Download PDF versionThe Price of Sport

What price do you charge for sport events or programs?

Sport and recreation clubs are often faced with the perplexing problem that the actual cost of providing sport programs is significantly greater than the revenue gained from program users (participants).

Comparing cost of sport programs with price people pay

In other words, there is a gap between what people actually pay for sport and recreation and what it actually costs. At first thought, this may not make sense if one considers that it is the responsibility of club committees to set fees and charges so that all costs are covered. However, this phenomenon does occur for a variety of reasons:

  1. Club committees rely on budgeting processes to determine appropriate fees but such processes often fail to include hidden costs such facility maintenance and volunteer management
  2. A mind set on the part of club administrators that fees need to be kept to a minimum for fear of losing club members to other clubs.
  3. A concern on the part of club administrators to keep prices low to assist sections of the club membership who are “doing it tough” financially.
  4. An expectation on the part of sections of the community that participation in sport and recreation should be low cost. This is often coupled with an undervaluing of the importance of sport and recreation services.
  5. A lack of community understanding of costs associated with running a sport club. For example, users of a Football club might just see ‘a field’ whereas club administrators see ‘a playing surface’ that requires significant investment in turf management, irrigation equipment, mowing machinery, line marking, fence upkeep and goal post fixing.
  6. An expectation that that the provision of sport and recreation is a government responsibility paid for out of taxes

If the true cost of providing sport and recreation is often greater than the price people pay, how can recreation organisations afford to provide the service? It is because the community pays:

Government funding Through taxes - tax payers' funds are used to provide grants to recreation organisations e.g. to assist in the creation and improvement of sport club facilities
Sponsorship Through everyday household expenditure - corporations that sponsor sport recover the cost by increasing the cost of goods and services they sell
Fundraising Through fundraising  - the sport organisation will sell raffle tickets and other fundraising products to the general public

These methods for funding “the gap” between the cost of service delivery and the price that people pay works well provided that:

funding mix for sport delivery

For many grass roots sport organisations, the difficulty of pursuing additional funding through these sources results in stagnation of service delivery. Years and years of effort to keep fees and charges as low as possible tends to manifest itself by:

In the final analysis, sport club committees are faced with difficult decisions in regard to setting fees and charges. There is a difficult balancing act between higher fees that allow for better service delivery and lower fees that increase price competitiveness. It is always worth remembering, however, that sport participants generally want an enjoyable experience above all else.

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