Sport public finance: a UK sport analysis

Abstract

For a long time, public organizations have been facing pressure in terms of how they use their financial resources and the respective returns for the population. In the sport environment, not only a good financial management is the key to any successful sports program but also the way funds are managed and solutions to budget problems can be seen as the most important parts of financial administration. In this sense, this paper aims to analyse a public sport organization in its financial situation and performance. The analysis was supported by 3 financial years (2 sets of financial statements), where firstly it is discussed different sources of revenue, their evolution and then the financial performance is presented. The chosen institution was the British UK Sport, which, through the World Class Programme (WCP) invests National Lottery and Exchequer income into Olympic and Paralympic sport. Based on the figures found and on the trends perceived, UK Sport should improve some key strategic points and keep the same financial performance in others. Indeed, taking into consideration the last 15 fiscal years, the data did not show a Department of Culture, Media and Sport (DCMS) and Lottery tendency of investments, neither increasing nor decreasing. However, it was possible to observe that the London 2012 Games put the absolute number in a higher pattern, which with the recent increasing dependency on the Lottery fund created a better scenario to UK Sport, not so affected by political decisions. In fact, the recent positive operating results were achieved thanks to additional Lottery support. On the other hand, even with a commercial department being created in 2011, UK Sport was not able to elevate the level of other incomes (e.g.: sponsorship), which certainly needed to be changed, in order to avoid uncertainties about the DCMS and Lottery revenues. As a possible future goal, the organisation could look for private resources to cover part of the staffing expenses, which have been predictable and stable in the last years.