Transition to efficient sports asset management model: current problems

ˑ: 

PhD, Associate Professor S.V. Sapogova1
PhD, Associate Professor S.V. Pershina1
PhD, Associate Professor M.A. Piunova1
PhD, Associate Professor L.B. Shorokhova1
1Tchaikovsky State Institute of Physical Culture, Tchaikovsky

Keywords: economic efficiency, sports facilities, physical education and sports assets, core services, physical education and sports asset management, return on investment (ROI).

Background. Presently the national physical education and sports community gives a high priority to transition to the new efficient physical education and sports asset management models with the improved budgeting provisions so as to arrive to an independent profitable physical education and sports service management system with no need for further governmental support. 

Objective of the study was to find an optimal local physical education and sports asset management model independent of the governmental budgetary support.

Methods and structure of the study. We used for the purposes of the study standard statistical and economic analyses, with the study data obtained from the statistical reports of the relevant municipal bodies and establishments plus a questionnaire survey of the physical education and sports asset managers and municipal experts in charge of the physical education and sport service infrastructure. We run the economical analysis of the physical education and sports asset management standards to find the ways to improve the physical education and sports asset management service efficiency and, hence, competitiveness of the local physical education and sport sector on the whole. The study of the physical education and sports asset management service efficiency included the economic feasibility analysis and demand-and-supply situation analyses with the physical education and sports service and goods marketing components [1].

Results and discussion. It was in 1976 that the Silk Fabrics Works, a core municipal enterprise in Tchaikovsky city, commissioned a newly constructed outdoor Central Stadium for more than 11 thousand spectators. Presently the stadium service infrastructure (see Table 1) includes the stadium as such with the stands (that accounts for 70% of the physical education and sports assets), outdoor infrastructure including a football field and some other facilities.

Table 1. Central Stadium: physical education and sports assets

Sports facilities

Square, м2

Share, %

Stadiums

Stadium with stands

30677

70

Outdoor facilities

Ice-hockey court

1800

4

Beach volleyball court

360

0,8

Street volleyball court

405

0,9

Physical fitness ground

200

0,3

Sub-total

2765

6

Football fields

Spare football field with natural surface

4410

10

Other

Physical fitness gym

203

0,4

Ski track

2000

4,7

Physical fitness ground with gymnastics equipment

153

0,4

Seasonal skating rink

3600

8,4

Sub-total

5956

14

Total

43800

100

Given in Table 2 hereunder is the current physical education and sports asset management situation analysis that provides an insight to physical education and sports service quality and range, financial performance and overall physical education and sports asset standing. The physical education and sports asset turnover, operation and maintenance analysis showed no serous changes in the assets due to the very low renovation ratio and low write-off ratio, albeit the depreciation ratio was estimated at 92%.

Table 2. Physical education and sports asset management: current situation analysis

Economic indicators

Value

Physical education and sports asset cost prior to the period under report, RUR’000

22 612

New assets for the period, RUR’000

161

Write-offs for the period, RUR’000

-

Physical education and sports assets cost after the period under report, RUR’000

22 773

Balance cost of the physical education and sports assets at the end of the period, RUR’000

1871

Renovation ratio

0,007

Write-off ratio

-

Depreciation ratio

0,92

Serviceability ratio

0,08

Given in Table 3 hereunder is the physical education and sports asset management efficiency analysis. Note that the average yearly cost of the physical education and sports assets grew up for the period with procurement of a few training machines.

Table 3. Physical education and sports asset management efficiency analysis

Service indicators

2017

2018

Absolute growth

Total sales, RUR’000

3623

3113

-510

Capital assets: average yearly cost, RUR’000

22 612

22773

+161

Active assets: average yearly cost, RUR’000

21707

21868

+161

Share of active assets, %

96

96

+1

Return on capital assets: RUR/ RUR

0,16

0,14

- 0,02

Return on active assets: RUR/ RUR

0,16

0,14

- 0,02

Capital assets: capital intensity, RUR/ RUR

6,24

7,28

+1,04

Active assets: capital intensity, RUR/ RUR

5,99

6,99

+1,0

The active assets account for 96% of the capital assets that is indicative of the high corporate asset employment rate. The return on capital assets shows the asset employment efficiency i.e. every RUR invested in physical education and sports assets generates RUR 0.14 of income. Over the study period, the return on the physical education and sports assets was found to drop by RUR 0.02 due to the lower revenues from the payable services, while the capital intensity grew by RUR 1.04. On the whole, 96% of the capital assets were found employed by the training and competitive services with the still low profitability and ROI rates – that means that the demand for the physical education and sports service is low, probably due to the poor quality and competitiveness of the services.

The physical education and sports asset service rating analysis showed the actual physical education and sports asset employment/ service ratios being lower than the design ones: see Table 4 [3]. Thus the service ratio of the stadium with stands, a core physical education and sports asset, was estimated at only 32%; the service ratio of the outdoor facilities was reported at 19% to 25%; and the football field, with account of the service seasonality, was loaded by 37% of the design capacity; whilst the ski track and skating rink stay virtually idle.

Table 4. Central Stadium service ratio

Physical education and sports asset

Length, m

Width, m

Size, m2

EPS

Actual service, people

Service ratio, %

Design service, people

Stadiums

Stadium with stalls

180

110

30677

67

34510

32

108808

Outdoor facilities

Ice hockey court

60

30

1800

30

30

142

24576

Beach volleyball court

18

20

360

8

1176

25

4704

Street volleyball court

30

13,5

405

18

3500

23

15120

Physical fitness ground

20

10

200

20

2799

19

14400

Football fields

Spare field with natural surface

98

45

4410

28

5474

37

14700

Other

Fitness gym

30,5

5,7

203,8

40

27531

26

103040

Ski track

 

 

2000

30

8925

2

43560

Fitness ground with gymnastics equipment

15

10

153

21

4004

9

44457

Skating rink

90

40

3600

240

8085

2

31040

The initiatives to fully mobilize the available physical education and sports assets need to lure investors and strategic partners for the large-scale sports facilities rehabilitation projects. To make the assets potentially attractive for investments, the key sports infrastructure shall give a room for modern team sports and outdoor health/ physical education and sports facilities including, e.g., volleyball/ basketball courts, children's playgrounds, outdoor training machines etc. [2].

We would prioritize the following potential commercial initiatives to promote the stadium services: active contacts/ negotiations with the key potential partners, sponsors, tenants of the indoor and outdoor sports facilities and the relevant service marketing entities; new services offered on the market, such as: rental of the sports facilities for entertainments, holidays etc. including sporting events, cultural/ leisure-time/ recreation events; outdoor health trainings; GTO Complex tests and promotion events; major  (regional, interregional, corporate) sports competitions; universal sports grounds; large-scale long-term rentals of the stadium spaces by sports organizations; commercial activities within the business space of the stadium; cost-effective business projects, start-ups etc. for the sports-prioritizing projects.

Conclusion. Based on the study data and analyses, we offered the following commercial initiatives to improve the stadium service efficiency: create payable health training groups to improve the physical education and sports asset service ratios; widely advertize the stadium services with the schedules and event calendars; and lure investors and strategic partners for large-scale business projects with the physical education and sports asset renovation components.

References

  1. Balakhonov V.A. Effective Stadium: Theories and Practices. SBK. Sport Business Consulting. 2012. no. 4-5. pp. 18-23.
  2. Karataev O.R., Kuznetsov A.S., Shamsutdinova Z.R. Management of operation of sports facilities. Study guide. Kazan: Kazan National Research Technological University, 2016. 144 p. ISBN 978-5-7882-1930-1. Electronic Library System IPR BOOKS: [site]. Available at: http://www.iprbookshop.ru/79582.html (date of access: 24.11.2019). Available at: for authorization. of users
  3. Landa B.H. Methodology for calculating load factor of sports facilities. Teaching aid. M.: Sovetskiy sport publ., 2013. 36 p. ISBN 978-5-9718-0704-9. Electronic Library System IPR BOOKS: [site]. Available at: http://www.iprbookshop.ru/40786.html (date of access: 24.11.2019). Available at: for authorization. of users.

Corresponding author: fendel82@mail.ru

Abstract

Objective of the study was to find an optimal local physical education and sports asset management model independent of the governmental budgetary support.

Methods and structure of the study. We used for the purposes of the study standard statistical and economic analyses, with the study data obtained from the statistical reports of the relevant municipal bodies and establishments plus a questionnaire survey of the physical education and sports asset managers and municipal experts in charge of the physical education and sport service infrastructure. We run the economical analysis of the physical education and sports asset management standards to find the ways to improve the physical education and sports asset management service efficiency and, hence, competitiveness of the local physical education and sport sector on the whole. The study of the physical education and sports asset management service efficiency included the economic feasibility analysis and demand-and-supply situation analyses with the physical education and sports service and goods marketing components.

Results and conclusions. The analysis helped reveal the problems in the work of sports facilities: a high degree of amortization; low actual workload of the main halls and playing fields used during competitions versus the normative (design) visitor capacity; low efficiency of use. In terms of the funding gap, it is recommended to attract investors and strategic partners for large-scale projects and renovation of sports facilities. In order to increase efficiency of the sports facility, it is necessary to make the most of the potential of its space and use the surrounding area to the full. Among the possible ways to raise the income of sports facility may be: creation of paid sections and services in order to increase the facility workload; providing rentable areas for concerts, celebrations, mass sports events, outdoor trainings; installation of monitors in the sports complex contact areas with information about the services of the stadium and the table of events.

To increase the workload and, consequently, the socio-economic efficiency of the existing sport educational facilities, it is recommended that additional fitness and health and sports classes be organized, the list of services provided is expanded, facilities are updated and modernized at the expense of interested investors.