ABSTRACT
For all sport facilities whether they be iconic stadia played in by professional teams, municipal facilities for public use, or a local recreational rugby club, it is essential that the overall governance of the organization is underpinned by sound financial management. Without needing to be an accountant and having a specific training in finance, there are two key questions to which all senior managers should be able to respond positively in the context of their business. First, ‘is the selling price higher than the cost?’ In other words, is the organization making a profit? For non-profit organizations such as members’ sport clubs and municipal facilities we can modify the first question to: ‘is the organization operating within the resources allocated to it?’ If sport facilities are not profitable or do not operate within their resources, then problems will follow. In the context of our own lives if we live beyond our means, then varying degrees of problems will occur. Initially, we may experience a cash flow problem such that there is a lot of the month left and we have exhausted the money available for the month. Next we might incur interest payments we are unable to meet; and finally we end up being declared ‘bankrupt’. The same analysis is applicable to sport facilities and teams that do not operate within their resources.
