Pál Orosz, CEO of Ferencváros, and Dr. Florian Hohmann explore the importance of financial sustainability in football clubs, the significance of equity ratio for stability, and strategies for building reserves, diversifying revenue streams, and achieving financial independence.
Sporting success and financial success are interconnected, and long-term success is dependent on a financially sustainable foundation.
Football clubs can develop financial sustainability by diversifying revenue streams, building a strong brand, and aligning player salaries with club revenue.
The future of football finance management will focus on financial stability, implementing measures to stabilize revenues and promoting more equitable distribution of financial resources.
Deep dives
The importance of financial sustainability for football clubs
To ensure long-term success, football clubs must prioritize financial sustainability, as sporting success and financial success are interconnected. While short-term sporting success can be achieved without financial stability, long-term success is dependent on a financially sustainable foundation. Examples of clubs like Borussia Dortmund and Barcelona highlight the importance of managing finances wisely to avoid potential crises. Financial sustainability requires finding the right balance between aspirations and realism, making calculated decisions, and focusing on long-term stability.
Strategies for developing financial sustainability in football clubs
Football clubs can employ various strategies to develop financial sustainability. This includes diversifying revenue streams to reduce reliance on variables like match day ticket sales. Club-owned merchandise brands and esports ventures can provide additional sources of revenue, while building a strong, unique brand can attract loyal fans and increase merchandising sales. Implementing variable payment structures, such as bonuses tied to sporting success, can align player salaries with club revenue and promote financial stability. Attracting and retaining the right people, both in business and sports-related roles, is crucial, as their expertise and management can affect the club's financial success.
The future outlook for football finance management
The future outlook for football finance management is likely to shift towards a greater emphasis on financial sustainability. While growth-oriented strategies have been prevalent in the past, the COVID-19 pandemic has highlighted the need for clubs to be more cautious and financially stable. Implementing measures to stabilize revenues and making cost structures more flexible will be key. However, challenges remain, such as the dominance of big clubs in domestic leagues and the need for more equitable distribution of financial resources. International regulations and rules may be necessary to ensure the long-term sustainability and interest in the sport.
The importance of finding the right balance in football finance management
Finding the right balance is crucial in football finance management. Clubs should aim high, but also be realistic in their goals and financial expectations. Balancing financial responsibilities with aspirations requires careful decision-making and a focus on sustainability. Clubs must acknowledge the business aspect of football and work towards managing it effectively. Creating a familial and professional club culture, hiring the right people, and fostering a strong brand identity can contribute to long-term success and financial stability.
Emphasizing the need for international regulations in football finance management
As football finance management faces challenges, such as the growing wealth disparity and stagnation in certain leagues, the need for international regulations becomes apparent. Implementing measures like salary caps or flexible caps based on revenue can promote financial stability. Ensuring equitable distribution of financial resources from international competitions is also crucial. Such regulations can prevent the dominance of a few wealthy clubs and foster a more sustainable and competitive football landscape.
In this episode of the Football Business Podcast, we talked about financial sustainability. What does it mean, why is it important and how can it be achieved?
As guests we invited Pál Orosz, CEO of the Hungarian football club and FBIN Network member Ferencváros and Dr. Florian Hohmann, Senior Lecturer in Financial Management at the University of St. Gallen.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
