Financial Health of Middle-Sized Finnish Football Clubs
Salo, Rasmus (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024051411635
https://urn.fi/URN:NBN:fi:amk-2024051411635
Tiivistelmä
This thesis examines the financial condition of mid-sized Finnish football clubs, a field often over-whelmed by financial difficulties. Smaller clubs, in particular, face heightened vulnerability due to the absence of investors capable of covering their operational costs. The research aims to identify the causes of financial challenges threatening many Finnish football clubs, evaluate the stability of their financial status, and propose potential ways for improvement.
The research question is supported by investigative questions relating to financial management practices, key performance indicators, and risk mitigation strategies. Furthermore, this thesis delves into the financial landscape of Finnish football within an international context.
The theoretical framework of this research consists of two chapters: financial and football con-cepts. The financial aspect encompasses an exploration of financial statements and financial man-agement techniques, while the football-centric segment introduces the Finnish league system alongside the concept of league licensing.
An analysis of the financial statements of eight Finnish football clubs competing in the second or third tier divisions during the summer of 2022 forms the basis of this study. Employing financial ratios, an examination of the financial statements produces insights into the financial health of these clubs. Additionally, interviews were conducted with four financial representatives from the clubs to collect their perspectives. The interview queries were aligned with the investigative ques-tions. It is relevant to note that both the clubs and interviewees remain anonymized throughout this thesis. The clubs did not work as the commissioning company of this thesis.
The findings reveal a prevailing lack of profitability among the majority of clubs in 2022, with many relying heavily on debt financing. While these clubs demonstrate efficiency in revenue generation relative to their assets, substantial expenses hinder their capacity to retain earnings. Insights from the interviews suggest that the depth of key performance indicators and risk management strate-gies employed by clubs is dependent upon their expansion plans, with those holding broader ambi-tions exhibiting a tendency to utilize more of such methods.
Furthermore, the interviews shed light on the necessity for football in Finland to enhance its finan-cial competitiveness against its Nordic counterparts. Such an advancement would need an eleva-tion in the stature of football within Finland, leading to increased player participation and financial inflows. Consequently, this cycle would not only improve on-field performances but also foster greater financial prosperity within the Finnish football ecosystem.
The research question is supported by investigative questions relating to financial management practices, key performance indicators, and risk mitigation strategies. Furthermore, this thesis delves into the financial landscape of Finnish football within an international context.
The theoretical framework of this research consists of two chapters: financial and football con-cepts. The financial aspect encompasses an exploration of financial statements and financial man-agement techniques, while the football-centric segment introduces the Finnish league system alongside the concept of league licensing.
An analysis of the financial statements of eight Finnish football clubs competing in the second or third tier divisions during the summer of 2022 forms the basis of this study. Employing financial ratios, an examination of the financial statements produces insights into the financial health of these clubs. Additionally, interviews were conducted with four financial representatives from the clubs to collect their perspectives. The interview queries were aligned with the investigative ques-tions. It is relevant to note that both the clubs and interviewees remain anonymized throughout this thesis. The clubs did not work as the commissioning company of this thesis.
The findings reveal a prevailing lack of profitability among the majority of clubs in 2022, with many relying heavily on debt financing. While these clubs demonstrate efficiency in revenue generation relative to their assets, substantial expenses hinder their capacity to retain earnings. Insights from the interviews suggest that the depth of key performance indicators and risk management strate-gies employed by clubs is dependent upon their expansion plans, with those holding broader ambi-tions exhibiting a tendency to utilize more of such methods.
Furthermore, the interviews shed light on the necessity for football in Finland to enhance its finan-cial competitiveness against its Nordic counterparts. Such an advancement would need an eleva-tion in the stature of football within Finland, leading to increased player participation and financial inflows. Consequently, this cycle would not only improve on-field performances but also foster greater financial prosperity within the Finnish football ecosystem.