Strategic Sport Management: Sustainability of Sports Clubs (Contributions to Management Science) 3030667324, 9783030667320

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Contributions to Management Science

Michal Varmus Milan Kubina Roman Adámik

Strategic Sport Management Sustainability of Sports Clubs

Contributions to Management Science

The series Contributions to Management Science contains research publications in all fields of business and management science. These publications are primarily monographs and multiple author works containing new research results, and also feature selected conference-based publications are also considered. The focus of the series lies in presenting the development of latest theoretical and empirical research across different viewpoints. This book series is indexed in Scopus.

More information about this series at http://www.springer.com/series/1505

Michal Varmus • Milan Kubina • Roman Adámik

Strategic Sport Management Sustainability of Sports Clubs

Michal Varmus Faculty of Management Science and Informatics University of Žilina Žilina, Slovakia

Milan Kubina Faculty of Management Science and Informatics University of Žilina Žilina, Slovakia

Roman Adámik Faculty of Management Science and Informatics University of Žilina Žilina, Slovakia

ISSN 1431-1941 ISSN 2197-716X (electronic) Contributions to Management Science ISBN 978-3-030-66732-0 ISBN 978-3-030-66733-7 (eBook) https://doi.org/10.1007/978-3-030-66733-7 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Contents

1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

2

From Management to Sport Management . . . . . . . . . . . . . . . . . . 2.1 Management Development and Interpretation . . . . . . . . . . . . . . 2.2 Sports Management and Specifics . . . . . . . . . . . . . . . . . . . . . . 2.3 Manager as a Key Person in a Sports Club . . . . . . . . . . . . . . . . 2.4 Strategic Management Process and Application to Sports Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.1 Setting a Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.2 Current State Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.3 Strategy Creation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.4 Strategy Implementation . . . . . . . . . . . . . . . . . . . . . . . 2.4.5 Strategy Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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3 4 9 16

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22 27 27 29 30 31 31

Sport and Sport Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Definition of Sport and Sports Industry . . . . . . . . . . . . . . . . . . 3.2 Individual and Team Sport . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Three Sports Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.1 Public Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.2 Non-profit/Voluntary Sector . . . . . . . . . . . . . . . . . . . . . 3.3.3 Professional/Commercial Sector . . . . . . . . . . . . . . . . . . 3.3.4 Case Study: Public Sector—Small Country Sports Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.5 Case Study: Non-profit Sector—Soccer and Politics . . . . 3.3.6 Case Study: Commercial Sector—NHL Expansion . . . . 3.4 Sport Culture Role and Development . . . . . . . . . . . . . . . . . . . . 3.4.1 Case Study: Foreign Players Impact on Success in Soccer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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35 35 39 40 40 43 45

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47 51 53 54

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vi

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Contents

3.5

Sports Organizations Funding . . . . . . . . . . . . . . . . . . . . . . . . . 3.5.1 Broadcasting Rights and TV Contracts . . . . . . . . . . . . . 3.6 Sport Cooperation and Management . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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68 72 77 81

Sustainable Management of Sports Organizations . . . . . . . . . . . . 4.1 Key Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.1 Stakeholder Involvement Model Recommendations . . . . 4.1.2 Case Study: Sports Clubs–Stakeholder Relations in the USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Setting Objectives for Sustainability . . . . . . . . . . . . . . . . . . . . 4.3 Strategic Management Process and Bottlenecks . . . . . . . . . . . . 4.3.1 Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.2 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.3 Goal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.4 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.5 Assessment and Control . . . . . . . . . . . . . . . . . . . . . . . . 4.3.6 Case Study: Sports Clubs Demise Causes . . . . . . . . . . . 4.3.7 Case Study: Startup Club Strategic Management . . . . . . 4.4 Strategic Management Process Principles . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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87 87 91

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92 105 106 108 110 113 115 118 119 129 135 137

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 1

Introduction

Exercise culture and a healthy lifestyle are the current leading trends that are becoming part of the daily lives of an increasing number of people. These trends can also be observed from the enormous growth of the number of personal trainers, nutrition counselors, and mental coaches, as well as health and exercise mobile applications. The official sports policy of almost all governments is aimed at promoting mass sports and exercise in general. Opposite to the exercise culture associated with a healthy lifestyle stands professional sport. It contains a relatively small group of professional athletes who get support from teams of specialists in various fields and whose performances and results generate billions in revenue, transforming the sport into a regular business. For many years, the sport has evolved from recreational activities connected with a healthy lifestyle or entertainment to a full-fledged global industry with billions in revenue under the control of professional managers. The most significant changes associated with globalization and technological progress have affected sport since the transition to the new millennium. Even in the age of modernization, automation, and a single large global market, the sport continues to maintain its specifics forcing managers to deploy management techniques outside the usual scope of management theories. Sports organizations are essential for the sports sector creating value for stakeholders. When it comes to sports organizations, most of the general public, who do not watch sports regularly, understand by that term the world’s most famous soccer clubs Real Madrid or Manchester United or hockey club New York Rangers or basketball club Los Angeles Lakers. You can already see their strength and position in the global market, reaching beyond the ranks of sports fans. Unlike people without a relationship to sports, a sports fan often favors their favorite club, regardless of the type of the sport itself. However, it also includes various sports associations, leagues, manufacturers of sportswear and accessories, media companies, operators of sports arenas and facilities, betting offices, and many other sports-related organizations.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 M. Varmus et al., Strategic Sport Management, Contributions to Management Science, https://doi.org/10.1007/978-3-030-66733-7_1

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Chapter 2

From Management to Sport Management

According to the English etymological dictionary, the term sport originated around the thirteenth century by the abbreviated words “disport” (old English) or “desport” (old French) standing for fun, joy, pleasure, play, or flirting. Certain elements of sports management were already used during the first ancient Olympic Games in 776 BC. One can say, in an exaggerated sense, that sports management was coined even before the word sport (Masteralexis et al. 2008). Currently, sport is defined in the Oxford and Cambridge dictionaries as an activity involving physical exertion, where individuals or squads compete against each other for entertainment, health, and/or money according to fixed rules. Although Klein (2016) agrees with the general definitions, they focus on the use of the term “physical activity.” Games and activities exist that do have a physical component, such as chess. The author also mentions the boundaries of what sport is and what sport is not. People could think that they knew exactly what sport is until eating and running down the hill competitions appeared. Although the beginnings of management as a science date back to the fifteenth century, sports and sports management as a science began to be a widespread phenomenon only at the beginning of the twentieth century. It was mainly created by educational institutions (universities) that decided to train people managing their sports organizations. The University of Wisconsin–Madison has held the first course to improve the organization of athletic events. Research in sport has gradually diversified, expanding both amateur and professional sports. The boom in the sports industry has also ignited the development of sports management. The commercialization of the sports environment has increased the need for better managers in sports organizations, which has resulted in subsequent developments in the field of sports management research (History of Sports Management 2018).

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 M. Varmus et al., Strategic Sport Management, Contributions to Management Science, https://doi.org/10.1007/978-3-030-66733-7_2

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2.1

From Management to Sport Management

Management Development and Interpretation

The evolution of management theory in the last century is essentially a history of the constant shifting of leaders’ roles within organizations (Bosman 2009). Although the development of the ability to manage organizations and people can be sought in very ancient history, the theory itself began to develop at the turn of the twentieth century. The gradual development of management is shown in Fig. 2.1. The development of management theory went through different thoughts and phases. Among the two earliest major phases were scientific management and human relationship management (behavior approach), also understood as classical theories of management. It is also important to mention the stages of development of an administrative and quantitative approach, systems theory, and contingent management approach. It should be emphasized, however, that although each theory or approach prioritized other limited aspects of its view on the issue, all approaches pursued the same goal—to improve the efficiency of an organization. Frederick Taylor is considered one of the first founders of management theory. Their publication The Principles of Scientific Management laid down the foundations for the scientific management of “Taylorism” in the early twentieth century (Wood and Wood 2002). Taylor believed that workers could not do the same thing differently, but that there must be one best way to do the job effectively. Another important stage in the development of management was the management of human relations, which happened between 1927 and 1932 when Elton Mayo examined the effect of motivation on employees. Mayo concluded that workplace social factors are very important, and job satisfaction and outcome depend on cooperation and perception of value rather than on material working conditions (Mahoney and Baker 2002). An important proponent of this idea was Mary Parke Follet, who worked as a consultant in the 1920s and believed that Organizing: best structure

Leading: roles and styles

Controling and work environment

Planing: better productivity

Paradigm shift

Other modern approaches Contingency approach Systems theory Quantitative management theory Behavioral theory of management Theory of administrative management Theory of scientific management

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

Fig. 2.1 Development of the main theories of management. Source: modified according to Robbins and Coulter (2004), DuBrin (2010), Lugtu (2016)

2.1 Management Development and Interpretation

5

Planning

Organizing

Leading

Controlling

Defining goals, strategies, partial plans and coordinating activities

Determining what needs to be done and how to do it

Instructing, motivating and conflict solving

Monitoring of all activities to be targeted to achieve what was planned

Leading to achieve goals of the organization

Fig. 2.2 Management functions. Source: Robbins and Coulter (2004)

effective motivational management is an integral part of cooperation and partnership. They believed that convincing people was better than hierarchical control or competition (Mousli 2002). Among the main advocates and theorists of the administrative approach was Henri Fayol, who in the early twentieth century described management as a universally effective set of functions—planning, organizing, commanding, coordinating, and controlling. This approach was later reduced to four basic functions that are still used in scientific literature today (Fig. 2.2). Proponents of the administrative approach looked at the organizations as a whole and searched for ways to make it more efficient. Advocates of the quantitative approach also called operational research or management science favored the use of quantitative procedures to improve decision-making processes (Robbins and Coulter 2004). This approach was developed amid the Second World War, and the managerial activities focused on the use of statistics, optimization models, and computer simulations. Systems theory views the organization as an interconnected system. If one part of the system changes, the other parts will be adjusted automatically. The theory also assumes that the organization’s environment has a significant impact on its efficiency. Two other influential concepts in terms of systems are entropy and synergy. Entropy is a tendency of a system to slow down or to cease entirely without new inputs from its surroundings. Synergy means that the whole is more than the sum of its parts. It is believed that when different parts of an organization come and work together, they can produce much more than if they worked independently of each other (DuBrin 2010). The contingency approach is based on the principle that no best-unified approach to managing people or work exists in any situation. According to DuBrin (2010), this idea forces managers to study individual and situational differences before deciding on the next step. Subsequently, other approaches appeared that reflected their time often based on previous theories and approaches, such as the empirical approach. The era of informatization and information technologies has been key in the development of management theory when the preferred form of communication and the use of information had changed. As follows from the above, management can be defined in different tables (Table 2.1), but the most common elements of these definitions are (a) goals to be achieved with limited (b) resources and with and through (c) people (Chelladurai

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Table 2.1 Definitions of management Author(s) Chung (1968) Donnelly et al. (1978)

Pearce and Robinson (1989) Drucker (1985)

Koontz and Wiehrih (1990)

Definition Management is the process of planning, organizing, leading, and controlling organizational activities aimed at achieving organizational goals Management is the process of coordinating the activities of a team of workers implemented through a single person or a group of people to achieve certain results that cannot be achieved through the individualistic approach Management is the process of optimizing the use of human, material, and financial resources to achieve organizational goals Management should not only be taken for the management itself but also for the ability to manage. Management expertise is based on the ability to plan, organize, motivate, and lead people and coordinate, communicate, and control to lead the company to success Management is the process of creating and maintaining a certain environment in which individuals work together in teams and achieve goals effectively

1999). The goal of managerial work and the role of managers is to organize employees to do what managers request in an efficient manner (Masteralexis et al. 2008). As mentioned above, as time and technology evolved, not only the understanding of management theory but also the role of managers changed. Due to the gradual development of the environment, society, and market, it was found that general management theories are no longer sufficient. Organizations operating in various sectors (e.g., manufacturing, healthcare, public administration, transport, and sports) to provide for their competitiveness have started to address different management approaches (strategic, innovative, cooperative, etc.) throughout the organization, but also individual departments (marketing, planning, finance, etc.). It follows that it was necessary to specify the theoretical meaning of management in different areas, categories, or specializations. Figure 2.3 shows a possible meaning of individual management application areas. Although these areas are interconnected and complementary, they need to be addressed separately in terms of theoretical background. Focus-based management and management approaches have evolved in line with the current needs of an organization and a competitive environment. The focus itself is constantly being researched and updated with the latest knowledge. These can include, inter alia, effective and efficient management of relations in terms of cooperation between independent organizations or individuals and their competitiveness—cooperative management (Soviar et al. 2014), or dedicated specialized analytical and management activities necessary for setting and achieving the goals of different organizational units in the long run and creating the necessary conditions thereof—strategic management (Hittmár and Jankal 2013). It is also necessary to draw attention to the use of innovative approaches in management. Innovation management, management of innovative processes, or the issue of creating and

2.1 Management Development and Interpretation

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Areas of management application

Focus-based management

Category-based management

Specialization-based management

Personality management

Innovation management Cooperation management Project management Strategic management ...

Marketing management Human resources management Financial management Product management ...

Regional management Transport management Sports management Public administration management ...

Time management Stress management ...

Fig. 2.3 Areas of management application

implementing innovation strategies is gaining importance not only in a wide range of businesses but also in academic fields. Category-based management means the division of a company by its departments based on their main function, such as production, human resources, or product portfolio management. This division has also brought considerable importance in the transfer of competencies to managers for specific results in the field. Tomáš Baťa was also a well-known pioneer in the issue of competencies and responsibilities. Management specialization areas are characterized mainly by different relationships or environments. As the real application has shown us, together with the management development theories above (especially systems theory), knowledge of an organization, its environment, and external and internal relationships can be key to success. If it is assumed that no living entity can exist in isolation regardless of the environment, a business entity—notwithstanding whether it is of a business, industrial, logistics, consulting, or marketing nature—is surrounded by an environment that in a way (positive or negative) affects this entity and influences its behavior (Vodák et al. 2016). Two theoretical schools have come up with a diametrically different view of the environment influence (Vodák et al. 2016): – The school of environmental determinism believes that the company’s activities influence and at the same time are influenced by competition in the given industry. The company cannot thus influence its environment. Success is primarily determined by how the company is capable of adapting to its environment. Environmental determinism has its roots in Darwin’s theory of natural selection. This means that both in nature and in a given environment, only those who can adapt successfully will survive.

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– The school of organizational determinism, together with some sociologists, economists, and experts in the field of strategic management and marketing, has different attitudes toward environmental determinism. They agree with the notion that the success of a company is based on its adaptation to the environment. They emphasize that success is also determined by how well the company can influence the forces of the environment in its favor. A special area of management application is personality management. This area largely uses knowledge from psychology, and it is up to each manager to consider how to use and apply the latest trends in this area to be more effective in their activities. The interconnection of individual areas can be understood in such a way that, for instance, within the sports management, different management categories are used (product, marketing, etc.), along with, for example, an innovative or cooperative approach. Just as the task of the management of industrial enterprises is to constantly improve their results, meet the demands of individual stakeholders, and generally improve the efficiency of the organization, it is also the case in sports organizations. Some of them realized the need for a different way of management when with the increasing level of investment in sport, the demands for higher professionalism of management in the sports sector arose; therefore, they started to act in this area. This was most evident in the growing development of information technology, as the sport began to transcend the limits of understanding of that time and took on the features of an industry that has the potential to gain mass appeal. Another important factor was the change in people’s lifestyle behavior. This created additional opportunities for sports organizations and their products. Gradually, sports organizations began to adapt to this trend, and applied management and marketing tools and skills to gain renown on the market; however, it was found that knowledge of the sports industry is essential. Entities operating in the sports industry behave differently than in other industries due to the differences in culture, values, and traditions, and therefore, it is necessary to address this issue as well. This is also demonstrated by the different approaches in the world—in the USA or Europe. The environment itself is also developing, and the sports industry, as well as the sport itself, has undergone a dynamic change in recent times driving the need to address this management issue in the sports industry, i.e., companies operating in the sports industry. As the environment has a significant impact on the management and efficiency of an organization, the following chapters deal with sports, sports industry, and the sports environment, in which sports organizations operate.

2.2 Sports Management and Specifics

2.2

9

Sports Management and Specifics

Whether it is a local sports club or an international federation, the management process is key to its sustainability. Sports management has parallels with the classical theory of business management, but it also contains specific features that are typical only for the sports industry and that must be taken into account to ensure sustainable management. To operate effectively and efficiently, any sport organization needs to adapt its structure and management processes to meet the demands of its contextual situation (Slack et al. 2020). Two historical approaches to managing sports organizations exist. The essence of the first is the management of sports organizations as classical enterprises (business entities), where the features of sport such as emotions, ambiguous goals, and limited resources are not relevant for the choice of management methods and approaches and where the same methods are applied as in classical management theory. The second approach sees sport to be unique, and not all managerial approaches from the business environment can be applied to it, since the sport is based on community and social activities and not on commercial entrepreneurship (Stewart and Smith 1999). As the view of sport as a business comes to the fore, managers must maintain a balance between financial and sports results (Wilson 1990). The subsequent focus on rationalization and productivity has forced sport managers to transform human (especially players) and material resources into economic equations, in which division and efficiency of work, regulation, rational work practices, and management control become key issues (Brohm 1978; Rigauer 1981; Stewart 1989). The notion that sport is not the same as the profitable commercial sector was addressed in Nice in 2000 in the Declaration on Sport (European Council 2000), which introduced the term sport specifics about the specific characteristics of sport. At the same time, it has become clear that sport is not only an appropriate or informal way to spend leisure time but is also an important cultural institution that brings significant benefits to the diverse spread of communities. The Declaration insisted that the European Community (the forerunner of today’s EU) should—despite the absence of direct power in this area—take into account social, educational, and cultural aspects that make sport unique. Later, the White Paper on Sport (Commission of the European Communities 2007) confirmed the special position of sport providing information on the specificity of European sport, which can be viewed from two angles. The first view is in the form of the specificity of sporting activities and rules, including provisions for maintaining a competitive balance and uncertainty of outcome. The second view represents the specificity of sports in their hierarchical structure and top bodies. As early as 1996, Slack emphasized the important connection between the issues and theories of modern management and sports management—not only to strengthen the credibility of management in sport but also to use sport as a testing ground for the wider development of management theory. Subsequently, Slack (1998) proved that sports management was distinguished from general management

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based on the social value of sport, which is more important than its economic value. Later, authors defined sport as a unique cultural institution operating in a commercial environment (Hess and Stewart 1998; Mangan and Nauright 2000; Hess et al. 2008). Although many managers are aware of the benefits of using the right management techniques in the management of sports organizations, they are often unaware of the different characteristics between sport and business (Smith 1998). Stewart and Smith (1999) summarized the characteristics that distinguish sports management from classical management. 1. Irrational passions: Sport is symbolic of its strong emotional intensity, which is almost nonexistent in other industries. Emotion and passion often suppress logical and economic behavior. An example is the growing popularity of cycling in Slovakia. After the successes of Peter Velits (in Vuelta 2010—third place) and Peter Sagan especially (three-time world champion, seven-time winner of the points classification in the Tour de France by 2020), the interest in cycling in the country is growing, and from being niche it is becoming one of the most popular sports in the country. Already in 2013, four out of five respondents in the GfK Slovakia survey stated that they take notice of results in professional cycling at least occasionally. In 2016, cycling became the most popular recreational sport for children even before soccer, swimming, or hiking in a survey made by the same agency. In the same year, in the survey of the Ministry of Education, Youth, and Sports of the Slovak Republic, cycling is the third most popular sport (6.96%) for Slovaks behind hockey (9.98%) and soccer (8.83%) (TASR 2016). 2. Profit or win: The most fundamental difference between sports organizations and the private sector is the way performance is measured. While in the private sector, the main goal is to make a profit, in sports, the main indicator of performance is sports results (ranking, winnings, times, etc.). One of the most popular sports clubs in the world is the record 20-time English champion Manchester United, which is at the same time the most indebted club in Europe (–€536 mil) (Bartlett 2017). 3. Competitive balance: Excessive dominance in a league or competition can be counterproductive for clubs and athletes. Recurring winnings of the same or a small group of teams/athletes do not maximize the profit for the competition as a whole. The interests of individuals are therefore not the interests of the entire competition, which is reflected in the popularity with the audience and in the proceeds from sponsorship. Some competitions, such as the NHL (USA hockey league), have introduced a salary cap that represents the upper limit of the club’s player salaries. This ensures a relatively even redistribution of the league’s best players, who naturally have the highest salary expectations, so it is not possible to combine many star players in a single team unless they are willing to reduce their salaries significantly. These rules were introduced in the NHL in the 2005/ 2006 season. Since this season, only one team has managed to triumph in the league twice in a row—the Pittsburgh Penguins in the 2015/2016 and 2016/ 2017 seasons (nhl.com 2019).

2.2 Sports Management and Specifics

11

4. Variable quality: While in the classical business, products and services have little variability in quality, but rather their consistency and reliability are valued the most, predicting the outcome of sporting events is more complicated. On the other hand, competitions with uncertain predictions spark much more interest than those that have a clear winner upfront. However, huge variability in the quality of a sports product is also a risk. Weather, injuries, excitement, or audience size and behavior affect the overall customer experience. In 1965, the two best boxers of their time, Muhammed Ali and Sonny Liston, met in a boxing match for heavyweight titles. Ali won by knock-out in the first round. After several months of pre-match excitement, whose cheapest tickets cost €25 (current €200 considering inflation), it lasted only a little over 2 min. From another point of view, it is one of the most famous boxing duels of all time. Thus, different visitors could leave with different feelings (Cosgrove 2014). 5. Anti-competition behavior: The existence of rivalry brings advantages in sports, as several strong clubs or athletes from one competition may attract the attention of fans and sponsors. Competing clubs work together to create sports experiences for fans and customers. The marketing activities of home clubs are often aimed at promoting an attractive opponent, which in turn can attract the highest crowd. A similar practice is to offer part of the tickets for the visiting teams even if they were sold out by home fans otherwise. Fans of both clubs take care of the atmosphere together and improve the sport product as a whole. 6. Brand loyalty: Cross elasticity of demand is very low in sport. This is reflected in the low possibility of substitution between individual sports or clubs. Although a fan is dissatisfied with the results, it is unlikely that they will change their preferences. The sequence of sport—club—athlete is also maintained, i.e., sport comes first, followed by the club, and only after a specific athlete playing for that club. Since 1994, the Spanish Euskaltel–Euskadi road cycling team has been a symbol of Basque cycling. The team was made up mostly of Basque cyclists and was largely sponsored by the local government. The characteristic orange color represented the region and supported the pride of the Basques. The team ended racing in 2013. In their research on fan reactions, Delia (2017) found an overall reduction in Basques’ interest in cycling after their local team left professional cycling. Another Spanish Movistar Team also competed in the most prestigious UCI (International Cycling Union) races. 7. Identification and imitation: Fans often identify themselves by wearing jerseys and trinkets of their favorite sports, clubs, or athletes. They also often pass their relationship on to their family. It is not uncommon for parents to dress their young children in the colors of their favorite sports club for matches. During the transfer of Cristiano Ronaldo to Juventus Turin in the summer of 2018, jerseys worth 60 million euros were sold in the first 24 hours alone, of which nine million were collected by the club (Hess 2018). 8. Blind optimism: Sports fans tend to trust their club or national team regardless of current performance and situation. At professional clubs, even after the departure of the biggest stars, fans believe that the quality of their team will be maintained. The same optimism prevails in national teams. People from

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different countries answered a question in a poll from yougov.co.uk (2018) before the 2018 FIFA World Cup in Russia about how far their national team will get. Their optimism was shown by the percentage of how many of them believed that their team would make it to the semifinals. 79% of the Spanish believed that their national team would get it to the semifinals (lost in Round 16), 74% of the German (did not advance from the group—last place), 59% of the French (won the cup), 40% of the Moroccan (did not advance from the group— last place), 33% of the Egyptian (did not advance from the group—last place), and 31% of the Saudi Arabian (did not advance from the group—third place). 9. Technologies: Many examples exist where information technology has given companies a competitive advantage or completely changed the business environment. However, sport is very conservative and slowly evolving in this respect, whether about improving the training process of athletes or the course of sporting events. VAR (Video Assistant Referee—Soccer) technology was first used at the World Championships in Russia in 2018. However, technological progress made this possible 30 years ago, when technology was used in match overseeing (TSZ 2016). 10. Availability: In the private sector, it is possible to increase productivity relatively quickly as a response to increased demand. However, sports clubs have a production curve with low elasticity. Clubs only have a limited number of meetings during a season or other cycles. It is during these events that managers have to attract fans and sponsors, as none of them can be repeated twice. If this fails, the proceeds are lost. This applies not only to club sports but for all kinds of sports and sporting events. The American Football club Green Bay Packers did not advance to the playoffs for the first time in 10 years in the 2017/2018 season (elimination tournament at the end of the regular season for the best teams). According to management, the club’s profit fell by up to 50% compared to the previous seasons (archyworldys.com 2018). After 12 years, Smith et al. (2011) reduced these ten properties to four, but in essence, it was only a generalization—merging of similar properties into individual groups. 1. Sport is a heterogeneous and fleeting experience drowning in the irrational passions of fans, driven by a high-level product and loyalty to the brand, optimism, and surrogate identification. 2. Sport prioritizes victory over financial gain. 3. Sport is an entity of varying quality, which has an impact on the management of evenness and anti-competitive behavior. 4. Sport must have a fixed schedule of resources. Foster et al. (2006) compared the specifics of professional sports and the for-profit business sector. They were looking for common areas, but also areas where these industries differ. They concluded that sport and business share a similar interest in value and branding, financing new revenue streams, product innovation, and market expansion, but the sport is much more concerned with defeating opponents, winning

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Non-sports organization

Professional sports organization

Top management

Middle management

Producers

The best paid employees Neither the best nor the worst paid employees The worst paid employees

Fig. 2.4 Financing and management levels in sports and non-sports organizations. Source: Hoye et al. (2015)

trophies, sharing revenue, and managing demanding players’ (employees) and fans’ (customers) emotions. Another important statement is that athletes are currently deemed commercial assets that serve as a tool to gain fans, sponsors, and media exposure. Therefore, it is no surprise that unlike trade, sports product representatives (i.e., players) earn much more than club managers. As shown in Fig. 2.4, the biggest difference between a non-sport and sports organization is that the producers (suppliers) of the “product” are paid more in the sports sector than the top management of a sports organization. In the business sphere, the opposite is true. A special group in sports are also volunteers who work without any compensation. These facts have a significant impact on the human resources management policy of a sports organization. Management of sports organizations since the beginning of the twenty-first century involves the application of techniques and strategies visible in most modern businesses, governments, and non-profit organizations (Hoye et al. 2015). Sports managers plan strategically, manage large amounts of human resources, deal with billion-dollar broadcasting contracts, manage the well-being of elite athletes, who sometimes earn 100 times the average salary, and work within a highly integrated global network of international sports federations, national sports organizations, governments, agencies, media corporations, sponsors, and community organizations. Thiel and Mayer (2009) also justify the need to define the difference between management in sport and management of sports clubs. They also tend to believe that sports management lacks a definition and consider the specificity of sports

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Table 2.2 Definitions of management in sport Author(s) De Sensi et al. (1988)

Chelladurai (1994) Čáslavová (2009)

Thiel and Mayer (2009)

Definition Management in sport includes any combination of skills related to the planning, organizing, managing, controlling, budgeting, leading, and evaluating within an organization or department that is delivering sports-related products or services or those related to physical activity Management in sport means the coordination of resources, technologies, processes, people, and situational contingencies for effective productivity and exchange of sports services It is the comprehensive management of physical training and sports associations and clubs, and physical training units and cooperatives, which at least partially are built upon business-oriented behavior Management is a recursive process that defines, monitors, and adapts or maintains the structures of a given social system to achieve its individual goals as effectively as possible

management goals as a key characteristic of sports management. The authors’ views on the issue of sports management are given in Table 2.2. According to Taylor’s view on scientific management, Robinson (2010) developed recommendations for sports club managers: 1. Develop a science for every single element of human labor. The club environment includes coaches, administration, and sports, marketing, and finance directors. 2. Scientifically select and then train, teach, and develop employees instead of requiring employees to choose their place of work and learn for themselves. Training opportunities—such as the National Soccer Association of American Coaches (NSCAA)—provide licensed courses for the training of coaches, sports directors, and sports managers. 3. Work sincerely with the staff to ensure that the tasks are fully performed in line with the standards set out in the first paragraph hereof. Club managers look for employees and then work with them to meet the goals—given by their position— such as working to win a competition, developing players, and/or raising funds for the organization. 4. Divide duties and responsibilities evenly between managers and employees so that managers may focus only on their relevant tasks without overloading the employees. Although club managers have a responsibility, they should assign a reasonable part of that responsibility to specific employees. Individual theories of management can also be applied in the field of sports (see Fig. 2.5). Examples are Taylor’s scientific management, Drucker’s management by objectives, and Deming’s total quality management (TQM). The application of Drucker’s management by objectives to the sports industry is best seen in situations where the management of a sports club is forced to cooperate with all club components for setting up objectives at all levels (teams, individuals, coaches, departments, etc.). When setting up objectives, the club’s management must evaluate the real situation about the purchase and sale of players, cooperation

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Scientific

management Taylor

Achieve maximum prosperity for employers and employees

Management by objectives Drucker Management theory

Goals must be realistic, achievable, measurable and motivating

Total quality management (TQM) Deming Management of values of employees and workers to instill a sense of action, consensus, building and cooperation

Fig. 2.5 Management theories applicable to sports clubs. Source: Robinson (2010)

with experts, sponsors and media, and other club-related factors. According to Robinson (2010), the principle of TQM in a sports club can be seen on several levels. If a club manager believes in the principle of TQM, then they believe that the club can constantly improve and even listen to its employees and has learned how to do it. The TQM principle also emphasizes the fact that the product must be delivered as expected. If a club expects to produce elite players, then that is what it must do. Finally, TQM focuses on customers to have a positive product experience. TQM is about promoting quality through the organization so that at the very end all the club members are satisfied. TQM specifics in sport are also reviewed by Rexhepi et al. (2018), who consider imbalance to be the main issue of quality. Organizations tend to concentrate quality into one sector, but not in the entire organization. Sports organizations also face this problem, and managers must implement quality management techniques in each department to improve the entire organization. According to the authors, TQM for sports organizations is quality circles—benchmarking, kaizen, empowerment, and outsourcing. Quality circles are small groups of employees (usually 3–7) who meet regularly voluntarily to identify work-related problems and find and implement solutions. Sports organizations that want to benefit from this approach must use a liberal management style. With an autocratic style, this would not be possible. Benchmarking is a technique whereby management identifies and implements best

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practices from other organizations. Sports organizations not only have to learn from other sports organizations but also organizations in other industries. Kaizen or incremental improvement is a step-based approach to implement a large number of minor improvements throughout the organization daily. All employees of a sports organization should adopt this style. By using the responsibilities assignment technique, it is possible to change the attitude of employees of a sports organization, who are often not motivated to present their ideas or point out a problem. By providing more freedom and responsibility in the decision-making process, greater commitment, increased productivity, more innovation, and an overall increase in quality can be achieved. Another problem of sports organizations is that they make an effort on only one main activity implemented at a high level, which in turn results in a lower level of the remaining activities or services. It is primarily the inability of the sports organization to concentrate on carrying out all activities at the highest level at the same time. Outsourcing means hiring another company to implement certain activities. These are mainly activities for which managers are not willing to spend time or resources. An example is the creation of a website, which is extremely important for sports organizations but also very time-consuming to create.

2.3

Manager as a Key Person in a Sports Club

As a sport system founded on club-based models evolved from amateur to professional clubs, leagues, and associations, there was a lengthy transition period between what is described as “kitchen table” administration and professional management (Shilbury et al. 2020). However, the rapid expansion of the sports industry over the past three decades has increased the demand for trained and educated individuals to manage and promote the increasingly sophisticated operations that characterize the field (Pedersen and Thibault 2019). Study of sports management includes many content areas. Sports management programs are structured in various ways but typically include courses in sports marketing, sports finance, legal aspects of sport, management and organizational behavior of sport, sports governance, sports facility management, event management, sociocultural aspects of sport, and a variety of other topics (Pedersen et al. 2020). Different authors define different types of responsibilities of sports managers. According to Lussier and Kimball (2019) a sports manager is responsible for achieving the sports organization’s objectives through efficient (getting the most out of your available resources) and effective (doing the right thing) use of resources. According to Vitthalrao Pargaonkar (2020), the responsibilities of a sports manager will vary depending on the actual title given to the position and the place of employment. The role of a sports manager can be called as the all-in-one job of a business, marketing, and personal agent. According to Harris (1993), sports managers are involved in diversified managerial responsibilities, such as producing and selling sports services to various clients, whose personal goals range from simply watching sports, through participation in recreational sports, to professional

2.3 Manager as a Key Person in a Sports Club

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Fig. 2.6 Recommendations, advice, and suggestions for managers of sports organizations. Source: Arnold et al. (2012)

sporting. The main role of sports managers is to increase sports performance and/or participate in sports management oversight. Sports managers work mainly in the field of training, sports, promotion, sports marketing, and management of sports organizations (Parks and Quain 1986). Arnold et al. (2012) present the basic topics that managers in sports organizations should address (Fig. 2.6). The research was conducted through interviews with national directors, which they later evaluated. According to them, the basic issues include employing the right people, creating a suitable environment, implementing systems and structures, developing an inclusive culture, and providing sound support. Within each theme, different partial tasks should be addressed. Each topic was assigned a frequency— priorities according to the respondents. Note that a large part of the respondents agreed on the task of minimizing the interference of external influences in creating a suitable environment. According to the authors, the highest priority within the main topics is to provide sound support.

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Indeed, the most suitable personality is sought when hiring a sports organization manager. Within a sports organization, it is necessary to define the criteria and requirements for the individual with care and to make sure that the candidates fully understand their roles and goals. It is also important to reflect on past experiences and results. Of course, the most preferable is having experience in the sports industry. Last but not least, personal, leadership, and managerial experiences are also essential. An optimal environment is key in both the business and sports industries. Sports organization managers should be ambitious and positive. A positive attitude and belief in success are extremely important in sport. For an optimal environment, it is necessary to minimize interfering influences from both internal and external environments. Closely related to this is the issue of stakeholder management, which is laid out in the following chapters hereof. When implementing the system and structure, it is important to set clear rules and sourcing of funding, and also to minimize administration. It is necessary to monitor new trends constantly, and thus creating opportunities for stakeholders from the ranks of managers, employees, coaches, and players for personal as well as professional development. As mentioned above, culture has a significant impact on sports management, notwithstanding whether it regards culture from the internal or external environment. As part of the development of an inclusive culture, according to the authors, it is important to pay attention to the integration of the team, i.e., to increase “ethos” and to set rules. It is necessary to formalize information links, set rules of communication, constantly raise awareness of what is wanted to be achieved, as well as demonstrate the respect and values that are essential to a sports organization. One of the key factors is the provision of good support. Within this support, regardless of whether it is monetary or non-monetary, it is necessary to understand the time-consuming aspect of achieving goals in the sport. It is a long and demanding process that comes with losses and victories, requiring a high degree of patience, enthusiasm, sensitivity, and empathy. The whole organization, including all stakeholders, must get a good grasp of the complex process. Managers in sports organizations work in various positions. In Western countries, especially in England, soccer squads have a manager who also acts as a coach. Their activities are thus divided into two areas, activity on the pitch to “do things right” and then activity in the office to “do right things.” It is more visible, especially in small sports clubs (not only soccer) that do not have a professional managerial structure. Soderman (2013) made an interesting comparison of the world of business and soccer in this context and laid out recommendations for this type of managers (see Table 2.3). The current role of a soccer manager—as the face and voice of a soccer club—is often monitored the same as the team performance (Carter 2006). Due to the manager’s work and their cooperation with various stakeholders (e.g., players, support staff, media, fans), their role can be understood as the most important position in a professional soccer club (Ogbonna and Harris 2014). If a manager wants to operate successfully within this unique and demanding environment, the

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Table 2.3 Business-to-soccer world comparison and recommendations for soccer managers Business world The infinite number of rules that are constantly changing

Soccer world Seventeen rules that change only rarely

The product is obvious

The game on the field is visible

The beginning is known, but the end is not

The game has a beginning and an end

Events in the business are limited in time only with regard to projects. The rest of the activities last forever and change over time The entrepreneurial idea is usually born with a small number of employees, and their number can grow to several thousand Clearly defined organizational structure with clearly defined competencies and objectives

In most cases, the match lasts 90 min

Four main processes—supply and demand, order and delivery, delivery and payment, commencement, and disposal The user interface is exposed constantly, and performance is reported only a few times a year

Reflections and recommendations Rules are one thing, but leadership is about people. Managing a soccer club is difficult. Players are often artists—stubborn, inflexible, and prone to injuries The game is a consequence of strategy just as the product is The beginning and the end must always be sensitively handled in different situations Constant reevaluating and strategies within a set time

Resources are fixed by the number of players on the pitch

Modularization of 11 players. Considering the possibility of buying, renting, lending, selling, or exchanging resources

The team is made up of those who start in the opening lineup, those who sit on the bench, and those who do not play (injured, out of form, or suspended). Some might be going through a transfer process or unavailable otherwise Four main processes in soccer—game, atmosphere, training, and management

Determine skill-based tasks and competencies precisely

The team is in plain sight constantly, but most intensely during a match. Soccer is a show that is made for fans

Sometimes, it is necessary to give up one in order to avoid the frustration of intent Although openness is required, trade secrets can occur as in other businesses

Source: Soderman (2013)

management (leadership) has to be taken as a key element to success (Morrow and Howieson 2014). Conor et al. (2016) state—in their study of soccer manager leadership who they consider to be the head coach—that the manager deals with their activities in two dimensions, the first in relation to the players and the second to other stakeholders. Managers and players produce the majority of the data and are among the visible entities within the main dimension. According to Conor et al. (2016), this dimension

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Fig. 2.7 Management of players off the field. Source: Conor et al. (2016)

consists of six main topics—team vision, setting expected performance, setting expected behavior, effective communication, individualistic approach, and the use of archetypes. As part of solving the main issues, managers must also deal with the less important topics, as shown in Fig. 2.7. Therefore, it is a solution to a complex issue of how to increase the effectiveness of team success. The research of Conor et al. (2016) was probably based on the research of Arnold et al. (2012) who solved a similar issue in the relationship between a manager and a sports team. Their main topics were establishing the procedure, understanding the tasks within the team, developing contextual awareness, improving personal skills, and strengthening relationships. Within relationships, it is important to point out the influence of individual stakeholders on sports organizations. Čáslavová (1996) emphasizes a wide range of activities of a manager in a sports organization; the basic tasks, specific tasks, and examples of application are given in Table 2.4. Manager tasks in a sports organization on a volunteer basis were also developed by the Australian Sports Commission (2013). It includes managing long-term plans for the future of the club, developing policies and procedures for club activities, managing external relations with other sports organizations, local government, or sponsors, managing club financial resources and legal compliance, taking into account any and all club members recommendations, communicating with club members on current issues and development aspects, evaluating employees’ actions

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Table 2.4 Sports manager tasks Manager core tasks 1. Planning

2. Organizing: – Procedures – Methodologies – Techniques

3. Creating organizational structures

4. Selection, deployment, and leadership of people

5. Control

6. Marketing

7. Finances

8. Legal

Examples—manager core tasks application to sport manager – Organizational development strategic plan – The long-term, mid-term, and current schedule – Manager planning-related strategic approach – Result evaluation procedures – Application of the CPM method in the organization, and provision of training cycles (e.g., OH, MS, and ME) – Use of computer technology in top sports competitions – Portfolio method in evaluating the activities of a sports organization – Streamlining association organizational structure – Streamlining club organizational structure (amateur, professional) – Enhancing paid services organizational structure – Selection and deployment of people working in sports organizations (professionals, volunteers) and their motivation – Selection and deployment of people in paid services – Financial control indicators – Paid services marketing – Sports goods manufacturers marketing – Sports club concept marketing – Overview of current economic trends and measures in state and business sphere – Review of sports organization managerial aspects – Application of tax, trade, and other laws to sports organizations – Laws on sports organizations and other state regulations

Source: Čáslavová (1996)

Specific tasks 1. Sponsorship tasks

2. Sports advertising

3. Player and coaches transfer

4. Knowledge of standards established in top international organizations

5. Compliance with standards and home and foreign contract requirements 6. Issues of health protection, insurance, and social security

7. Contacts and cooperation with interest groups and professional organizations of athletes, coaches, teachers, etc. Note: 8. Successful implementation of the basic manager tasks in a sports organization requires ongoing managerial tasks with regard to analytical, decision-making, implementation, and communication duties

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(if any) and service providers, making detailed records and archiving them for future managers, and acting as a role model for other club members. It is important to emphasize here the key aspect of making and archiving detailed records for future managers. This is an extremely important aspect that is often absent in organizations where the continuity is thus not maintained. In professional sports, the aspect of athlete management is increasingly popular. This is mainly represented by external agencies that cover player transfer and contracts. Hoye et al. (2015) consider the following factors: contract negotiations, marketing activities, public relations management and involvement in charity, budgeting, media control, skills development, and dialogue commitments. Although several authors classify the principles of sports management of professional and amateur sports organizations in terms, the basic management principles of both types are very similar. Among the two most difficult tasks faced by managers of all sports organizations are working with people and adequate financial security.

2.4

Strategic Management Process and Application to Sports Environment

A strategy, according to Merriam-Webster Dictionary (2020), is defined as “a careful plan or method for achieving a particular goal usually over a long period of time.” The importance of strategic management is increasing as many sport organizations face competition from both domestic and global players (Goslin et al. 2020). Different authors together understand strategic management as a long-run commitment connected with the company’s vision and at the same time as being vital for success in the competition (Table 2.5). Many authors understand the process of strategic management the same with only minor differences. According to White (2004), the main stages of a simple strategic management model are the definition, comparison, and implementation of a strategy. The definition is based on the analysis of the internal and external environment and a SWOT analysis—analysis of strengths, weaknesses, opportunities, and threats. Afterward, other possible options are compared. The selected option that best matches the objectives is then implemented. The strategic management model according to this author is shown in Fig. 2.8. Unlike White (2004), Hittmár and Jankal (2013) understand strategic management as a constantly recurring process. According to the authors, the main elements of the modern theory of strategic management are adapting the organization to the business environment, change, and complexity, combinations of situations requiring unstructured responses or reactions from management indicating the direction the organization will go, including strategy definition and implementation, partial planning (partially unplanned process) process, the involvement of several levels of governance, and the inclusion of a conceptual and analytical thought process. The strategic management process is defined by four main phases, which

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Table 2.5 Definitions of strategic management Author(s) Ansoff (1965) Gluck et al. (1982)

Štefánik and Laššák (1994) Fleisher and Bensoussan (2003)

White (2004) Bill (2009)

Shilbury (2011) Hittmár and Jankal (2013) Wells (2015)

Goslin et al. (2020)

Definition Strategic management is a dynamic tool for coping with unexpected fluctuations in turbulent markets It is a systematic approach to identify and implement the necessary changes and measurements to move closer to the organization’s vision, linking strategic planning with daily decisions at the operational level A set of decisions and activities that leads to the creation and development of an effective strategy or strategies for achieving companywide objectives A way of leading an organization whose ultimate goal is to develop (increase) organization’s values, managerial skills, organizational duties (responsibilities), and administration system linking strategic and operational decision-making at all hierarchical levels and across all lines of organization’s management A coordinated set of measures involving the allocation of resources to achieve a given purpose Management of an organization that is characterized by a longer period (often 3, 5–10 years) and extensive use of resources, which must be planned and managed in line with the objectives set. Management of measures considered by managers to bring competitive advantage in terms of the organization’s position The need for flexible and purposeful management of a company in a constantly changing environment Strategic management is not linear, but rather a complicated process that needs the involvement of most people in the organization to progress. It represents a new focus of an organization—a focus on the future vision Strategic management, which is a much broader concept than strategy, is a critical component that should be inherent in the operations of an organization to gain competitive advantages and successfully compete in the marketplace

are analysis and diagnosis, strategy definition and preparation, strategy implementation and adaptation, and strategy review and evaluation. The phase of strategy definition and preparation is further divided into vision, mission, and philosophy, organization’s objectives, strategy definition, strategy options, and selection. Afterward, the entire process returns to the beginning to adjust the strategy according to the newly emerging needs and the current organization’s environment. This understanding of strategic management as a process is shown in Fig. 2.9. Fišera (2007) created a method of strategic thinking called “Dynamic Strategic Balance,” which is based on a spiral process of creating thinking and combining, using practical imagination and its continuous enhancement through the gradual addition of new knowledge and information. The method is based on a simple logical assumption that the basis of the strategic decision-making process lies in partial development scenarios of key future development factors of the business sector. These are scenarios of market development, process development,

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Scanning the external environment (external appraisal)

Identification of opportunities and threats (key success and risk factors)

Analysing the internal environment (internal appraisal)

Formulation

Identification of strengths and weaknesses (distinctive competencies)

Consideration of all possible combinations (creation of strategies)

Social responsibility

Comparison

Managerial values

Evaluation of best matches Choice of strategy

implementation of strategy Fig. 2.8 Strategic management model—White. Source: White (2004)

development of the sector territorial allocation, development of financing, development of competition, and development of external factors. These scenarios need to be interconnected and translated into a comprehensive estimate of the future development of the company’s competitive field within the business sector. Only then does it make sense to use the well-known SWOT analysis (analysis of the company’s strengths and weaknesses), naturally in comparison with the strength and weaknesses of the main competitors. In the next step, the shapes of the inertial development would begin to materialize if the company were to implement its existing strategy without alterations. If this development would lead to a risk to a company or insufficient use of its opportunities, it is necessary to incorporate creatively an innovative active strategy of the organization, which must then be confronted with the likely counter-reactions of competitors. The advantage of the method is the use of knowledge from the initial analysis and forecast of developments in the industry, as they significantly facilitate and enhance the estimation of dangerous competitive counter-reactions to the company’s innovative strategy. Strategic sports management can be defined as the focus of a sports organization on a pre-chosen direction based on factors influencing the external environment and maximizing the organization’s resources and capabilities to gain a competitive advantage or meet its needs (Bill 2009). Hoye et al. (2015) define it as a process of finding balance and gaining resources in various, not always related directions, such

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Analysis and diagnosis Vision, mission, philosophy Organization’s objectives

Strategy definition and preparation

Strategy formulation Creating strategy variants Strategy selection

Strategy implementation and adaptation

Strategy review and evaluation

Fig. 2.9 Strategic management model—Hittmár and Jankal. Source: Adjusted according to Hittmár and Jankal (2013)

as player development, community expansion, profits increasing, or winning at any cost. In each of these areas, an organization sets its objectives. Bradbury and O’Boyle (2017) see the main difference between classical and sports strategic management in the higher degree of public responsibility of sports organizations. While in the regular business sector, the highest priority is customers and shareholders, in the sports sector, organizations need to satisfy a larger number of stakeholders, and the strategic management process—primary objectives—should also be consulted with the athletes, coaches, parents (for youth organizations), and/or sponsors. They consider the sports industry to be a fast-paced, highly competitive industry, for which sports organizations’ strategic planning should be designed to be implemented within 2–4 years. To achieve successful strategic management in sports, it is necessary to use enough resources in combination with analysis, passion, bravery, adaptability, and creativity. At the same time, sports organization’s strategic planning must also address which elements of the organization’s activities and stakeholder relations need to be changed and which may remain the same (Beech and Chadwick 2013). Delarestaghi et al. (2017) identified three main benefit levels of applying elements of strategic management in sports—individual (enhancing managerial abilities and skills, increasing job satisfaction), organizational (enhancing innovation process management, improving process management), and social (creating value for the customer, sustainability of job positions, building the position of sports in the community).

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Internal analysis (capabilities, deficiencies and stakeholders) External analysis (environment, competitors and customers)

Strategy analysis

Strengths. weaknesses

Opportunities, threats

▼ Strategy direction

Mission, vision, objectives

Performance measures

Strategy formulation

Strategic options

Generic strategies, cost leadership, differentiation, focus

Strategy implementation

Deployment of strategy

Products, services, systems, structure, culture

Strategy evaluation

Performance measurement

Corrective action

▼ ▼ ▼ Fig. 2.10 Strategic management model—Hoye et al. Source: Hoye et al. (2015)

ANALYSIS Where are we?

VISION Where do we want to go?

CONTROL

ACTION

Are we getting there?

How do we get there?

Fig. 2.11 Cyclical model of strategic management in sport. Source: Chappelet and Bayle (2005)

Hoye et al. (2015) do not provide any more extensive specification of the strategic management process of a sports organization. The model (Fig. 2.10) is based on the models of classical management without any major alterations. Chappelet and Bayle (2005) also illustrate sports strategic management in a cyclical model (Fig. 2.11) as a recurring process. Its principle is to answer the four basic questions, along with the actions to be taken as well. In the first step in answering the question “Where are we?,” it is necessary to perform an internal and external analysis; in the second step in answering the question “Where do we want to go,” it is necessary to set a new vision, mission, and goals; in the third step in answering the question “How do we get there,” a sports organization has to prepare

2.4 Strategic Management Process and Application to Sports Environment

27

strategies and tactics; and in the fourth step in answering the question “Are we getting there,” it is necessary to monitor the established benchmarks and indicators. A different approach to the strategic management process from authors working in different industries can be generalized into five basic steps, which are setting a vision, analysis of the current situation, strategy design, strategy implementation, and strategy evaluation.

2.4.1

Setting a Vision

The first prerequisite of the draft strategy is to determine the vision, mission, and philosophy of the organization. Vision, mission, and philosophy are closely related concepts. Hittmár and Jankal (2013) define a vision as a picture of a company about its future, the idea of the ultimate state of the company, and the direction of the company’s way of thinking. They consider the mission to represent the purpose of the company’s existence for society. Wells (2015) applies the same definition. The philosophy is seen by Hittmár and Jankal (2013) as the basic intention, values, and general idea of the organization providing employees with guidance and direction. Wells (2015) also agrees with this notion, which defines philosophy as a guide for behavior for members of an organization. Unlike those authors, White (2004) considers vision to be at the heart of the organization’s identity representing the reason for the organization’s existence and not a mission defined only as a tool for expressing the organization’s vision. White describes philosophy as a moral factor in determining which actions are acceptable and which are not. In sports management, Beech and Chadwick (2013) define a vision as the partly rational and partly emotional idea that unifies and helps to achieve the highest level of performance of a sports organization. They see mission as a clear, strong, and inspiring message vis-à-vis external and internal stakeholders, which clearly defines the purpose of existence, the main business goals, identity, policy, and values of a sports organization. Girginov (2010) defines culture in a sports organization as a tool for creating order and avoiding uncertainty.

2.4.2

Current State Analysis

One of the basic activities of strategic management is the study of external influences. This is a starting step in creating an organization’s strategy. In consists of four activities—diagnosis of the initial situation, analysis of the external environment, analysis of the internal environment, and analysis of competition. Diagnosis of the initial situation deals with issues of the organization’s past (where it is, what it does, where it got to) and the future (business activities, products, what will be the organization’s position concerning its environment, customers, suppliers, competitors, etc.). The internal analysis examines the internal (strengths and

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weaknesses) and external (threats and opportunities) parts of the companies that are key to market success. Basic measures include resource analysis and capability analysis. Resource analysis focuses on the analysis and evaluation of existing resources and the analysis and evaluation of the development of corporate resources and their evaluation by competitors (Hittmár and Jankal 2013). The basic resources are considered to be financial, material, human, organizational, and technological (Štefánik and Laššák 1994). Capability analysis extends the analysis of internal resources. It examines and analyzes the relationships between the basic factors and their impact on the company value creation (Hittmár and Jankal 2013). The external analysis examines and evaluates the company’s environment by identifying threats in the industry and looking for opportunities to develop new business activities. It deals with the external microenvironment and macroenvironment (external and interactive), using methods such as STEEP analysis or Porter’s five-factor model of the competitive environment (Hittmár and Jankal 2013; Ritson 2013). The task of competition analysis is to increase awareness of the social and interactive environment of the industry, identify basic strategic factors (opportunities and threats), examine and evaluate competitors’ resources and compare them with organizational resources, and formulate the market position (Hittmár and Jankal 2013). In terms of sports management, the process of analysis of the current situation consists of four steps—SWOT analysis, analysis of stakeholders and customers, competition analysis, and Porter’s five-factor model of the competitive environment. The individual parts of the SWOT analysis, i.e., strengths, weaknesses, opportunities, and threats, have their specifics in sports management. Usually, the strengths of a sports organization include a qualified backroom staff, a broad membership base, and/or quality youth grounds and development. Conversely, common weaknesses may include insufficient training facilities, weak sponsor support, or the absence of a voluntary workforce. Common opportunities include new opportunities for government grants or the chance to hire new employees with unique skills. The traditional threats in the management of a sports organization are the advent of new competition, higher salaries for the athletes, or the reducing trend in the interest of young people in sports. With regard to sports management, the analysis of stakeholders and customers deals with employees, athletes, the government, the community, the management of competitions, owners of premises and facilities, sponsors, and/or fans. For the future determination of the strategy, a sports organization must answer the crucial question of whose needs will be satisfied the most with limited resources. An example thereof may be the focus of some sports clubs on winning rather than on ensuring financial stability. In the short run, the desires of fans and the community are satisfied; on the other hand, this approach threatens sustainability and thus the wages and jobs of employees or the name of the league where the club plays (Hoye et al. 2015). Due to the special relationship that most sports organizations have with stakeholders, specific groups can exert strong pressure on an organization’s strategic decisions if they are not as intended (Beech and Chadwick 2013). The analysis of competition in the sports industry, like the classic analysis of competition in other industries, deals with the evaluation of competitors’ strategies,

2.4 Strategic Management Process and Application to Sports Environment

29

their strengths, weaknesses, and the resources they have at their disposal. Porter’s five-factor competitive environment model examines the threat of new competition, the bargaining power of customers, the bargaining power of suppliers, the threat of substitutes, and the intensity of the competitive environment. The threat of new competition has two levels within sports management. It is very difficult to anticipate the creation of new competitions in sports such as soccer, but on the other hand, the probability of an occurrence of new events either at the local or international level or the occurrence of new sports venues and sports equipment, in general, is higher. The bargaining power of customers comes mainly from fans, and it is limited, as they seldom cooperate in strengthening their position vis-à-vis organizations. However, especially in team sports, various boycotts tend to appear, mainly in the fan base. The bargaining power of suppliers in the sports industry comes mainly from the players. They are interested in increasing their income and through various associations and unions are very well organized that increases their strength. In terms of substitutes, it is rather about competition between different sports. The current problem in relation to classical sports is e-sports, which is growing more and more into the position of a global sports industry. The intensity of the competitive environment is called rivalry in sport. The strongest rivalry is between organizations from the same region, which—although not always competing for the same audience—are waging a tough war for sponsors or a skilled workforce (Hoye et al. 2015).

2.4.3

Strategy Creation

A specific category when comparing classical and sports strategic management are the objectives of an organization, which represent the future state that an organization wants to achieve. Strategic objectives are set by a synthesis of considerations about the possibilities and advantages of sub-business activities (Hittmár 2006). The formulation of goals using the SMART method was introduced by Doran (1981). They believed that thinking in line with the SMART criteria, i.e., set goals that are specific (S), measurable (M), achievable (A), realistic (R), and time-related (T), is a precondition for the effective formulation of goals. Hittmár (2006), Williams (2008), and Drucker (2007) also agree with this approach, who consider the method to be effective when interpreting the objective on the part of the employees at lower management levels. In contrast to the formulation of goals using the SMART method, which is professed by authors focusing on classical management, research conducted in the conditions of sports clubs has shown a different approach to defining goals (Petkovic et al. 2016). As the research showed, the goals of sports organizations are not always formulated by the SMART method, as the formulation of goals is not always fully connected with the company’s profit and loss. The strategies of sports organizations represent more value than the results expected, so it is fundamentally linked to the vision, which is construed as the value basis of an organization. Objectives, according to the classical theory of management, should

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be formulated with respect to the vision, but they should also be measurable in a certain period in line with the SMART criteria. An example is sports clubs whose goal is to educate young athletes. In these cases, it is very difficult to determine when and how many of them will become professionals or national team players. Siric and Dumancic (2014) classify objectives in sports management into two general categories—the achievement of sports successes in a certain period and the achievement of business goals of a sports organization. Depending on the objective, Nagel (2016) distinguishes between clubs that focus on the community and traditions and clubs that aim for success and performance. In addition to those mentioned above, according to Bradbury and O’Boyle (2017), other objectives can be set depending on the type of a sports organization, such as increasing interest in sports, increasing membership base, gaining new sources of income, finding and maintaining a volunteer base, and developing coaches and referees. When formulating a strategy, the organization must answer questions in which fields or areas it will operate and at the same time in which fields or areas it wants to improve or stabilize itself or suppress its operations (Hittmár and Jankal 2013; Hoye et al. 2015). The strategy is prepared in different alternatives, which serves as an important decision-making process consisting of finding ways to achieve strategic objectives. This process is immediately followed by the evaluation of individual alternatives assessing their impact on the strategic objectives of an organization. The last step is the selection of the most beneficial alternative, which will become the new company’s strategy (Hittmár and Jankal 2013).

2.4.4

Strategy Implementation

Hittmár and Jankal (2013) believe that implementation is the bottleneck of strategic management emphasizing the fact that a strategy not implemented is not a strategy. They define it as a process whereby the strategy is implemented and through which the strategic goals and objectives are fulfilled. White (2004) adds that in the implementation process, the strategy is gradually modified and developed depending on what the organization is trying to achieve and what is in its capabilities. Ritson (2013) also agrees with this resource-related fact, acknowledging the need for changes in the resources required to implement the strategy. In addition to changes in needs and resource allocation during the implementation process, Hoye et al. (2015) also mention frequent changes in organizational culture and leadership. As a result of the implementation process in a sports organization, they cite changes in the development of youth athletes, community relations, sports equipment, marketing, funding, and human resources as examples. Factors outside the control of a club or an individual, i.e., opponent, referee, or luck, also play a role in the implementation of some type of goals, especially those related to the sports results (mamnato.sk 2016).

References

2.4.5

31

Strategy Assessment

Strategy assessment completes the process of creating and implementing the strategy and leads to feedback to previous phases. Ongoing evaluation of the results achieved together with the expected stimuli for the reevaluation of the formulation and implementation phase gives the whole process the nature of coherence and permanent adaptability (Hittmár and Jankal 2013). Managers must decide which key indicators will be used to measure progress toward the objectives (Wells 2015). Several issues in sports management that complicate this process exist. Most importantly, to the contrary, sporting success tends to divert attention from evaluating other elements of the strategy that may not be at the required level (Hoye et al. 2015).

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Chapter 3

Sport and Sport Environment

Sport has been an important social activity since the days of ancient Greece or the Roman Empire. Sport has its place in every culture, and each culture has its specific popular sports (Szymanski 2004), even though each culture had individuals who carried new ideas and habits. Sport has undergone significant development and a change in its influence, organization, or formalization. Sport is the gateway to cultural awareness, education, health, as well as economic and social development. It helps young people learn the value of self-discipline and goal setting. It creates self-confidence. It provides an alternative to conflict and delinquency. It can bring hope and meaning to the lives of people in poor communities and other people in need (olympic.org 2013).

3.1

Definition of Sport and Sports Industry

Sport can be characterized by several definitions, and several different opinions among experts exist, both in terms of content and its understanding, division, but also of meaning and management. The Council of Europe has defined sport as all forms of physical activity, which through occasional or organized participation, lead to the demonstration or increase of physical fitness and well-being, form social ties, or enable results to be achieved in competitions at any level (Commission of the European Communities 2007). The laws of countries around the world distinguish between different types of sports. From the point of view of the state, the following are defined in the field of sports in particular: – Sporting activity, such as the implementation, organization, management, administration, promotion, or development of sport.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 M. Varmus et al., Strategic Sport Management, Contributions to Management Science, https://doi.org/10.1007/978-3-030-66733-7_3

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Mainly tangible

Mix of tangible and intangible

Mainly intangible

Sports equipment Sports wear

Sports events

Practicing in sports Participation in sport

Fig. 3.1 Continuum of a sports product. Source: Smith (2008)

– Professional sport as continuous training of an athlete to achieve the best sporting results in the competition and their participation in an international competition or the highest national competition. – Sport for all as sport intended for the general public carried out in an organized or unorganized manner to fulfill the social, cultural, and health benefits of sport. Hlivák (2016) believes that sport is an important social, cultural, and economic phenomenon that contributes to achieving company’s strategic objectives, such as solidarity, security, and prosperity while defining the following sport aspects, which have a positive effect on people and the company: recreational (sport is recreation and entertainment), educational (sport educates), economical (sport is an economic category—employs people), health (we play sports for health), social (sport is a tool to eliminate social exclusion, ensuring equality among people, and develop solidarity), international–cultural integration (sport brings people together between nations and cultures), and sociopolitical (international sporting events represent a certain symbolism). Guttmann (1978) considers sport to be a phenomenon of three dimensions, the first dimension being the physical activity, the second being competitiveness, and the third is the structuring and rules that athletes must observe. Smith (2008) understands sport as a product that they believe can be a mixture of tangible and intangible elements. Some sports products are mostly tangible, and some of them are mainly intangible. The continuum of a sports product is a suitable tool to show that products can be defined along a continuum (or on a scale) with predominantly tangible products at one end and intangible products at the other end, and a combination thereof in the middle. The continuum of the sports industry is shown in Fig. 3.1. Stewart et al. (2004) created a typology of sport, which is shown in Fig. 3.2 and illustrates different types of sport, emphasizing the perception of the sport as an activity as well as a product. On this basis, Nicholson (2007) conducted a study on media interest in various types of sports. Spontaneous sports include random sports activities, which are very often gradually formalized into recreational sports. Recreational sports include, inter alia, extreme sports activities. Fitness sport is characterized by the formalization of exercises in various circles, such as aerobics. These three types of sports are minor in terms of media interest (Nicholson 2007). In contrast, competitive sport, which mainly includes amateur competitions and university leagues, enjoys greater media interest, especially in the USA and Western Europe. Elite sport, which

3.1 Definition of Sport and Sports Industry

37

Fig. 3.2 Typology of sport. Source: Stewart et al. (2004) Elite sport

Recreational sports

Competitive sport

Fitness sport

Spontaneous sports

includes professional leagues and top international events, naturally gets the main focus of media attention around the world. Like most other sectors, sports environment and sports management are affected significantly by the political, economic, social, technological, and legal conditions. From a political point of view, the existence of many sports organizations depends directly on the support of the government, which subsidizes their activities leading to increased participation in the relevant sports and the growth of top athletes. It is often possible to see a geographical impact on the sporting environment when the major sporting events are assigned to a particular location, such as the Olympic Games or the World Cup. Organizations, such as the International Olympic Committee (IOC) and the International Football Federation (FIFA), have become both sporting and political organizations equally with ties to global political elites that can affect sports worldwide. From an economic perspective, sport is mainly affected by events such as the global financial crisis affecting the outflow of private sector sponsorship. A sedentary lifestyle and the rise in obesity in many countries are among the social impacts affecting sports. Technologies are influencing the growing popularity of e-sports, as well as the ability of sports organizations to bring new experiences and interactions to fans through smartphones, tablets, social networks, or live broadcasts. Naturally, the impact of the legal environment on sport can also be significant. Specifically, these are issues related to the growing popularity of martial arts (e.g., UFC—Mixed Martial Arts Championship) and their regulation, corruption, and financial irregularities in organizations, such as FIFA, match results bribery, or using banned performance-enhancing substances (Bradbury and O’Boyle 2017). Globalization also has a major impact on the sporting environment. The integration of global economies has enabled better communication between products and consumers, thus increasing flexibility in responding to customer requirements. Sport is one of the sectors that can benefit from this. Spectators of major sporting events, such as the Olympic Games, the FIFA World Cup, the Rugby and Cricket World Cup, the English Premier League, and the Grand Slam tennis and golf tournaments, have access to them via mainstream and social media. The global sports market has

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+5 % Sports market revenue ($ billion)

90.9 +7 % 76.1 +6 % 58.4 46.5

2005

14.8

17.7

11.9

2009

2013

2017

Fig. 3.3 Sports market revenues. Source: Sultan and Collignon (2014)

become overcrowded, and managers seeking to enter it must understand the global environment of the sports industry (Hoye et al. 2015). The development of marketing activities due to globalization associated with an increase in the number of foreign players in sports clubs has undoubtedly changed the sport. All major sports leagues have become more than just sports competitions; they become a regular business environment that deserves the same attention as any other industry (Madichie 2009). According to a study by Sultan and Collignon (2014) of AT Kearney, the sports industry is expanding worldwide at a rate faster than GDP growth. The market for sporting events—including ticket revenues, broadcasting rights, and sponsorship— opens up huge opportunities for the companies, provided that they have a proper understanding of key factors and business model management. Pitts and Stotlar (1996) state that the sports industry is a market in which the products offered to customers represent the recreational sport, fitness, or performances or activities, products, people, places, or ideas. According to Čáslavová (2009), it is evident that many products are available in sports and contribute to the creation of the gross domestic product, and as they state, in the USA, the sports industry is considered a regular branch of the national economy. Between 2005 and 2017, revenue growth in sports almost doubled, with revenue gradually rising from $46.5 billion to $90.9 billion. Between 2005 and 2009, the increase was in the amount of $11.9 billion (6%) and between 2009 and 2013 $17.7 billion (7%) and between 2013 and 2017 $14.8 billion (5%) (Sultan and Collignon 2014). Revenues in the sports market are shown in Fig. 3.3. Sports Industry Is Growing Faster Than Global GDP. Expenditure on sport between 2000 and 2012 is 1.1 times higher than GDP growth in China, 1.6 times in

3.2 Individual and Team Sport

39

the USA, 1.8 times in Brazil, 3.1 times in France, and 3.9 times in the UK (Sultan and Collignon 2014). Pitts and Stotlar (1996) believe that to understand the concept of the sports industry, it is important to look at some past, present, and future factors influencing the growth and development of the industry. Only this way can a market participant trade, make decisions, and devise a strategy that leads to success. According to the authors, they are the following factors: the number of new and different recreational activities and fitness activities is growing, the number of institutions offering the same sports activities is growing, the number of different sports magazines and business magazines is growing, leisure time is increasing, the time devoted to sports in the mass media is increasing, results of the fitness boom in the 1970s, the number of types of facilities, events, and participation is growing, the development of new sports-related products is growing, the number of sport types played at a professional level is growing, as well as exercise types in the area of fitness and recreational activities, shift from single-purpose to multi-purpose devices, population diversity is growing, sponsorship is growing, and the fact that sport is considered now as a trade opportunity, cashless transactions are growing, and education in sports is growing. Production sites in sports are for-profit and non-profit organizations in which sports products are created and offered. Trading in sports products then affects the understanding of the management of these organizations (Čáslavová 2009).

3.2

Individual and Team Sport

One of the basic views on the division of sports is the division into individual and team sports. Despite some similarities, each of these two types has its specifics. Athletes engaged in individual sports are more often introverts, have more individual goals, and competition between them is more common than in team sports. These athletes have more control over their training process, which gives them greater responsibility for their results. In addition, they have closer contact with their coach or trainers, and the parents are more involved in their careers. They are exposed to more stress from the fear of overtraining, the pressure to perform, or aligning their sport and study duties with regard to students. From the point of view of their sports career, their transition from the junior to the senior category is more difficult, when they have to get used to a new level of competition and adapt to its level of training and required skills. Team athletes have both individual and team goals. They have less control over the training process, competition tactics, and results than athletes in individual sports, where the responsibility is distributed among the whole team. This means that the whole team is responsible for the training as well as the results. They have closer ties with their teammates, and their main causes of stress are the fear of making mistakes, the conflict between the individual and team objectives, fear of injuries, and fear of team conflicts. The transition from the junior to the senior category has, in addition to performance, also a psychological level, and athletes must find their place both in the team and outside it (Stambulova 2006). When taking

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a closer look at the training method, the results of individual athletes rarely rely on individual effort. In the vast majority of sports, these athletes prepare for group competitions, where they spend hundreds to thousands of hours creating various forms of relationships with each other (Evans et al. 2012). Regardless of whether athletes in individual sports are trained individually or collectively, their results are considered individual, although they are mostly a whole team effort. In team sports, the whole team competes, and although some players prepare individually and to a greater extent than their teammates, the results are always shared by the whole team (Lindwall et al. 2002). The system of competition in team sports is often based on teams competing in leagues or other long-term competitions. In individual sports, individuals compete against each other. The most common forms of competition are tournaments, 1-day events, or a series of tournaments. Here, too, many forms of team competition exist (tennis doubles, swimming relay), but these are not as common as individual competitions in the same sports (Zimmermann and Klein 2018).

3.3

Three Sports Sectors

To understand the meaning and modalities of partnerships, interactions, and entrepreneurship of organizations involved in the sports management area, these organizations can be grouped into three different sectors—the public sector, the non-profit sector, and the professional sector. The public or state sector includes public administration and other specialized bodies dealing with the development of sport providing funding to other sectors and supporting specialized activities, such as the development of athletes or doping control. The non-profit or voluntary sector consists of community clubs, associations, and international sports organizations, which provide the opportunity to play sports and compete, regulate and manage legislation, and hold sporting events. Professional or commercial sports organizations include sports leagues and their member teams, as well as related organizations such as sportswear and equipment manufacturers, media companies, or event managers and stadium and sports halls owners (Hoye et al. 2015). However, it should be emphasized here that the sector in which sports organizations belong is not related to their legal form. The three-sector model in sport is shown in Fig. 3.4.

3.3.1

Public Sector

Most countries see sport as a tool for nationalism and economic and social development. Governments control, support, or regulate the activities of individual sports organizations. Most of them try to support training institutions materially and financially to develop athletes for domestic or international competitions, support sports organizations in organizing international events, or make contributions with regard to the maintenance of national sports venues (stadiums, halls, swimming

3.3 Three Sports Sectors

41

Fig. 3.4 Model of three sectors in sport. Source: Hoye et al. (2015) Public/ state sector

Non-profit/ voluntary sector

Professional/ commercial sector

Table 3.1 Political ideologies and their influence on sport Type of ideology Conservative Reformed Neoliberal Socialist

Characteristic Private ownership, state regulation Mixed economy, regulation of social and economic environment Market emphasis, deregulation Limited market space, central planning, bureaucratic control of resource allocation

Influence on the development of sport Sport understood as a community growth activity run by the voluntary sector Direct involvement in building sports infrastructure and community sports Most of the resources allocated to top athletes and for commercial purposes Direct involvement in all aspects of the development of sport, often associated with a high degree of regulation and an emphasis on support for both community and elite sports

Source: Hoye et al. (2015)

pools, etc.). In exchange for this support, the state can influence mass sports in the country or promote healthy lifestyle messages or to fight against alcohol, cigarettes, narcotics, gambling, and/or discrimination (Hoye et al. 2015). The state can influence sport in various ways. However, the scope and form largely depend on the ideology (Table 3.1), values, and overall philosophy of the state institutions (Gardiner et al. 2009). Conservative political ideology is characterized by a belief in traditional values. Conservative government tends to regulate social life and wants to censor literature and art, which it considers offensive. On the other hand, it believes that the business environment should regulate itself. While agreeing on the key role of a strong private sector, it is ready to assist and protect the industry when needed. In the line of the conservative ideology, sport performs its function best when it is performed by amateurs for their good and run by volunteers. Reformed political ideology, also known as social democracy, is focused on justice and decency. Although a social democratic government believes that a strong private sector is essential, it also believes that a poorly regulated market will never deliver good outputs and must, therefore, be tightly regulated. Disadvantaged groups are

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also very important for this type of government; thus, it tries to redistribute wealth by establishing progressive taxation to get more money from wealthy organizations and individuals. Sport is seen as a tool for social development and is intended to be as accessible as possible to the whole community. It focuses more on mass sports rather than on top sports. Neoliberal political ideology believes that it is best for society when people would live their lives without any major state interventions. This type of government believes that law is important, but at the same time, people should be free to organize their work and private lives by themselves. It does not think that state ownership of companies will lead to better economic results. The same view is applied to sports. The neoliberal government does not call for strict regulation of it. On the other hand, it believes that sport can be used as a tool for national and economic development. It, therefore, tends to focus more on elite than mass sports. Socialist political ideology considers the combination of private property and a selfregulated market to be the source of social inequality. According to a socialist government, the redistribution of resources must be controlled centrally. Sports are taken as an important part of life, but with the emphasis that it must be managed, and that resources must be distributed evenly among sports organizations. As the state provides most of the resources in this system, both mass and elite sports are developed evenly (Hoye et al. 2015). In youth categories, the public sector seeks to increase the number of children participating in sport primarily to promote a healthy lifestyle and to represent the nation on the international level (Kristiansen et al. 2017). Green and Oakley (2001) examined the education system of elite athletes in Western countries (Australia, Canada, France, Spain, and the USA). Based on the similarities in the approaches of individual countries, they identified the key elements of managing the education of elite athletes: a clearly understandable role and an effective communication network of the system, streamlining administration, an effective system for statistical monitoring of athletes’ progress, creating a culture that allows team members (athletes, coaches, managers, scientists) to communicate with each other on a formal and informal level, international confrontation, specific sports facilities with priority entry for top athletes, targeting resources to a small group of sports with a chance of reaching success at a world stage, comprehensive planning for the needs of every sport, recognizing the price of success and sufficient funding for infrastructure and people and supporting lifestyle, and preparing for life after the end of a career. China, in particular, is known for its central management of sports. Local government uses a three-level system to identify talents, as shown in Fig. 3.5. The standards used in the evaluation of Chinese sports are in line with international standards, and athletes are provided with a “reward” if they achieve them, e.g., in the form of benefits when seeking a job outside sports circles (Tan and Green 2008).

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43

Fig. 3.5 Chinese talent identification system. Source: Tan and Green (2008)

3.3.2

Non-profit/Voluntary Sector

Non-profit organizations are organizations that operate independently of the state, do not bring profit to their owners, are independently managed, are characterized by a significant degree of volunteering work, and have a formal structure. They serve to develop communities and carry out their activities to support social welfare rather than the wealth of individuals (Hoye et al. 2015). A non-profit organization can include a wide range of sports organizations, including local government departments dealing with sports and recreation, sports department of educational institutions, youth sports organizations, and sports clubs. Prominent non-profit organizations include international sports associations with a global (IOC—International Olympic Committee, FIFA—International Soccer Association) or national (NCAA—National College Athletics Associations, USA; Czech Handball Association) influence on sport (Bradbury and O’Boyle 2017). Hierarchical order of governance for non-profit sport organizations is shown in Fig. 3.6. The largest number of non-profit organizations is engaged in organizing competitions and events for their members, which are either individual athletes, coaches,

44 Fig. 3.6 Hierarchical order of governance for non-profit sport organizations. Source: Bradbury and O’Boyle (2017)

3 Sport and Sport Environment

International sports governing bodies (e.g. FIFA) National sports governing bodies (e.g. Football Association of the Czech Republic) Provincial sports governing bodies (e.g. Ontario Volleyball Association) District sports governing bodies (e.g. Coimbatore Cricket Association)

referees, organizers, clubs, associations, and other club organizations. Non-profit organizations are interconnected, which can result in financial subsidies and crosssupport activities (Hoye et al. 2015). An example is the International Soccer Association (FIFA), which has supported the federations of five African countries that have made it to the 2018 World Cup in Russia with a total amount of ten million dollars (SITA 2018). When it regards youth support, the non-profit sector is trying to increase the number of children participating in sports to increase the visibility of the national team or to gain higher funding from the state calculated from the player base (Kristiansen et al. 2017). One of the non-profit organizations with the strongest influence on the education of athletes and world sports, in general, is the North American National College Athletics Association (NCAA). NCAA is run by its members and cares for the success of more than 450,000 college athletes from the USA and Canada in sports as in life as a whole. The main difference between college and professional sports in the USA is the NCAA’s focus not only on income but also on students’ achievements, ethics, and fitness, campus relationships, and student funding. A comparison of selected aspects in college and professional sports is shown in Table 3.2. Financial resources earned by the organization are distributed among the institutions operating under the NCAA. The most successful institutions receive the largest share. These include, inter alia, the following universities: – North Carolina (Michael Jordan, Vince Carter—basketball). – California, Berkley (Natalie Coughlin—swimming, Aaron Rodgers—American football). – Connecticut (Diana Taurasi, Ray Allen—basketball). – Stanford (Tiger Woods—golf, John McEnroe—tennis). – Florida (Tim Tebow—American football).

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Table 3.2 Comparison of college and professional sports Indicator Number of stadiums (American football) Attendance during the season in millions (American football) Audience of final events in millions (American football) Attendance in millions (basketball) Advertising revenue in billions of dollars (basketball)

College sports 128 (NCAA FBS) 43 (NCAA FBS)

Professional sports 31 (NFL) 17 (NFL)

160 (NCAA Bowl Series)

120 (Super bowl)

27 (NCAA D1) 1.1 (March madness)

22 (NBA) 0.9 (Playoffs)

Source: statista.com

– Michigan (Magic Johnson—basketball, Duncan Keith—hockey). – Ohio (Jesse Owens—athletics, John Havlicek—basketball). NCAA operates in line with the non-profit organization and amateurism principles, despite the huge revenue it generates. The amateur status of student-athletes prohibits them from earning money, either by performing sports or from private sector resources (sponsorship, advertising, etc.). Students may not have any sponsorship, marketing, or other agreements with businesses. Any agreement they made is deemed as a violation of the law with harsh sanctions for both parties. The only income that is provided to students is in the form of scholarships (Senne 2016).

3.3.3

Professional/Commercial Sector

Professional sport is a complex macroeconomic system consisting of several interconnected markets. Teams purchase the services of players and coaches; fans purchase match tickets, subscriptions to sports channels, and souvenirs; television companies purchase broadcasting rights to sports events; and the private sector purchases opportunities to sponsor or manage clubs (Gerrard 2004). In particular, club sports have become a commodity with high commercial potential. Some professional clubs are owned by wealthy entrepreneurs and others by multinational corporations such as Red Bull or Disney. The emphasis on managing these clubs is not so much on sports skills, i.e., winning, but rather on the return on investment to shareholders (Slack 2014). Bradbury and O’Boyle (2017) further defined two general groups of stakeholders in professional sport. Internal stakeholders include athletes, leagues, clubs, and associations and external include fans/spectators, corporations, community, and media. The professional sports environment model is shown in Fig. 3.7. The main objective of working with young athletes in professional clubs is to attract children in the effort of increasing the player base, which can be capitalized in the future through success, attracting more spectators and sponsors, or by selling or

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External stakeholders

Fans/supporters

Athletes

Internal stakeholders

Community

League

Professional sport

Governing bodies

Clubs

Media

Corporations

Fig. 3.7 Professional sports environment model. Source: Bradbury and O’Boyle (2017)

Board

Board

General sports director (GSD) Business manager for professional football

Business manager for youth fotball

Professional team / 1. team

Youth football / academy

GSD assistant Sports director

Professional team / 1. team

Youth football / Academy

Fig. 3.8 Basic types of structures of professional sports clubs in Europe. Source: Relvas et al. (2010)

exchanging for other athletes (team sports). The popularity of top youth sports has been growing in recent years (Kristiansen et al. 2017). Youth academies operate in the European sports club as part of them but legally independent and self-governed. According to research by Relvas et al. (2010), despite the formalized organizational structure, the biggest issue lies in the communication between the senior and youth sections of a club. Two basic types of professional club structures in Europe are shown in Fig. 3.8.

3.3 Three Sports Sectors

3.3.4

47

Case Study: Public Sector—Small Country Sports Policy

A country’s sports policy is key to sports management. Nevertheless, the level of professionalism or the type of sport, regulation, and government’s approach affects the activities of all sports organizations and athletes. Different approaches to sports management exist, along with sports issues that are relevant at the time in the given country. Various “small countries” from around the world were selected to demonstrate the diversity of the system and the position of sport in the country. Population or area is often used to define “small countries.” Finland, New Zealand, Jamaica, Lebanon, Qatar, and Hong Kong—which are comparable to Slovakia’s population—were selected to make the comparison between different approaches to sports management. Depending on historical and sociocultural conditions, different small countries choose different sports strategies. Some focus on support of a narrow range of sports, some on organizing international events, and others on copying strategies from neighboring countries with similar conditions but with a larger population (Houlihan and Zheng 2014). Sport offers an ideal platform for the development of cultural values and the formation of national identity. Especially in small countries, international sports achievements support nationalism and serve to make them visible to the world (Koski and Lämsä 2015; Sam and Jackson 2015).

3.3.4.1

Finland

Finland is a Nordic country with a population of 5.5 million, which is a member of the European Union. The country’s sports system is largely dependent on volunteering and—compared to other countries—sport is not given much attention. The original role of sport in Finland is community accessibility and people’s education. Adjacent countries started to implement sports strategies much earlier than Finland. This is so probably due to the deep-rooted ideal of equality and the emphasis on pluralism; the country did not even think of promoting selected sport types. Therefore, it is no surprise that this has been reflected in one of the traditional indicators of success, such as the number of Olympic medals. As a traditional winter sports country, Finland won only five medals at the Sochi 2014 Olympics and only six medals at Pyongyang 2018. The basic issue of sports in a country deals with investments in mass sports and investments in elite sports. Advocates of mass sports investments are of the opinion that increased investment in this type of sports leads to success even at the highest level. On the other hand, those who believe that investing in elite sports should be a priority state that without targeted grants they will not be able to maintain their

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current level on the international stage and that the elite sports should be the engine of the entire sports system in the country (Koski and Lämsä 2015).

3.3.4.2

New Zealand

New Zealand is an island nation in Australia and Oceania with a population of 4.8 million. Sport is one of the main features of national identity. It is considered to be one of the tools of increasing visibility, which presents New Zealand as a sporting country to the world. In particular, rugby—as the national sport—is supposed to give the impression of bravery, resilience, independence, and prosperity. Organization of the Rugby World Cup 2011 or co-organization of the Cricket World Cup 2015 is seen by the government as a sign of its competence and capacity—despite its size and geographical isolation—to make the most of the country’s economic and social cohesion. Even by meeting the sport challenges, New Zealand wants to be seen as a small but capable and innovative country rather than blaming the lack of resources (Sam 2015).

3.3.4.3

Jamaica

Jamaica is a Central American island nation with nearly 2.9 million population. It is part of the Commonwealth. Although sport in Jamaica is considered as an important part of national development, it is only getting a low budget priority from the local government. Commercial sports are more semi-professional than professional, as most competitions are dependent on amateur athletes. The only sport that can be considered fully professional is horse racing. Most professional athletes, especially in athletics, operate outside Jamaica. Occasional commercial international sporting events (golf, tennis, cricket, etc.) organized by the country have only minimal participation of Jamaican professional athletes. Sports policy addresses four main themes: sport for all (healthy lifestyle and socialization), sport for peace and unity (a tool of a stronger community system), sport for economic development (development of sport as a sector that can contribute to GDP), and sport and environment (sustainable landscape development and a healthy environment) (Toomer 2014).

3.3.4.4

Lebanon

Lebanon is a state in the Middle East with a population of six million. Sport in the country is fundamentally influenced by the politics and Christian and Muslim religious communities. Funds for individual sports are allocated according to the stakeholders’ beliefs and stances (ministry, president of the federation, general secretary, and majority representation of athletes in a particular sport).

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The supremacy of religion over the sport in the most popular sports, such as soccer (president and general secretary are Muslims) and basketball (president and general secretary are Christians), prevents talented athletes from other religious communities from participating. Redistribution of funds to sports federations that are “under political protection” without audits, overseeing, reviews, and evaluation damages the image of the sport. Private investors are, therefore, very careful when entering elite or community sports. In addition, sport generally does not attract a wider fan base. The reason is the violence at sports events, which is again caused by religious differences (Nassif and Amara 2015).

3.3.4.5

Qatar

Qatar is an emirate with 2.6 million inhabitants located on the Arabian Peninsula. Thanks to oil deposits, it is a rich country with a high standard of living. Due to its wealth, it has successfully become a global sports hub. Sports policy is focused mainly on the organization of international sports events and the building of sports infrastructure. Qatar will organize the World Cup in 2022. When representing the country, the so-called naturalization is also derogatorily named as buying athletes. This principle consists in changing the citizenship of athletes from other countries. It also seeks to integrate the children of migrants who have come to Qatar for work opportunities. Top sport lacks strategic planning. This small country focuses on too many sports instead of focusing on just a few disciplines. The current support of team sports, such as soccer or handball, takes away a large number of potential athletes for individual sports with better chances of success. Investments in the organization of major and elite sporting events may not bring increased interest in sports among the population as a whole. The main issues of development are mainly cultural barriers, in particular, the low participation rate of women in sport (Reiche 2014; Silva 2014).

3.3.4.6

Hong Kong

Hong Kong is a former British colony with more than seven million inhabitants, which since 1997 has become a special administrative region of China. Even after Hong Kong became part of China, it was able to retain its capitalist system and autonomy in all areas except diplomacy and defense. Therefore, the entire sports structure in the country is independent. Rapid economic growth is also reflected in a high standard of living. Despite a more systematic approach in the last decade and cooperation with more governmental and non-governmental funding, sports in the country are still very underdeveloped. By further investments, the government wants to reflect the

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country’s fundamental economic progress, foster national pride, and undermine China’s sense of subordination through international sports success. The three main issues of sports policy are sport for all, professional sports support, and providing for good infrastructure for organizing international sports events. Although the government is trying to find a balance between all three areas of interest, funding is not, in fact, allocated fairly and evenly. The country invests the most in elite sports, which are seen as an inspiration for young people, and in international sporting events, which are seen as a means of strengthening the international image. Hong Kong co-organized the Olympic Games in Beijing in 2008 and was the main organizer of the East Asian Games 2009. Despite significant efforts, the biggest problems so far lie in the third area—mass sports. The reason is the absence of tradition and culture of physical activity and the young people’s interest in academic areas rather than sporting (Zheng 2015).

3.3.4.7

Slovakia

According to the Sports Act #440/2015 Coll, the public interest in sport lies in the (a) support and development of youth sports providing for preparation and participation in Slovak national teams in major competitions, (b) protection of sports integrity, and (c) promotion of healthy lifestyle among the population. In legislation terms, sport in Slovakia belongs to the Ministry of Education, Science, Research, and Sport (MESRS). The sports public—led by the strongest soccer and hockey association—is of the opinion that sport is clearly a state’s priority, which can also be seen in the controversial Sports Act (440/2015 Coll) and sport funding. In the neighboring Czech Republic, the Czech Sports Union and the Czech Olympic Committee have been working for several years to reform legislation that would create an independent ministry of sports, such as in neighboring Poland (ČTK 2017; Kotian 2018).

3.3.4.8

Conclusion

Sports policy has a major impact on all sports organizations in a country. Limited human and financial resources force small countries to adapt the sport to these conditions. The logical precondition for these countries is to focus on a narrow range of sports to be able to train the best athletes in those disciplines. However, not all countries follow this notion. The reasons may be the popularity of global sports, liberal approach to sport, or religious influences. Some countries want to present their national pride or economic strength to the world through their top athletes and events that they organize, without hesitating to use large financial resources pumped either to the events themselves or even in some cases to buy the best athletes. On the other hand, numerous countries exist where, for various reasons, sport is virtually on

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Table 3.3 Main topics in the field of sports in the analyzed countries Country Finland New Zealand

Position of sport in the country Tool for community and educating people based on volunteering Symbol of national identity used to present the image of the country

Jamaica

Part of national development, but with a low budget priority and mostly at semiprofessional level

Lebanon

Form of presentation of political and religious views

Qatar

Tool for presenting the country as a global sports center, but with the absence of strategic management of its own sports structure Way of presenting economic growth through international events, but underdeveloped sports structure

Hong Kong

Slovakia

Promoting a healthy lifestyle and representing the country at major events

Main topics in the field of sports Financing of mass sports Financing of elite sports Presentation of positive qualities and prosperity Organizing international events Sport for all Sport for peace and unity Sport for economic development Sport and environment Religious and political affiliation of representatives of sports federations Organizing international events Naturalization of athletes Sport for everyone Supporting of elite sports Creating conditions for organizing international sports events Sports act Sport financing Development of youth sports

the fringes of social interest. A comparison of the position and main issues in sports in the analyzed countries is shown in Table 3.3. Different positions of sports in various countries and main sports issues point to the importance of geographical, social, economic, political, and religious effects on sports. Thorough knowledge of the conditions and acknowledgment of the significance of sports in each country can improve the understanding and the importance and mission of sport for the global society.

3.3.5

Case Study: Non-profit Sector—Soccer and Politics

Soccer is one of the forms of pop culture, which massively attracts people around the world and influences national and global views. Through its reach and impact, it offers the opportunity to express emotions and symbols that can influence political views and actions (De Waele et al. 2018). UEFA presents itself as an apolitical organization, but it goes hand in hand with politics. Although UEFA leaders present views that they do not want to mix politics and sports, they make many decisions that are regarded as highly political in nature (Hughson et al. 2016). According to the rules, some national teams that wage war or have other conflicts cannot compete against each other in qualifiers or championships. The situation

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between Ukraine and Russia is well known and current, but other examples of “forbidden matches” exist. These happen especially in the main events to which Kosovo, Serbia, or Bosnia and Herzegovina qualify. According to UEFA, six such forbidden encounters exist at present. In addition to Ukraine and Russia, which cannot compete against each other since 2014, Kosovo against Serbia (2016) and Russia (2019), Armenia against Azerbaijan (2010), and Spain against Gibraltar (2013) matches are also forbidden. These rules also apply to club soccer. However, it is not clear what would happen if these clubs would reach the finals of the Champions League or the European League, or if the national teams would reach the finals in one of the world cup events (Nestler 2019). UEFA, in its disciplinary rules, prohibits conduct that offends or otherwise violates the basic rules of fair and good conduct or which abuses a sporting event for manifestations of non-sporting nature. The association seeks to prevent political manifestations in sports venues by these rules and severely punish political gestures (UEFA 2019). In 2013, the Scottish club Celtic Glasgow was fined £42,000 for banners depicting Scottish national hero William Wallace and Irish Republican Army member Bobby Sands. As justification, UEFA cited the noncompliance of fans with the values of unity, solidarity, peace, respect, and fair play without discrimination on political, racial, national, or gender grounds. Opponents of this decision considered the fine to be hypocritical for two main reasons. The first one is to honor the memory of Nelson Mandel, who was also a prominent political figure. The second is the system in which national teams or clubs from selected countries cannot play against each other. From this perspective, according to UEFA opponents, this can directly be construed as political, and thus UEFA does not comply with its own rules (Muirhead 2014). The Scottish club was again fined for its fans in 2016 when some fans spread the Palestinian flags in a match against Israel’s Hapoel Be’er Sheva. These two countries are in armed conflict. It was impossible to oppose the nonpolitical motive for this act, and therefore the club had to pay a fine of €10,000. A much higher fine of €150,000 had to be paid by the Spanish club FC Barcelona, whose fans showed Catalan flags as a sign of support for the independence of this region of Spain. Fans defended themselves mainly by injustice and violation of the principles of freedom of speech. Another argument was that fans of their Madrid rival could provoke Barcelona fans by having Spanish flags without any retribution, even though this behavior would have a political undertone (Sportslawscotland.co.uk 2016). Although these measures and fines respond mainly to behavior and potential threats, from the fans’ point of view, the athletes themselves are often a problem. The incident from the 2018 World Cup match between Switzerland and Serbia is also well known. Several players of Albanian or Kosovo origin took part in the Swiss national team. Kosovo, home to Albanians in particular, declared independence in 2008, but Serbia does not recognize it, and there is tension between the two countries. After Switzerland’s goals, those players crossed their arms, which is a gesture resembling an eagle from the coat of arms of Albania (ČTK 2018). These problems are affecting the players of Turkey, who in 2019 celebrate a goal with a military salute in support of Turkey’s invasion of northern Syria (TASR 2019).

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Throughout history, countless similar situations happened in general in sports, not just in soccer. The most well-known political gesture in sport is considered to be a clenched fist in the black glove of American sprinters Tommie Smith and John Carlos when the American anthem was played during the medal ceremony in Mexico 1968, who protested against the position and discrimination of the people of color.

3.3.5.1

Conclusion

Even though non-profit sports organizations present themselves as apolitical, the influence of politics on their functioning cannot be eliminated completely, and they are forced to make decisions that cannot be called anything other than political on their own. These decisions are related to the prevention or assessment of political gestures of athletes and fans, especially at sporting events, but also outside them. Due to their global impact, political messages can be spread especially through the most popular sport, which is soccer, with a significant influence on political opinions and actions. That is why non-profit organizations with a global impact are considered both sports and political organizations.

3.3.6

Case Study: Commercial Sector—NHL Expansion

Sports organizations that want to maintain a competitive advantage are constantly looking for other growth opportunities. Once an organization has established its market position and built up its brand identity, one of the options for expanding its scope may be to enter new markets or develop new products. It is in this type of crucial decisions where the significance of strategic management and the strategymaking process is the most evident (Hoye et al. 2015). The Canadian-American NHL is the most prestigious and popular hockey competition in the world. However, this league has also fought in the past with a declining fan base. The fact that the NHL became the first professional league in the USA, which was forced to cancel the entire 2004/2005 season due to labor disputes between the league management and the players’ association, did not help to maintain sustainable growth. After resolving this situation, the NHL manages to increase revenues every year. The main contributors are the contracts for broadcasting rights and open-air matches, which are a success with the general public. The all-time highest attendance was recorded in 2014 during the Detroit versus Toronto match hosting more than 105,000 fans. Despite the continuous increase in popularity in the USA and Canada, the management of the competition is aware of the existence of other possibilities for the league’s expansion into new markets. Among them is the expansion of the competition by adding new clubs. The candidate cities are assessed for their overall readiness to join the NHL, which has many criteria including market potential, stadium capacity, and a wide range of economic and

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demographic data such as employment, population trends, or the stability of the local economic situation. Based on the best NHL-ready assessment, Las Vegas Golden Knights club has joined the league in 2018/2019. This was the first expansion of the NHL since 2000, which shows the strategic importance of this move. Unlike the last case, when the entry fee for clubs in Columbus and Minnesota was $80 million, Las Vegas paid $500 million. However, this strategic step has proved to be extremely successful not only from a sports point of view but especially from an economic and marketing point of view. The Las Vegas hockey team made it to the finals in their opening season, which no team in the recent history of American professional sports has managed to do. That is why the Las Vegas Golden Knights are considered the best startup club of all time. Due to the huge interest in home matches’ tickets, the club also introduced standing-room tickets, which increased the average number of spectators in the venue to almost 104% (fourth place in the NHL). In an effort to reach a younger audience, Las Vegas has created a channel on the Twitch Internet platform. This is the first professional club that wants to offer its fans an exclusive content in this way. If successful, this form of promotion can gain new sponsors and thus increase its income, which can inspire other professional clubs. The presence of a hockey club in the well-known city of gambling also increases the number of bets in the category of “miscellaneous,” which also includes hockey. Last but not least, the establishment of the Las Vegas Golden Knights has a positive impact on employment throughout the region. Seattle is another most ambitious candidate city for joining the NHL, which meets the requirements of the league management, but must complete the sports infrastructure (a common basketball and hockey stadium), which should be fully completed by 2020. Kansas City, Indianapolis, and Quebec City are also potential candidates. However, unlike Seattle, the expansion of the NHL to include the club from these cities is merely theoretical (Cintron et al. 2016; Brzezinski 2017; Fisher 2018; Powers 2018).

3.4

Sport Culture Role and Development

According to Bąk (2013), the concept of culture from the anthropological and sociological point of view has its etymological origin in ancient antiquity. It originated from the Latin “colo” or “colere” and was originally associated with tillage (agriculture). The Roman philosopher Marcus Tullius Cicero (106–43 BC) came up with a completely new understanding of a culture that he called philosophy a culture of spirit in Tusculanae Disputationes (45 BC). This laid the foundation for understanding culture as a property of human education. The first anthropological definition of culture was given by Tylor (1889), when they understood it as a complex unit that includes knowledge, faith, art, law, morality, traditions, and all other abilities and customs that a person had acquired as a member of society. If Tylor identified culture and civilization, the German philosopher M. Weber (1968) already in 1922 divided civilization and culture into the instrumental sphere and purposeful sphere, respectively.

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According to Mistrík (2006), culture contains objects, signs and symbols, values, customs, institutions, rituals, and other activities characteristic of a particular society. Therefore, culture is a cognitive system, i.e., a system of information and knowledge about the world; a symbolic system, i.e., a system of signs that record the contents of human consciousness; an action system, i.e., the sum of actions carried out by a community in its way; and an institutional system, i.e., a system of community institutions. Culture arises and changes as a result of daily human activities. It acts as a regulator of everyday activities and also as a standard for perceiving the world. According to Mistrík (2006), the functions of culture are as follows: though culture, a person understands the world and expresses the content of their consciousness; through the transmission of culture, communities are preserved for the future; through culture, communities are integrated; and through culture, communities differ from each other. Thus, culture can be understood as a reference system of a certain social unit (whole), representing a comprehensive summary of generally socially accepted tangible and intangible past and present results of human actions, taken over and passed on to future generations of the same social unit or other social units (Buocová 2006). Thus, society and group practices cannot be understood separately from the whole community where they belong. When studying a certain culture, it is necessary to act according to its meanings and values—one of the key requirements in social science (Giddens 1999). Girginov (2010) developed seven main aspects of culture to study sports management whereby they defined the fundamental processes in the sports environment, i.e., for the sports management needs (Table 3.4): 1. Culture is an organized, logical, and shared learning system that is transmitted and accumulated over time and is therefore deterministic and normative. 2. Culture is also an innovative and constantly evolving system and a place to test new observations and meanings. 3. The main function of culture is to create a nomos or order so that it can ensure the survival of a group of people. 4. Culture can be interpreted as an abstract category, but also as a limited world of beliefs and practices. 5. Culture is a dialectic of system and practice, where everyone presupposes another. 6. Culture is defined in relation to a rooted system of production. 7. Culture has a political significance. From the sports industry perspective, it is also interesting to distinguish between subculture and counterculture, which according to Buocová (2006) includes a set of specific norms, values, patterns of behavior, and lifestyle that characterizes a certain group within a wide community or distinguishes between the so-called dominant or main culture to which this group belongs (being a constructive part thereof). A. B. Hollingshead (1949) formulated the thesis that at the same

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Table 3.4 Culture key aspects, fundamental processes, and consequences Culture understood as Normative

Innovative Legal Dialectics of the system and practice Determined by production Political

Abstract category and bounded world

Significant processes Socialization and adaptation of people to culture through sport Creation of new sport cultures Social control and survival of a group System interaction between symbols and practical measures Sport socioeconomic organization Political recognition of the issue of culture/ multiculturalism Singularization and homogenization of sport cultures

Implementation in sports management Managers and mediators of meaning

Changes management Common management issues—specific solutions Use of mixed methodologies and capture of a practical system of dialectics Recognition of sports management as a political topic, and subsequent proposal of plans and schedules New forms of sport-related governance

Brand, organizational culture, and diversity management. Concerns about social inclusion, equality, and meaningful policies based on a universe of action between different cultures while maintaining social control. Researchers and managers need a clear idea of culture at an abstract level in order to cope with differences in various environments

Source: Girginov (2010)

stratification levels, specific subcultures arise, which are reproduced by interacting with each other differently at various stratification levels. The rules of differentiation between members of a certain social class lead to the emergence of a functional attitude, value, and normative complex, which includes attitudes to work, education, schooling, fashion, language, music, religion, political events, ethnic minorities, and the like, and which manifests itself in similar, and in relation to other groups, specific lifestyles and ways of responding to recurring social stimuli. Tradition and value are an important aspect of culture in the sports environment. Traditional sports values tend to be deeply rooted in sports organizations. Dominant values represent the strongest standards that are maintained by the vast majority of individuals within an organization. Typical dominant values tend to be part of the objectives and support of an organization’s philosophy and ideology (Hoye et al. 2015). The beliefs, values, and assumptions of sports managers represent their “ethos,” which is often interpreted as a national culture or “collective programming of the mind” (Girginov 2010). In the Oxford Dictionary, tradition is understood as a belief, principle, or way that people follow in a society for a long time. Mistrík (2006) defined cultural tradition as a set of objects, values, and ideas that a certain

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community has created so far and considers them to be the forerunners of the current culture. The areas of perception of value as well as its definition have changed and evolved over time. While most authors were inclined to believe that values are more hierarchical, Schwartz’s new view (Schwartz 1992) is interesting from the sports perspective. Schwartz understands values as relatively constant characteristics. The theory of values (Schwartz 1992, 1994; Schwartz and Bilsky 1987; Smith et al. 2006; Ištvániková and Čižmárik 2007; Jowell et al. 2007) emphasizes the following six features: – Values are beliefs—they are beliefs inextricably linked to emotions and not objective “cold” ideas. When values are activated, whether or not they are acknowledged by people, they evoke positive or negative emotions. – Values are stimulating constructs—they relate to the desired goals that people strive to achieve. For instance, success is the desired goal for most sports club managers. But also popularity, health, and willingness are values that encourage responsible action. – Values that go beyond specific actions and situations (these are abstract goals)—obedience, honesty, and perseverance, for example, are values that are important in sports. The abstract nature of values distinguishes them sufficiently from other concepts, such as norms and attitudes, which usually relate to specific activities, objects, or situations. – Values are the guiding principle in selecting or evaluating activities, plans, people, and events—values serve as standards or criteria. Actions, plans, people, and events are considered to be either good or bad, legitimate or illegitimate, worth pursuing, or straight rejecting, depending on whether they make it easier or harder to achieve values. The impact of values on everyday decisions is seldom known. Values are often recognized when the actions or judgments under consideration have conflicting consequences for other values that are also deemed important. – Values create a structure—human values form a commanded system of preferred values, which then characterize them as individuals. They attach greater importance to justice or success, originality or tradition, material wealth, or spirituality. This hierarchy of values also distinguishes them from norms and attitudes. – The mutual importance of many values determines action. Any attitude or behavior has consequences for more than one value. The interrelationship between important competitive values is a guide for attitudes and behavior. Values contribute to the action insofar as they are relevant to the overall context (since that moment they are activated) and important for the individual. According to Schwartz (1992), the essence of value is a motivational goal. Specific values that form the same goal then form a motivational type of value. Schwartz believes in the existence of ten motivational types, i.e., power, success, hedonism, stimulation, self-determination, universalism, benevolence, tradition, conformity, and security (Barnea and Schwartz 1998).

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As stated by Ištvániková and Čižmárik (2007), the necessary precondition for the emergence of the type of values was the inclusion of all key values, which are recognized in most countries around the world. Historically preserved value questionnaires from different cultures were also analyzed, together with religious and philosophical materials related to the field of values. Understanding culture and perceived value are of great importance in sport. An example is the fan’s perspective. Sports events in different geographical parts of the same country may have different attendance. While residents of larger regions may be overwhelmed by sporting and cultural events, regions with fewer events may have much higher attendance at seemingly the same sporting events. University sports are very popular in the USA, and attendance is comparable to that of professional leagues. The difference is the perception of value by American spectators. While spectators of university sports are mainly concerned with supporting young athletes and the desire to be a part of success, then with professional sports spectators primarily look for entertainment and show. Another example of understanding the culture and perceived value of sport is its impact on the development of relationships in the community. The value of sport is created by authorities, such as community, government, sports, or others (organizations and individuals). Sport may have a positive impact on various areas of community life, such as public health, education, gender equality, community, development, and the like (Kidd 2008; Jarvie 2012). However, these positive sport aspects also have a downside. Sport often leads to the spread of violence, hatred, marginalization, social exclusion, or even racism (Jarvie 2012; Spaaij et al. 2014). It is these negative aspects that are under the microscope of the authorities. Removing or reducing the impact of individual negative aspects of sport improves global development. As an example is UEFA’s long-standing global campaign—NO TO RACISM—which is directed against racism in soccer. Within the development of sport in the community, it is possible to talk about the importance of the development of sports inclusions and social inclusion as well (Coalter 2002). This mission can be understood from two perspectives. The first is in the form of supporting the positive aspects of sport in the community, for example by increasing children’s sports skills and sports awareness in the community, building cooperation between schools and sports organizations, developing coaching skills, building and modernizing sports facilities, or supporting sports organizations otherwise. The second is in the form of eliminating the negative aspects of sport in the community, for example by reducing crime, promoting employment, or improving health in the community (Edoardo et al. 2017). However, influencing these aspects is very problematic, as opportunities in the field of sport are often limited. Great responsibility lies precisely with sports organizations, which often do not have a suitable combination of factors that could appropriately affect individual aspects of the sport. The main problems include the limited ability of these organizations to implement individual steps for change if they go beyond their reach. An example is a need for mass cooperation in solving problems in the field of crime or racism. In these cases, it is necessary to cooperate with high-tier authorities, such as state authorities or other organizations with a wider impact. However, it is necessary to think about the coordination of the

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interests and goals of organizations, the community, and the stakeholders, because their diversity can also complicate achieving the goal (MacInstoh et al. 2016). However, in aligning the interests and objectives of stakeholders, such involvement in the sports environment subsequently offers a wider range of opportunities to achieve key changes, e.g., the implementation of various projects. Projects represent an opportunity to not only support the positive aspects of sport in the community environment but also eliminate negative ones. Notwithstanding the project’s focus, it is necessary to establish partnerships between the various stakeholders aimed at achieving common project goals within the community, as community development is closely linked to the development of sport in the community. These activities can be understood as a process in which people and organizations pursue a common interest in order the improve the quality of life of citizens, children’s health, or support of various sports associations within the community (Skinner et al. 2008; Vail 2007; Ledwith 2011). This approach is very important in sport. Through contacts, sports organizations can gain important partnerships or deal with their issues. The original system for building a sports club was based on the geographical principle. Players came from the club’s vicinity and naturally professed similar cultural traditions. However, the development of scouting and the effects of globalization marked a turning point in professional sports. Most of the world’s leading clubs in all sports have begun to attract players not only from neighboring countries but from all over the world (Storey 2011). This has had an impact on traditions and values, which are an important part of the culture of the sports environment, as traditional cultural values are deeply rooted in sports organizations. These values are also usually part of the organization’s goals and underpin its philosophy and ideology (Hoye et al. 2015). Changes in the thinking of soccer clubs are closely related to globalization, which brings a completely new perspective to the sports environment, i.e., a new culture. Globalization is not only an important part of modern sport but also an important part of globalization. On the other hand, globalization increases competition for less attractive domestic competitions in smaller countries, which have to compete for fans with renowned foreign sports leagues (Giulianotti and Robertson 2009; Yunduk et al. 2019). With regard to the situation in England, clubs were formed on religious (Aston Villa founded in 1874) or labor (Arsenal founded in 1886) foundations. Both groups, believers and workers from the same plant, came together in sports forging a sense of community building. Foreign players practically did not exist in such clubs. This approach to building a sports club has gradually disappeared by transforming the rural lifestyle into urban (Holt 1990). In 1992/1993 season, when the highest English league was formed named Premier League, 69% of all players brought on to the pitch were home players. In the season 2011/2012, it was only 37% (Bullough et al. 2016). In the 2007/2008 season, only foreign players were among the top ten scorers of the league, which means that these players brought quality soccer to England (Madichie 2009). In the international European Champions League, only 21 Englishmen played in the group stage in the 2014/2015 season, despite the fact that four English teams were involved, which together with Spanish and German clubs was

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the highest number of clubs. Globalization and the open market have fundamentally changed the culture of the top English league, which is considered the best soccer league in the world (Bullough et al. 2016). As in England, the development of Spanish sport is linked to foreigners. Modern sports practices began to develop in Spain later than in other European countries—in the last quarter of the nineteenth century. Many Spanish clubs were founded, which closely worked with foreign experts and specialists with years of experience in the sports industry. Until then, soccer clubs existed only in an amateur form (García 1986). Even in Germany, the number of foreign players has grown over the years. In 1963, only three foreign players played in the top German league. 40 years later in the 2007/2008 season, this number was more than 150. In connection with these and other similar cultural changes in the sport, the importance of the issue of foreign players in domestic leagues is becoming very topical. According to Taylor (2006), migration in soccer has a rich history as evidenced by the professionalization of soccer dating back to the 50s of the twentieth century. Several authors have addressed this issue. Poli (2010) found that the higher migration of players in all European soccer leagues brings the majority of new players from Eastern Europe and Latin America. Travlos et al. (2017) analyzed the effects of foreign players on the Greek league. They found only a statistically significant relationship between investment in foreign players and the position of clubs in the league, but also an increase in revenue from the media (broadcasting rights, streaming) and from the sponsors, which allowed clubs to invest even more in development. Flores et al. (2010) defined a stronger focus of leading European sports clubs on the talent rather than on the origin of players, which contributes to the diversity of nationalities in the most ambitious clubs. They also note that the global market has contributed to greater competitiveness among European clubs, but also emphasize the leader–follower relationship whereby stronger clubs in economic and sporting terms have better access to talented players than clubs with weaker financial and sporting backgrounds. Bullough et al. (2016) argue that modern sport is a commercial product and therefore the managers of sports leagues are interested in creating the most interesting content for sponsors or broadcasting services. Athletes of different nationalities play a key role in creating this content. Their participation is not mutually exclusive with the development of home athletes. From the soccer perspective, the Dutch and Spanish leagues are at the forefront of the elite European leagues in creating conditions for home-grown players, while the English and Italian leagues rely mostly on foreign players. Foreign players by affecting home-grown players have a partial effect on national teams of the countries where they play. However, this does not necessarily have to be negative. If they are of sound quality, they can participate in the development of the abilities and skills of home players with the potential of being included in the national team. If the league management wants to affect the development of home players through giving opportunities in matches, it must do much more than just to introduce regulations on the number of foreign players (Hardman and Iorwerth 2014; Balsmeier et al. 2018). In November 2019, 78 Slovaks played in foreign national European leagues, which is 17th place among all countries. The first places were players from Brazil, France, and Spain (statista.com). Of the total number of players

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Table 3.5 Average number of foreigners in European football clubs

Share of foreign players Share of foreign starts

Country ESP FRA (%) (%) 41.88 51.19

GBR (%) 66.45

GER (%) 52.98

ITA (%) 60.5

NED (%) 46.11

POR (%) 67.73

46.66

71.81

53.28

65.5

48.86

70.98

50.23

Source: Varmus et al. (2020) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 ESP

FRA

GBR

GER

ITA

NED

POR

Fig. 3.9 Trend in the number of starts of foreign players. Source: Varmus et al. (2020)

who played in foreign leagues in 2019, the top three are Brazil (1330), France (867), and Argentina (820). Serbia (fourth place, 458 players), Columbia (eighth place, 382 players), and Croatia (ninth place, 374 players) are also in the top ten. This confirms the continuation of the trend from the beginning of the migration increase period when the largest section of foreign players came from Latin America and the Balkans. The top ten ends with Nigeria (361 players), which symbolizes the increasing trend of the African players (statista.com). Varmus et al. (2020) point to the influence of foreign players on the sustainability of the team successes at the national and international levels. Their research shows that Europe’s leading soccer clubs have a relatively significant number of foreign players and that these players get more opportunities in matches than home players. In their research, they analyzed with teams that played at least once in the Champions League or UEFA Europe League finals (formerly the UEFA Cup) in the 2009/2010–2018/2019 seasons. The greatest number of appearances of foreigners in matches was seen in teams from the English and Portuguese and the least from Spanish and Dutch leagues (Table 3.5). The trend in the number of appearances of foreign players in the clubs of these countries, breakdown by seasons, is highlighted in Fig. 3.9. The shift can be seen with all the clubs.

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These findings suggest a significant shift in the modern understanding of club identity. They also assessed the effect of foreign players on success in national, but mainly international, competitions where the national aspect (players from the club’s home country) is replaced by cubs’ aspects (players of all nationalities). The issue of foreign players is also sensitive from the fan’s perspective. Every fan perceives the relationship of players to the club logo, jersey, or club colors. While this is true regardless of nationality, concerns often arise as to whether players from distant players can build an honest bond with the club. It is definitely harder than for players who grow up in the city from an early age and have an emotional bond to it. Quality foreign players are accepted everywhere in the world, but those who are weaker than home players should never get into the clubs. Well, this is not always the case (Tokoš 2018). The Spanish Autonomous Community of the Basque Country is the opposite of globalization and foreign players, and soccer clubs (the most popular sport in Spain) from this region are known for some form of protection of human capital. They offer a sufficient number of opportunities for young players from their region, which is reflected in the largest ratio of players who made it to the youth teams with regard to the total number of players from this region among all parts of Spain. Unlike the regions with the largest total number of soccer players, such as Madrid and Catalonia, with many young players, where clubs’ ambitions do not provide them with adequate opportunities, as they have many experienced players and world stars and where young players tend to play in junior competitions, in Basque region however it is the other way around. And it is the experience from the highest senior league or international competitions that is one of the main criteria in the selection for youth teams (Corral and Calero 2014).

3.4.1

Case Study: Foreign Players Impact on Success in Soccer

The change of culture in sports increases the role and importance of foreigners in team sports. History suggests that the trend will continue, and the number of foreign players will grow across sports. This case study examines the most popular sport in the world—soccer—and the first best soccer leagues, also called the TOP 5. These are the English, Spanish, German, Italian, and French leagues. The aim is to find out the influence of foreign players on the success of clubs by analyzing their number and the number of appearances for the clubs that ended at the top of the table and those at the bottom. Data are taken from the statistical portal transfermarkt.com.

3.4 Sport Culture Role and Development

3.4.1.1

63

English League

The highest soccer competition in England is deemed to be the best national soccer league in the world due to its high competitiveness. Every year, the teams that are placed in the top four positions in the table advance to the international Champions League. From the season 2009/2010–2018/2019, a total of seven different teams managed to do that, of which two became the winners of the Champions League (Chelsea—2011/2012, Liverpool—2018/2019). The three worst teams are relegated from the English league. The average ratio of foreigners and their appearances in the team that made it to the Champions League and those that were relegated in the given years is shown in Fig. 3.10. In the 2009/2010–2018/2019 seasons, the English top league shows a higher share of foreigners and their appearances in successful clubs; nevertheless, the ratio of players in clubs from the bottom of the league table was not less than 50%, and the ratio of their appearances was lower only in 2010/2011 season. In addition to the 2011/2012 season, the ratio of foreign players’ appearances in successful clubs is always above 70%. It follows that the English league can be deemed as being heavily impacted by foreigners.

3.4.1.2

Spanish League

At the top of the Spanish league are the big clubs—Real Madrid and FC Barcelona— which have won 33 and 26 titles, respectively. Only 29 titles were won by other clubs. The four best teams qualify for the Champions League, which included eight different clubs between the seasons 2009/2010 and 2018/2019. In the same period, Spanish teams won this competition 6 times. Every year, the teams from the last three places in the table are relegated to the lower tier. The development of the ratio 80.0 75.0 70.0 65.0 60.0 55.0 50.0 45.0 2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

% players - Champions League

% starts - Champions League

% players - relegation

% starts - relegation

Fig. 3.10 Share of foreign players and their starts—England

2017/18

2018/19

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80.0 70.0 60.0 50.0 40.0 30.0 20.0 2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

% players - Champions League

% starts - Champions League

% players - relegation

% starts - relegation

2017/18

2018/19

Fig. 3.11 Share of foreign players and their starts—Spain

of foreigners and their appearances in the team that made it to the Champions League and those that were relegated in the given years is shown in Fig. 3.11. Since the 2014/2015 season, the Spanish league has shown a significant difference between the number of foreigners and their appearances with successful and unsuccessful clubs. The ratio of foreign players in successful clubs has not fallen below 50% since this season. It is similar to their appearances. While until the 2014/ 2015 season, they exceeded the 50% limit only in the 2011/2012 season, since the 2014/2015 season they have not fallen below the 50% limit even once—and exceeded the 60% limit twice. Both observed indicators have a long-term rising trend in successful clubs.

3.4.1.3

German League

The dominant club of the German league is Bayern Munich, which won the title eight times between the 2009/2010 and 2018/2019 seasons with only two “interruptions” by Borussia Dortmund. Until the 2011/2012 season, the three best teams qualified for the Champions League, but since this year, their number has been increased to four. Together, eight different German teams have made it to the Champions League in this period. In 2013, a purely German final took place in the Champions League between Bayern and Borussia. The three weakest clubs are usually relegated from the top league. The average ratio of foreigners and their appearances in the team that made it to the Champions League and those that were relegated in the 10-year period is shown in Fig. 3.12. The development of the number of foreigners and their appearances in the German league does not point to significant differences between successful and unsuccessful clubs, but the number of appearances of foreigners has an increasing trend in both types of clubs.

3.4 Sport Culture Role and Development

65

80.0 70.0 60.0 50.0 40.0 30.0 20.0 2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

% players - Champions League

% starts - Champions League

% players - relegation

% starts - relegation

2017/18

2018/19

Fig. 3.12 Share of foreign players and their starts—Germany

3.4.1.4

Italian League

The Italian teams were at the forefront of the European soccer scene from the 1980s until the turn of the millennium. At present, however, only Juventus Turin keeps up with the best clubs and dominates the home league. During the 2009/2010–2018/ 2019 seasons, Juventus managed to win the Italian league 8 times consecutively since the 2011/2012 season. Four Italian clubs advanced to the Champions League until the 2011/2012 season, but this number was reduced to three since this season due to the worsening results of Italian teams. From the 2017/2018 season, the number has returned back to four. During this time, eight different clubs appeared in the Champions League. The last Italian winner was Inter Milan in the 2009/2010 season. Every year, the three worst teams are relegated from the top-tier Italian league. The average ratio of foreigners and their appearances in the team that made it to the Champions League and those that were relegated in the given years is shown in Fig. 3.13. The difference in approach to foreigners in the Italian league began to manifest itself more significantly from the 2014/2015 season. While the ratio of foreigners and their appearances in unsuccessful clubs exceeded 50% only in the 2016/2017 season, not a single indicator in the best clubs had dropped below 60%. The overall trend in terms of the number of foreigners and their appearances is increasing in successful clubs, and in the 2018/2019 season, these clubs were made up of almost 70% of foreign players, who made almost 80% of all appearances.

3.4.1.5

French League

The French soccer league does not have as much historical credit as the other four leagues, but it still ranks among the top five leagues in the world. Paris

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80.0 70.0 60.0 50.0 40.0 30.0 20.0 2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

% players - Champions League

% starts - Champions League

% players - relegation

% starts - relegation

2017/18

2018/19

2017/18

2018/19

Fig. 3.13 Share of foreign players and their starts—Italy 80.0 70.0 60.0 50.0 40.0 30.0 20.0 2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

% players - Champions League

% starts - Champions League

% players - relegation

% starts - relegation

Fig. 3.14 Share of foreign players and their starts—France

Saint-Germain is the best in the home competition, which has won six domestic titles over 10 years. However, together with other French teams, it cannot get a big success on the international stage. In the 2009/2010–2018/2019 seasons, the three best teams advanced to the Champions League every year. Together, a total of seven different teams advanced. Every year, three worst clubs are relegated to a lower tier. The development of the ratio of foreigners and their appearances in the team that made it to the Champions League and those that were relegated in the 10-year period is shown in Fig. 3.14. In the first five seasons, no significant differences in the number of appearances of foreigners in the French league were seen concerning clubs that ended up at the top or the bottom of the table. Since the 2015/2016 season, however, there is a trend

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where more successful clubs have a larger number of foreigners in their squads getting more opportunities on the pitch than in unsuccessful clubs.

3.4.1.6

Total

Apart from the German league, successful clubs of all other competitions under analysis had a larger ratio of foreigners and their appearances than unsuccessful clubs in the 2009/2010–2018/2019 seasons. The ratio of foreign player appearances in successful clubs (Figure) is very high, especially in English and Italian leagues. Since the 2014/2015 season, their ratio is greater than the share of home players in all successful clubs, regardless of the league. The number of foreign player appearances in unsuccessful clubs (Figure) confirms the focus of the English league mostly on foreigners. On the other hand, in Italy, where successful clubs play mainly with foreigners, however, unsuccessful clubs together with Spanish leagues tend to rely on foreigners the least compared to clubs from other countries. The average ratio of foreigners in those leagues for the entire period between the 2009/2010 and 2018/2019 season (Fig. 3.15) shows the differences in the approach to foreigners in different countries. While in the German league, the difference is minimal, in the Italian league, it is more than 20%. A bigger difference of more than 10% is in the Spanish and English leagues, which have the largest ratio of foreign player appearances, both for clubs that have qualified for the Champions League and for the clubs that have relegated.

80.0 74.0 70.0

64.3

63.2

58.8

60.0 52.7 52.0

52.3

51.0

50.0 42.4 38.0

40.0 30.0 20.0 England

Spain

Germany

% starts - Champions League

Italy % starts - relegation

Fig. 3.15 Share of foreign players and their starts—5 countries

Francúzsko

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3.4.1.7

Conclusion

The importance of foreign players in sports clubs is supported by the fact that in the world’s top five soccer leagues, successful clubs give on average more chances to foreigners than home players than is the case with unsuccessful clubs. Clubs that were relegated to lower tiers offered home and foreign players similar opportunities or were more focused on home-grown players. An exception is the English league, in which both groups of teams focused mainly on foreigners. Quality players from all over the world are therefore the reason why the highest English competition is considered the best national soccer league in the world.

3.5

Sports Organizations Funding

Sports organizations can have different hierarchies. A simplified model of the standard hierarchy of a sports organization abstracted from international associations and other stakeholders (state, cities, regional associations) is given in Fig. 3.16. This is the model that is used in most countries. Each sports association (unit) consists of sports clubs with a direct influence (in most countries) on the election of their representatives (executive power) to sports associations. Sports clubs are represented by teams or individuals. It depends on the nature of the sport or a combination of sports. From the sports ecosystem perspective, sports clubs play a key role. It is a place where most fans experience joy and excitement, as well as a place where the money ends at the end of the value chain. The similarity of the sports environment to the classic business sector is not only in the application of managerial approaches, globalization, or potential high returns. As in companies, sports organizations need to set up the right and sustainable funding (Fig. 3.17) to ensure their functioning.

Sports association 1

Sports club 1

Team 2

Team 2

Sports club 2

Team 2

Sports association 2

Sports association n

Sports club n

Individuals

Fig. 3.16 Standard hierarchical arrangement of sports organizations. Source: Varmus et al. (2019)

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Resource allocation

Assets

Income

Team salaries

Team salaries

Team salaries

Academy

Sale of talents

Acquisition of talents

Stars

Commercial income

Facilities, promotion

Fan loyalty

Gate receipts

Club management

Fig. 3.17 Cycle of a successful club. Source: Sultan and Collignon (2014)

Various studies have shown that victories are the best guarantee for income protection. While victories are a combination of many factors, such as couching, team chemistry, infrastructure, or luck, in principle, the best teams are the ones that invest the most in getting the best players. For some teams, it is easier to buy players rather than gradually growing them and building a player base. Building a player base is a long-term process that Sultan and Collignon (2014) compare to venture capital. Supplying young players with high potential does not mean that these players will become stars in the future. According to Sultan and Collignon (2014), two main sources of revenue for clubs (excluding the media) exist that have not yet been fully utilized especially in Europe—marketing and match tickets. North American sports have already seen a huge shift in the sale of commercial stadium names, developments in sponsors’ relationships, and improved sales of club products in foreign markets. European sports analysts have found three significant differences compared to North American (Fort 2000): 1. European leagues are national and international in principle, and organizations have learned to manage these aspects. 2. North American sports (leagues) do not have a system of ascension and relegation, as it is a norm in European leagues (e.g., in soccer). 3. In North America, no cascading system of sports funding from “higher” incomes exists (using income from higher, international tiers to fund the lower ones). Most literature on European sport, with a few exceptions, emphasizes the idea that sports teams do not generate profit (Sloane 1971; Cairns et al. 1985). As stated by Fort (2000), it can be concluded that the prevailing idea is to maximize profits of victories as the main objective of European club owners. Kesenne (1999)

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Table 3.6 Differences between the European and North American model of management of sports organizations Characteristic Basic goal of clubs Leagues—promotion/ relegation Leagues—international reach Financing of leagues and competitions Sources of funding League competition

European model Success Yes

North American model Financial profit No

Yes Cascade system

No Each league has its own resources

State support (public resources) Horizontal and vertical

No state support, but better commercialization Horizontal

Table 3.7 Competition factors in Europe (professional football clubs) Characteristic Ownership of media rights Tax burden and social charges Listing of clubs on the stock market Co-ownership of clubs by the same shareholders Budget control of clubs Media rights (million €, 1999/ 2000) Turnover (million €, 1999/ 2000)

Germany League/ clubs 56% 1

England Clubs

Spain Clubs

France League

Italy Clubs

50% 20

48% 0

77% Forbidden

50% 3

Up to 49.4% Yes 300

Up to 9.9% No 800

Up to 5% No 300

Forbidden Yes 260

Forbidden in the same division No 400

700

1200

600

600

1000

Source: Bourg (2004)

stated that the biggest difference between European and American is that American clubs are of profit-making nature, whose goal is to generate profit, while the only goal of European clubs is to be successful in what they are doing. Primault and Rouger (1999) state that in the American environment, apart from the horizontal competition, no vertical competition between league levels exists, so it is not surprising that American clubs tend to make a profit rather than maximize victories. According to the claims of the authors above, the fundamental differences between European and North American models can be summarized in Table 3.6. Bourg (2004) is of the opinion that although very similar principles are used in the individual models (“European model” and “North American model”), several different operational methods exist on a country-by-country basis (Table 3.7). Within the sports ecosystem, a number of entities that offer or buy products or create financial resources exist. Finances flow in different directions through the media, leagues, clubs, fans, or commercial enterprises (Fig. 3.18). Fans buy tickets, various fan products, and TV fees. Clubs pay players and the backroom staff but receive revenue from TV rights, sponsorship agreements, ticket

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Fans

TV fees

Sale of tickets and products Transfer fees

Ticket sales

Broadcasting rights

Media

Income distribution

Leagues

Clubs

Salaries

Players (through agents)

Sponsoring Sponsoring

Sponsoring

Brands

Fig. 3.18 Sport ecosystem: Money flow. Source: Sultan and Collignon (2014)

sales, and various fan products. It is a system in which each subject has an important role, and it can be said that they are closely interconnected, even interdependent. Figure 3.19 shows a model of a sports system that is emerging in Europe. The model shows that even with a relatively small set of stakeholders, it is a complex set of interactions. The figure arrangements show typical sports management with arrows indicating resource flows. From the economic point of view, this discussion leads to questions on the reasons why voluntary schemes and sports clubs exist and why they have broad hierarchical functions. According to Willie (2017), five main types of revenues exist—broadcasting rights and television contracts, match tickets, souvenirs, sponsorship, and advertising. However, the author focuses mainly on North American sports leagues (NFL— American football, NBA—basketball, MLB—baseball, NHL—hockey) or clubs in the world’s most successful sports leagues in the world, such as English or Spanish soccer leagues. An important source of funding for sports organizations in Europe is the public administration itself or mechanisms for direct support of individuals, such as tax allocation or sports vouchers. These mechanisms vary depending on the legislation in specific countries. Other sources of income for sports clubs can be grants and financial rewards, i.e., the so-called prize money from international federations, or player transfers, or conversely, from the purchase of players with high marketing attraction (e.g., Asian soccer players in the best leagues). Part of this income is fixed and does not depend on the club results (broadcasting rights,

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Public environment Economic and political priorities

Public environment Economic and political priorities

Sports management Government / Sports institutions

Taxes Public environment Economic and political priorities Lottery

Sports clubs

Time

Participants / Volunteers

Charges

Fig. 3.19 Traditional model of a European sports organization for mass sports. Source: Adjusted according to Downward et al. (2009)

sponsorship), while other parts are directly dependent on performance and results (match tickets, prize money). Semi-amateur, amateur, and youth clubs can also be funded through membership fees. The financial flows of sports organizations vary depending on the type of sport, the country, the legal form of the organization, or other aspects. By combining theoretical and practical knowledge, the resources of sports clubs come mainly from broadcasting rights and TV contracts, tickets, souvenirs, sponsorship, advertising, government grants, international federations (grants and prize money), and player transfers.

3.5.1

Broadcasting Rights and TV Contracts

Leisure time and betting are still important parts of sports. However, the problem today is that instead of going directly to a match or other game, it is possible to watch everything at home in front of a screen. This fact is of particular importance due to the significant increase in the prices of sports broadcasting rights in recent years (Kringstad et al. 2018). The sale of broadcasting rights has gradually become a major source of direct revenues in the North American leagues and other most-watched leagues in the world (Madden 2019). These include the French, Italian, and Spanish soccer leagues. Comparing the income structure of soccer clubs in those leagues is shown in percentages in Fig. 3.20.

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60 50 50 40

38

36 37

27

30 20

20

20 9

10

12

10 11

11 5

6

8

0 Domestic broadcasting

Revenie from EUFA

Gate receipts

France

Spain

Sponsorship / commercial

Other

Italy

Fig. 3.20 Revenue structure of football clubs in 2015—broadcasting rights. Source: statista.com

Broadcasting rights account for up to 50% of clubs’ revenues in Italy, 37% in Spain, and 36% in France. In the 2015/2016 season, the top English league received €3.7 billion from home broadcasters alone. The Spanish and French leagues also received more than a billion euros. The German and Spanish highest competitions were above the 800,000 mark (Červený 2015).

3.5.1.1

Tickets

In team sports, the income from admission or the sale of season tickets for clubs is very attractive. However, unlike direct income from TV contracts, team performance, opponent attractiveness, stadium or hall capacity, fans loyalty, and marketing also play a role in this type of income. In other sports, e.g., organization in outdoor areas, the weather can also play a key role.

3.5.1.2

Souvenirs

As with the income from the tickets, the performance of a team or individual and the loyalty of the fan base are very important when selling souvenirs. The advantage of selling souvenirs, especially with global clubs, athletes, or events, is the international reach. Fans can buy souvenirs directly over the Internet, and they will be delivered to them regardless of the country or continent. In professional sports, souvenir sales in 2015 reached $20.1 billion.

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60.0

55.3 43.1

44.0

2008

2009

46.3

48.6

57.5

60.1

62.7

65.8

51.1

37.0

40.0

20.0

0.0 2007

2010

2011

2012

2013

2014

2015

2016

2017

Fig. 3.21 Development of the sponsorship amounts between 2007 and 2018. Source: statista.com

3.5.1.3

Sponsorship

The key source of income is sponsorship for the vast majority of professional sports clubs. Sports sponsorship is a mutually beneficial relationship between people or companies whereby the sponsor provides the sponsored several benefits in exchange for associating themselves or their organization with a sport, event, sports equipment, athlete, or club (Eksteen 2012). Even after the end of sponsorship, the sponsor may remain forever in the history of the sponsored club, e.g., color combination that may have been associated with a successful era of a club, athlete, or event (Delia 2017). Sponsorship includes the following types: individual athlete, club, team, event, sports leagues and competitions, sports venues (stadiums, halls), sports broadcasts and awards, and audience votes. The amount of funds available to professional sports organizations through sponsorship agreements is directly proportional to the return on investment for the sponsor. This arises from an increase in sales or the expansion of the business achieved by the sponsor through awareness-raising or own sports-related marketing activities. Sports organizations with a global, regional, or strong national profile have an advantage in the sponsorship market. This is because sponsors can present their products directly to a large number of fans and also increase self-awareness through media coverage of the organization or athlete, along with media coverage of the competitions in which they play (Hoye et al. 2015). The development of the sponsorship amounts between 2007 and 2018 is shown in Fig. 3.21. The highest sponsorship contributions are in North America. Europe is second followed by Asia and the Pacific. The development of the sponsorship amounts between 2007 and 2018 is shown, breakdown by region, in Fig. 3.22. Naidenova et al. (2016), on the other hand, question the return on the funds provided by the sponsors in their research. Their research was focused on soccer. However, even the most popular sport in the world cannot bring sufficient benefits to

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75

70.0 60.0 24.2

50.0 40.0 16.5

17.2

18.1

18.9

19.8

30.0

21.4

16.0

16.7

17.6

14.1

14.5

14.8

15.3

13.3

14.0

16.6

12.6

15.7

12.0

14.8

11.2

3.6 2.0

3.7 2.1

3.9 2.2

4.0 2.3

4.2 2.4

4.3 2.5

4.4 2.6

4.5 2.7

4.6 2.8

2010

2011

2012

2013

2014

2015

2016

2017

2018

12.1

12.9

13.5

10.0

10.0

10.6

0.0

3.5 1.9

2009

20.0

20.6

23.1

22.3

Other countries Europe

Central and South America North America

Asia and Pacific

Fig. 3.22 Development of the sponsorship amounts in regions between 2007 and 2018. Source: statista.com

cover sponsorship investments. The main reason is the sponsorship agreements. The more popular the club is, the more lucrative the sponsorship agreements are. When comparing sponsoring companies with companies that never made any sponsorships, the authors did not observe any significant impact on economic results. Therefore, they consider sports sponsorship to be mostly a charity. As a potential explanation, they state that the sponsors are interested in the sports they invest in. This is also supported by the fact that companies owned by individuals have a greater tendency to become sponsors. Conversely, companies owned by financial institutions or owner associations are less willing to sponsor. Only the main soccer clubs’ sponsors were analyzed in the research, and the authors admit that possible return on sponsorship investments may exist with other sponsors. Return on investment is also possible in other sports with different types of sponsorship agreements. Managers of sports organizations and events usually offer two alternatives in sponsorship agreements. The first is visibility, and the second is the added value for the sponsor. In terms of visibility, it is not just about the classic sponsor logos on sports venues, jerseys, or graphics. The strongest presentation is directly through the names of the competition or clubs. In the largest traditional leagues, the most popular sports have strategic partners, but the name of the competition never changes (Major League Baseball, USA; Continental Hockey League, Russia, and Eastern Europe) or bears the name of the association or federation (EUFA Champions league—soccer, Europe; FIBA Europe Cup—basketball, Europe; ISAF Sailing World Cup—sailing, worldwide). With seemingly smaller leagues and competitions, the name of the strategic sponsor appears in the title much more often (Carabao Cup—soccer, UK; Turkish Airlines EuroLeague—basketball, Europe; VELUX EHF Champions

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League—handball, Europe; Unibet Premier League—darts, Europe). With shortterm multi-day/week events, the names of the most traditional world-famous remain unchanged (Wimbledon—tennis, UK; Tour de France—cycling), but with smaller events, the sponsor’s name is common (BWM Championship—gold, USA; Evergrande China Championship—snooker, China). The same principles apply to club sports. The names of the world’s big clubs have not changed due to the same sponsors basically since they were established (Manchester United FC—soccer, England; Real Madrid CF—various sports, Spain; CSKA Moscow—various sports, Russia). On the other hand, with regard to smaller clubs with a strong sponsor, it is much more common to include the name of the sponsor in the club’s name (MOL-Pick Szeged—handball, Hungary; Panathinaikos OPAP Athens—basketball, Greece). The sponsors’ names are often borne by the home venues of these clubs. This phenomenon is common in all kinds of team sports. Many of them are multifunctional with the possibility of organizing various sports and cultural events (O2 Arena, Prague; AT&T Center, San Antonio). In connection with the events, an organizer offers sponsors packages with the opportunity to be a partner of the whole event or parts thereof (individual awards, spectator competitions and polls, etc.). In addition to promoting brands and/or products to fans and media, the English soccer club Crystal Palace FC offers sponsors other benefits in the form of personalized experience during any specific match. These include a private lodge with refreshments, stadium tour services, photos in the home locker room, a T-shirt signed by the whole team, and a personal meeting with the Player of the Match. In terms of sponsor promotion, the club offers a logo on the front and half a page in the match brochure, promotion on large screens, and Player of the Match media coverage wearing the sponsor’s clothing (cpfc.co.uk). Outside sporting events, from the visibility perspective, the sponsor–club relationship can be promoted through billboards, posters or leaflets, graphics, videos, and articles of posts on websites or social networks to include sponsor logos. Secondly, this relationship can also be promoted through external media (television, newspaper, etc.). Added value for the sponsor comes in the form of visibility enhancement. It is not just about the advertising message and promoting the sponsor’s relationship to the sport, but about the motivation to buy the sponsor’s product or service based on factors other than awareness and connection with the sport. While visibility is promoted through standard communication channels, the options are much less limited when creating added value. The most common form is a partnership discount when showing match tickets, season tickets, or vouchers that could be obtained during a particular event or that could be downloaded from the organization’s website or social networks. An essential part of sponsorship is also the establishment of a business relationship between sponsors, who meet during events in a less formal atmosphere.

3.6 Sport Cooperation and Management

3.5.1.4

77

Advertising

Revenue from advertising also plays an important role in the overall revenue of sports organizations and athletes. Even here, it mostly applies to North American sports, where 30-s commercials can cost up to $700,000 at some events (NovyWilliams 2016). The second more well-known way of advertising revenue is the connection of an athlete (or squad) with a brand that is not directly a sponsor. So it is about participating in advertising.

3.5.1.5

Government

State sports funding is common, especially in Europe. It is associated with the allocation of public resources to sports federations, clubs, individuals, or organizers of sports events. In the same way, the state can greatly contribute to the construction of sports infrastructure.

3.5.1.6

International Federations (Grants and Prize Money)

International non-profit federations allocate revenues among their members, which may include national associations. The Solidarity Fund of the Union of European Football Associations (UEFA) has distributed funds to developing countries. These were purposefully tied to youth soccer support (ProFutbal.sk 2002). The second way of obtaining money from international federations is the participation of either a national team or a sports club in an international event organized by any federation. Here, the financial reward increases depending on the results. The winner of the World Cup in France 2018 earned $38 million (Kelly 2018). On the club’s scale, again in soccer, the winner of the Champions League 2018/2019 season won more than €80 million calculated based on the number of victories throughout the competition (Cuquerella 2019).

3.6

Sport Cooperation and Management

Cooperation management is one of the important elements in a competitive sports market. Figure 3.23 shows the basic steps of creating a cooperation organization. It is possible to assume that every organization operates in a competitive market, sport included. Soviar et al. (2014) assume the emergence of a common organization in a competitive environment. In the sports industry, a similar situation can occur, i.e., merger of competing entities in dealing with a common issue, but a creation of organizations by non-competing entities is also common.

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Competitive environment

Organization A

Organization B

Organization C

Existence of a common problem

Negotiation and agreement

Cooperation environment

Common organization (A, B, C) Change

Fig. 3.23 Process of creating a cooperative organization. Source: Soviar et al. (2014)

Cooperation in the sports industry can, therefore, be understood in two dimensions, namely: – Searching and building relationships with partners and fans to support their organization, team, or event (e.g., sponsorship, fans loyalty programs). – Cooperation with stakeholders, organizations, partners in various development projects (e.g., cooperation of schools, sports clubs, and associations within the sports sector, as well as the cooperation of competing sports club in pursuing a common goal of higher social value). As an example of a development project is the project of the Slovak Tennis Association “Tennis to Schools,” which aims to establish cooperation between the Slovak Tennis Association, tennis clubs, and primary schools. The main goal of the project is to develop a youth base. The project is described in detail in the next section hereof. The complexity of implementing sports development programs is partly due to the myriad of stakeholders, their expectations, and their resources needed to sustain the programs (MacInstoh et al. 2016). For example, an external agency often expects—in return for its resources— various assessment reports regarding the progress deviating from the core values already conveyed by the program (MacIntosh and Spence 2012). Therefore, each stakeholder group must have a clear idea of their roles, values, and responsibilities associated with the program, as well as with other stakeholders (Guest 2009; MacIntosh and Spence 2012; Ponting et al. 2005). Besides, many critical resources exist such as human resource elements (e.g., knowledge, skills), which may contribute to program success or conversely to failure (Willis 2000; Schulenkorf et al. 2014; Schulenkorf 2012; Levermore 2009; Vail 2007), including degree of control

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Environmental uncertainty

Importance of stakeholders Key importance

Important, but not key

Great uncertainty

Partnership

Marginal connection

Little uncertainty

Stakeholder management

Environment monitoring

Fig. 3.24 Stakeholder relationship management—variants. Source: Giddens (1999)

in the community, communication between different stakeholders as well as within the local community, hierarchy of social relations, and presence of leaders for change. As a result, programs are largely dependent on partnerships and resources inside and outside the community (Levermore 2011; Willis 2000). Managers must understand the resources that pass from agencies to the organization, as well as their impact (Lindsey 2008; Pfeffer and Salancik 1978; Vail 2007). If external stakeholders are key and uncertainty of the internal environment is high, managers should seek partnership with stakeholders, i.e., act proactively so that organization and stakeholders pursue a common goal (Fig. 3.24). These partnerships allow building “bridges” between the organization and vendors, between the organization and customers, between the organization and the local community, between the organization and the competition, etc. (Giddens 1999). Just as the roles within the partnership are to be clarified, so do the expectations of stakeholders. Hoye et al. also deal with the issue of sports stakeholders (Hoye et al. 2015). They tried to name typical stakeholders in sport and define their expectations, which are based on cooperation with a sports organization (Table 3.8). Conor et al. (2016) also addressed the issue of leadership with regard to other stakeholders within a sports organization (Fig. 3.25). In particular, it is the view of the lower-level management and the role of these managers within the organization. They focused mainly on cooperation with management, the use of employee support, and the proper handling of the media to increase influence. According to Conor et al. (2016), lower-tier managers should make club decisions and strive to improve internal relationships in order to cooperate well with the management of a sports organization. To improve leadership within the organization, it is appropriate to also use the support of other employees. It is about creating a good climate that motivates everyone involved to achieve their goals. The media have a huge impact not only on public opinion and relations with the external environment but also on the climate within the organization. The effect of a leader through media can be built by setting clear rules on who and when will give media statements, but also on what topics can be communicated. In order to strengthen trust, it is also necessary to protect stakeholders (e.g., players) through

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Table 3.8 Stakeholder expectations from the sports organization Stakeholder Players

Employees

Suppliers

Members Owners, shareholders Sponsors Players agents Fans Community and society Media

Expectations from sports organization Success Appropriate wages and benefits Few injuries Appropriate wages and benefits Job security Professional department Reliability of demand Player support Brand awareness Services and benefits Overall satisfaction Return on investment Public recognition of the club or association Positive reputation of the club or association Brand awareness and recognition High morale of players Payment of market rates Match quality and excitement High win–loss ratio Civic pride Providing role models for young people Mass marketing High public interest

Source: Hoye et al. (2015)

Less demanding topics

More challenging topics

Inward relationship management Cooperation with management Entering into club decisions

Using employees to reinforce expectations Using employees to motivate and support players

Leadership with employee support

Setting an agenda with media management Protecting players through the media

Influence through the media

Managing emotions through the media

Fig. 3.25 Management leadership of other stakeholders. Source: Conor et al. (2016)

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the media and simultaneously mitigate emotions that could affect external and internal relations or even jeopardize financial flows.

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Chapter 4

Sustainable Management of Sports Organizations

The strategic management process of sports clubs has its unique characteristics, which mainly affect the sports environment. When creating strategy alternatives for individual objectives, managers shall base their decisions on the analysis of the club’s internal and external environment.

4.1

Key Stakeholders

Stakeholders in the sports industry can represent not only individuals, but also organizations whose activities affect the success of a sports team, athlete, or the entire sport (Linton 2017), and also initiate or accompany athletes from their first contact with the sport to their advancement to higher levels of their development (Green 2005; Sotiriadou 2013). It is possible to include governments, associations, and sports organizations, but also coaches or sponsors (Sotiriadou et al. 2008). Commercialization in the sports industry has led to a situation where companies that are primarily focused on making a profit are also included in these organizations. Generally, the internal environment includes the club’s management and departments (sports, marketing, financial, and sales), contractual partners, and volunteers. Depending on the organization type, individual parts of the internal environment may be combined or divided into several separate parts. The external environment includes the public sector (government, ministries, regional institutions), non-profit sector (national and international organizations), business sector (leagues, clubs, sports staff), community (fans, parents, sports public), sponsors (local and global), and media (television and streaming services, print and web mass media, sports commentators, bloggers, and influencers). Some stakeholders may act as an interface between the internal and the external environment or shift between them concerning their position vis-à-vis the club. An important example of this is the relationship between the senior and youth component, which belongs directly to the senior club or is independent. Sports environment has a major impact on the whole process of © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 M. Varmus et al., Strategic Sport Management, Contributions to Management Science, https://doi.org/10.1007/978-3-030-66733-7_4

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strategic management and especially on setting goals that are key to the sustainability of sports organizations. Club management lies at the heart of the internal environment. Depending on the legal type and organizational structure, different management and overseeing bodies exist. It is a common practice in clubs where the investors are directly involved in their management. This is a form of a sponsor, which in this case belongs to the internal environment, as they are represented by one or a small number of people who are directly involved in the club management (owner, president, board chairman, major shareholder, etc.) and has a decisive vote in the strategic planning process. They put their resources or the resources of their companies into the sport, and their main motivation is their relationship to sports and prestige. For them, running a club is a kind of leisure activity. Other members of the internal environment are department managers and individual departments of the club. Their arrangement and number of employees vary depending on the size and financial capabilities of clubs. Especially smaller clubs tend to accumulate functions into a single role, which means that one person takes care of several departments or is the only employee in these departments. According to their focus, they can be divided into the sports department, the marketing department, and the economics and trade department. The sports department is usually composed of a sports director, players, implementation team, and (in larger clubs) scouts. In a broader context, this may also include employees responsible for handling technical aspects of sports. The marketing department includes employees taking care of marketing and creative activities, such as promotion, public relations, audiovisual outputs, organization of events, and—in cooperation with the financial and sales department—ticket sales. The main activity of the financial and sales department is the management of finances, accounting, and legal aspects, such as employee contracts and sponsorship agreements. In some cases, sales staff directly communicates with sponsors. Volunteers do not work directly in the club structures but participate in organizing sports events or regular club operations. These are enthusiasts who help voluntarily for various reasons. Volunteers are former athletes, parents, and family members of players, supporters of sports clubs, or officials in honorary (unpaid) positions who do not have the right to decide but make contributions with their experience and advice. Like volunteers, contractual partners do not belong directly to the club’s organizational structure. They work under mutual contracts and agreements, and the club has a direct influence on the type and scope of services they render. They are mainly used by the club for technical or financial reasons in activities that are necessary for the club’s operation, These include sportswear vendors, information technology providers, photographic and video producers, private security service providers, or other suppliers related to the organization of events (announcer, mascot, dance groups, DJ, etc.). With smaller clubs, sports-related activities—such as physiotherapy or massages—can also be subcontracted. Their activities are managed by the club’s managers and employees of different departments. Youth clubs and their organizational structures lie at the interface between the internal and external environment. They cannot be understood in exactly the

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same way as the internal environment, as the youth component does not always fall directly under the senior club. In some cities and sports, several youth clubs that work with senior clubs exist, which are not directly involved in the organizational structure. This means that they can be legally independent with their management, without the influence of a professional senior club. For the development of players and their transition to the senior sport, cooperation on a formal and informal level is necessary. Successful talents later help to achieve sports, economic, or marketing goals. The external environment consists of three sports sectors (Hoye et al. 2015) and other stakeholders—community and media. While the public, non-profit, and commercial sectors represent a view of the issue from a sporting perspective, the community, sponsors, and the media do it rather from a marketing and business perspective. However, their importance in strategic management is the same. The basic division of the sports environment is the three sectors of sport. The first one is the public sector focusing on mass and elite sports with the same intensity, which includes the government represented mainly by its ministry or ministries through individual regional institutions, which vary from country to country. The public sector comes in the form of laws and legislation, stipulates regulation, and allocates direct or indirect grants to sports organizations. The second one is the non-profit sector, which includes national and international sports organizations, which, like the public sector, allocate funds and stipulate sports regulations. The last is the commercial sector composed of sports leagues, clubs, and sports staff. Sports leagues are run by representatives of the clubs that compete in them. A sports organization creates suitable conditions for the performance of sports, organization of competitions, and the preparation and participation of individuals or teams in a competition. The most important part of the sports staff is domestic and foreign players, backroom staff, sporting managers, sports grounds managers, or player agents. The sports industry is characterized by frequent work relocations, especially with regard to players and coaches. Club external environment also includes the community, sponsors, and media. The community is made up of fans, parents, and the sports community. These are people who are connected with the club and show interest mostly for selfless reasons. Sponsors make the largest contribution to the club funding. They can be divided into two groups. Global sponsors, including large multinationals, offer the greatest financial opportunities. With regard to smaller groups, the most widespread are local sponsors that support sports clubs on a geographical basis and take advantage of the marketing targets offered by the sports clubs. Representatives of these two types of sponsors may have positions on the board of directors’ tier 2 (the so-called supervisory boards) or in other control mechanisms (if applicable), but they do not participate in strategic management. Media is made up of television and streaming services and print and web mass media, which are increasingly joined by sports commentators, bloggers, and influencers. Revenues from the broadcasting rights of competitions represent a major budget line for clubs and athletes active in the world’s most popular competitions.

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Creation and analysis of stakeholder profiles (Why? What?)

What they care about?

Stakeholder Identification (Who?)

2 What risks need to be addressed?

1 How to analyze? What do we want to find out? 0

Stragety (How?)

Strategy of how and when to do what

Feedback Is it necessary to adjust the strategy? Have stakeholders changed?

Strategies for how relationships should be managed

Evaluation of effectiveness (Results)

Management planning (When?)

3

How to cooperate with stakeholders?

5 What differences in management were observed?

Stakeholder management (Implementation)

A plan for who, when and how 4 will manage stakeholder relations?

Fig. 4.1 Stakeholder management cycle. Source: Adjusted according to Portman (2014)

In line with the specificities of the sport (Stewart and Smith 1999), and the high personal commitment of stakeholders, a very thin line can be drawn between the internal and external environment. In addition to youth clubs, this can also be observed with players and coaches belonging to sports staff (external environment—commercial sector), who after signing a contract with the club move to the club’s sports department (internal environment). Parents who belong to the community (external environment) can become part of volunteers by participating in volunteering activities (internal environment). Another example is local and global sponsors belonging to the “sponsors” group. Through their ambition, they can become members of the club’s management and get directly involved in the club’s strategic management. For solid and sound management of stakeholder relationships, it is good to follow the basic motto—identify, analyze, plan, and engage. But what does this mean in practice? According to Portman (2014), stakeholder relationship management is a recurring cycle consisting of five main components that are influenced by the zero component—the established stakeholder engagement strategy. The whole process can be seen in Fig. 4.1. Is this general model applicable to sports clubs? Definitely yes. It is because sports clubs also need to define a strategy before they can manage stakeholder relationships. Furthermore, also taking into account other author’s claims (listed herein), the first basic step is to identify the stakeholders. Other steps such as activity planning, activity implementation, and subsequent feedback are well-known basic management knowledge. It can therefore be said in general that the model in Fig. 4.1 hereof can also be understood as a model of stakeholder involvement in sport.

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As can be seen in the previous figure, in addition to the individual components of the stakeholder relationship management cycle, the strategy has a major impact on the overall outcome. Therefore, if a sports club wants to use the maximum potential from individual stakeholder relationships, it must adapt its corporate strategy accordingly.

4.1.1

Stakeholder Involvement Model Recommendations

Based on the previous findings, several general recommendations for sports club managers have been made. – Recommendation 1: When setting a strategy, it is necessary to think about the stakeholders who may influence the planned results in the set strategy. – Recommendation 2: The identification must reveal any and all, even the smallest or seemingly insignificant stakeholders, as they may ultimately be more significant than initially expected. – Recommendation 3: When analyzing the external environment and external stakeholders, it is necessary to consider the culture affecting the whole company’s environment. – Recommendation 4: When managing stakeholder relationships with respect to the cycle shown in Fig. 4.2, it is important not to forget the feedback, which helps to adjust the original feedback. It is expected that if managers use these recommendations, the chances of success will be higher with regard to stakeholder management.

17%

17% 15% 14% 14%

13% 10%

13%

15% 13%

11%

12% 9%

9%

13%

9%

8%

8% 7%

6%

6% 6%

5% 2008

2010

2012

2014

Baseball

Basketball

American football

2016 Football/Soccer

Fig. 4.2 The most popular sports among young people in the USA. Source: Adjusted according to Bogage (2017)

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4.1.2

4 Sustainable Management of Sports Organizations

Case Study: Sports Clubs–Stakeholder Relations in the USA

This case study aims at understanding stakeholder relationship management by sports clubs in the USA. It describes how individual sports clubs approach this issue, what activities they perform, why they perform them, and what consequences they have for the club. The purpose hereof was to find key factors to establishing a successful attitude by a sports club in stakeholder relationship management based on the analysis of mutual relations of sports clubs and their key stakeholders. The case study is based on available public information as well as online interviews conducted via email communication.

4.1.2.1

Topic Introduction

The research area of the case study is the sports industry in the USA. The case study focuses on sports club from the following competitions: One representative from each competition was sampled for this case study. The representatives are the clubs that have been the most successful in individual competitions in recent years.

National Hockey League—Pittsburgh Penguins Pittsburgh Penguins is a professional hockey club based in Pittsburgh, Pennsylvania. It plays in the NHL Metropolitan Division and the Eastern Conference. The club was founded in 1967 (Brief History: Pittsburgh Penguins 2018). Since its inception, it has won this competition five times, in 1991, 1992, 2009, 2016, and 2017.

National Basketball Association—Golden State Warriors Golden State Warriors is a professional basketball club based in Oakland, California. It plays in the NBA Pacific Division and the Western Conference (2018–2019 NBA Standings | ESPN 2018). The club was founded in 1946 (Warriors History Index 2018). Since its inception, it has won this competition six times, in 1947, 1956, 1975, 2015, 2017, and 2018. In 2017, Warriors became the third most valuable franchise in the NBA with an estimated value of $2.6 billion (Golden State Warriors 2018a, b).

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Major League Soccer—Los Angeles Galaxy Los Angeles Galaxy is a professional soccer club based in Los Angeles, California (LA Galaxy FB Fanpage 2018). The club was founded in 1994 and is part of the MLS league in the Western Conference. Since its inception, it has won this competition five times, in 2002, 2005, 2011, 2012, and 2014. Besides, the club participated in the CONCACAF Cup, which it won in 2000. Since 2007, the club has established cooperation with several foreign players, such as David Beckham, Steven Gerrard, and Zlatan Ibrahimovic.

4.1.2.2

Environment Description

The environment under this study (USA) has several specifics. The main specifics include the popularity of sports, culture (patriotism), business, or a high level of involvement of adolescents in sports (Basics of Americans and American Culture 2018; 101 Characteristics of Americans/American Culture 2018; USA—Language Culture, Customs, and Etiquette 2018; Brezinská 2018; Felfe et al. 2016; Youth Sports Participation Statistics and Trends 2018). Team sports, in which most children under the age of 17 are involved, are basketball (Youth Sports Participation Statistics and Trends 2018; Hidden Demographics of Youth Sports 2018). Figure 4.2 shows the development of the popularity of sports in the USA. The most popular sport in the USA is basketball. Interesting is the fact that European soccer is more popular than American football. In addition to promoting racial equality and the fight against doping, it is also aimed at promoting a healthy lifestyle (Houlihan 2005). Sport in the USA can be considered as a government tool for improving people’s lifestyles, creating unity in the community, and creating mutual respect or overall national cohesion. According to Jaekel (2017), activities to improve children and youth health are often provided not only by schools but also by community organizations. These are often supported in the USA by local sports clubs. In the commercial sector, it should be noted that the revenues of this sector in the USA have been growing since 2009. Their amount in 2016 reached the value of $67.29 billion, and the forecast shows that in 2021 revenues could reach up to $78.53 billion (Sports Market Size North America 2009–2021 | Statistic 2018). A similar increase is expected in the area of media rights, whose year-on-year increase in value reaches up to 7.2% (Heitner 2015). The appeal of this sector has also an impact on the growing sale of sportswear (Sports products US wholesale sales 2008–2017 | Statistic 2018) or the growth of tourism, which has increased by about 40% in the last 10 years (United States Tourist Arrivals 2018). Therefore, it is possible to perceive sports in the USA as a sector that is not only dynamic and rapidly evolving but also as a sector that affects people in this environment.

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4 Sustainable Management of Sports Organizations

Results

Several relationships between sports clubs and their stakeholders have been examined in this case study in order to find the “best practice” of foreign sports organizations in the studied area. The analysis examined the relationship of clubs with their employees, community, partners, the media, fans, cities, the public, and schools, along with their approach to youth development, certification, and support for women in sport.

Sports Clubs–Members Relations External evaluations of internal members’ satisfaction with the sampled clubs were used (Pittsburgh Penguins Reviews 2018; Golden State Warriors Reviews 2018; LA Galaxy Reviews 2018). A total of 51 internal club members were analyzed, of which 31 are former and 20 current. The sample was divided into those who work or worked in the club for less than a year and those who work or worked in the club for more than a year (Fig. 4.3). The satisfaction of internal club members with their job is higher with those who have been employed in the club for less than a year. It follows that their satisfaction is adversely affected by factors they begin to realize only after being more than a year in the club. From the interviews with internal members, it was found that these factors include low job flexibility, very long working hours, and the uneven workload during out of season. They also stated that they were not satisfied with the evaluation of their performance or with the frequent ambiguity of the allocation of duties by their superiors. However, the internal members of these sports clubs also see positive aspects of their relationship. The main job positives in these clubs according to the former and current members are organizational culture, collective unity, friendliness,

79%

Less than a year

Former employees

60%

More than a year

90%

Less than a year

Current employees

66%

More than a year

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 100%

Level of employee satisfaction Fig. 4.3 Satisfaction of current and former employees in selected sports clubs. Source: Pittsburgh Penguins Reviews (2018); Golden State Warriors Reviews (2018); LA Galaxy Reviews (2018)

4.1 Key Stakeholders

95

professional attitude, and miscellaneous benefits such as discounted tickets and travel benefits. Despite many positives, however, long-term internal members of the club show lower satisfaction than short-term ones. The main reasons can be seen in the recommendations addressed to the managers of these sports clubs. These workers recommend improving interdepartmental communication, opening career growth opportunities, setting more individual goals, and higher investing in employees’ development. The recommendations proposed by internal club members are key factors for sports clubs to retain current and future employees in the long run and to increase their job satisfaction. Internal members of sports clubs taking responsibility for the ultimate success/failure of the club are not only the players themselves but also other employees providing for the overall operation of the sports club. One of the ways to invest in their development is, for example, certification. Certification can be understood as an effort to prove to stakeholders that their actions comply with the standards applicable. Sports clubs in the USA focus mainly on the certification of their staff—coaches (Golden State Warriors | NBATA 2018; LA Galaxy—Coaches 2018; LA Galaxy—Sports Science 2018; Pittsburgh Penguins—Coaches 2018).

Sports Clubs–Media Relations The media represent a very important stakeholder for sports clubs, especially in terms of building awareness, branding, spreading culture, or improving the overall appeal of the club. Media are a strong stakeholder with a large number of opportunities, and each club tries to deal with this issue as best it can. Media such as TV stations, radio stations, tabloid magazines, sports magazines, Internet stations, newspapers, blogs, and the like not only spread information on club finances or sporting results and also various speculations regarding club changes, but they also inform the community or general public about the course of a sporting event. These broadcasts in the USA usually go through local-regional companies or individual sports clubs that have their television channels, radio stations, or Internet channels (AT&T SportsNet 2018; Post-Gazette 2011; Sarajevič 2016; Video Gallery LA Galaxy 2018). Through these media, the public also learns about their “success stories” (Favorito 2018), which not only helps to build their position in the community but also inspires smaller sports clubs to follow. It is therefore possible to see them as a communication bridge between the club and other stakeholders. For the media, the relationship with sports clubs means ensuring viewership/reading at a time when they provide information from the sports environment to their stakeholders.

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Sports Clubs–Fans Relations Fans are one of the most important stakeholders in the sports industry. It is therefore imperative for sports clubs to build good relations with them in the long run. Sports clubs in the USA are aware that their income depends on fans, as without them there would be no spectators but also no investors and media rights. That is why they are trying to build their fan base. Through various video interviews with players and fans alike, they bring a closer look at life in the club. In addition, they also have their e-shops through which they offer their fans various club products such as jerseys, scarves, hats, and player-signed gift items with a club motif. As they want to be as close to the fans as possible, they also use modern technology and disseminate all information to fans through mobile applications. Fans expressed their satisfaction and highly rated such applications. In addition to mobile applications, social networks are still very popular nowadays, and also through them, sports clubs try to bring club events as close as possible to their fans. The selected sports clubs communicate with their fans mainly through social networks—Twitter, Instagram, and Facebook, where they have more than 34 million followers (Fig. 4.4). Due to a large number of followers, sports clubs must offer fans interesting content via social networks as often as possible. The average number of posts from the sports clubs above on the Twitter social network is 81,867 and on Instagram 8561. Despite the uneven number of fans on social networks (Fig. 4.5), all sports clubs try to offer approximately the same amount of content—number of posts. Sports clubs realize that the fan is the one who attends their matches, so they try to provide fans with various ticket benefits such as discounted family tickets (Public Skate—UPMC Penguins Rinks 2018), or other season ticket benefits (Warriors Season Ticket Holders 2018). Another interesting fact is the possibility of involving season ticket holders in the club’s charitable activities (Rising Stars LA Galaxy 2018), and thus bring loyal fans closer to the club.

Sports Clubs–Community Relations Several stakeholders come from the community that is in a direct or indirect relationship with a sports club. These stakeholders are made up not only of groups of people but also of various organizations. Relationships with them are very important for sports clubs, as these stakeholders have a great influence on the club. Important activities in creating and maintaining relationships with the community can include the construction of sports facilities or contribute thereof. The sports clubs selected are actively interested in this issue and have built several sports venues in their area to support community sports (LA Galaxy Soccer Pitches in the Community 2018; GSW Event Center 2018; Warriors Foundation 2018). Therefore, they also support amateur sports clubs (Official Amateur Soccer Partners

4.1 Key Stakeholders

97

1,948,657 „Penguins“

1,100,000 1,830,000 11,256,633

„Warriors“

9,300,000 5,870,000 2,107,647

„Galaxy“

729,000 469,000 -

5,000,000 Facebook

10,000,000 Instagram

15,000,000

Twitter

Fig. 4.4 Number of followers. Source: LA Galaxy on Twitter (@LAGalaxy) (2018), LA Galaxy on Instagram (@LAGalaxy) (2018), LA Galaxy on Facebook (2018), Warriors on Twitter (@warriors) (2018), Warriors on Instagram (@warriors) (2018), Warriors on Facebook (2018), Penguins on Twitter (@penguins) (2018), Penguins on Instagram (@penguins) (2018), Penguins on Facebook (2018)

7,891 „Penguins“ 86,300 9,157 „Warriors“

Instagram Twitter

72,200 8,500 „Galaxy“ 87,100 -

20,000

40,000

60,000

80,000

100,000

Fig. 4.5 Number of posts on social networks. Source: LA Galaxy on Twitter (@LAGalaxy) (2018), LA Galaxy on Instagram (@LAGalaxy) (2018), Warriors on Twitter (@warriors) (2018), Warriors on Instagram (@warriors) (2018), Penguins on Twitter (@penguins) (2018), Penguins on Instagram (@penguins) (2018)

2018). They create sports camps for children in the community (Youth of LA Galaxy 2018; Warriors Basketball Camps 2018; Summer Hockey Camps 2018), and also they have created conditions for the development of youth (Youth of LA Galaxy 2018; Academy of LA Galaxy 2018; LA Galaxy 2 2018; Penguins Youth Hockey

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Landing 2018; Excel Hockey Academy 2018). They also develop women sports (LA Galaxy Women’s Team 2018; Warriors WNBA Team 2018), and give them opportunities to join their academies (Academy of LA Galaxy 2018). Besides, they attempt to appoint women to managerial positions (Women behind the Warriors 2018). Other activities include supporting the local community (in the area where the club operates). These are activities whereby the club wants to show not only respect for the community but also a willingness to help. It includes, for example, “Hero of the Game” activity. This activity before every home season match serves to express gratitude to the selected heroes nominated by the community. Heroes will receive 4 tickets to the match and dinner at the stadium (Hero of the Game 2018). Support for the local community can also be understood in the form of providing sports facilities (Public Skate—UPMC Penguins Rinks 2018), organizing sporting events (Penguin Tickets 2018), supporting children (Penguins Future Goals—Hockey Scholar 2018), offering discounted tickets or gift tickets (Pittsburgh Penguins Foundation 2018; LA Galaxy—Rising Stars 2018), or various charitable activities. They participate in auctions, organize their charities, actively participate in community charity activities (LA Galaxy Giving 2018; Warriors in the Community (a) 2018; Mario Lemieux Foundation 2018; Pittsburgh Penguins Foundation info 2018; Penguins Community Report 2018; LA Galaxy Foundation 2018), promote charities through community advertising (Community Partners 2018), or contribute to various groups in the community through their foundations (The LA Galaxy Foundation 2018; Warriors in the Community (a) 2018; Warriors in the Community (b) 2018; Warriors Community Foundation Awards 2018). This means that these sports clubs try to be pro-social. These activities come up from their social responsibilities. On the other hand, it can be said that the individual activities implemented by clubs are beneficial to the community, and the community appreciates them as can be seen from individual reactions of people on social networks or interviews given by sports clubs’ stakeholders (Table 4.1).

Club Responsibility Towards Itself Sports clubs must be responsible not only to the external environment but also to each other, as their internal strength has a major impact on the external environment. The main thing is for the clubs to prosper in the long run, and the funds to be invested in the development of the club itself. As can be seen in Fig. 4.6, the value of clubs has a stable or increasing trend. As well as the value, the club income is stabilized and has a growing trend (Fig. 4.7).

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Table 4.1 Comments from representatives of the various stakeholders Stakeholder Donna L Green Citizen A non-profit organization in Southern Los Angeles Warriors Ground SF Association of community members Carin Greathers Elementary school principal

Christopher Barooni Citizen

“blanc0ooDamn” “hammed.m.c”

“_wiild_flower”

Bruce Y. Lee Editor Forbes

A non-profit organization in California

Opinion on the activities that sports clubs perform in the community This team is great and understands what the community is all about Source: Green (2016) We are very excited to work with an unnamed club Source: interview with—Community Partner (2018) Support for schools within the region and an active approach to volunteering in the community is very beneficial Source: Warriors Helping Hands in Potrero Hill (2016) It’s great to be a part of the schools that GSW helps this year. It is exciting and we are very much looking forward to this cooperation. We believe that children at the beginning of the year will be very happy with the changes made Source: Warriors Helping Hands—Back to School at Burckhalter (2018) I am happy to support the development of greenery in the environment of our community Source: Warriors in Community on Instagram (a) (@warriors) (2018) These kids are lucky! Source: Warriors in Community on Instagram (b) (@warriors) (2018) It’s good to see them bringing back so much to their community Source: Warriors in Community on Instagram (b) (@warriors) (2018) I love our team. It always gives so much back to the community! Source: Warriors in Community on Instagram (b) (@warriors) (2018) After the winning Warriors match over the Cavaliers, the players did not go to relax. They went to the Boys & Girls club and took care of the children. They discussed with them, played with them, but also gave them material equipment Source: Lee (2018) We are very happy to be able to work with them. They support us and thanks to them we can provide more to children. Source: interview with PR Manager of sport club (2018)

Source: Varmus et al. (2019)

These figures show that income and value curves of clubs almost coincide. Following Pearson’s correlation coefficient (Table 4.2), it can be stated that these quantities are interdependent. Stable performances and successes are also reflected in stable stadium attendance. Table 4.3 shows that the attendance of individual stadiums is well-balanced. At the same time, it is possible to observe two extremes in the “Galaxy” club in the years 2014 and 2016, when their attendance dropped/rose significantly. In the long run, however, this is a common occurrence with the LA Galaxy. In addition to match results and championship titles, the purchase of star players from

100

4 Sustainable Management of Sports Organizations

350

Millions of dollars

300 250 200 150 100 50 0 2012

2013 „Penguins“

2014

2015

„Warriors“

2016 „Galaxy“

Millions of dollars

Fig. 4.6 Value of clubs. Source: Revenue of the Pittsburgh Penguins | Statistic (2018), Revenue of the Golden State Warriors | Statistic (2018), Smith (2013, 2015, 2017), 2. LA Galaxy (2018), Phillips (2018)

80 70 60 50 40 30 20 10 0 2012

2013 „Penguins“

2014

2015

„Warriors“

2016 „Galaxy“

Fig. 4.7 Club income. Zdroj: Operating income of Pittsburgh Penguins | Statistic (2018), Operating Income of Golden State Warriors | Statistic (2018), Operating Income of MLS teams | Statistic (2018), 2. LA Galaxy (2018), Smith (2013, 2015) Table 4.2 Test of dependence of the value of clubs and club income Pearson’s correlation coefficient

“Penguins” 0.5930

“Warriors” 0.9707

“Galaxy” 0.4426

Europe also has a high impact on match attendance. A similar change in attendance could be observed after the arrival of both Robbie Keane and David Beckham. Clubs need to invest in self-development to ensure long-term growth. Figure 4.8 shows that the arrival of new important players, together with the new coach and their assistants in 2014, had a positive effect on the team, as the team managed to win

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101

Table 4.3 Average club attendance 2012 18566 18947 23136

“Penguins” “Warriors” “Galaxy”

2013 18648 19373 22152

2014 18618 19596 21258

2015 18617 19596 23392

2016 18550 19596 25138

2017 19762 19596 22246

Source: Home Attendance of Pittsburgh Penguins | Statistic (2018), Home Attendance of Golden State Warriors | Statistic (2018), Home Attendance of MLS teams (2018) New players: Marc-Andre Fleury Patric Hornqvist Nick Spaling Steve Downie

Personnel changes:

2013

New players: Beau a Bennett Ian Cole Ben Lovej e oy Lovejoy

Personnel changes:

App A ointm t ent of a new Appointment player development coach A App ointm t ent of a new Appointment coach an aand d his assistan a t assistant A App ointm t ent of a new Appointment Vice President A App ointm t ent of a new Appointment general manager man a ager Extension of contracts with t young in AHL ECHL players

App A ointm t ent of a new Appointment AHL coach A App ointm t ent of a new Appointment special assistant to th tthee head coach Extension of contracts with t young in AHL ECHL players

2014

2015

New players: Mike Sullivan a Thomas DiPau a li DiPauli Olli Maat a ta Maatta

Personnel changes: Extension of th tthee contract with t key players Extension of th tthee contract with t the t e general manager th man a ager Extension of contracts with t young in AHL ECHL players

2016

New players: Matt Hu H unwick Hunwick Antti Niemi

Personnel changes: Ap A pointment of a new Appointment goalkeeping coach Extension of contracts with t young in AHL ECHL players

2017

2018

Season with the championship

Fig. 4.8 Personnel changes over the years in Pittsburgh Penguins. Source: Pittsburgh Penguins Transactions—2014 | ESPN (2018), Pittsburgh Penguins Transactions—2015 | ESPN (2018), Pittsburgh Penguins Transactions—2016 | ESPN (2018), Pittsburgh Penguins Transactions— 2017 | ESPN (2018)

the NHL in the seasons 2015/2016 and 2016/2017 with no other significant changes in the roster. A similar situation as in Pittsburgh can be seen in the Golden State Warriors team, where the main coaching changes happened in 2014 bringing the NBA trophy to the Warriors the next season (Fig. 4.9). However, they made a significant change in the roster in 2016, when they signed a contract with NBA star Kevin Durant, which also brought a positive effect upon the team, and the Warriors won the next two seasons. As can be seen in Fig. 4.10, the LA Galaxy sports club has not made so many significant changes in the main team roster during successful seasons. However, they still managed to win the championship title 3 times between 2011 and 2015. LA Galaxy invests funds mainly in the purchase of young talented players for the LA Galaxy 2 team, who are then added to the main team as they develop. Since 2015, LA Galaxy has signed nine players from the LA Galaxy 2 (Dave Romney, Daniel Steres, Clement Diop, Ariel Lassiter, Jack McBean, Hugo Arellano, Bradley Diallo, Nathan Smith, and Jaime Villarreal). Besides, they have an established academy program (U-18, U-16, U-14, U-12). Currently, 11 players of LA Galaxy 2 are a product of the academy (LA Galaxy—Ambitions 2018). LA Galaxy has also created the “LA Galaxy Academy Alliance” program, which creates a broader youth base through the integration of existing youth clubs from the

102

4 Sustainable Management of Sports Organizations New players: Sean Kilpatrick Jason Kapono Leandro Barbosa

Personnel changes: Appointment of a new Appointment A ambas m sador for the ambassador commu m nity community A Appo intment of new Appointment assistant coaches Appointment A Appo intment of a new head coach Extension of the contract with key players Extension of contracts with young NBADL players 2013

2014

New players: Michael McAdoo Kevon Looney

Personnel changes: Appointment of a new Appointment A HR manager Appointment A Appo intment of a new head of the physical performance and sports medicine department Extension of the contract with key players Extension of contracts with young NBADL players

2015

New players: Patrick McCaw Scott Wood Kevin Durant

New players:

New players:

Matt Barnes Jordan Bell Stephen Curry

Quinn Cook Jonas Jerebko

Personnel changes:

Personnel changes:

Personnel changes:

Appointment of a new Appointment A assistant coach for player development A Appo intment of a new Appointment general manager Extension of the contract with key players Extension of contracts with young NBADL players

Extension of the contract with key players Extension of contracts with young NBADL players

Extension of the contract with key players (Kevin Durant) Extension of contracts with young NBADL players

2016

2017

2018

2019

Season with the championship

Fig. 4.9 Personnel changes over the years in Golden State Warriors. Source: Golden State Warriors Transactions—2014 | ESPN (2018), Golden State Warriors Transactions—2015 | ESPN (2018), Golden State Warriors Transactions—2016 | ESPN (2018), Golden State Warriors Transactions—2017 | ESPN (2018), Golden State Warriors Transactions—2018 | ESPN (2018) New players: Robbie Keane

2010

2011

New players: Will Hesmer Colin Clark

2012

New players: Carlo Cudicini A Andy Gruenebaum

2013

New players: Samuel m Rosa Rob Friend Stefan Ishizaki

2014

New players: Mika Väyrynen Giovani Dos Santos Edson Buddle Donovan Ricketts Sebastian Lletget Dan Kennedy Steven Gerrard

2015

2016

Season with the championship title

Fig. 4.10 Personnel changes over the years in Los Angeles Galaxy. Source: LA Galaxy Transactions—2011 | ESPN (2018), LA Galaxy Transactions—2012 | ESPN (2018), LA Galaxy Transactions—2013 | ESPN (2018), LA Galaxy Transactions—2014 | ESPN (2018), LA Galaxy Transactions—2015 | ESPN (2018)

region (Academy of LA Galaxy—Alliance 2018). These clubs retain some autonomy and gain access to certain resources at the same time (monetary and non-monetary) from the LA Galaxy. LA Galaxy also invests heavily in youth development through the Blended Learning Program, which provides a full secondary education at StubHub for student-athletes. They will become part of the professional environment of LA Galaxy and LA Galaxy 2. Since 2012, the club has invested $16 million in youth development compared to only $4 million in 2016. The club has invested more than $15 million in the StubHub Sports Center in 2013, mainly in its facilities (LA Galaxy—Ambitions 2018). From a financial perspective, the club benefits greatly from sponsorship agreements. The partnership with the Herbalife Nutrition main sponsor brought more than $23 million to the LA Galaxy in 2016. Apart from that, local television broadcasting rights brought $5 million to the club in 2017 (LA Galaxy—Ambitions 2018).

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103

Sports Clubs–Sponsors Relations Various clubs have different sponsors. Sponsors differ not only in their economic strength and the amount of funding they bring to the club but also in the length of sponsorship agreements and places where their brands are promoted. More detailed information on mutual relations, expectations, or benefits between such stakeholders was not found, as both clubs and sponsors refused to comment on their mutual relationship. Based on press releases from clubs and sponsors (Penguins Partnership 2018; RMU on Twitter (@RMU) 2018; Warriors Partnership 2018; Warriors Jersey Deal 2018; AEG Partner 2018; LA Galaxy Partnerships 2018), it can be said that both sponsors and sports clubs are enthusiastic about establishing cooperation; however, feedback on the relationship is absent over time.

4.1.2.4

Conclusion

The case study identified several issues in the relationship between sports clubs and their stakeholders. It also revealed several best practices that could be applied in Slovakia. The main problems were identified concerning sports clubs’ relationships with employees and sponsors.

Sports Club–Employee Issues The main issue is the declining satisfaction of those employees who have been employed by a sports club for more than a year. From the interviews with some members, it was found that these issues include low job flexibility, very long working hours, and the uneven workload during/out of season. These employees also stated that they were not satisfied with the evaluation of their performance or with the frequent ambiguity of the allocation of duties by their superiors. The main recommendations for eliminating these problems include improving communication between departments, enabling career growth, creating a larger number of individual goals, and also rewarding employees by supporting their personal development (education).

Sports Club–Sponsor Issues No issues were identified in this area by this case study; therefore, the main issue is the reluctance of cooperation and evaluation of mutual relations. This finding brings forth several issues that will need to be addressed in further research. These questions are: – Are clubs and sponsors happy with their relationships? – What are their expectations arising from the relationship?

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– Do their mutual expectations differ? – Are their expectations satisfied? – What other benefits, other than non-financial ones, bring sponsors to the club?

Sports Club–Media Relations Best Practices The conclusions showed that it is beneficial for sports clubs to use regional media to disseminate club information, as well as to share content tailored to their key stakeholders through selected media.

Sports Club–Fans Relations Best Practices Sports clubs need to build their fan base. Currently, it is beneficial for clubs to use social networks—Facebook, Instagram, and Twitter in particular—to add attractive content for fans to social networks, such as player, employee, or fan interviews. Dissemination of digital content through mobile applications is also an important part of building relationships with fans. However, the dissemination of digital content must be regular so that fans feel that they are in daily contact with the club. In addition to digital content, it is also recommended to create activities for fans who regularly visit the club arena or events. A club can offer various prizes for fans, including season tickets discounts or inviting season ticket holders to various volunteering activities of the club.

Sports Club–Community Relations Best Practices Several stakeholders come from the community who are in a direct or indirect relationship with a sports club, and it is important to the club to make a good impression. It is therefore recommended to the club to support these stakeholders or to participate in their activities. These activities can include: – – – – – – –

Constructing children sporting grounds. Supporting children sport through various sports camps. Supporting amateur sports clubs. Supporting women sports. Organizing events for specific community stakeholders. Organizing charities for stakeholders. Charity and voluntary activities.

4.2 Setting Objectives for Sustainability

105

Sports Clubs Responsibility to Itself Best Practices Concerning this area, sports clubs must focus on investing funds in the running of the club to ensure not only their growth in the long run but also the growth of arena attendance. It is imperative for them to invest in the facilities and staff—players and employees. Investing in staff does not always mean replacing it. In fact, it is beneficial for clubs to retain their key employees (coaches, players). Therefore, it is recommended that clubs should invest in their development and certification.

4.2

Setting Objectives for Sustainability

A key element to the sustainability of sports organizations’ strategic management is the setting of objectives that ultimately form the strategy itself. In terms of long-term sustainability, sports success, sustainable funding, youth development, and community building (Fig. 4.11) are among the top priorities with regard to the sports environment and theoretical background information in classical and sports management. Sports organization must decide which of the sub-objectives are relevant to it and to what extent are their alternatives {v1, v2, . . ., vn} achievable.

GOAL

Sports success

Sustainable funding

Youth development

Community building

Other goal

v1

v1

v2

vn

v1

v1

v1

v2

vn

FORMULATION OF OBJECTIVES CREATION OF STRATEGY VARIANTS FOR INDIVIDUAL OBJECTIVES

v1

v2

vn

v2

vn

CREATION OF STRATEGY VARIANTS

Fig. 4.11 Process of creating a strategy through goals

v2

vn

v2

vn

106

4 Sustainable Management of Sports Organizations

The individual strategy alternatives are a combination of different objectives’ alternatives, one of which is selected by the managers for implementation. Some clubs are willing to subject the entire philosophy to sporting success, thus limiting financial growth, which can lead to regression. On the other hand, by focusing on sustainable financing or profit-making, they can sell or exchange their best players and thus reduce their chances of sporting success. They can also hinder the development of talents by maximizing their import limits of foreign players. In addition to the mutual exclusion of targets, they can also be combined. Youth education clubs can benefit from the players they develop through transfers (soccer in particular) or grants from the state or sports associations. This also helps to build a community, as the youngest children gain their role models in this way, and at the same time, parents can see that their children can get to the top level even in the home club. The same is true in the specific American youth sport (NCAA), where the universities with the best athletes receive the most funding and also have the best chance of attracting students, whose role models also studied at the given university. The combinations of individual goals differ, and their definition varies depending on the specific organization. Setting goals depends on a number of factors, such as the economic situation, sports opportunities, managerial skills, youth base, number of sports organizations in the region, as well as happiness or other more or less predictable influences.

4.3

Strategic Management Process and Bottlenecks

Sports clubs’ strategic management (Fig. 4.12) starts with the vision, analysis of the external and internal environment, definition of objectives, implementation of the strategy, and assessment and control of the results. Due to the rapid pace of the sports environment and strong competition, this process should be designed for implementation within 2–4 years (Bradbury and O’Boyle 2017). In each part of the strategic management process, managers encounter bottlenecks that can pose a threat but also an opportunity and can fundamentally either positively or adversely affect the entire process or even the very existence of the club. Thus, to ensure sustainable operation, a club must identify and define these bottlenecks. At the same time, it is necessary to determine managerial responsibilities and measures whereby their negative impact will be minimized or maximized if bringing positive impacts. Managers must also assess the likelihood that these situations may occur. A significant bottleneck affecting all strategic management phases is related to the managers’ skills and knowledge of the environment. Without these two key aspects, no bottlenecks can be managed successfully. Managers must use different managerial skills (predictive, conceptual, design, technical, ability to treat people, etc.) with this regard and must have the highest possible knowledge of the environment in which they work. The management, as well as the CEO and individual departments’ managers (sports, marketing, financial, and sales), do not always have to be top experts with excellent knowledge of the environment. Here, their personal

4.3 Strategic Management Process and Bottlenecks

YOUTH MANAGEMENT

CLUB MANAGEMENT

VISION

EXTERNAL ENVIRONMENT COMMUNITY

107

- Fans - Parents - Sports public

PUBLIC SECTOR - State - Ministries - Regional institutions

SPONSORS - Global sponsors - Local sponsors

NON-PROFIT SECTOR - International organizations - National organizations

MEDIA - TV and streaming services - Print and web mass media - Commentators and bloggers

COMMERCIAL SECTOR - Leagues - Clubs - Sports personnel

INTERNAL ENVIRONMENT

SPORTS DEPARTMENT VOLUNTEERS

ANALYSIS MARKETING DEPARTMENT

GOAL

Sports success

CONTRACTUAL PARTNERS

FINANCIAL AND SALES DEPARTMENT

Sustainable funding

Youth development

Community building

Other goal

FORMULATION OF OBJECTIVES CREATIN OF STRATEGY VARIANTS FOR v1 INDIVIDUAL OBJECTIVES

v2

vn

v1

v2

vn

CREATION OF STRATEGY VARIANTS

v1

v2

vn

v1

v2

vn

v1

v2

vn

v1

v2

vn

IMPLEMENTATION

EVALUATION AND CONTROL

Direct link

Potential link

Fig. 4.12 Model of strategic management of sports clubs

commitment and willingness to learn are important, which not only means formal education but mainly following trends and developments in the environment. Communication between the management, CEO, and department managers and between individual departments’ managers is key to interconnect activities and common goals of the entire club. By adhering to these measures, managers can grow professionally and personally, which has a positive effect on the entire club and its results. The CEO is responsible for coordinating communication and creating conditions ensuring continuous training. Not all bottlenecks, however, can be fully under control by the club managers during the process of implementation. Therefore, its main task is to minimize the

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possibility of other adverse impacts and maximize the potential benefits thereof. Bottlenecks throughout club management strategic management process phases are based on the principle of cyclical repetitions, which end with the demise of the club. Therefore, their management measures are not permanent and must be continuously monitored or changed with each new cycle, which may begin with a new competition year or a short period of several consecutive seasons.

4.3.1

Vision

When setting a vision, a club needs to account for its general characteristics and key relations affecting its management. The vision of sports clubs is not always clear. In the media, most of the leading club representatives present ideas for the development of mass sports, youth especially, and certain long-term location-relevant challenges. Key factors influencing club management include ambitions, opportunities, and leadership skills, which inevitably include knowledge of the environment, in which the club operates. Especially smaller clubs are often managed by enthusiasts with a strong relationship to sports, who know the environment but lack the managerial skills and experience. The financial participation of club managers can also be problematic. In such a case, the club may be overly dependent on the managers providing financial and material resources. Personal ambitions (location, preference of certain players—often family members) may exceed the club’s capabilities, which may eventually lead to its demise. The threat of insufficient managerial skills also applies here. Another key factor influencing the vision is the relationship with the youth section of the club, both formally and informally. In the largest team sports, the youth are most often directly subordinated to the senior club, but even here subjects exist that develop talents independently without connection to the senior, high school, or university clubs or clubs from lower tiers that also have youth programs. Club management and youth are key components of strategic management with a major impact on the vision and thus on the whole direction of the sports club. Vision is a common idea of these key stakeholders in the sports club’s management and must be based on their real capabilities and abilities. The entire process of strategic management of a sports organization is built on it. The main bottlenecks of the first phase (setting up vision) of sports club strategic management include the ambitions of the management, excessive micromanagement, and the relationship between the senior and youth component of the club (Table 4.4). Before setting the vision itself, it is necessary for the management to clarify their ambitions and real chances of achieving them. Their correct definition is closely related to the general knowledge of the club leaders with the club’s environment. Without this knowledge, the vision can be overly optimistic, especially with startup clubs (newly formed or advanced from lower tiers). Examples are clubs that have advanced from a lower tier or have been created based on success in the youth categories, where management often has an uncritical view of its sports

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Table 4.4 Bottlenecks—vision Bottleneck Ambitions of the management

Responsibility Management

Excessive micromanagement

General manager

Relationship between senior and youth sections

General manager, sports manager, management

Action – General knowledge of the environment – Recruiting people with experience in managing sports organizations – Regular meeting of managers – Equal delegation of responsibilities (powers and duties) – Identification of priority actions – Recruitment of volunteers – Regular meetings – Legal compliance – Communicating public relations

staff and believes in the sport’s success of the same players and coaches even at the higher tier, which is unrealistic in most cases. A similar case is the pressure to prefer certain specific players (often family members) who are not of sufficient quality. To improve the general knowledge of the environment, it is, therefore, necessary to incorporate a person or people with experience in managing sports organizations into the club structures, who can estimate the initial situation of the club rather pragmatically than emotionally, without personal ties to any players. At the same time, all leading members of the club should be confronted at joint meetings to clarify their personal ambitions in all directions of the club and then to determine the main idea and path that the club will take and on which the entire club strategic management process will be based. The entire club management takes responsibility for these measures. One of the pillars of the management of all types is the division of duties, the bottleneck of which is excessive micromanagement. In this case, it regards managers who report to the club’s management (CEO, managers of individual departments). Especially in smaller clubs, one person or a small group of people is often responsible for relatively independent duties. Even with sufficient expertise of managers, this still may be time-consuming (lack of time to complete all tasks) leading to the inability to manage several club aspects effectively. Equal delegation of duties (powers and responsibilities) and identification of priorities (if a single manager has different duties) are essential. Due to the time-consuming nature, certain measures can be taken, for example, recruiting volunteers, are also possible, which can make the manager’s duties easier, and even be more knowledgeable in some areas than the manager itself. This is especially true for marketing, which is often put last in smaller clubs, with which the managers have often very little or no knowledge. The CEO is responsible for taking measures to avoid excessive micromanagement of their managers. Not only from a sports perspective, the relationship between senior and youth sections is also considered a bottleneck when setting the vision. Regardless of whether the youth section is part of the club or it is a separate youth club or clubs operating in the same region, in all cases, the relationship must be managed systematically. The youth section is closely connected with the senior

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during the entire process of strategic management, and regular mutual sessions and subsequent compliance with agreements are necessary for the overall development of sports in their location. The communication of mutual relations consequently affects all stakeholders—the community, public institutions, and sponsors—which may contribute to the acquisition of financial and material resources. The second, equally important aspect, is the development of talents and their subsequent transition to senior elite sports. Here merge the interests of the public and non-profit sector as a result of raising future members of the national team. The CEO is responsible for mutual relationships, together with the sports manager as well as the entire club management.

4.3.2

Analysis

The individual goals are based on the company’s vision. Before it is set, it is necessary to analyze the internal and external environment of a sports club and its possible impact on the process of strategic management. The internal environment represents specific people who, together with the management, are responsible for the club management (sporting, financial, and non-financial) and results. Although the areas of influence of the internal environment overlap, each of them primarily has an impact on the other main goals of the club (Table 4.5). General club departments include sports, finance and sales, and marketing. Sports department has a key influence on the club’s sports results. The main role here is played by the players themselves, led by the coach and the backroom staff, who are recruited by the sports manager. Depending on the level of the sports department, the club’s management sets goals focused on sports success and youth development. Marketing department has the greatest influence on the objectives associated with building a community. Here, it is more important than the sports department, as it needs to communicate sports results. They must either benefit from good results or mitigate adverse effects from bad results vis-à-vis the external environment. It also participates in all other community and social responsibility related measures. The finance and sales department has different forms depending on the club. In some cases, it is solely responsible for economic and accounting matters. With a smaller pool of human resources, this department often includes managing business relationships and communicating with sponsors. The sales part thereof is thus closely connected Table 4.5 Impact of departments on the main objectives

Sports Marketing Financial sales

Sports success X

Sustainable funding

Youth development X

Community building X

X

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with the marketing department (they also assist with match ticketing). Through its activities, the finance and sales department has a direct impact on funding, which the club can allocate to marketing and, more importantly, to the acquisition of new (“more expensive”) players and coaches. This is mainly related to ensuring the objective of sustainable funding, which is a prerequisite to any other objectives of sports clubs. Based on various types of agreements, subcontractors and volunteers are also involved in the club’s operations. Depending on their specializations, subcontractors cooperate with specific departments (physio—sports, announcer—marketing, accountant—finance, and sales). While subcontractors are relatively easy to replace due to the nature of services they render, volunteers and the management thereof can cause certain complications for a club. Their stance and attitude toward their duties may pose a risk. As these are enthusiasts who do not have an employment contract, they may ignore the manager’s instructions. In some cases, volunteers have high bargaining power, as filling their position could increase the club’s costs. The external environment is linked to the commercial potential of a sports club on two main levels. It is either influenced by it (public sector, the non-profit sector, sponsors) or helps to create it (commercial sector, community, media). Even here, however, there are various exceptions and intrusions, where the affected environment creates commercial potential, and vice versa. The public sector has the highest influence on sport mainly through laws. Laws regulate all types of club activities—employment relationships or taxes. Ministries distribute public resources to sports associations, which then reallocate them to their organizations according to their mechanisms. Institutions at the regional levels of the public sector are particularly interested in mass sports and youth development. In many cases, however, they also provide funding to sports organizations directly or indirectly. In terms of the non-profit sector, sports clubs influence international and national organizations—both through rules (regulations) and support mechanisms. International organizations allocate money from their development funds and set rules and financial rewards for sporting results they organize. National organizations mainly support youth sports and infrastructure. Through positive motivation programs linked in particular to the support of young players and the regulation of foreigners, they can also allocate funnel directly to sports clubs. With this regard to the majority of stakeholders, the club’s standard sporting activities are more influenced by the commercial sector consisting of the leagues (competitions) in which the club plays, the rival clubs, and the sports staff (home players, foreigners, and backroom staff). Each competition has its system and rules to which the club must adapt (number of games, playing time limit of foreigners, number of young players on the roster, salary conditions, etc.). An analysis of other clubs that are league and cup rivals is necessary, especially prior to the setting of objectives associated with sporting success. All clubs have their objectives in competitions, which are mostly overlapping, and which cannot be achieved by several of them (championship title, specific ranking, etc.). The influence of sports staff lies at its potential. These are mainly available domestic players, foreigners, and coaches who the club wants to sign. Subsequently, they become part of the internal environment and participate in

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Table 4.6 Bottlenecks—analysis Bottleneck Volunteer management

Responsibility Department managers

Change in the amount of funding

General manager, financial and sales manager

Rules of roster composition Sports staff with relatively limited resources

Sports director Sports director

Action – Determining the rights and duties of both parties unambiguously – Recruiting volunteers beyond needs – Creating different funding alternatives – Creating contingency plans responding to changes in funding – Player roster flexibility – Youth development system – Establishing personal relationships with the commercial sports sector – Thorough analysis of available players

achieving the objectives of the sports department and the entire club. The community supports a club by paying match tickets, membership subscriptions, or other voluntary contributions. Parents also have a major influence on the direction of their children and the development and maximization of their potential. But the greatest strength of community influence is in marketing opportunities. By participating in matches and activities (online activities are also important), the commercial attractiveness of a club increases or decreases, which can affect the behavior of sponsors and thus the amount of direct and indirect funding they provide. Concerning sponsors, the same may apply to managers who provide their funds to the club. Managers may be competent enough, but in some cases, they are forced to comply with the sponsor’s interest although they may not fully accept them. Media also play a major role in the commercial appeal and subsequent building sponsors’ relationships. The interest of television and streaming services, along with the attention of print and web mass media, as well as sports commentators, bloggers, and influencers, is as important as the behavior and preferences of the community. A thorough analysis of the effects of the internal and external environment is the basis for setting achievable goals. The main bottlenecks when analyzing the internal and external environment are the management of volunteers, changes in the number of funds, roster rules, and relatively limited resources of sports staff (Table 4.6). The main bottleneck of the internal environment is volunteer management. While the relationships within the club’s departments, or with the subcontractors, work at a highly formal level, and the process of changing these stakeholders (players, coaches, IT providers) is relatively simple due to market opportunities, the relationship with volunteers is specific. The main reason is the financial resources that the club can save by deploying them. Replacing them with paid staff can lead to financial losses of the club or additional increases in costs. Relationships with volunteers must, therefore, be set up before they join the club. It is essential to stipulate the rights and duties of both parties. Since volunteer recruitment costs are lower than for regular staff of subcontractors, the club should consider recruiting more volunteers than it needs. This will reduce their bargaining power and dependence on certain volunteers.

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Managers of the departments that are relevant for the given activities shall take responsibility for volunteering. The bottleneck with the greatest impact on the club’s sustainability is the change in the amount of funding. The main measure for both situations is to create different funding options. This includes not only reaching out to new sponsors but also creating contingency plans responding to funding changes. These may come up with the possibility of recruiting youth players or engaging foreigners with lower salary requirements. A change in the amount of funding can also lead to a complete change of vision (in the worst case, to bankruptcy) and thus getting back to the beginning of the strategic management process. The general responsibility for managing this bottleneck lies with the CEO, together with the chief financial and sales officer. Each competition has its own rules, some of which may regulate the number of foreigners, introduce mandatory numbers of domestic players, or otherwise determine the rules of roster composition of the member clubs. Especially with the mandatory number of home players, a club must have a sufficient number of players of sufficient quality who are full members of the team. Relying on a narrow circle of players may be fatal if they get injured, which may thwart the objectives associated with sporting success. Here, the system of youth development is important, which can provide adequate compensation (enough quality players) for injured or suspended players. The sports director (sports department manager) is responsible for taking roster-related measures. Sports staff with relatively limited resources are also connected with roster and backroom staff composition. Recruitment of players, coaches, and backroom staff is strictly limited by the number of financial capabilities. With limited resources, clubs must try their best to put together the best possible team. For the most efficient use of resources, personal relationships with players and their agents and a thorough analysis of their skills and abilities (sports and personal) are important. With this regard, knowledge of the environment saves or uses the budget effectively and contributes to the greatest extent of achieving sporting success-related objectives. Sports director is at the top of the responsibility hierarchy.

4.3.3

Goal

The main goals of sports clubs are sporting success, sustainable funding, youth development, and community building. Management determines strategy variants for individual objectives. When identifying objectives, emphasis must also be placed on possible future developments of the sports industry (Fišera 2007). The resulting strategy alternatives are thus a combination of different objectives, of which the best ones are subsequently implemented. The main objectives can be very closely linked and influence each other, but at the same time in some situations, their implementation may be mutually exclusive. Sporting success depends mainly on a team roster. Depending on the specific competition, this is subject to regulations related to the number and playing time of foreigners and domestic players. Although the number of foreign players may not affect success, their ratio versus home players on

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a team roster is historically increasing. This can restrict opportunities for domestic players and thus youth development. Sporting success also affects community building in the form of increased interest in sports or greater media attention. Last but not least, it is possible to obtain more funds from sponsors thanks to sporting success. This is especially important if you depend on sponsors (whether or not they are part of the club’s leadership) with sports ambitions, non-achievement of which may lead to their termination of the relationship with the club (usually within a period of 3–4 years). Some clubs are willing to sacrifice sustainable funding for sporting success. Most often it is in the form of strengthening the team with players beyond the real financial capabilities of the club or even getting into debt to get them. Here, management relies on sporting success that can bring additional funding beyond what is planned. As with sporting success, all other objectives are linked to sustainable funding. With stable funding and material resources, a club can work for a long time and thus form a team that can achieve success in sports. At the same time, the club can invest resources in the development of talents and the creation of conditions for the development of domestic players. Without financial resources, marketing, and public relations that are essential for building, a community cannot work. Partial goals of youth development require long-term efforts. Through youth development, a club can secure sustainable financing, as it can be seen in several clubs, where no small part of their budget comes from the sale of its home-grown players. Likewise, a club with a sufficient quality of home-grown players can gain new players to the senior team, thus saving money on foreign and domestic players from other clubs. Youth development is also important for community building. Local fans including parents and family members are showing more interest in the youth team. With a sufficient number of appearance opportunities, a club may use their marketing potential to build a community toward its marketing attractiveness. Likewise, youth players can be role models for other children, who want to follow their stories and become members of the club and subsequently top athletes, with whom the club can continue to work. Building a community is an extension of sports and economic objectives. It is about connecting all stakeholders and the intensity of their relationship with the club. Through community building, the club’s commercial potential increases, which has an impact on sustainable funding. Sponsors want to logically associate their name with an attractive product sparking interest from their potential customers. The position of clubs and sports in the city is also influenced by the amount of direct and indirect funding from regional state institutions, which may tend to support sports in which people participate the most. High match attendances and interest in sports also motivate children to join the clubs, which is then beneficial to the development of youth. For these close links between individual main and secondary objectives, each club should, therefore, set an optimal and minimum objective, which should be treated as sufficient if achieved. As some objectives are difficult to align or are virtually contradictory, a discrepancy between the objectives that club declares vis-à-vis the public and the objectives it is really trying to achieve exists. The main bottleneck when creating strategy alternatives is mutually exclusive objectives (Table 4.7). This bottleneck shows the mutual influences of individual

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Table 4.7 Bottlenecks—goal Bottleneck Mutually exclusive objectives

Responsibility Management, general manager

Action – Defining optimal and minimum (sufficient) objectives

objectives. Although most are closely related, some are mutually exclusive completely or to a certain extent. A club must therefore define not only optimal objectives but also minimum objectives that should be treated as sufficient if achieved. Optimal and minimum objectives can be set for each sub-objective separately (optimal—championship title, minimum—third place) or across objectives, where the achievement of an objective beyond the threshold can compensate for not achieving another objective (optimal—championship title, minimum—second place and two players in the national team). Setting up and achieving objectives is a key phase of the whole process; therefore, the management and the CEO shall take the highest responsibility.

4.3.4

Implementation

In addition to setting objectives, the influence of internal and external factors is also significant when implementing a strategy. This is due to the development of an environment that is dynamic and constantly evolving. The situation when implementing a strategy may not always be the same as when analyzing and defining objectives. Depending on the individual areas, even without obvious fault of the club and its management, a situation may arise in which the objectives may not be achieved. The internal environment is mainly involved in achieving sports success and other objectives associated therewith. With positive results and their sound communication toward the public, it is possible to increase the fan base, spark children’s interest in joining the club, or increase the number of sponsors and resources they provide. Otherwise, with unsatisfactory results, the opposite may be true. The implementation of a strategy is equally affected by the external environment. The public sector at the governmental level may change regulations during an ongoing season, and clubs may not be able to adapt sufficiently. New legislation can also bring benefits to clubs. It all depends on the legislation. Similarly, sponsors may make changes in their business, which might render financial and material resources ineffective. However, an opposite situation may occur, where the sponsor will provide even more funding to the club. International and national organizations and leagues, where the club plays, have the power to impose fines, forfeit matches, deduct league table points, or impose suspensions on teams, players, or coaches. This affects sub-objectives in all areas. This situation can also occur with sports opponents, i.e., it may help other clubs in implementing and achieving their strategies. Sporting success is also influenced by the situation with other clubs. Competitors have the same opportunities and options relating to their managers’ skills and

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Table 4.8 Bottlenecks—implementation Bottleneck Changes in laws

Responsibility General manager, department managers

Fines (related to sport)

General manager, sports director

State and objectives of competing teams Luck Impact of the results on the community

General manager, sports director

Creation of media image

Marketing manager

Marketing manager

Action – Monitoring the political situation – Education and requalification – Contingency fund – Player roster flexibility – Youth development system – Contingency fund – Analyzing and updating information on competitors continuously – Appointing a person in charge of communication – Unified system of informing about the results – Appointing a person in charge of communication – Establishing personal relationships with journalists – Correct communication toward the press

objectives set. Opponents can gain unplanned funds during a season and thus strengthen their teams with new players or employ talented players from their youth team. Through a solid player roster and favorable circumstances, they can also improve their situation in relation to their objectives. Last but not least, happiness is important when implementing a strategy, especially with regard to achieving sporting success. Its impact is much more pronounced here than in other sectors. It may be injuries or accidents that determine a match outcome. Even the best-prepared clubs cannot completely mitigate this factor. Implementation bottlenecks include changes in laws, fines, state and objectives of competing teams, luck, the impact of the results on the community, and creation of a media image (Table 4.8). The legislative process takes place throughout the year; thus, changes in laws can also affect the standard operation of sports clubs. The CEO and department managers must, therefore, keep track of the political situation and take the legislative process as a factor that is directly related to sports and other areas affecting the club’s management. Once new laws are adopted, it is necessary to train or retrain staff according to the new regulations in order to ensure compliance. The most effective measure for new laws affecting the budget is the creation of a contingency fund, which can then be used to cover any incurred expenses (or to decrease expected revenues). The CEO together with department managers is responsible for managing this bottleneck. Sports sanctions include, inter alia, suspension of specific team members, match forfeiture, points deduction, financial fines, or stadium attendance restrictions. These arise mainly from sports emotions (physical fights, media statements, fan behavior, etc.) or tactical reasons (intentional fouls, taunts, etc.). The consequences then affect all kinds of objectives,

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mainly sporting ones. As with the team roster, measures taken to mitigate this bottleneck are linked to staff flexibility and youth development. Thus, players with a temporary or permanent suspension are easily replaced. When a permanent suspension is placed, a club can try to get new players from their contingency fund, which is also an effective measure with regard to monetary sanctions. The club can reach for new and better players even with regard to match forfeiture or points deductions. This helps to bring better match results and compensate for these losses. A contingency fund is also needed for losses associated with the loss from matches played behind closed doors. As sanctions are mainly linked to sporting activities, the main responsibility for the measures lies with the CEO and the sports director. Competition—clubs competing in the same league or clubs competing in different leagues or sports but coming from the same region—has its level and objectives. Their level and objectives may change during the implementation process. Clubs competing in the same league may acquire quality players or through tactics achieve results that make it impossible to achieve sporting success objectives. Clubs playing in the same region can use good results to attract fans to their games, thereby limiting income sources or community building objectives. Both cases also apply oppositely if their results get worse. This can help to achieve the club’s strategy. Competitors must be continuously analyzed and responded by the CEO and the sports director. The bottleneck of this process is virtually impossible to manage—luck. In other sectors as well, luck is very important, but this is especially true in sports. Luck plays a key role in achieving objectives and especially to sporting success. It can have a positive as well as a negative impact. The sports public sees luck as minor effects that may determine the result. In ball sports, it can be an accidental rebound of the ball or in other short-term weather effects or other unforeseen circumstances. Luck is also directly related to athletes, e.g., when setting up the team roster, the sports manager can work with statistics and recommendations, but these are just approximations, and it is possible to have the full knowledge of their physical condition and form (despite medical examinations). Even with a good selection and satisfactory performances, players can get injured and then be virtually worthless to the club. No medical team in the world can prevent that. As with luck determining a sports result, ordinary physical contact, bad landing or stepping, or illness may also play a key role. Players’ mental state, which is influenced by a large number of factors beyond the control of managers, is also important. The same goes for other sports staff, referees, and finally fans. Just as luck can have adverse effects on the club’s results, it can also help them, and the same applies to the competitors that have to be taken into account. Therefore, the measures and responsibilities with regard to this aspect cannot be fully assigned. Even the best preparation with the best contingency plans may not work at all. Regardless of whether the results are positive or negative, sports results have a significant impact on the community and its building. As important as the results and performances are the communication vis-à-vis the sports community. Especially in sports, where fans are confronted with information from various sources, the club’s official communication is important. The aim of managing this bottleneck is to eliminate the negative impact of poor results and performances and, conversely, to

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make the most of good results and performances with regard to the set objectives. A person must be appointed to take responsibility for the communication of results toward the community through media releases and to coordinate media communication of all club members (players and coaches). This will avoid giving conflicting statements from different stakeholders. At the same time, depending on the circumstances, the values that will be presented toward the community must be prepared upfront. Responsibility for these measures lies with the marketing manager, who most often delegates the PR manager, if applicable to the club. The creation of media image is an extension of the club’s results impacts on the community. Here too, it is necessary to apply measures that eliminate the negative impact and boost the positive one. This time, however, it is not just about the results impact, but about the overall media image through other than their communication channels, i.e., sports media. As well as in this case, one person communicating with the media must be appointed and take responsibility for coordinating media releases. Personal relationships are much more important than communicating results to the community. These can influence the judgment of journalists and their style of publishing information about the club. Although the facts cannot be changed, the style in which they are presented creates space for influencing the community and the sports public, which has a direct impact on the club’s objectives. It is therefore important to avoid giving contradictory media statements as with the communication of individual club members. Media relations must, therefore, be good and at the most professional level, or at less formal but still friendly. This will ensure the creation of a positive media image. Even in this case, the marketing manager is responsible for the measures that can be delegated to the PR manager if the club has one.

4.3.5

Assessment and Control

At this stage of the process, the management must assess the strategy adopted, especially in terms of achieving the objectives thereof. It is not only about achieving the objectives, but also about the means of achieving them, or not achieving, as well as whether achieving specific objectives prevented achieving other objectives. In particular, a poor assessment of possible sporting success can lead to an oversight of the achievement of other objectives or the subsequent setting of unrealistic objectives when repeating the process. The objective achievement assessment is a bottleneck of this phase of the strategic management process (Table 4.9). This is important due to the characteristics of the process, which is constantly repeated. Objectives achievement assessment Table 4.9 Bottlenecks—assessment and control Bottleneck Objective achievement assessment

Responsibility Management

Action – Managers meeting – General knowledge of the environment

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must also be made with the participation of managers working at lower levels of the organizational structure, coaches, or player agents. What matters is not only the degree to which the objectives are achieved but also the means of achieving them. Assessment is essential to adjust the vision and set up new objectives that can be achieved. Also, due to the connection with the vision, it is again necessary to have a basic knowledge of the environment and compare changes since the beginning of the process (the initial state). This will ensure the best possible interpretation of the results achieved, which can be skewed (especially by sports success). Sound assessment will then improve the process of the sports club’s strategic management. Club’s management is responsible for measures in the last phase of the process.

4.3.6

Case Study: Sports Clubs Demise Causes

Sustainability is one of the problems of commercial sports clubs in Slovakia. Sports clubs cease to exist or reduce their operations for various reasons. This is not only happening with small clubs but also clubs of the highest tiers. The total number of clubs in the highest Slovak soccer, hockey, and basketball league (sports with the highest attendance) in the period between the seasons 2014/2015 and 2018/2019, which did not continue to play in the following season, together with general causes, is summarized in Table 4.10. Out of the total number of 16 clubs, 11 of them had a non-sporting reason for discontinuation in the next season. It is not a rare situation when even the highest league has the required number of teams. This is especially true in basketball, where any club meeting the financial conditions can enter the league without any sports history. The case study analyzes nine of these clubs (since two of them announced their discontinuation but then resumed the league a year thereafter). This includes the clubs: Košice and Myjava soccer clubs, Skalica and Pieštany hockey clubs, and Banská Bystrica, Nitra, Košice, and Bratislava Karlova Ves basketball clubs. An overview of the analyzed clubs together with their standing in different seasons (ranking in the last/full season is highlighted) is shown in Table 4.11. Key factors influencing the sustainability of clubs can be found in the causes of bankruptcy. Other objectives and challenges of sports organizations in Slovakia can be defined at the same time. From the identified objectives and factors that affect them, it is possible to determine clubs’ strategies and the means of achieving them, even though they were not successful in this case. At the same time, they can be compared with clubs that did not go through bankruptcy in the same period or who resolved it and now continue in the highest tiers. Table 4.10 Reasons for not continuing the clubs in the competition Number of clubs

Sports reason 5

Other reasons 11

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Table 4.11 Standing of selected clubs in individual years Football 2014/15 MFK Košice

6

Spartak Myjava

9

2015/16

2016/17

2017/18

2018/19

2017/18

2018/19

3 Ice hockey

2014/15

2015/16

2016/17

7

8

4

ŠHK 37 Piešťany

8

9

HK 36 HANT Skalica

9

MHC Martin

Basketball 2014/15

2015/16

KB Košice VŠEMvs Karlovka MBK SPU Nitra ŠKP Banská Bystrica

2016/17 4

2017/18

2018/19

3

2 7

6

7

9

10

8

11

7

General assessment criteria have been established for all clubs, such as the club’s background, demise background, and stakeholder’s views, which were then incorporated into the causes of the club’s demise. MFK Košice—Soccer (TASR 2015a, b) 1. Sports situation: Košice club had played under different names throughout its history and became a two-time Slovak champion and five-time winner of the Slovak Cup. It is the first Slovak club to play in the best international soccer competition in the world—the Champions League (1997/1998). Before bankruptcy, it ranked sixth in the Slovak league in the 2014/2015 season. 2. Demise background: The MFK Košice soccer club did not receive a license for the highest tier due to failure to meet the financial criteria and could not play in the league in the 2015/2016 season according to the club licensing system of the Slovak Soccer Association. After being relegated to the third tier, the club changed its name from MFK to VSS, and despite winning the league, the club did not sign up for the second tier and went again bankrupt in the 2016/2017 season. 3. Stakeholder views: Slovak Soccer Association (SFC) decided not to grant a license for MFK Košice in May 2015 for the 2015/2016 season, as the club failed to remove the causes that led to no-licensing and thus failed to comply with the financial license criteria. As a result of the modified auditor’s assessment, the club’s continuous operation was endangered, and any proposals rather led to the reduction of the club’s debts instead of increasing its financial capabilities to play in the following season. SFZ also considered the club’s estimated future revenues to be unrealistic in the next season budget. The last noncompliance was the club’s

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debts to the players, and the repayment agreements with the players were antedated by the club. Part of the players also wanted to get severance pay and filed the case with the Arbitration Court. The club’s management in its representation declared only the reason for no-licensing that the repayment schedules were not signed and estimated its debt at €220–300 k. The club’s management believed that player transfers, who will not be willing to play lower tiers, will bring enough funds to repay the debts. However, most of them left in retaliation despite fines. This had another negative impact on the budget. The following season, the club tried to contact local companies and the city council to become a shareholder of the club. They failed to get any, and the management acknowledged that the club has no sponsors for several years. Youth teams under 16, 17, and 19 years of age dropped out of the highest tier and thus did not meet the criteria for the UTM (talented youth unit) status, which stipulates, inter alia, that the senior club must play in the first- or second-tier league). This also put the €300 k city grant at risk. The club would no longer have enough funds to continue and could not register a senior and no youth teams for the next season, and thus, FC VSS ended and the youth with 300 players moved to the second soccer club in Košice—Lokomotíva. 4. Demise main causes overview The club has not been able to get sponsors or find an agreement with the city council and keeps on insisting on the unrealistic budget, which was disproven already by the SFZ when it decided to not grant license but also by the fact that the club relied on player transfers who would not be willing to play lower tiers. The last reason regards the results of the youth teams, whose overall motivation was thwarted due to the club’s poor financial situation. Spartak Myjava—Soccer (SITA 2016a, b; pluska.sk 2016; Čapla 2019) 1. Sports situation: Myjava advanced to the highest tier in the 2011/2012 season. After the successful 2014/2015 season, Myjava ranked third and played UEFA European League in the following season. In the same season, however, the club’s management signed off from the highest tier during the winter break. At that time, Myjava was in sixth place. 2. Date of final demise Compared to the competition, Myjava was one of the smaller clubs with a short history. Nevertheless, the club was secure in financial and roster terms and stabilized in the highest tier. In the last autumn round of the 2016/2017 season, a fight broke up after the Myjava–Slovan match, after which some of the Myjava players and officials were suspended for a longer period of time. The club did not play the summer part of the season. 3. Stakeholder views: Myjava club’s management felt that it does not belong to the highest tier since the moment it advanced to it and believed that the first league is only for large clubs with intense infrastructure and financial background. The club’s representatives did not feel enough respect and felt inferior during meetings with other clubs’ representatives (each club should have the same vote). From the financial perspective, the management thought that more money should

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be spent on soccer by the government; the new Sports Act increased the club’s costs by another €100 k, and that the club felt that it is unfair that it never received anything from the government and believed that even municipalities were underfunded. When Myjava resigned from the league, youth teams also stopped playing at its stadium, where they regularly played their matches. The management saw this move as an act of revenge. Players were paid salaries together with bonuses according to their contracts by the end of the club’s operations, i.e., by the end of 2016. Those who had trouble finding a new club also received severance pay. The disciplinary commission of the Slovak Soccer Association imposed a fine of €75,000 on Myjava, which was the highest fine ever imposed in the history of Slovak football. In addition, the club was relegated to the fourth tier. The club perceived the fine as disproportionate and never paid it bringing it to a civil court. Even after the club withdrew from the highest tier, the B-team and the entire Myjava youth category continued to play. 4. Demise main causes overview The club’s management did not have good relations with other league clubs’ representatives. Following severe fines combined with increasing fees imposed by the new Sports Act, lack of funding from the city, and none from the state, the club decided to end its participation in the first tier in the middle of the season. HK 36 HANT Skalica—Hockey (SITA 2016a, b; SITA–TASR 2016) 1. Sports situation: The Skalica team started to play the highest domestic tier in the 1997/1998 season and has been a regular member since then. They reached the semifinals twice and once the finals when they lost to Košice in the 2008/2009 season. The club failed to reach playoffs only three times throughout its history, the last time in the 2014/2015 season. 2. Demise background: Even before the start of the 2015/2016 season, the club had financial problems that led to a shorter preparation, which was reflected in a series of consecutive losses at the beginning of the new season and last position in the table. Due to financial problems, the players refused to appear on the ice, and following a third match forfeiture, the team was automatically excluded from the league. 3. Stakeholder views: Due to the lack of funds and the announced refusal to play the next two matches, players were allowed to look for a new club. As a result, most of the roster’s key players left. Despite the announced acquisition of funds to complete the season, the club’s management was not able to get a sufficient number of players of adequate quality, and the club failed to show up on the third match in a row. The league’s governing body had to exclude the team from the league and subsequently annulled all its results in line with the rules following three-match forfeitures in a row. 4. Demise main causes overview: The club entered the season with a lack of funds, which led to a shorter preparation and training period and subsequent non-payment of players who in turn refused to play and later left the club. Skalica

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failed to get enough players for the third match in a row, and the league’s governing body excluded the team from the league and annulled its results. ŠHK 37 Piešťany—Hockey (TASR 2015a, b; PNky.sk 2016a, b) 1. Sports situation: The Piešťany club reached the highest hockey league in the 2012/2013 season and always managed to advance in the playoffs. The team reached the semifinals twice and took the final fourth place. After the 2015/2016 season, in which Piešťany experienced their worst season and ranked 9th, the team did not enter the next season. 2. Demise background: Piešťany was largely dependent on local government grants. Even before the 2015/2016 season, they were thinking about leaving the highest tier and sell their license to Liptovský Mikuláš. The city eventually increased its grants, and Piešťany managed to play the entire season. The situation repeated itself in the following season, but this time, Piešťany had sold the license. 3. Stakeholder views: Local government tried to keep hockey in the city and increased the maximum budget item that can be requested by clubs by €100 k already in the summer of 2015. In the summer of 2016, this amount was increased by another €50 k in the form of an increase in energy subsidies. The club’s management settled all debts and met the league licensing criteria for the 2016/ 2017 season and then sold the license to Liptovský Mikuláš for €85 k. The league governing body approved the sale of the license and relegated the club to the lowest tier. After the end of the Piešťany club, the KH Orange U20 national team moved to Piešťany stadium—which was playing in the highest tier and was receiving funds from the Slovak Ice Hockey Association in cooperation with the National Sports Center originating from commercial sources—which brings income to the city by about €150/h for renting the arena. 4. Demise main causes overview: Although the club has managed to settle all debts, it failed to obtain enough funds to start in the next season. Although the local government repeatedly increased subsidies for the hockey club, it could no longer provide more funds. The club, therefore, sold the league license. U20 national team has moved to the city, which brought in income from renting the stadium for training sessions and matches. MHC Martin—Hockey (Ondrišek 2017; TASR 2017a, b, c; SITA 2018) 1. Sports situation: Since the establishment of the independent Slovak Republic, and thus an independent hockey league, Martin has been active in the top tier, except for 2 years, winning a bronze medal twice. In the 2016/2017 season, Martin fought its way to the semifinals but did not start in the next season. 2. Demise background: Even though the club owed the players’ salaries for several months in the 2016/2017 season, the players and backroom team continued to play. The team managed to sell out the stadium several times, and defeated HK Košice against all odds and ranked fourth in that season. The payers finished the season only because of the fans and good results. The financial issue began to be addressed only after the season. However, the players did not receive their

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salaries, and the Martin club failed to receive a license for the next season due to the non-payment of its debts. 3. Stakeholder views: The players finished the season without getting paid for more than 4 months. Some were offered a portion of this amount in which case they would waive the rest in favor of the Martin club. In the end, they agreed with the club that they would waive 40% of their salary, but still, the club was missing €100 k. Most of them, thanks to their good performances, were engaged by other clubs on better terms. The league’s governing body does not have the powers to intervene in the club’s operations, as it is not a party to its contracts. The only tool it has is to consider excluding the club from the competition, which happened, and Martin did not receive a “recommendation to obtain a license” for the 2017/ 2018 season due to the non-settlement of debts. The league management also insisted that if the club did not comply with the league’s rules, its players may freely withdraw from their player contracts. The club’s management was interested in continuing to run its youth, junior, and U23 teams, which would replace the team B of MHC Martin club in the second tier. Junior and youth teams were allowed to continue, but the U23 team was excluded by the league’s organizer. As the defunct club was considered to be a city club, its players sought help from the city council. The city did not assume the club’s payment liabilities vis-à-vis the players, as this would be in direct conflict not only with the Martin city’s subsidy regulation but also with the Act on Budgetary Rules of Local Government and the Act on Budgetary Rules of Public Administration. No legal possibility to pay the players’ wages for the 2016/2017 season therefore existed. 4. Demise main causes overview: The club’s management did not have the financial resources to cover the entire season; however, despite non-payment of their salaries, players were willing to continue due to good results and match attendances. They started to deal with the situation only after the season when the league’s governing body did not grant the club a license, even though it had no direct powers to do something with the club’s debts. The players waived a portion of their claims. Even though it was a city club, the local government could not pay the amount due for legislative reasons. ŠKP Banská Bystrica—Basketball (Balko 2015; Buček 2015) 1. Sports situation: Banská Bystrica started playing the highest basketball league in modern history in the 2008/2009 season. Throughout its history, the team never got further than to the quarterfinals of the playoffs. 2. Demise background: After losing the controversial quarterfinals against Komárno in the 2014/2015 season, several members of the club’s management resigned due to the lack of funding and interest in continuing in men’s basketball. 3. Stakeholder views: After being eliminated by Komárno in the 2014/2015 season, both the coach and the assistant coach of Banská Bystrica made offensive comments about the referees. The coach subsequently repeated their opinion on television. The league’s governing body imposed a fine on both of them. First, the manager and then the club president (also a major sponsor) left the club afterward.

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They stated the workload as the main reason. Finally, the president of the association decided not to continue in men’s basketball due to a lack of funds and interest. Despite the demise of the senior team, the youth team in Bystrica continued to play under new management. 4. Demise main causes overview: After a long-term failure of the inability to reach semifinals in the playoffs, together with the controversial series against Komárno ending with fines for the club’s coaches, along with the resignation of the main sponsor who also was the Club President, no people were found to be willing to continue in senior basketball. However, the new management took over the youth team. MBK SPU Nitra—Basketball (Kilian 2017; omeste.sk 2017) 1. Sports situation: Nitra was one of the leading basketball clubs, having been in the top tier for 15 years continuously, and between 2003 and 2012, it won six medals, including two gold ones (2005 and 2009). In 2011, the club also played in the Transitional European Cup. 2. Demise background: After years among the elite, Nitra went through a tough period between 2014 and 2018, when the management was failing to get more funding, and the club hovered around the bottom of the league. The club’s management assessed the situation and concluded that it does not make sense to continue at this level and did not submit an application for the 2017/2018 season. 3. Stakeholder views: The club’s management relied mainly on the funding from the main sponsor, who was also the president of the club, and who was attracting other sponsors. After three seasons of being on a limited budget, the objective was to double it in order to increase the club’s performance. The club failed to do that, and the president did not want to risk competing with insufficient funding and a high risk of falling into debt to players; thus, the club decided to not apply for the next season. During the low-budget period, the club tried to work mainly with young domestic players, but they did not perform as they expected, which was another reason for the termination of the club. The club failed to get funding from the local government either, as Nitra already has a larger number of top and successful sports clubs. Youth teams, however, continued in their leagues. 4. Demise main causes overview: The club relied on a single sponsor for 3 years, failing to increase its budget and failing to work with their youth team effectively. Increasing support from the local government was also impossible due to a large number of other existing sports clubs in the city. After evaluating its financial capabilities, the club did not apply for the next season. KB Košice—Basketball (Jurkovičová and Fotta 2018) 1. Sports situation: After a successful era when the club managed to win gold and bronze medals in the 2006 and 2007 seasons followed by a period of decline, Košice returned to the league in the 2015/2016 season. In the first season, they

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have not yet made it to the top, but in the following season, they won bronze, and then in the 2017/2018, they won silver and twice won the Slovak Cup. 2. Demise background: Košice management aspired to win the title right in the first season after returning to the highest tier. In the third season, Košice lost in the finals, and the club’s management complained about the influence of the referees and negative publicity. The club did not apply for the next season. 3. Stakeholder views: The club’s management cited the Sports Acts as the main reason for not applying for the next season, as it expected an increase in players’ salaries, and the club was not able to get more funding and did not want to lose players and reduce the power of the team. In their opinion, the club’s president mentioned the negative opinion of the basketball community and non-basketball community in Slovakia on the Košice club, negative publicity during the semifinals, referee’s detrimental decisions against Košice during the first finals match, and the league system in which matches are too concentrated at the peak of the season. Players who were willing to continue in Košice were offered lower salaries with the opportunities to continue playing the top tier, but since the management had the highest ambitions, none of them agreed with that. After finishing in the first tier, the club settled all debts and left the KB Košice name to the new management under which the club started playing the second tier as an amateur team. 4. Demise main causes overview: Košice wanted to build a championship team immediately after entering the league. After the failures, the club’s management blamed the referees, the league system, the journalists, and the public. Finally, after all the debts have been paid out, the club president cited the Sports Act as the main reason for leaving the league. VŠEM vs. Karlovka—Basketball (TASR 2018; Prokop 2018) 1. Sports situation: The club has been active in the top tier since the 2014/2015 season and reached playoffs three times out of four. However, it always ended in the quarterfinals and failed to win a single match therein. 2. Demise background: The goal of the management was to reach semifinals, but after 4 years, the club did not even come close. When key players left the club after the 2017/2018 season, the management assessed that this goal would no longer be realistic and did not apply for the next season. 3. Stakeholder views: After the 2017/2018 season, the majority of the best players joined the competing league teams, abroad, or ended their careers. The club’s management did not want to develop young players for other clubs, and due to the inability to keep key players in the team, and the consequent reduction in the team’s strength, it did not apply for the next season. Another reason cited was the level of support for Slovak players and Slovak basketball in general from the Slovak Basketball Association and the Ministry of Education, Science, Research, and Sport of the Slovak Republic and the future impacts of the Sports Act. The youth teams, as well as the second-tier Karlovka (joined by the players of the defunct club) team, continued to be active in their leagues.

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4. Demise main causes overview: The club did not approach its goals in four seasons, and in the end, the best players left for more lucrative offers. Since Karlovka only played with Slovak players, it is expected from the form of support from the state or the basketball association. As none was given, the club’s management decided with regard to the new Sports Act to not apply for the next season and only continue to play in the lower and youth leagues.

4.3.6.1

Conclusion

Depending on the sport, the size of the club, the number of sponsors, the number of local government subsidies, and the club’s ambitions, the club’s mentioned above cited several reasons for their decline. A summary of the main causes is shown in Table 4.12.

Table 4.12 Reasons for termination of selected clubs in Slovakia Club MFK Košice (football)

Spartak Myjava (football)

HK 36 HANT Skalica (ice hockey) ŠHK 37 Piešťany (ice hockey) MHC Martin (ice hockey) ŠKP Banská Bystrica (basketball) MBK SPU Nitra (basketball)

KB Košice (basketball)

VŠEM vs. Karlovka Bratislava (basketball)

Reasons for termination Continuing to operate without securing sufficient funding Long-term inability to get sponsors Insufficient subsidies from the municipality Insufficient results for young people Bad relationships in competition Insufficient subsidies from the municipality Insufficient subsidies from the state Sports Act Enter the season without securing enough funds Departure of players during the season Lack of funds to continue to the new year Insufficient subsidies from the municipality Outstanding debts to players Impossibility of paying debts by the municipality Sports failure Resignation of the main sponsor Long-term inability to get sponsors Resignation of the main sponsor Insufficient subsidies from the municipality Sports failure Bad relationships in competition Sports failure Sports Act Sports failure Inability to retain key players Insufficient support of Slovak players from the state Sports Act

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Fig. 4.13 Ratio of reasons for the decline of sports clubs in Slovakia

Other reason 33%

Unsecured financing 67%

Unsecured financing

Other reason

Table 4.13 Occurrence of reasons for the decline of selected clubs in Slovakia

Occurrence

Resignation/nonacquisition of sponsors 6

Insufficient subsidies from the municipality 5

Sports failure 4

Sports law 3

Despite the diversity of clubs and sports, the causes overlap to some extent. One of them is funding, which is the major reason for quitting the highest tier. The ratio of decline due to insufficient funding for other reasons is shown in Fig. 4.13. The main one, together with other reasons, can be further subdivided. An overview of the most common reasons for the club’s bankruptcy is given in Table 4.13. As many as six clubs did not manage to get long-term funding for their club and were ill-prepared to deal with this situation without any contingency plans. They either relied on a single sponsor or local government and/or failed to get more sponsors. In four cases, it was a performance failure, which was either related to unfulfilled personal ambitions of the management or resulted in lower financial grants from the state. The least common reason was cited in the Sports Act (#440/ 2015 Coll). This Act has been in force since 2015, but for the first 3 years, the clubs had a tax holiday, which was to end on December 31, 2018. From the player’s perspective, tax holiday means that they do not receive sickness benefits for work incapacities, were not insured as employees, were not entitled to maternity allowance, and were not getting any money to their pension funds during these 3 years of social security and health tax holiday. This has negatively contributed to their social welfare. Their conditions were supposed to improve after the end of the tax holiday, but for clubs, it could result in demise. From January 1, 2019, the club’s costs for players’ salaries were to consist of the player’s income + 80% (for players with €1,000 or even by 90% for players with €2,000 monthly salary), which includes 19% or 25% income tax + 50.2% social security and health insurance (Kotian 2018; Sepeši 2018). Several clubs, therefore, referred to the financial demands and announced the risk of their demise in the 2017/2018 season. But that did not happen. The tax holiday has been extended, which means that the law would not apply to the

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clubs that cited the Sports Act as the main reason for their bankruptcy. The expected massive impact on the entire leagues did not happen, and the clubs were given more time to prepare for the end of the tax holiday and new rules applicable to their players. Throughout the 2014/2015–2018/2019 seasons, Slovak clubs were in decline (relegated to lower tiers or ceased to exist) for four main reasons—resignation/ insufficient sponsorship, insufficient local government funding, poor performances, and the Sports Act. With foreign clubs, it was mostly debt management and a player transfer policy. Although local governments could previously pay off sports clubs’ debts, today it is no longer possible due to European Union regulations. It was the local governments in fact that saved some foreign clubs, especially in France, from going bankrupt. Relations with local governments must, therefore, be managed by clubs well in advance, and clubs must not rely on state subsidies, which are complicated from a budgetary and legislative point of view. From the sponsor’s perspective, the biggest difference was that while Slovak clubs were often dependent on a single sponsor, and they went bankrupt when they lost it, foreign clubs received even more financial support from their largest sponsors in the worst moments. It is also related to the attractiveness and commercial potential of the league, where the German, Italian, or French leagues have significant global potential compared to the Slovak league, which has virtually a zero potential. Dependence on a single sponsor is also related to another most frequent bankruptcy causes, i.e., the fulfillment of sports ambitions. Slovak club presidents and major sponsors often feel that if they put their money into sports, they must succeed automatically. The analysis shows that the period before they decided to leave or take other bankruptcy-related measures lasts 3 to 4 years.

4.3.7

Case Study: Startup Club Strategic Management

In the 2017/2018 season, the club from Žilina returned to the highest Slovak basketball league tier after 5 years. The club’s management was composed of people with strong basketball background (former players and coaches) but without experience in managing a sports organization. The club’s philosophy was to build on youth and talents; the case study is based on interviews with all four players (born 1996, 1996, 1998, and 1999) who played in the club for all 3 years. Two of them played for the Slovak national team, one in the U20 national team, and one in the U18 national team. Other sources of information came from an interview with the CEO and the club’s representatives press releases.

4.3.7.1

Vision and Background Analysis

The original name of the PP & TV Raj Žilina club was created before the 2017/2018 season from the names of the two main sponsor companies—Poradca podnikateľa

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and Televízia Raj (renamed to BK Slávia Žilina since the 2019/2020 season). The club’s vision was to build a team gradually with as many Slovak players and young talents as possible (Hatala 2019a, b). The management wanted to provide players “who deserve it” with an opportunity to continue their careers even after leaving the youth team (Zilinak.sk 2019). The club was based on the success of youth basketball in the city. Several youth clubs are active in Žilina, the main being MBK Victoria Žilina, which was established in 2006 and has a complete youth development hierarchy. The club had 138 registered players in the 2018/2019 season. Despite the independence, MBK Victoria works closely with the men’s club with the best players having a chance to join its training process or even get to the senior team roster or team B roster, which is a new team created in the 2019/2020 season (Kotlárik 2019). The club’s original sporting ambition was to fight for the title (reaching finals) within the next 3 years, which was later changed to 5 years. But even the players themselves did not consider this vision to be realistic. The club’s management did not have experience in managing a sports club and knew only the sport from the player’s perspective or the coach’s perspective (youth). The club has been built with enthusiasm and good intentions, but insufficient managerial capabilities thwarted the development, which is acknowledged by the club’s management itself. Another critical point was the unlimited power of sponsors not only over the managerial decisions but also over sporting decisions. Another problem was the organizational structure with vaguely defined roles, rights, duties, and vertical and horizontal relationships. The roles were divided without a deeper understanding of their scope: – Sports director (in fact the team leader). – PR manager (later renamed to clerk). – Marketing manager (later renamed to PR manager but without competences). Besides, since the club operated with a small budget from the beginning and was based mostly on volunteers, complications arose in managing these volunteers (reluctance and noncompliance with rules). The issue, which was mostly experienced by the players, was the language barrier of the club’s management and coaches, where none of them was fluent in English. Due to the inexperience and incompetence of managers and inconsistencies related to the vision setting and analysis phases (especially when defining the mutual responsibilities), the phases of defining and achieving goals were both problematic.

4.3.7.2

Objective—Sport Success

The club declared its intentions already through the first press releases that it intends to fight for the title within the first 3–5 years. The following goals before individual seasons were also created in line with vision (Kotlárik 2017; Hatala 2018, 2019a, b): – Stabilizing in the league, not ranking last. – Ranking up to sixth place.

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Table 4.14 Influence of foreigners on location—Žilina Season 2017/2018 2018/2019 2019/2020

Standings 9 5 6

Share of foreigners (%) 34.8 46.7 47.1

Share of foreigners’ starts (%) 28.7 44.1 50

– Semifinals (medal). The club tried to achieve higher goals by placing more foreigners on the team’s roster. Increasing their number and appearances, however, did not lead to any significant results (Table 4.14). The club failed to meet the goal in the 2019/2020 season (the season ended prematurely, and Žilina ranked sixth before playoffs). Foreigners were frequently exchanged, and out of the total number of 24 foreigners (in three seasons together), 14 did not appear in more than half of matches (10 of them played less than 1/3 of matches). The management believes that the problem lies in the high fluctuations of foreign players and their poor recruitment (full competence of the coach in the 2019/2020 season). The players also agree with this and cite other reasons such as disagreements with foreigners and poor communication, together with insufficient skills of the coach (tactics, use of strengths). The problem from the club’s management and players’ perspective was with the vision, which was caused by the lack of experience on the part of the club’s management. American players had to leave Slovakia in the 2017/2018 season for a certain period (Mariňáková 2017). After the problem has been settled, they returned to the team at the end of the season. The club says that with regard to the selection and performance of foreign players they contributed to better results, but it also admits that they were not selected and managed effectively. Adapting to the level of the highest Slovak basketball league also poses a complication in the first season, which led to coaching changes (TASR 2017a, b, c). In a short period of time, the team was led by three different head coaches (and two assistants). The club’s management advocated this step by the argument that it tried to provide opportunities to domestic coaches who had experiences mainly from youth leagues. This was also negatively commented by the players themselves. From the end of the 2017/2018 season until the end of the period reviewed (2019/2020), the same coach Ivan Kurilla has been active in the club.

4.3.7.3

Objective—Sustainable Funding

Sustainable funding is secondary to the interests of the Žilina basketball club’s management. This is one of the reasons why some players and marketing specialists were expelled during the period due to personal preferences without the consent and acknowledgment of the people in charge. On the contrary, other players and coaches were privileged without their own merits. Local government grants (Table 4.15) did not reflect improved performances and ambitions, and after the 2018/2019 season,

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Table 4.15 Local government grants—Žilina

Amount in €

2017 15,000

2018 16,820

2019 0

Table 4.16 Playing time trend of young players—Žilina Total playing time in minutes Average playing time in minutes

2017/2018 1245 138

2018/2019 51 13

2019/2020 8 2

which was seen as successful by the club, the local government did not provide the club with any direct or indirect support. Since the club’s sports venue is owned by a higher state authority above the local government, Žilina basketball club, as one of the few clubs, has to pay full rent for training and matches (Šoška 2018). After the change in funding before the 2019/2020 season, the new board chairman has managed to get enough funds for 5 years (Galdun 2019); however, following the premature ending of the season, the club’s debts amounted to almost €30 k, of which €7 k were player’s salaries (Vnuk 2020).

4.3.7.4

Objective—Youth Development

Youth development was an integral part of the club’s vision. During the three seasons, more than ten players in their youth team (Kotlárik 2019) and five other more experienced home-grown players joined the team’s roster. However, the appearances of young players had a significantly declining tendency throughout the seasons (Table 4.16), and in the 2019/2020 season, young players played only 8 min in total for the whole season. The satisfaction of players who worked in the club during all three seasons (two from the academy, two experienced) with their playing time, as shown in Fig. 4.14, also stagnated (5—full satisfaction with the playing time, 1—full dissatisfaction with the playing time). Players also saw their playing time as insufficient in terms of their potential growth and basketball future. More experienced foreign players were recruited to help domestic younger players to grow and develop. According to them, however, foreign players helped only to a minimal extent to improve their talents.

4.3.7.5

Objective—Community Building

In the first season, the club did almost no activities toward the community and considered the marketing aspect to be unnecessary. Nevertheless, before the season, the club hired an expert in sports marketing and public relations, whose contract has been terminated before the start of the season due to conflicts with the club’s coach.

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4.5

4 3.3 3

2.5

2 1 0 2017/18

2018/19

2019/20

Fig. 4.14 Trend of players’ satisfaction with playing time—Žilina Table 4.17 Media communication in the season 2017/2018—Žilina Author Moravčík (27.9.2017) Moravčík (14.10.2017) Moravčík (17.10.2017) Mühlberger (27.12.2017)

Statement Our team is the youngest in the league, virtually they are all students, the oldest Ďurana already has a job, they are a dentist, and they can only do the evening sessions. Gustáv Hoferica last played basketball 5 years ago. Under normal circumstances, we cannot match Levice. We only have four key players, Levice coach can rotate nine quality players. I feel sorry that some young players do not appreciate the opportunity they get in such matches. The team has a bad atmosphere, it lacks chemistry, and it is not surprising really after the last results. The problem is that foreign players do not respect our rules and instructions. If this does not improve, we will have to say goodbye to them. With such results, we can easily finish the remaining matches with only domestic players. . .

Source: basketliga.sk (2017)

Here too, the unlimited power of management played a role in dismissing the employee without any discussion. The lack of coordination of basic communication toward the press was reflected in coach and assistant press statements, who often discussed internal affairs (Table 4.17). The website administration that was in charge of one of the volunteers was also problematic. The website was out of date with minimal content. With the arrival of a new coach, the hiring of marketing specialists, and the setting of new rules, the situation improved in the 2018/2019 season. Even before the start of the season, the team competed in the legends of Žilina basketball exhibition match. The event met with a positive response. Besides, players underwent marketing training, the club created a profile on Instagram and began to use social networks to a greater extent (including paid advertising), graphic design was streamlined, the problem with the website content was partially resolved, video invitations to home matches began to be created with an emphasis on the match schedule, competitions

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Table 4.18 Attendance and social media—Žilina 2017/2018 2018/2019

Attendance 611 683

Facebook Increase by 475 (2505) Increase by 707 (3121)

Instagram 0 500

for spectators were held, cooperation with professional sports club in Žilina was established, and a new fan club was created. These and other activities have led to an increase in attendance and the number of fans on social networks (Table 4.18) and an overall increase in the awareness of the club in the region. The club continued in line with these new rules in the 2019/2020 season. Moreover, the club has changed its colors to the typical yellow-green jerseys (formerly red-white), a mascot was created, a match announcer was replaced, and a new club anthem was created during the season. Despite poor results, home matches maintained stable attendances, and social networks gradually intensified. The problem, however, was the change in leadership, when another person with no experience in running a sports organization came to be the new CEO, who several times gave press releases detrimental to the club’s interest. The most important is the statement given after the premature end of the season, in which the CEO assessed the club’s commitments vis-à-vis players and sponsors (Vnuk 2020): I tried to contact our sponsors with this solution, but I will not specify the exact names so that no one feels offended. Except for one person, no one agreed. Everyone wanted their money. Even though they love basketball, money is their priority. I can understand some that this is a source of income for them, and they lack money. On the other hand, I am disappointed because I thought they would understand the situation. However, it must be respected, they have a right to their money, personally, I am a little disappointed with their attitude. You know, many claims that they support us because they love basketball, and I expected that they show that in these critical moments.

This statement, which was published as part of an interview in the Žilina Evening Newsletter, outraged many of the club’s sponsors and deepened the club’s uncertain financial future.

4.3.7.6

Assessment and Control

The club has gradually moved away from its vision of working with young players, and the issue also was their courageous goals that the club was not able to meet. The club’s management concludes that the management has improved compared to the first season. However, it claims it was a mistake to assign all sports duties to a single person—the head coach. Most players do not see an improvement in managerial competences (Fig. 4.15). As the most severe issue they state is the behavior of the club in conflict with the vision that was presented at the club’s inception. They also see negatives in the communication and leadership approach to Slovak players and the deteriorating atmosphere in the team.

4.4 Strategic Management Process Principles 2017/18 No 25%

135 Has the situation improved?

2019/20 Yes 25%

Partially 50%

No 25%

Yes 25%

No 50%

Partially 50%

Yes 25%

Partially 25%

Fig. 4.15 Assessment of managerial competencies by players—Žilina

All players who have worked in the club in each season consider their experience with the club to be negative rather than positive and none of them had expressed that they wish to continue playing for the club (three players are not decided yet and one does not want). From the financial perspective, the financial stability declared for the next 5 years is at risk due to health and economic crisis, and the club’s future in the highest tier is therefore uncertain.

4.3.7.7

Conclusion

After its establishment, the Žilina club encountered a large number of issues caused by incompetence of managers and ignorance of the environment, and even after 3 years, it still appears to be a “toy” for some entrepreneurs who have unlimited power over its management, which has a negative impact on setting and achieving objectives and club chemistry. This approach is compensated by the efforts of former players who hold various positions in the club’s structures and try to do basketball for people. However, their powers are not sufficient to take the necessary measures. The club’s future is uncertain, which is not only due to the health and financial crisis that hit the world in 2020. The main cause thereof is improper bottleneck management.

4.4

Strategic Management Process Principles

Knowledge of the strategic management process, together with stakeholders and bottlenecks, does not automatically mean it is correctly implemented in a sports organization. For sound management of the strategic management process, a club must adhere to the following principles:

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Table 4.19 Matrix of optimal and minimum (sufficient) objective Sports success

Sustainable funding

Youth development

Community building

Other goals

Optimal objective Minimum (sufficient) objective

– – – – – – –

Management’s acknowledgment with the process and bottlenecks. Creation of organizational structures (relationships, rights, and duties). Recognition of bottlenecks on the part of those in charge. Definition of optimal and minimum (sufficient) objectives. Continuous analysis of the environment (use of statistical methods). Continuous education and trend monitoring. Uniform and transparent communication with stakeholders.

The process of strategic management concerns the entire organization, but the club’s management especially needs to be aware of its bottlenecks. Subsequently, it is necessary to create an organizational structure based on the relations between the senior and youth sections with the internal affairs department. In addition to identifying vertical and horizontal relationships and assigning rights and duties, those in charge must also be made aware of the bottlenecks that must be managed through proper measures. The basis of strategic management is setting objectives, means of achieving them, and communicating them to the stakeholders. To ensure management continuity, these objectives must be set at least in two levels—optimal objectives and minimum (sufficient) objectives. A matrix of optimal and minimum (sufficient) objectives serves as their summary (Table 4.19). Optimum objectives contained therein mean the ideal future state, and the minimum (sufficient) objectives mean the border between what is and what is not acceptable by the club and its stakeholders. The objectives must also be communicated uniformly among the stakeholders. The evolving environment of the club needs to be analyzed continuously. Although managers still rely mostly on empirical data (Hittmár 2006), it is still necessary to use statistical methods. In addition, managers must constantly develop their managerial skills and knowledge of the environment, especially through monitoring of current trends. As with the objectives, the communication of the entire club toward the stakeholders (even within the club) must be set based on uniform rules, and different club representatives must communicate the same messages, and all principles of transparency must be observed. In the sport, which is largely based on emotions, this is one of the key principles.

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Chapter 5

Conclusion

Over the years of its existence, sport has developed from a leisure activity to a fullfledged professional industry. The goal of sports organizations is no longer just to achieve sports success and fan popularity but also to generate profit. The process of strategic management is vital for the sustainability of all companies in the business environment. This also applies to sport, in which the same elements are used and which is led by experienced professional managers and a large number of other workers with the same rights and responsibilities as in other sectors. Club (collective) sports have a specific position in the world of sport. This type of sport has a high commercial potential, which its representatives are trying to increase even more, e.g., by involving foreign athletes and coaches in their teams. In the world’s leading sports clubs, regardless of sport, economic performance is considered as much and sometimes more than sports success. Paradoxically, the importance of club sport is also supported by individual sport, as the results of these athletes are also part of the team and individual athletes (especially young ones) are often associated with clubs (tennis clubs, speed canoeing clubs, martial arts club, etc.). As with most sectors in the business environment, sport is fundamentally influenced by the internal and external environment. As with other sectors, globalization has the most significant impact on the sport environment, in addition to new technologies. Sport is one of the sectors that can benefit from this. The process of sustainable strategic management of sports clubs can be divided into five phases, which are the determination of vision, analysis of the external and internal environment, definition of objectives, implementation of the strategy, and assessment and control of the results. Due to the influence of the environment and the specifics of sport, critical points are created, which are in every phase of the process of strategic management of sports clubs. To minimize the impact of threats and seize opportunities, the club must develop measures and at the same time designate persons responsible for their management. The main principles creating a precondition for a successful strategic management process are identification of managers with the process and critical © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 M. Varmus et al., Strategic Sport Management, Contributions to Management Science, https://doi.org/10.1007/978-3-030-66733-7_5

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points, creation of organizational structure (relationships, rights, and obligations), acquaintance of responsible persons with critical points, determination of optimal and minimum (sufficient) goals, continuous analysis of the environment (use of mathematical and statistical methods), continuous learning and monitoring of trends, and uniform and transparent communication with stakeholders. The measures must be followed by the whole club, but the managers are mainly responsible for creating a suitable environment for their observance. The challenge for sports clubs in the coming years will be to deal with the health and economic crisis, the impact of which is changing the entire sports world.