In 2013, the Sport and Recreation Alliance in the UK released a report exploring the financial health and other issues facing Grassroot Sport Clubs (GSCs) in the UK. The report is called the Sports Club Survey, 2011. Data was gathered from sports clubs in survey form, covering many aspects of the operations of GSCs. An astonishing 63% of sports clubs surveyed were worried about accessing enough funds in the short term. Additionally, 61% of sports clubs surveyed felt that generating enough income was their biggest challenge. A consistent factor throughout this report and subsequent reports has been the inability of GSCs to raise enough revenue through sponsorship to avoid financial hardship.
Policy and structural reform over the last 40 years within the UK government has changed the role that sport plays in society. During this time, the UK government began to politicise not only which sports organisations should receive funding from the lottery fund but also how it should be spent (Doherty & Murray, 2007). For example, the government, in selecting a small number of Olympic sports to fund, has made the financial viability, stability and sustainability for unfunded Olympic sports and other community based sports clubs increasingly more difficult. The difficulties for the sports industry arise due to the continued pressure to be financially and commercially viable, and at the same time, continue to provide communities with the opportunities for mass participation not only in the sport activities, but also opportunities to be active in the community and adopt a healthy approach to sport and physical activity.
The Sport and Recreation Alliance Report “What’s the Score?” (2015) which sampled sport clubs within the UK, was released in 2018. Despite using a smaller sample of sport clubs from England and Wales than the previous report, almost 50% of the clubs sampled identified financial stability as a big problem (Sport & Recreation Alliance, 2015) which impacts the financial longevity of the sport club.
The main purpose of this study is to explore possible funding avenues available to GSCs. In particular, which factors are most salient when considering the sponsorship opportunities between a Grassroots Sport Club (GSC) and Small and Medium-Sized Enterprise (SMEs) to effectively create a working relationship and a mutually beneficial financial partnership. By understanding these factors, GSCs can become better prepared to access the resources of SMEs and broker new financial partnerships which could help with their longevity. There are still many gaps in our understanding of the deep relationship between business and their investment in sport organisations.
Financial instability within a sport club, can be detrimental to the longevity and long term viability of its operation. The effect of financial instability is the creation of uncertainty within the larger community for athletes, volunteers, officials and supporters who participate and give their time regularly. This leads to disappointment for all involved and potentially losing a powerful community asset. This thesis aims to contribute to the current literature as GSCs and smaller SMEs as they are under researched areas in terms of sponsorships at community level, and to deliver new insights in to sport sponsorship decision making within small business. It also aims to provide new insights to GCSs about how they can tap into possible sources of funds.
Personal Interest
I was born in rural Victoria, Australia, where for the most part, sport provides a vehicle for those in the community to socialise and build friendships, commiserate, celebrate and share lifelong experiences. Most of these experiences occur in the setting of a sports club. My introduction to a GSC was when I was five years old and I participated regularly in weekend junior athletics competitions. There was no official training during the week. Members just turned up on the Saturday morning for a few hours to participate. I really enjoyed the challenge of competition and the sporting activities, but most of all I liked meeting new people from neighbouring towns. This introduction to club sport provided me a great insight into the social aspects of sport, building networks and developing resilience and skills.
What I was less aware of was that financial issues are something many clubs face. GSCs generally lack funding because either it is tied to winning, losing members or being unable to utilise local resources. GSCs in local communities who are unable to embrace the wider community for resources will decline to the point of extinction. This is the worst case for everyone involved given the many benefits GSCs can provide.
I have called the UK home for over ten years. In London, I took a coaching course in Athletics and volunteered at an athletics club as an assistant coach to two groups of young athletes. Having attended the GSC’s Annual General Meeting, it became clear that the club was no longer receiving financial support from the local municipality for the maintenance and refurbishment of the facilities. The club was required to pay for and undertake costly infrastructure work in order to continue providing the community with opportunities to develop athletic skills and training sessions in the future. Without the infrastructure work being done, the club risked the facility being downgraded and becoming ineligible to host regional and county championships. Therefore, any potential revenue that could have been generated is lost. Without this income, the consensus at the AGM was the club would suffer financial hardship in the foreseeable future.
Therefore, my thesis, was borne from the need for clubs to become financially independent from or minimise their reliance on government funding, as local government assistance is no longer guaranteed. This thesis explores how a GSC can potentially gain financial stability and long term sustainability.