Examining the Financial Condition of Sport Governing Bodies: The Effects of Revenue Diversification and Organizational Success Factors

Organizational Mission and Revenue Diversification among Non-profit Sports Clubs

“…Revenue diversification has also been examined for sports governing bodies which represent the sports organizations at the middle layers (e.g., at the community level, district level, state level, and national level) of the pyramid of the German sports system. A similar value of .46 was obtained for sports governing bodies in Germany [19]. The average revenue diversification values from this study and from previous research indicate that non-profit sports organizations in Germany have a medium level of revenue diversification.…”

“…To put it short, Herf is obtained by adding the squared proportions of all income sources. In the survey, sports clubs were asked to state their revenues in the following 25 different categories: revenues from (1) membership fees; (2) admission fees; (3) donations; (4) subsidies from sport organizations; (5) subsidies from the state; (6) subsidies from the district/community; (7) subsidies from the European Union; (8) subsidies from the friends' association; (9) subsidies from other programs (e.g., employment office); (10) fund management (e.g., interests); (11) self-operated restaurant; (12) sport events (e.g., gate revenues); (13) service fees from members (e.g., facility fees); (14) convivial gatherings (e.g., club parties and festivities); (15) sponsorship: jerseys, equipment; (16) sponsorship: boards; (17) sponsorship: broadcasting rights; (18) sponsorship: advertisements; (19) own business company; (20) course fees; (21) service fees from non-members (e.g., facility fees); (22) service fees from collaborating institutions; (23) rent/lease of own facilities; (24) credits; and (25) other (i.e., sum of all other miscellaneous revenues that could not be assigned to one of the 24 categories). All 25 income sources are used to calculate Herf.…”

“…The variety of stakeholders may be one reason why sports organizations were found to have more diversified revenues than non-profits in other industries [2,19]. Similar to the general non-profit sector, the beneficial effects of revenue diversification have also been shown in the sport industry.…”

“…Similar to the general non-profit sector, the beneficial effects of revenue diversification have also been shown in the sport industry. For example, previous research documented that non-profit sports organizations with a diversified income portfolio are in a better financial condition [19], are less financially vulnerable [20], and have less volatile revenues [21], although not all studies could support a positive relationship [22]. However, it has not yet been examined how different types of organizational missions affect the level of revenue diversification, i.e., what types of clubs have more diversified revenues than others.…”

Community sports clubs' responses to institutional and resource dependence pressures for government grants

“…For example, in Poland, sports clubs are referred to as the 'local clubs associations' and association is a sub-type of sports club (Krawczyk 1999). In other countries, such as Germany, it is the other way around (i.e., associations encompass several clubs, not clubs encompass several associations) (Wicker and Breuer 2013a). In this sense, an association can be an institution that represents several clubs within one region (i.e., federation) or within one sport (i.e., association).…”