The 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).
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:
- 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
- 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.
- 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.
- 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.
- 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.
- 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:
||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
||Through everyday household expenditure - corporations that sponsor sport recover the cost by increasing the cost of goods and services they sell
||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:
- Organisations are able to muster the skills and effort to submit government funding applications. The application process can be quite daunting despite the help and assistance provided by funding agencies.
- Organisations have events and programs that serve as a useful promotional vehicle for potential sponsors. The reality for most grass roots organisations is that meaningful amounts of money from sponsorship are very hard to achieve.
- Organisations have sufficient energy and manpower to organise fundraising programs such as raffles, functions and merchandising.
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:
- Slow dilapidation of the clubhouse and other facilities. The unpleasant visit to the toilets is a good example.
- Slow degradation of playing facilities and equipment
- Difficulty recruiting and retaining volunteers as there is no money in the budget for volunteer rewards and training
- Insufficient funding to be able to respond to innovative ideas and new opportunities for programs and events
- Lack of communication with existing participants e.g. difficulty keeping the website up to date or inability to publish a newsletter
- Failure to promote to potential new participants e.g. lack of advertising, website out of date
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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