Businesses and the world of sport: How can their financial health be supported?

The sports industry is unique within the economic landscape, where financial dynamics and emotional factors are deeply intertwined. Between the uncertainty of sporting results and the value of the bond with supporters, sports organisations face challenges that differ significantly from those of other sectors. Sustainable growth, asset renewal and liquidity management become crucial strategic levers. In this context, advanced business models and flexible financial solutions play a central role. At the same time, the ability to diversify revenue streams and strengthen the brand proves decisive. It is a complex balance that requires vision, discipline and innovation. We discuss these themes with Antonio Coiro, Head of Commercial Credit Underwriting North-East.

What distinguishes a business operating within the sports industry from companies in other sectors, and how can a sports organisation grow without placing additional strain on its financial structure?

A business operating within the sports industry, particularly at professional level, differs from companies in other sectors because of the inherent unpredictability of sporting results. The “finished product” is the sporting event itself, which, by definition, has an uncertain outcome and therefore generates value that cannot be fully determined in advance. The economic dimension also merges with the social and emotional dimension: the customer is not only a purchaser of the end product, but is primarily an individual (the supporter) who develops an identity bond with the club. As a result, demand is significantly influenced by emotional factors and is therefore less rational and less stable. In practice, the main revenue streams – broadcasting rights, ticketing and matchday revenues, sponsorships and advertising – are all affected in their precise value by the uncertainty surrounding sporting performance.

To achieve growth without overburdening its financial structure, a professional sports club must adopt a sustainable business model based on revenue diversification (rather than excessive reliance on income generated solely through television broadcasting rights), cost control (particularly in relation to player and staff wages), and the enhancement of intangible assets, such as the club’s brand and academy-developed players.

What are the most appropriate solutions for renewing the equipment and assets of a sports organisation?

It is important to distinguish between different types of assets. On the one hand, there is technical equipment (training machinery, medical equipment, etc.), for which leasing is often one of the most effective solutions. On the other hand, there are infrastructure assets (stadiums, sports centres, hospitality facilities), for which professional clubs frequently rely on structured financing solutions, such as medium- to long-term loans and/or project financing transactions. In this context, partnerships with public-sector entities (as demonstrated by the forthcoming construction of the new stadium in Cagliari) can facilitate infrastructure development by reducing the club’s direct capital commitment and spreading risk across multiple stakeholders. Alongside these traditional financing tools, a club’s ability to secure new commercial partnerships and sponsorship agreements is becoming increasingly important.

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Given the variability of revenues, how can a sports organisation optimise liquidity management in a flexible way?

In a context characterised by fluctuating revenues linked to factors that are not entirely controllable (sporting results, broadcasting rights, sponsorship agreements and participation in different competitions), it is essential for a professional sports club to implement a dynamic and constantly updated financial planning. This enables the organisation to monitor cash flow trends, anticipate potential pressures and intervene promptly. Equally important is the development of different forward-looking scenarios based on a range of possible sporting outcomes, since uncertainty is a structural feature of the sports industry.

Alongside financial planning, clubs should also focus on the nature of their revenue streams by developing more stable and recurring sources of income – such as season-ticket subscriptions, multi-year sponsorship agreements, licensing activities, digital fan-engagement platforms and the year-round utilisation of owned facilities, rather than limiting their use to event days. This helps reduce dependence on sporting results and, above all, on broadcasting rights, which often represent the largest component of turnover.

From the perspective of aligning cash inflows and outflows, flexible financing solutions also play an important role. Receivables financing arrangements – for example, advances against sponsorship contracts or broadcasting rights – can convert future revenues into immediate liquidity. However, these instruments should be used as a support for managing the volatility of sporting results, and not as a permanent solution to structural imbalances: in a context of uncertain revenues, a cost base that is not aligned with the scale of business activity can create significant liquidity pressures.

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