Financial Vulnerability in Football Clubs: Learning From Resource Dependency and Club Theories

Abstract

Many amateur (third sector) sports clubs face financial vulnerability, threatening their ongoing operations. Resource dependency theory argues that clubs should eschew financial vulnerability through diversifying their revenue, increasing funder legitimacy, and having a proactive and open board. Alternatively, club theory highlights members who cooperatively own and enjoy the benefits of club goods; arguing that to eschew financial vulnerability, clubs should work to attract members, and make club facilities available which are of high quality. We compare and contrast these two theories, analysing factors differentiating financially vulnerable football (soccer) clubs from those that are not. Key factors are: facility availability (club theory) and an open board (resource dependency theory), which, along with supporting factors, suggest how financially vulnerable clubs can survive and thrive.

Keywords: Financial Vulnerability; Financial Viability; Amateur Sports Finance; Club Theory; Resource Dependence Theory

JEL Classification: M40; H40