Play. Inspire. Unite.
The temporary suspension of soccer across Ontario has had a ripple effect across all levels of membership. Clubs and Academies have had to swiftly respond to significant reductions or fluctuations in revenue and find ways to adjust to an unexpected new financial reality for the foreseeable future.
In this installment, the Grassroots Spotlight Series will look at the financial challenges COVID-19 has presented to members, and how a couple of member organisations – Pickering Football Club and Guelph Soccer - have effectively managed their finances and controlled costs. It will also provide some tips your organisation can execute to ensure you maintain a viable financial position during this challenging time.
Unsurprisingly, the uncertainty around the status of the 2020 outdoor soccer season has had the greatest impact on outdoor registration fees, which is the main source of revenue. Up to this point, many Clubs and Academies may have secured up to 55%+ of their total player registrations with the remainder typically coming during April and into May. This reduction or delay in collection of registration fees, combined with what appears to be a preliminary decline in sponsorship funds from local businesses, has forced Clubs and Academies to find ways to address this situation.
Members have had to project into the future and implement a number of cost control measures, including temporarily laying off staff in some cases. For example, Pickering Football Club, laid off six staff members, along with two additional consultants hired to complete Trillium grant applications, according to Executive Director Matt Greenwood.
Generally, these circumstances have forced many organisations to examine their financial structure and make decisions focused on cash flow management, recouping or generating new revenue and cost recovery.
With only limited revenue generation occurring, Clubs and Academies large and small have had to demonstrate sound fiscal prudence. Staffing represents one of the largest cost items, along with facility overhead, where applicable. Many Clubs and Academies do not possess large cash reserves and contingency funds, so are focusing on protecting cash flow to sustain themselves for potentially the next three to six months.
Pickering Football Club, which operates and pays mortgage on its own facility, has had to refund external user fees, switch off the lights and turn off the heat to save on overhead costs.
Sara Orrell, General Manager of Guelph Soccer, has examined the club’s expenses and implemented cost controls that have reduced monthly operating costs. She believes this approach will enable the Club to remain operational for a longer period of time.
Thankfully, relief may be available via various government grants and programs. Guelph Soccer is focusing on maximizing government benefits, including leveraging the $40,000 loan provided by the Canada Emergency Business Account.
Capitalizing on the various financial assistance vehicles offered, Orrell believes, is key as it would enable soccer organizations to maintain operations and have the resources available to mobilize quickly for a return to play.
The loss of registration revenue has forced many Clubs and Academies to be creative with revenue generation by developing various cost models.
Some organizations are deferring fees for competitive soccer, so players will only pay when they return. Others have instituted mechanisms that would enable a mass intake of kids in a short period of time once a return to play is announced, thus quickly generating revenue at the outset of return to play. Another approach is adjusting programming to allow for a larger intake of players for the fall and winter seasons at various price points.
An example of an approach that may serve as a model once return to play has been approved and formally announced is recreational, community-based soccer.
This initiative, which could help engage lower income families, involves a shorter season format (e.g. six weeks), less equipment requirements and matches set more in community park fields to restrict gatherings to smaller pockets, consistent with prevalent physical distancing protocols. While making soccer more accessible and affordable, it would help ensure registration revenues continue to come into the organisation.
Guelph Soccer has adopted an approach based on maintaining relationships with key stakeholders including sponsors, vendors and parents. The focus on maintaining relationships will enable them to rebound faster, when the season can finally kick-off.
To improve cash flow, many members have also sought ways to recover various costs. It is recommended Clubs and Academies examine each existing expense and be aware of its provisions, terms and conditions.
Once such analysis has been completed, vendors and the local and regional municipalities can be engaged to, for example, secure fee refunds for field permits and other costs. The goal should be to recover costs incurred both in the short- and the long-term.
Guelph Soccer has approached its vendors requesting such assistance. The strength of its relationships with these stakeholders, combined with honest communication about the Club’s financial realities has resulted in vendors deferring payments or providing credits.
As member organisations manage their financial affairs, some have indirectly discovered new opportunities to conduct business in ways that could lead to better fiscal management in the future.
The current situation has driven many Clubs and Academies to move their services online like never before. Pickering Football Club is shifting as much of its technical training and fitness sessions as possible online for the time being to keep members engaged with valuable services. This has enabled the Club to continue delivering programming, while ensuring its partner service providers generate revenue.
To preserve cash, Clubs and Academies have shifted marketing spend away from traditional advertising of road-side signs or community newspaper ads and towards social media. This has increased engagement with stakeholders and provided new avenues for programming delivery, leveraging the convenience and on-demand benefits of digital and social media.
Engagement with sponsors has also benefited, as Clubs have expanded their relationships through increased communication and more creative activation. The result is preserving some revenue from sponsors and assisting them with generating new business.
The uncertainty has also been an opportunity to reflect on the necessity of all core costs and streamline them further.
From their own experience and consultation with other peer organizations across the Province, Pickering Football Club and Guelph Soccer have a number of tips to share with the Ontario Soccer membership that can help Clubs and Academies weather the current uncertainty and ensure they are in the best financial state possible:
If you would like to recognize an Ontario Soccer member organization that is proactive and innovative in engaging, servicing and caring for its stakeholders during this challenging time, please contact Bjorn Osieck, Director, Business Operations. If suitable, we would be happy to share any suggestions and case studies with our membership, so we can all support and learn from each other.