As with every other business, the sports industry requires funding in order to enhance its growth and ensure its survival. In the past, the financial aspect of the business was a task that was managed by the marketing manager. Nowadays the overall responsibility of the financial status of the business is operated by the finance manager. The sports businesses also need to raise funds to increase their cash flow levels. They can do this through the stock exchange, mergers, acquisitions, promotions, athletes’ transfers etc.
There have been cases where some clubs or unions have spent more than they can afford, which in turn leads to massive debt. In addition, there has been a noticeable drop in ticket sales and with no forthcoming funding from governments the interested parties have to look for ways to reduce their losses. They may choose to reducing players’ wages or not renewing their contracts. It can be quite difficult to get financing for sports and additionally keeping fans interested in the sport.
If sports organizations want to survive in this tough market, they have to come up with inventive ways. With careful financial planning and fresh new ideas like stadium construction, debt refinancing and revolving loans are a sure way for the continuous survival of any sports club.
When looking for sports finance, there are aspects like competition, environmental trends and demands fluctuation that play a vital role. Some see this as an opportunity to invest because if you invest when share prices are low you have the advantage of gaining more. The sports business can be a profitable venture if there is proper and coordinated management which strives for excellence.
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Source by Mercy Maranga