From a financial perspective, many more sports than football satisfy the famous “game of two halves” description. Or perhaps it would be more accurate to say, games of haves and have nots.
Sports like football, rugby, golf, tennis, cricket, and boxing are very clearly delineated into professional and amateur categories, elite and recreational levels. It’s a lopsided arrangement both in terms of participation and money. It goes without saying that only small fractions of participants ever make the top levels of their chosen sport – it wouldn’t be an elite level otherwise. But by the same token, the higher echelons are where all the cash ends up being concentrated.
A good example of this is rugby union in Ireland. The country has just four professional teams, the provincial clubs of Leinster, Munster, Connacht and Ulster, employing fewer than 200 players who make a full-time living from the game, plus a similar number of coaches, physios, administrative and other support staff. This is out of an estimated 50,000 registered rugby club members in the country, of whom around 21,000 are active adult players (the figures are higher at junior levels).
It’s a model that has nurtured incredible success in recent years, certainly for the Irish national team. On the back of high-profile Six Nations successes and rising to number 1 in the world rankings, the Irish Rugby Football Union (IRFU) has enjoyed record revenues, topping €100m in the 2021/22 season.
As a sporting body, the IRFU would no doubt point to this as clear evidence of the success of its financial model, not to mention its strategic and operational approaches. But it’s never easy to balance the needs of a money-spinning professional game with nurturing the amateur, volunteer-led levels that are required to sustain it.
Straddling the divide
National bodies like the IRFU have to have their feet in both halves/worlds, the commercially lucrative world of professional sport, and the funding-dependent world of grassroots sport. 80% of the IRFU’s revenue comes from TV rights, sponsorships, ticket sales and merchandising associated with the Ireland men’s national team, a phenomenal commercial success.
But the IRFU is also obliged to distribute around 40% of its revenue to the provincial clubs and boards, which then filter that money into the grassroots game. These clubs, too, are straddling the professional-amateur divide, with their own elite level teams and associated commercial interests, but responsibility for supporting the amateur game beneath them on a local level.
This dual commercial-community operational paradigm is almost unique to the world of sport. It means that clubs and associations are often navigating two different financial worlds, too. On the one hand, a professional club operating as a limited company can handle its financial affairs like any other businesses, with the same obligations in terms o tax, reporting etc. At the amateur level, unincorporated associations have even more freedom in how they manage financial affairs through private membership fees or voluntary donations – they by definition have no legal status and therefore no further obligations.
Yet as soon as distribution of/access to funding becomes involved, whether it’s through the structures of a specific sport or from public sources, the rules become very different. Financial arrangements come under stricter scrutiny. Transparency and strong governance become critical. It’s not unusual for sporting bodies, perhaps slipping into the role of a commercial entity a little too far, to fall foul of this extra scrutiny. The story of the Football Association of Ireland (FAI) having its funding from Sports Ireland suspended over the remuneration of CEO Jonathan Hill springs to mind.
All of which is to say, financial management in sport is a complex business, a unique blend of commercial and community-focused, corporate big money and voluntary sector, public and private. It takes specialist knowledge to understand and navigate funding structures and commercial opportunities that differ sport by sport – and ultimately make sure the complex flows of revenue and funding work for the many AND the few.
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