus, football clubs need to know more about which side benefits are appreciated by which kind of investor.
The purpose of this study was to understand how radical organizational change impacts the effectiveness of national-level sport organizations from the perspectives of internal and external stakeholders. A single case study methodology of U SPORTS – the national governing body of university sport in Canada – was employed. Data sources included 32 semi-structured interviews with internal (n = 16) and external stakeholders (n = 16), as well as documentation (e.g., annual reports, financial statements). Results indicated the effectiveness of organizations can be impacted by radical change but can vary in the degree of impact, depending on the organizational effectiveness approach and stakeholder perspective used. Using both internal and external stakeholders contributes to our understanding of radical organizational change, as it demonstrates the outward impact of change on not only the focal sport organization but also its external stakeholders, which are critical for organizational survival.
The main goal of this paper is to evaluate the players’ contribution and economic value in the soccer industry. Media visibility records provide us with comparable metrics to identify talent and make hiring decisions—these records can jointly capture sport (on-field) skills and other attractive (off-field) abilities.
This paper presents a valuation method that applies media visibility appraisals to estimate “theoretical values” of the transfer fees paid for hiring soccer players. The estimations are performed by analysing the evolution over time of the media exposure of about 5,000 individuals of more than 200 clubs.
Our empirical results reveal that, along with sport performance, the players’ media status also affects their economic valuation, which explains why the clubs – in search of greater economic returns – fiercely compete for the most popular players. The paper also identifies the main factors determining the players’ economic value. In predicting the players’ transfer fees, some variables are statistically significant: individual media visibility, media visibility share of the player within his team, contract duration, status of the hiring team, years of experience, player’s age at the end of the contract, and the domestic league of the hiring team.
Professional sports provide reliable measures on individuals’ performance that may help in the hiring process of workers. This paper identifies gifted soccer players while taking into account their skills as media leaders and the economic implications. Insofar as players’ talents determine their teams’ sport and economic achievements, the transfer fees paid for players must then be seen as crucial factors. Measuring individual talent and being able to translate this talent into productivity levels entails serious methodological and empirical challenges.
Purpose
In 2017, the Chinese Super League (CSL), the first professional football division in the People’s Republic of China (PRC), became the highest-spending league in the international players’ transfer market, with a total spending of €377m. Moreover, the government of the PRC is backing the CSL with an ambitious football plan. Therefore, the purpose of this paper is to examine the governance of the CSL by questioning the organisational viability of the league.
Design/methodology/approach
In addition to the relevant international literature, this study is based on 14 recent scholarly articles published in Mandarin from 2013 to 2018 to reflect the national academic debate. Moreover, website research on all CSL clubs has been conducted. The institutional analysis follows the integrative change model of Cunningham (2002) complemented by agency and bureaucracy theory.
Findings
The CSL still faces substantial governance problems caused by the divergence of goal setting, organisational inefficiencies and compliance issues. The organisational change is notably constrained by internal competitive value commitments and external power dependency.
Research limitations/implications
The institutional findings on the CSL provide a starting point for empirical studies. The approach contributes to the theory of sport governance processes.
Practical implications
The material and insights are informative for decision makers to evaluate the competitiveness of the CSL.
Originality/value
This paper is the first international in-depth analysis of the governance of the CSL using the body of knowledge published in Mandarin.
In March 2015, the Chinese government issued the Overall Plan for Chinese Football Reform and Development, which aimed to develop football in China from the grassroots level to the elite level. The salient element of the plan was to separate the Chinese Football Association (CFA) from direct government control. Considering the previous failed attempts to reform the CFA, this paper asks the question ‘why the reform occurred in 2015 and not earlier?’ and aims to: 1) identify the potential sources of the policy change through the lens of the Multiple Streams Framework (MSF) and 2) examine the timing and conditions under which the Chinese government initiated the football reform. Public policy documents and media reports from 1993 to 2017 were collected and analysed; 17 interviews were conducted with key policy actors within the CFA and professional football clubs in varying tiers of Chinese football leagues. The findings suggest that the failure of previous policy attempts at improving Chinese football (policy stream), match-fixing scandals and the continuing under-performance of the national men’s team (problem stream), the increasingly critical national mood towards football and the turnover of Presidency (political stream) combined in the mid-2010s opened a ‘policy window’ which facilitated this significant change. This research is the first paper to apply the MSF theory to explain the Chinese football reform that occurred in 2015. It extends the application of MSF to a different political and cultural environment and has implications for the policy-making in China.
Purpose
Women’s football has received increasing attention in the academic literature, partly due to its growing popularity worldwide. However, women’s football research remains scattered across numerous academic domains. Focusing on the social sciences, humanities and management disciplines, the purpose of this paper is to map and organise contributions, and to identify research directions for future studies within these disciplines.
Design/methodology/approach
Using the keywords “women”, “girls”, “female” and “football” or “soccer” to initially identify articles, an integrative approach was followed to evaluate and analyse relevant literature. In all, 117 academic journals were classified and subsequently divided into 26 themes according to the subject area, topic and level examined.
Findings
Results of this integrative review show an increasing trend of journal publications since 1998, with a large representation of studies related to historical and sociological research, where qualitative methods are dominant. Articles investigating economic, managerial and marketing areas appeared in more recent times. Women’s football has been researched from different perspectives (players, fans, sport organisations) and across various countries.
Research limitations/implications
The restricted scope of this review (i.e. its focus on social sciences) and the manual classification of articles represent two limitations of this study. However, the synthesis of academic literature provided may assist scholars who are interested in women’s football and women’s sports research to fill identified research gaps and contribute to further advance academic investigations in this area.
Originality/value
This paper provides an overview of salient research avenues and represents the first attempt to critically appraise the direction of academic contributions in women’s football for the purpose of advancing scholarly inquiry in this sport.
This paper evaluates intangible talent in two global industries of sports: European professional football and Formula One. We apply the MERIT approach (methodology for the evaluation and rating of intangible talent) to evaluate – through media value ratings – sport talent and economic contribution of Formula One drivers and football players. Individual media value appraisals jointly capture the infield and outfield skills of individuals. By aggregating individual ratings, we are able to rank in terms of media value football clubs and racing teams; and to establish a hierarchy among sporting competitions. The empirical analysis is made on large databases from worldwide media sources and internet sites. The paper gives insights on managerial issues, as it permits predicting the future career development and economic perspectives of sportsmen. It also applies regression techniques to examine behavioural inter-industries differences concerning the relationship between sport performance, media visibility and economic revenues.
The purpose of this chapter is to outline the development of the idea of "stakeholder management" as it has come to be applied in strategic management. We begin by developing a brief history of the concept. We then suggest that traditionally the stakeholder approach to strategic management has several related characteristics that serve as distinguishing features. We review recent work on stakeholder theory and suggest how stakeholder management has affected the practice of management. We end by suggesting further research questions.
This chapter assesses the economic value of intangible assets in the
tennis industry. More specifically, it establishes procedures to measure the
intangible talent of players based on their exposure in the mass media.
In addition to ranking the media value of professional tennis players
(both men and women), we examine some issues related to the competitive
structure of tennis. Then, we explore whether policies regarding prize
money could be more efficiently designed to account for the economic
contribution of the players who produce spectacle in sporting events.
The French Football Federation was the first football governing body to put in place, in 1990, a financial regulation system. It might be expected that UEFA’s Financial Fair Play (FFP) system established in 2010 would be similar to French DNCG (National Direction for Management Control) regulations. However, while FFP is concerned with profitability, DNCG is focused on solvency. Hence, a French club may be loss-making and not compliant with FFP, while at the same time being solvent in accordance with DNCG rules. Our research confirms that most French clubs do not conform to FFP rules. As such, it provides further evidence that DNCG has not prevented poor financial management within French clubs. The coexistence of DNCG and FFP– or any other domestic financial regulation and FFP –may result in disparities between domestic clubs. As a consequence, there should be consistent financial regulation in all European leagues.
Purpose
The purpose of this paper is twofold. First, to highlight the heterogeneity of the organizational aims within the professional football teams in Ligue 1. Second, to understand why some teams swing from a win orientation towards a soft budget constraint from year to year, and vice versa.
Design/methodology/approach
Financial data from annual reports for the period 2005/2015 was collected for the 35 Ligue 1 clubs. To define the degree of compliance with the intended strategy for those clubs, an efficiency analysis was conducted thanks to the data envelopment analysis method. This measure of performance was supplemented with the identification of productivity and demand shocks to identify whether clubs suffered from such shock or changed their strategy. It enables to precise the nature of the evolution in the utility function, with regards to the gap between expectation and actual performance.
Findings
The paper suggests that a team can switch from one orientation to another from year to year due to the uncertain nature of the sports industry. The club director’s utility function could also be maximized under inter temporal budget function in order to adjust the weight between win and profit according to the opportunities in the environment.
Originality/value
The paper sheds new light on the win/profit maximization. The theoretical model provides an assessment of the weight between win and profit in Ligue 1 and then identifies a new explanation for persistent losses in the sports industry.
This article examines insolvency (payment failure) in the top three divisions of French soccer. Between 1970 and 2014, we observed 79 cases of insolvency arising from participation in the top two or three (since 1993) divisions. We find that demand (attendance) shocks can account for insolvency to a significant degree. We also find that insolvency can be explained by club status and ownership structure, with professional status and the association structure being more likely to lead to insolvency. We also examine the postinsolvency performance of soccer clubs and find that the adverse consequences of insolvency are long lasting.
This paper examines the role of performance measurement systems (PMS) in managing the co-existence of different institutional logics in a football organization. We show that while the sports and business logics at times compete with each other, in other situations they are in harmony. We explain this with reference to an ambiguous cause-effect relationship between these logics which allows for different ways of enacting the logics. Our study thus demonstrates that compatibility of logics may vary not just between fields and organizations, as the literature has emphasized, but also between situations within an organization. Furthermore, our paper highlights how varying outcomes of the performance measures affect the way in which compromises between the two logics are made. While the literature has mostly focused on examining how compromises can be designed into the PMS, we draw attention to how situation-specific compromises are made on the basis of such PMS. The meaning attributed to different levels of sports performance was key for understanding the differences in compromising behaviour.
Football players' transfer rights are the main and core assets in Football Clubs Public Companies (S. A. D.). They are partially recognized as intangible fixed assets in accounting. Internally generated players' exploitation rights are not reflected in the balance sheet. Only the acquired players' transfers fees are disclosed but at their historic acquisition cost. These deficits of the accounting standards often lead to net book values remarkably lower than those of transfer market. Through a Case Study, we try to prove the evidence of the enormous hidden values the assets of these firms contain, which are especially patent just a few months later after year end, when players' transfers are sold from one club to another. Under our opinion, the new Spanish Accounting Standards according to the new underlying principles on which they are based should allow the possibility to amend these deficits of accounting.
Purpose
– The purpose of this paper is to provide early assessments of the changes for corporate reporting processes, which an emerging initiative like integrated reporting (IR) will require. The authors also consider the potential for these changes to contribute towards resolving major problems such as financial and environmental crises. IR is gaining momentum globally, and the implementation of some form of future mandatory requirement in this regard appears likely.
Design/methodology/approach
– The authors begin by developing a reporting checklist based on the requirements for IR, which they use to assess the gap between current “best practice” reporting processes and IR. They then propose systems thinking, a widely accepted approach to problem-solving, as a theoretical basis for assessing the IR Framework and for deeper consideration of the gap analysis. They demonstrate, at a paradigm level, how systems thinking can be used to assess IR and find that IR has the potential to offer specific and implementable strategies for operationalising systems thinking principles.
Findings
– The authors assess 2011 annual reports and related online reporting practices for four New Zealand “best practice reporting entities”, using their reporting checklist. Although none of their sample entities published a full integrated report for 2011, reporting scores range from 70 to 87 per cent. The findings suggest that current reporting processes lack the integration, oversight and due attention to future uncertainties required by IR. While this appears to be a relatively small gap, systems thinking principles indicate that these deficiencies may be critical to sustainability and financial stability, the stated aims of IR.
Research limitations/implications
– The normal limitations which apply to small sample studies.
Practical implications
– The IR reporting checklist and systems thinking proposal could be used by policymakers, standard setters and firms to assist in assessing IR’s potential and the additional requirements it will impose for corporate reporting.
Originality/value
– This study answers calls in the literature for a reactivation of the normative research agenda by assessing IR against systems thinking, a widely accepted approach to problem-solving. It contributes further to an understanding of IR through the development of a unique reporting checklist and by offering empirical evidence derived from application of this checklist.
This article enlarges the "extended enterprise" metaphor from its origins in manufacturing-logistics management to embrace the full range of constituencies that are vital to the survival and success of the corporation. This article presents a new "Stakeholder View" of the firm which holds that stakeholder relationships are the ultimate sources of the firm's wealth-creating capacity. According to this view, long-term business success requires a firm to develop and integrate relationships with its multiple stakeholders within a comprehensive management strategy. In order to illustrate the validity of this approach, this article describes and analyzes the evolution and impact of comprehensive stakeholder management policies in three major firms.
Professional football in Europe is characterized by persistent deficits and growing debts among the majority of the top league clubs. Despite these problems, the clubs have an abnormally high survival rate. This paper focuses on this apparent paradox and poses the question: Why do only very few European professional football clubs go out of business even though they operate chronically on the edge of financial collapse? The paper argues that the paradox can be explained by the fact that professional football clubs operate within soft budget constraints in a way which is similar to the role of large companies in socialist economies – a phenomenon which was first identified by the Hungarian Economist János Kornai.
Purpose-The purpose of this conceptual paper is to introduce a new governance model based on collaborative co-creation of value that leads to the strategic integration of football clubs and their community trusts. This paper also introduces a new process framework that can be instrumental to practitioners and can be operationalised by researchers. Design/methodology/approach-The paper is underpinned by social strategy literature, the service-dominant (S-D) logic framework of value co-creation, stakeholder thinking and the creating shared value (CSV) framework. The process framework is based on the P.A.S.C.A.L. (perception, analysis, synthesis, choice, action and learning) decision-making process introduced by Goodpaster (1991). Findings-Although the evidence that we have presented shows that some clubs are already applying some of the strategies that are part of our process framework, the paper highlights further opportunities particularly for clubs with less-developed social schemes. Research limitations/implications-This paper is a conceptual paper based on an ongoing multi-case study of four English Premier League clubs. The evidence we introduce is to bring our proposed process framework to life. As implications for future research, the process framework can be tested empirically. Future studies might also focus on how the international footprint of the community trusts influences their strategic integration with the rest of the club. Lastly, the leader plus team might be used as a new unit of analysis in future research. Practical implications-This conceptual paper can mitigate the separation fallacy that decouples social schemes from football and commercial objectives. Our process framework illustrates how stakeholder relationships are governed and lead to value creation. The strategies within the CSV framework are a roadmap for expanding social and economic value co-creation. Social implications-Our process framework for collaborative value co-creation can guide practitioners on how to develop and implement their social strategies. Originality/value-The originality of this paper is in the application of the S-D logic and the CSV framework to social strategies in football clubs and the introduction of a process framework that may be operationalised by researchers and applied by practitioners as they develop and implement their social strategies.
Purpose
With the licence season 2013/14 onwards UEFA Financial Fair Play (FFP) fully came into force. Among other things, FFP demands from the clubs to operate within their own revenues in order to counteract the increasing over-indebtedness in European club football. The purpose of the article is to cast further light on the relationship between UEFA and the clubs as the main actors of FFP and to derive implications to UEFA to improve the efficacy of this regulatory intervention.
Design/methodology/approach
This paper explicitly examines the case of FFP from an agency theory perspective. A positivist agency approach is applied in order to describe and explain (potential) problems in the relationship between UEFA and the clubs.
Findings
The paper demonstrates that the relationship between UEFA and the clubs corresponds in many aspects to a classic principal-agent problem. A potential conflict of interest between both actors is outlined which together with asymmetric information creates incentives for opportunistic behaviour on the part of the clubs. The necessity of a stronger emphasis and communication of the economic and sport ethical legitimacy of FFP is detected.
Practical implications
It is suggested that UEFA should consider taking a more proactive stance and endeavour to prevent non-compliance not only by limiting the opportunities to do so but also by providing information as well as education.
Originality/value
FFP is supposed to have ground-breaking consequences for European club football. This is the first paper to systematically examine (potential) agency problems inherent in FFP.
Purpose ‐ This study seeks to examine the influence of the gamut of changes that have taken place in the past 15 years in the world of international football that have permanently transformed football from a game into a real business, while also considering some specific events that have affected Italian football in terms of the valuation of players' registration rights in the financial statements of the leading Italian football clubs throughout the period 1996-2009. Design/methodology/approach ‐ The research was conducted taking into account the leading Italian clubs. The clubs considered were those that, in the period examined, qualified at least five times for a place in the Italian Serie A championship which is instrumental to their direct participation, or through the qualifying round, in the Champions League. Findings ‐ The research shows that questionable window dressing policies, consisting of artificially overestimated values of players' registration rights, aggravated the Italian football crisis that exploded during the 2001/2002 season. However, the origins of this crisis must be ascribed to the inability of Italian teams to control players' wages. Research limitations/implications ‐ The study concerns only the leading clubs and examines the value of players' registration rights as an aggregate, as it is not always possible to extrapolate from financial statements the values attributed to individual players. Originality/value ‐ The Italian legal system, unlike others, establishes for corporations, the obligation to recapitalize if losses exceed a certain level. Based on this particular regulation, this research, suggesting a different interpretation of events, identifies the window dressing policies implemented by Italian football clubs during the period in question as behavior designed to evade the obligation to cover losses, and highlights the real purpose of the exceptional measures undertaken by the Italian legislator to save the entire industry.
This paper investigates the stock price reactions of Turkish soccer clubs to game results, according to match venue and competition type. Betting odds are included to control expectations. The findings indicate that match results of the listed soccer clubs affect abnormal returns, and there is an asymmetric stock market reaction to both wins and losses. The results also indicate that a win in a European Cup does not affect clubs' stock returns. However, a domestic win effect is significantly higher than the effect of a European Cup win. The price reaction of stocks also depends on the type of corporation that the clubs establish when they go public.
This paper analyses the 53 managerial sackings and resignations from 16 stock exchange listed English football clubs during the nine seasons between 2000/01 and 2008/09. The results demonstrate that on average, a managerial sacking results in a post-announcement day share price rise of 0.8%, whilst a resignation leads to a drop in share price (0.5%) that continues for a month thereafter, cumulating in a negative return of around 8%. These findings are intuitive, and suggest that sacking a poorly performing manager may be welcomed by the markets as a possible route to better future match performance, while losing a capable manager through resignation, who typically progresses to a superior job, will result in a drop in a club’s share price. The paper also reveals that while the impact of managerial departures on stock price volatilities is less clear-cut, speculation in the newspapers is rife in the build-up to such an event.
The notion of “dominance” in multiattribute utility decision contexts leads to a change in the considered alternative set. The implications of this set change are discussed in relation to the conditions of Wainer's (1976) “equal-weights theorem,” and the possibility of sensitivity to weighting of importance dimensions is demonstrated. Data from three multiattribute decision-making studies are examined using four rank weighting techniques as well as equal weights in order to examine the practical significance of this sensitivity. Correlations between measures of overall utility produced by each weighting technique suggest that rank weighting of dimensions results in some improvement over equal weighting. This improvement was not always, however, reflected by significant changes in decisions.
This article presents conclusions from a 10-year research program, the purpose of which has been to develop a framework and methodology, grounded in the reality of corporate behavior, for analyzing and evaluating corporate social performance. There are three principal sections: (a) a summary of the approaches, models, and methodologies used in conducting more than 70 field studies of corporate social performance from 1983-1993; (b) a discussion of the principal conclusions derived from the data that (1) corporations manage relationships with stakeholder groups rather than with society as a whole, (2) it is important to distinguish between social issues and stakeholder issues, and (3) it is necessary to identify the appropriate level of analysis in order to evaluate CSP; and (c) a discussion of propositions and areas for further research.