Utility of financial information in managing football business model: case from Central Eastern Europe.

Abstract

: The study provides description of football clubs in the context of performance management theory. The research is based on a concept which can explain contemporary role of sports organization as a special business entity. The economic effectiveness of this business branch is not easy to define, as one must first identify the factors that influence it. First of all it is necessarily to understand business models of sports clubs. In the study it is assumed, that sports business operates differently between continental Europe, Asia, Anglo-Saxon countries and other world regions as literature review confirmed. There is a gap in literature studies. The business models are elaborated widely in theoretical and practical way, but concern mostly on profit-orientated companies. As this research confirmed the football clubs in Poland are not profit-orientated. The expenditure of sport clubs raises questions about its operations and effectiveness. So that the aim of the paper is to assess the utility of financial information in managing a football business model. Mostly qualitative research approach was applied in order to understand financials of football clubs. Managerial perspective on football business was included by complementary interview with a manager. The research is based on football clubs from the highest football league in Poland. The financial analysis of football clubs included analysis of income statement and a balance sheet information. The analysis outcomes reconfirmed that football is not a profit orientated business. It determines different attitudes towards management information.The study let us assume that huge part of financial information has low utility to assess football business model. Moreover elaborated interview results concluded that football business model is more social benefit orientated in Poland than profit orientated. methods based on value added and making use of WACC (weighted average cost of capital). This study investigates how many cases have a positive value of calculated WACC without estimation of market value of equity (companies are privately held). A calculation has proven that 6 out of 11 examined clubs show a positive WACC (equity calculated based on book value), the