Though all accountants adopt the commonly accepted accounting rules, each industry has its own characteristics. That is why analysts will need specific knowledge about the market so as to decide which set of accounting rules to apply to reflect the financial situation of the company best.
In addition to the soccer industry, probably the main attributes is the fluctuations in revenue and net gain due to uncertainties in the industry. A team may earn a huge amount of money in this season but it can find itself taking a loss in the next year.
The uncertainties root through the uncertain results in the league games. The revenues of football golf clubs heavily rely upon the performance of the staff in the little league. A simple model is that the football club which truly does well may well have a greater revenue than its alternatives due to the elevated demand of the club-related merchandize.
So , if the root principles that affect the team's revenue-generating component can be determined, predicting the organization performance will probably be much easier. This shall be mentioned in the pursuing by studying the gross annual reports from 2004-2007 of three sports clubs, which can be Arsenal Football team, Liverpool Football team and Tottenham Hotspur. (Notes: The gross annual report intended for the year 3 years ago of Liverpool is not released and so we utilize statistics in 2004 rather. As stated previously, considering that the financial overall performance fluctuates significantly, we are never going to estimate the figures in 2007. )
There are a number of things that can affect the ability of the football staff of generating profits.
First, it can be known a part of the working income of a football club originates from the prize of earning a championship. For UK football golf clubs, they usually aim advancing in the UEFA Glass or the possibly loftier EUROPAISCHER FU?BALLVERBAND Championship League, which have a comparatively high value of prize money. They sometimes pay significantly less attention to home-based competitions like Premier Little league, Carling Cup and FA Cup.
Apart from the prize funds, another important factor is the broadcasting revenue. This kind of comes from the agreements signed between the golf equipment and the little league or cup organizers. Every team in the league obtains the transmissions fee immediately proportioned to the number of rounds they performed. Therefore , a team in the league generally receives similar share of broadcasting profits. Yet, intended for the cup competitions in which the knock-out strategy is adopted, a team helping to make a much deeper run has more matches to play and hence even more broadcasting income. It also appeals to a larger market to watch the broadcast, thus benefiting the club.
Also, the earnings gained from the gate statements is also crucial. Similar to the TV broadcasting charges, the better the team works, the higher the revenue the team gets in the ticket sales, partly due to the brand name effect, which boosts the ticket product sales.
The above four factors shall be discussed in the upcoming section of Team Outcomes.
Secondly, the sales of team-related merchandize items can be a major income source. This very depends on the scale fan-base. A bigger fan-base provides a higher require in the team merchandize, which will boosts the working income. Golf clubs tend to spend to increase the size of its fan-base, which is often described as a marketing strategy because found in the annual information.
A larger fan-base also enhances the brand name with the football club, which can also be a potential benefit intended for the football club itself. This shall be discussed in the Group of followers section.
Thirdly, a group who is able to control the salaries of self-employed players better enjoys the fiscal independence due to the stricter cost control, which can be good for the football club. Plus, when a team can efficiently deal with the total involving trading player, the team places itself to a sound financial position.
These types of factors shall be discussed in the section Salaries and Trading of Players.
Last but not least, the administration...