In the first two blogs of this series we looked at how sporting clubs have used diversification strategies to achieve commercial success and what innovative technologies they have invested in to improve their bottom-line. In this third and final blog of the series we will explore how sporting organisations can use savvy spending techniques to ensure the maximum return from their investments.
Running a sports club or organisation is big business but a business is exactly what it is, and despite how a sports club may perform on the pitch, off the pitch many sporting organisations face the same fundamental challenges that are faced by all organisations.
Investing wisely
Spending money in the right areas can help secure the financial future for sports clubs, and although sporting organisations are known for investing heavily in order to improve their on the pitch performance, it is just as important that they deploy savvy spending techniques when managing their back-office operations.
Many sports clubs are investing in a variety of back-end solutions to improve functionality within their financial infrastructure. One common solution that sports clubs are investing in is electronic invoicing (eInvoicing), an automated invoice processing solution that eliminates manually processing invoices and can yield savings of 60-80 per cent. With a recent report highlighting that paper invoices cost 74% to 89% more to process compared to eInvoices, its no surprise that sports organisations are switching to this method when sending and receiving invoices.
One sporting organisation that has adopted this solution is horseracing giant, The Jockey Club. Having to manually process over 40,000 purchase invoices per year using a paper-based system was taking its toll on the club. In order to gain greater control of their invoicing process The Jockey Club installed an eInvoicing system which has seen the time staff spend processing invoices reduced by 75%.
The Jockey Club are not the only ones that are spending savvy when it comes to back-office functions. Experiencing exponential growth, rugby club Leeds Rhinos decided to completely upgrade their IT system, which included integrating core financial modules that would allow them to enhance their reporting capabilities and streamline their accounting workload. As a result, the club can now benefit from detailed matchday reporting, which allows them to analyse and compare spend / revenue at fixtures across different seasons.
Eliminate the risk
But savvy spending doesn’t just happen off the pitch. In 2014, Cardiff Blues Rugby Club invested in a brand new artificial pitch, which made a huge difference to its finances. The 3G artificial pitch is the first of its kind in the UK and offers the perfect playing surface all year round. Although the new addition cost Cardiff Blues around £400,000, the team has been able to see a return on its investment as it can now rent the pitch out for events and conferences and also to the local community.
Another club that has made improvements to its ground in an effort to bump up its income is Chelsea Football Club. Knowing that its Stamford Bridge ground was full to capacity, it knew that it could not generate any more matchday income using the venue as it was. To combat this, Chelsea FC has announced plans to utilise the decking over the railway lines to the north and east of the ground to create an additional 20,000 seats. The move will make Chelsea’s ground the third largest ground in the Premier League and will no doubt have a positive impact on its annual profits.
Whether it’s making improvements behind the scenes to back-end operations or investing in on-the-pitch facilities to drive income revenue, in order to secure their financial future sporting clubs need to invest in the right areas to ensure the maximum success, and return on their investment.
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