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Frost, Lionel; Halabi, Abdel --- "Kicking short to a contest - Accounting and community groups" [2008] MonashBusRw 30; (2008) 4(2) Monash Business Review 34

Kicking short to a contest
Accounting and community groups

Lionel Frost, Abdel Halabi

As Australian football celebrates its 150th year, Lionel Frost and Abdel Halabi examine how distance has affected the costs of running Australian football clubs and offer some suggestions for how community groups might operate in the future.

In 2008 Australian football celebrates 150 years since the formation of its first club – Melbourne. For the great majority of those years, until the 1980s, football clubs Australia-wide operated in regional markets in which they enjoyed high levels of distance protection. Leisure activities and services in general needed to be consumed on the spot, as it was difficult, and in most cases impossible to import these products from other places. These captive markets restricted the revenue that clubs could make, but allowed clubs to operate on small cash flows. At the elite level, few players were fully professional and most relied on jobs outside football to support their families. Although clubs at both the elite and local level benefited from close relationships with their local communities, clubs offered only basic amenities for spectators. Women and children were often excluded from club functions.

The technological and organisational changes that have reduced the ‘tyranny of distance’ have given people a choice of ways to spend their leisure time. National broadcasts of Australian Football League (AFL) games make it possible for people to watch football without visiting or establishing a connection with their local football ground. While the AFL has embraced and profited from the use of television to establish a national brand, country and suburban football faces a greater challenge in attracting the players, supporters and sponsors it once did. In many ways, the country and suburban football ground has remained unchanged as a place to watch enthusiastic amateurs, many of whom will have grown up in the local area.

To watch local football, people still need to be present at the event and this requirement brings people from communities together in a public place. Although local clubs have lost the distance protection that they once enjoyed, those that have survived have done so by maintaining and strengthening their connections with local communities and by preserving their playing and social facilities as inclusive places where families can feel welcome and safe. In a more competitive market for leisure activities, no local club can survive if it continues to provide sub-standard facilities and acts in ways that alienates families.

“You’d take your hat and gloves, and take your tea-basket along. It was more like a picnic! Once the crowd dispersed at half-time – the men’d go down for a drink – the thermoses came out, and it was a very friendly crowd. It was a place you could take your wife or girlfriend.” — A female Carlton supporter recalling the 1930s in The Winter Game: The Complete History of Australian Football, by Robert Pascoe (Melbourne: Text; 1995).

The focus of this paper is on clubs at the local and junior level which are generally run by volunteers who donate time, products and services without any expectation of financial reward. These volunteers, together with their counterparts in other sports-focused, professional, religious, educational, health and community welfare groups, complement the private and public sectors of the Australian economy by creating positive externalities and increasing stocks of social capital. This ‘third (volunteer) sector’ of the economy is large but in recent years concerns have arisen about the ability of community groups to continue to attract members and volunteers as they have done in the past.

In previous studies, rising costs and demographic changes have been identified as key factors in reducing the number of participants in volunteer groups (see for example Rural and Regional Services and Development Committee 2004), but we argue that the changing influence of distance has also left these groups vulnerable to decline. In the last quarter of the 20th century, football clubs that had previously operated in small local markets where they were protected by distance found it more difficult to retain members as technological change and greater mobility led to an intensification of competition for peoples’ leisure time. In the face of these challenges, football clubs have responded in ways that offer useful lessons as to how successful community institutions might operate in the future.

The country and suburban clubs that have survived into the 21st century have continued to prosper by implementing effective management decisions in four areas:

1. Developing a more family-oriented product

While local clubs strive to win premierships and increase their supporter and membership base, results from a survey of club administrators stressed the importance of community welfare aspirations. ‘Our aim is to provide the best possible service in this area and to provide an opportunity for our juniors and seniors to participate in a sport in their own community,’ wrote one administrator. Another club saw its role to foster ‘general community involvement, providing good culture and environment for all types of community to be part of. We aim to give the community a quality recreational and social outlet.’ Most administrators noted that healthy finances and a strong sense of community were not mutually exclusive.

There is strong evidence that as levels of distance protection have declined, local football clubs have worked successfully to consolidate, and in places boost, their contribution to the well-being of their communities. This may reflect their being part of rural communities, which in general have higher levels of social capital than suburban and inner-city areas.

Freda Lahiff’s husband Tommy became captain-coach of Albury in 1947. Freda noticed that women were inconspicuous at football club functions and she soon concluded that ‘Albury was a man’s town’. Indeed, a sociological study of country towns found that football clubs tended to segregate men and women, with women shouldering the burden of chores such as running canteens and catering for club functions. More recently, this segregation has broken down. Football clubs have benefited from the formation of interdependent relationships with netball clubs. Providing adequate facilities for netball teams and building family-friendly social rooms have helped football clubs retain the playing members, supporters and sponsors they need to survive and prosper. Smoke free legislation and drug and alcohol initiatives that seek to modify behavior at sports clubs has made it easier for families to interact on an equal footing. Best practice is exemplified at Yinnar, where the Football and Netball Club’s Alcohol Policy requires all players to complete a Responsible Service of Alcohol course, prohibits the consumption of alcohol at junior matches and functions, and states that the club will only stage family-oriented functions. Clubs and leagues have also taken steps to emulate the AFL’s code of conduct and eradicate violence and racism at clubs.

2. Making improvements to physical capital

The reduction in the number of country clubs has created economies of scale in the building and upgrading of pavilions and social rooms. Country clubs and leagues continue to be subsidised by local councils and the state government and some reaped the benefit of new pavilions, social clubs and ground lighting, such as those at Pakenham and Stawell. At most country grounds glassed viewing areas and social rooms have been added to the clubrooms that were built in the 1960s and 1970s.

3. Strengthening human and knowledge capital

When country and suburban clubs were protected by distance, many were able to recruit a high-quality player from the VFL (usually a coach) to stimulate recruiting and develop local players. Given the salaries available to AFL–listed players at present, the possibility that any minor league club could afford to pay higher wages to secure an AFL star at the peak of his career is now remote. Local clubs now rely on effective coaching at junior and pre-competitive levels. There are good reasons to suggest that teaching basic skills and correcting weaknesses is best done in person, by an accredited coach, rather than at a distance, by having a child watch a coaching DVD. However, elite coaching and player development systems, such as the TAC Cup, may not be in the interests of local communities, as they take the most promising young players away from their local clubs. Not all of these players return to their local club, and some give the game away altogether if they are not drafted by an AFL club.

4. Adopting a businesslike approach

Ultimately, in a world of shrinking distance, local clubs need more than a strong relationship with their local community. A few months before one suburban club folded in 1995, an anonymous leaflet was distributed to players and supporters before a game:

“The Carrum Football Club, founded in 1911, has a marvellous history, tradition and spirit. ... From its first premiership in 1921 to its last in 1994, the character of the club has ensured that it is endeared by its own, and respected by its opponents. The club has been an intrinsic part of the Carrum community for over 80 years and has had an enormous impact on people’s lives over that period. To survive, and continue to provide the worthy benefits to the community that it does, changes need to be made at the club to ensure its survival beyond the turn of the century. .... If the club cannot demonstrate successful and professional operations, trade profitably plus be competitive on the field, it is doomed to be swallowed in a merger or lose its identity altogether” (Anon 1995).

In the 19th century, office bearers at football clubs acted in an unpaid capacity and were invariably men drawn from the middle classes and local businesses. These administrators needed to be numerate and know how to organise and make financial decisions. Club treasurers were responsible for monitoring expenditure on training facilities, transport costs, levies, player payments, insurance, social events, testimonial funds, office materials and equipment, donations to charities and community groups. The importance of sound administration has not diminished. Football clubs still require a governing board that appoints various sub-committees and is responsible for the everyday management and logistics of fielding a team. One survey found that 57 per cent of clubs operated with a committee of between 11 and 20 people. Outside the formal committee, many volunteers are needed to help run a healthy club. When the Carrum Football Club was dying, the point was made that “the workload has unfairly been left to a handful” (Anon 1995).

A survey of accounting systems in 177 country Victorian football clubs reveals that annual turnover ranged from $50,000 to over $300,000. Of these clubs, 76 per cent use accounting software to record receipts and payments, 74 per cent of club treasurers produce a balance sheet, 65 per cent a Business Activity Statement, 60 per cent a monthly profit and loss statement, 54 per cent a budget, and 37 per cent segment financial reports by various functions. An independent audit is made of the accounts of 82 per cent of the clubs. These accounting procedures indicate that local clubs are acting in compliance with the statutory requirements of being an incorporated association. Typically a club treasurer spends over 10 hours per week during the football season and between five and 10 hours per week in the off season working on the finances of his or her football club. Football clubs also prepare and adopt a constitution, articles of incorporation, and by-laws that set out the mission of the club, their structure and operating procedures. These rules can give structure and stability to the club life that will endure beyond subsequent changes in its administration.

To view this academic paper in full, see www.buseco.monash.edu.au/industry

Cite this article as

Frost, Lionel; Halabi, Abdel. 'Kicking short to a contest'. Monash Business Review. 2008.; Monash University ePress: Victoria, Australia. http://www.epress.monash.edu.au/. : 34–37. DOI:10.2104/mbr08030

About the authors

Lionel Frost

Associate Professor Lionel Frost is from the Department of Economics, Monash University

Abdel Halabi

Dr Abdel Halabi is from the Department of Accounting and Finance, Monash University.


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