Amid the passion that comes with being a sports fan, it is all too easy to lose sight of the fact that many of the teams we support - or clubs we are members of - are also businesses.
Everything which happens on the pitch, track, court or course, is underpinned by how that organisation is run behind the scenes, whether it is formed as a company, a community benefit society, social enterprise or charity.
Even at the highest levels of sport in Scotland, the chances are that those charged with overseeing the organisation’s work on boards and committees became involved as fans or supporters.
That, of course, brings emotion. We want to see those we support picking up medals, trophies and points. Our superb summer of sport - from the Euros, Wimbledon, the Open to the Olympics - has highlighted how we can all get caught up in the action and excitement.
But, with the domestic football, rugby and ice hockey seasons in Scotland kicking off, it is a good time to remember that, for decision-makers, be they directors, trustees or committee members, emotion should not cloud judgement. They need to think firstly as custodians rather than passionate fans, which can be difficult.
For them, securing financial sustainability and operating within corporate, charitable or the sport’s governing body laws needs to be as important as achieving sporting success and complying with rules of the game on the pitch.
And, while the impact of that may not always play popularly with coaches or fans, it is critical not to forget that it is not only shortcomings on the pitch which can penalise clubs competitively. Just think of those football clubs which have been docked league points for falling into administration, leaving them in a relegation battle; or where poorly managed admin creates problems with premises, staff or funding.
The scale of finances differ greatly, whether you are a prominent Scottish Premier League football club, local golf club or one of the many athletics clubs with whom Lindsays are connected through our long-established support of Scottish Athletics.
Yet, whether it’s at elite or grassroots level - and irrespective of the sport – many of the principles are the same as those that every business must consider. Sometimes they are even more complex. Do the decision-makers understand their duties and responsibilities? Are proper governance policies and procedures in place? Are arrangements robust and secure?
Contracts and sports clubs can be tricky.
What are the lease or ownership arrangements around the grounds that the club uses? Are any special considerations accounted for (such as pitch or court hires to others)?
What are the funding arrangements? Are there any special conditions attached to grants, which must be adhered to?
Are terms and conditions in place surrounding sponsorship agreements? Does the club - and the sponsor - understand what they are? Can they rely on the contract?
Does the club comply with employment legislation? Are there any special terms and conditions which need to be in place in the contracts of players and coaches? How might they differ from the general contracts of the likes of admin, marketing and grounds staff?
Do you need to have special arrangements in place to allow for volunteer participation?
As sports fans, we all want to see our team secure titles and lift cups. Yet no-one will get a shot at glory unless run properly and in a business-like manner. That way everyone wins.
Nicholas Howie, Partner in our Corporate and Commercial team.
Article published in the Scotsman 12 August 2024.
