Football clubs and financial challenges: factors that affect economic sustainability

Abstract

Football enjoys the status of being the world's most popular sport and is thus able to generate more income relative to other sports. Indeed, global demand ensures that football clubs around the world can earn billions of dollars.By and large, clubs focus on providing a service through sporting activities. Nonetheless, they must function effectively as business entities in order to remain competitive. As with organizations operating in other sectors, the COVID-19 pandemic exposed the financial vulnerabilities of football clubs.Its impact highlighted the need for financial sustainability that serves as a foundation for the social and environmental sustainability dimensions. Like other businesses, economic sustainability demands that football clubs utilize resources efficiently to ensure sustainable income is generated. There is an additional obligation to invest wisely so that future growth and financial well-being are not compromised.Ruling bodies in football such as Federation Internationale de Football Association (FIFA) and regional organizations like the Union of European Football Associations (UEFA) have provided specific definitions of what constitutes economic sustainability for high-level football club ownership. A well-developed structure is widely seen as one of the key pillars. Maturity in this respect is indicated through the alignment of key internal and external dimensions. Effective communication processes involving human resources and business partners are one manifestation of the structural efficiency demanded of leading European clubs by UEFA.