Don Mariano Marcos Memorial State University

South La Union Campus

COLLEGE OF GRADUATE STUDY
Agoo, La Union
Telefax No. (072) 710-7959
email address: cgs.sluc@dmmmsu.edu.pha Union
Telefax No. (072) 710-79591
email address: cgs.sluc@dmmmsu.edu.ph

Introduction

This module provides learners with the ability to apply the various concepts of the
broad discipline of financial management, in a realistic manner, in any modern sport context
or organization. By introducing and applying a range of appropriate techniques, based on
recognised financial theories, this module develops a critical awareness and appreciation of
the role of financial management in modern sport organisations.Learning outcomes
By the end of the module you will be able to:

● explain the main terminology and concepts used in financial management.

● apply these concepts to decision making in sport organizations.
● correctly record, report and budget for the financial consequences of transactions
and events.
● critically analyze, interpret and use financial statements and reports in decision
making.

What Are the Different Types of Sports Funding?

There are many different types of sports funding available to youth and recreational teams.
Sponsorships from local businesses are one of the most prominent methods of youth sports
funding; many corporations seek this type of partnership for both tax purposes and public
relations. Some rural areas may also have grants available for sports funding in order to
build new practice fields or team buses. Many teams also have fundraisers to cover
additional expenses like uniforms, rental fees, and playoff trips.
Most of the sports funding for non-professional teams comes from various forms of
businesses in the way of donations. A corporate entity is often more than willing to donate
the cost of uniforms and travel in exchange for free advertising at the sports complex. In
fact, this type of donation often pays for itself by increasing exposure of the brand or
product that the company sells, which is why so many large retailers favor sponsorships.
When seeking sports funding from local area businesses, many team managers and
coaches send out sponsorship letters several months before the season actually begins.
These solicitations may ask for direct contributions or a cross-promotion where the team
will advertise the business's products. Some sponsorships may also be exclusive within
certain industries as well. For example, a restaurant may agree to donate resources if a team
promises not to promote a local competitor. Another popular method of sports funding is
holding fundraisers. Many youth and school sports funding organizations use car washes,
bake sales, raffle tickets, and other types of direct sales to gain money for the team. Some
organizations may also choose to charge admission for home games and set up a
concession stand with snacks from local vendors in order to raise additional funding. These
 Don Mariano Marcos Memorial State University
South La Union Campus
COLLEGE OF GRADUATE STUDY
Agoo, La Union
Telefax No. (072) 710-7959
email address: cgs.sluc@dmmmsu.edu.pha Union
Telefax No. (072) 710-79591
email address: cgs.sluc@dmmmsu.edu.ph

types of sports funding are normally organized by a parents' association in order to offset
the direct costs of including their children on the team.

Diversifiable funds are those that can be controlled by the company, for example choosing where
to invest monies, choosing the amount of money to be diversified, the business and financial risk
associated with types of investments, and the current status of diversification options.
Undiversifiable funds involve matters beyond an organization’s control, such as rates of currency
exchange, political developments, fluctuations in investment fields, and interest rates. To become
and remain financially sound, a sports business must take all of these under consideration as it
identifies the method of diversification that best serves its needs (Chamberlain, 2003).

Liquidity describes “how fast something can be turned into cold hard cash” (Kennon, n.d.).
Keeping much liquid cash is considered by many to be a waste of investment potential; however,
it has proved beneficial in some instances. For example, when catastrophe strikes some area (or
areas) of investment, those portions of a financial portfolio which are liquid would suffer minimal
damage. The September 11, 2001, events, for example, had a tremendous negative effect on
financial stability. In the wake of the attacks, many of the United States’ financial structures
suffered from a dramatic decrease in consumer confidence. Stock market investors even had to
endure a 4-day freeze on their holdings. This had an incredible impact on America’s confidence
in the market. Because catastrophe is inherently unpredictable, there is a sense of security in
keeping some part of an organization’s finances liquid (Kennon, n.d.).