Financial Constraints in Football Clubs in the UAE - Research Paper Example

Financial Constraints in football clubs in UAE ABSTRACT Every organization such as a football club is usually faced with some challenges that further affect the achievement of the desired goals. Financial constraints areone of the most common challenges affecting such entities. The football clubs in the United Arab Emirates (UAE) have equally been affected by this concern especially those located within the lower-tier of the sports division. This paper sought to carry out research on the clubs within UAE and how they have been challenged by the problem of financial shortages. The study focused on the use of case study and comparative research so as to select the sample of 20 respondents to be analyzed. Besides, it focused on the existing literature to analyze the response given from the qualitative and quantitative data generated from the response of the sampled population. The research findings are financial constrains and poor management. The football clubs are actualy left to be independent without receiving any support from the government. Key words : Financial management , football clubs , Asian Football confertation , Union of European Football Associations Financial Fair Play (UEFA FFP) , Table of Contents Table of Contents 2 1.INTRODUCTION 3 2.0 Research Objective 4 3.0 Significance of the study 4 4.0 Research Questions 5 5.0 LITERATURE REVIEW 6 5.1 Challenges in the clubs after the introduction of independence requirement by AFC 7 6.0 METHODOLOGY 9 6.1 Research Design 9 6.2 The qualitative and quantitative approaches 11 6.3 Variables of the research study 12 6.3 The sample 13 7.0 FINDINGS 14 8.0 .DISCUSSION 15 9.0 Recommendations and Conclusion 18 10.0 References 19 1. INTRODUCTION The football clubs have become essential entities in the modern societies due to the large traction they receive from the viewers and the extent of the fan base that they command. Most of these clubs have however proved difficult to manage due to the large financial requirements that they require for their efficiencient and proper functioning. In recent years, the management of some of the common clubs has acknowledged the difficulty of retaining players and financing some of the basic activities undertaken by the clubs due to shortages of sufficient financial outlay. This has affected the existence and performance of most clubs. The football clubs in Asia had equally suffered immense challenges especially since 2007 when Asian Football Confederation (AFC) ruled that all clubs become stand-alone professional entities. Since the establishment of this condition, many clubs in Asia, specifically in United Arab Emirates (UAE) have suffered immensely in their bid to change the sports into business (Anagnostopoulos et al. 2014). One of the legal requirements set out by AFC was to transform all the football clubs into professional entities. This transformation came up with a host of challenges such as the use of contracts between the players and the clubs and also the solitary financial management processes of the clubs. The establishment of Pro League Committee was to necessitate the transition and change the football clubs. This has since seen the withdrawal of two clubs within the second tier of the league citing financial challenges. This paper seeks to establish issues of financial challenges which the football clubs in UAE continue to experience, and recommend the best way possible to manage such challenges. 2.0 Research Objective There has been a concern in the football clubs within UAE especially after three clubs within the second tier withdrew from the league. The problem cited was the issue of financial constraints which proved difficult for them to retain their activities and performance as football clubs. The challenge has spread across other football clubs in the expansive UAE, and this has been the reason behind the development of this study. It intends to find out the problems affecting the clubs and come up with better recommendations to help alleviate the financial constrains that is affecting club performance. 3.0 Significance of the study The football clubs have been a source of employment and recreational facilities for most of the youths in the UAE. The establishment of the clubs has allowed the youth an opportunity to engage in football as a profession and consequently receive their livelihood from such activities. However, the collapse of these football clubs due to a plethora of challenge since 2007 risk making many youth unemployed and rendering them idle and jobless in the society. The study is equally significant in helping the small teams within UAE comply with the Union of European Football Associations Financial Fair Play (UEFA FFP) requirements. It would be difficult to enforce such major UEFA requirements such as professionalism without building the capacity and the ability within the local teams. Therefore, the study would be significant in helping solve the problems at the lower side of the league so as to give the capacity of managing the problems at the higher levels such as the UEFA league tables. 4.0 Research Questions The presidents of the various clubs within the UAE would be subjected to the following set of questions; i. Is the hiring of foreign players expensive and how does the initiative constrain the budgets of the clubs? ii. Is the decision to retain the best players in the club a costly decision to the budget of the club? iii. Would you agree to the fact that the players in the club are overpaid? iv. Are the practices of traveling, hotel booking among other activities expensive to the club? The following questions would be directed to the football federation of UAE i. Does the federation offer sufficient legal and financial support to the clubs? ii. What are some of the interventions which you deem fit to improve the experience of the clubs in the stadia? iii. What are the steps taken to alleviate the introduction of financial constraints to the clubs since 2007? iv. Would the consideration be made for lowering the number of foreign players especially for the clubs within the lower tier? 5.0 LITERATURE REVIEW The modern society has indicated a lot of preference and favor towards football as a game. Most of the people within the society have a strong liking for the football game and have idolized most of the teams or players within this game. In many instances, a lot of preference has been given to most successful teams in the world. The Asian Football Confederation (AFC) has always been at the forefront in regulating the football game in the country and ensuring that the football teams meet the requisite global standards. A lot of attention has been given into transforming the various football clubs in the country into independent entities which can manage themselves independently and engage in financial activities quite independently. Besides, a lot of attention has been given to the manner in which the football teams hire and compensate the local or even the foreign football players (Cordery et al. 2013). For example, the salary paid to these players has become an important aspect in the management and regulation of these clubs. One important feature of the clubs within Asia is the manner in which they are formed and regulated. The Asian Football Confederation (AFC) has arranged the clubs in different tiers within the main league. Most of the clubs which feature in the lower tier have consistently faced immense challenges due to their significantly small resource base and little support due to their position. However, the major clubs have also not been spared from the challenges which have covered nearly all the participants in the leagues. In the recent years, the management of these clubs has relied heavily on assistance such as sponsorship, donations, grants and contributions to help them in alleviating the financial concerns (Anagnostopoulos et al. 2014). The positioning of these clubs in the global map has further added their responsibility in regards to meeting the global standards and also participating in a lot of world events. The challenges to doing with resources have complicated the matters for most of these clubs despite their position in the league. 5.1 Challenges in the clubs after the introduction of independence requirement by AFC Since 2007, the clubs within UAE have admit facing a lot of challenges. In fact, the decision by Asian Football Confederation (AFC) seeking to turn the clubs into independent entities aggravated the challenges. One of the outstanding concerns to most of these clubs disputes their position in the league is the aspect of the financial challenge. Most of the clubs in Asia have been faced by shortage of sufficient sources of finance to aid their activities. For example, most the clubs money to pay and hire the players, move from one place to another and also purchase enough games kits and training equipment. The decision by the AFC to make the clubs independent entities blocked a lot of financial opportunities to these clubs. Instead, it only allowed them to focus on what they can generate from their internal activities. This explains why three clubs have so far pulled out of the second tier of the league due to lack of financial capacity (Blecharz et al., 2014). The situation is similarly worse even for the clubs which are placed top in the league table. Studies have revealed that the clubs have been having a significant challenge in transforming the sports into a business that enable them to receive returns from their activities. The other challenge has been the introduction of the contract within the clubs. The contracts were meant to make the football clubs operate in a more professional manner. The players in this team can make an agreement with the management of the clubs under the contract deal for a specified period. The major teams within UAE have been able to benefit from the decisions made and implemented by the Pro League Committee which is a product of AFC seeking to make the clubs professional entities. However, the challenge has been seen on the small clubs which are at the lower end of the league tier. The small clubs have seen many of their good players move to major clubs that can have a professional engagement with them ending up losing most of their good players in the long run. The challenge has further incapacitated most of these small clubs since most of them have no capacity to engage in and sustain professional activities with other players within the football arena (De Bosscher et al. 2015). This has led to a decimal performance in most of these clubs and has further forced some of them out of the league. The small clubs are the highly affected players within the football area. Most of these clubs have little financial and legal capacities to enable them to comply with most of the requirements. For example, most of the clubs at the lower levels have the little financial capacity to manage and retain some of the professional players from foreign countries (Olusoga & Kentta 2017). The extent of activities in these clubs is limited to their sizes and their resource base. This explains why there are more clubs from the lower and the second tier not withstanding as opposed to the clubs at the top levels. The introduction of professionalism requirement has further complicated the ability of the small clubs to remain competitive; the challenge spread from the financial constraints of managing the players to the inadequacy of professional capacity of contracting with the players. In the end, the major clubs in UAE have befitted from snatching most of the good players from these small clubs. Presently, the regulation introduced by Asian Football Confederation (AFC) has a similar implication in all the clubs across the UAE (Geeraert et al. 2014). For example, the requirements on the minimum or a maximum number of foreign players within each club are uniform across all these clubs. This has remained as a significant challenge especially to the small clubs with no capacity to comply. Other scholars have argued that the regulation introduced by Asian Football Confederation (AFC) have complicated the existence of small clubs within UAE. This has therefore led to the collapse of most of the football clubs in the country and has further posed a challenge to employment for many youths. The study , therefore, will try narrow down to the challenges facing the small clubs and the best way to help in addressing these challenges. Besides, the study will also focus on the major clubs and how the regulation by Asian Football Confederation (AFC) has affected their activities since 2007 (O'Boyle & Hassan 2014). Add one more recent study used the same approach or design . 6.0 METHODOLOGY 6.1 Research Design There are some research designs applicable in the research studies and are usually applicable depending on the nature of research questions and the nature of topic to be studied. Some of the most common research designs used in the research include the case studies, cross-sectional, longitudinal among many others. This study focuses on the football clubs in UAE and the financial challenges which continue to affect the clubs. The best research design which matches the nature of research questions and which is applicable in this study are the comparison research design as well as the use of the case studies that is practical for the well performing football clubs such as New Zeeland. The use of the case study involves the selection of a particular situation, group or even a person to compose the research investigation. The selected situation is further examined, and the analyzed so as to come up with a conclusive information which suits the research questions. The use of the case study is highly individualized and narrow down to a particular concern in which the case selected suits. For example, the situation identified or different cases identified are handled differently and their results reported as separate and independent. This study specifically focused on the teams within UAE as comprising the case study selected (Olusoga & Kentta 2017). There are diverse teams across Asia, but the study sought to narrow down on a specific region within the continent and study the football teams within the region. Besides, the study further narrowed down to the case of teams within the second and lower tier of the league and their financial constraint experience since 2007. Comparative design , on the other hand, seeks to compare different situations or groups in different countries. The identification of the studied groups or even situations helps in making a comparison with those which exist in different regions or even countries. For example, the study focused on comparing the various foot all clubs, their budgets and also comparing the manner in which they handle their budgetary constraints. Besides, this study focused on the application of comparative design in studying how the small clubs cope with the challenge of maintaining different players (Blecharz et al. 2014). Therefore, the data collected for the study involved those from some clubs which are further compared and analyzed so as to come up with a better conclusion of the research. One fundamental requirement for this study is the application of both quantitative and qualitative data in making the research. The use of the two research designs would be helpful in generating and analyzing the various quantitative and qualitative data which corresponds to the budgetary changes of different clubs and how such changes have been influential to the conduct of some players in the country. The comparative research, as well as the use of the case study, would be highly beneficial in generating the qualitative and quantitative data that is beneficial for the performance of the research and making of a better conclusion out of the study. Other research designs have been deemed as not directly beneficial for this study due to the nature of research questions under investigation (Ribeiro et al. 2017). 6.2 The qualitative and quantitative approaches The use of the quantitative approach in research entails the collection of numerical data which is applicable in the research study. The used of the numerical is usually beneficial for comparison and analysis functions. In the research, different response on the questions sought through the use of the questionnaire. The use of this approach is however quite beneficial at the last stages of the study since it helps in coding the information from the questionnaire. The qualitative approach involves taking and summarizing the narrative data from the respondents in a given research. It involves seeking a response on some research questions and analyzing the narrative response from some respondents as per the questions asked. This approach was highly predominant in this study since it helps in finding information that cannot be quantified from the respondents. The nature of research questions addressed in this study involves the examination of the attitude of the respondents, their feelings, frustration among many other intrinsic attributes (Wicker & Breuer 2013). These cannot, however, be quantified. Therefore, the qualitative approach was highly beneficial in the study and brought much relevance to the analysis and presented the study information generated by the respondents. 6.3 Variables of the research study Financial performance, such as budgetary gaps and poor compensation of the players in the clubs: this is one of the fundamental concepts analyzed in this research study. It involves examining the budgetary trends and the financial, performance of various clubs within UAE. The changes introduced in 2007 by the Asian Football Confederation (AFC) led to significant effects on the financial positions and positions of various clubs in the UAE. Most of them experienced financial challenges after the decision to make all the football clubs independent entities was reached. This significantly led to issues regarding the financial performance of clubs both on the lower tier and those at the paper tier. In essence, this variable centers on determining the manner in which the various clubs have been affected since 2007 and their challenges in regards to their financial performance in their pursuit for existence in the football arena (Oueiti 2014). Changes on the local players in the clubs: the various clubs in the UAE have been dependent on both local and foreign players who are carefully selected to meet the league requirements. Most of these players enter into agreements with tee clubs under certain terms and period within which they play for such clubs. However, the changes made by Asian Football Confederation (AFC) brought a lot of disruptions in regards to the number of the foreign players and the composition of the local players in these clubs. A lot of changes occurred as per the regulation in and this led to significant changes in the number and the kind of local players that join the clubs since 2007. The research focused on this variable and sought to investigate some of the primary changes which have occurred since the non-local players took center stage in most of the clubs within the UAE. Sporting Performance: this is the other variable which is important in this research. It determined the excellence of the various players within the football clubs regarding their delivery and playing abilities. It also focused on the experience of the players and their number in each of the football clubs. This concept sought to determine how the players can form a teamwork and deliver in general to the expectations of the hiring club. The issue of retention of the best players has remained as one of the issues in the clubs since the introduction of the changes by Asian Football Confederation (AFC) since most of the clubs have no financial capacity to achieve the requirement. This study sought to examine this variable in detail and come up with the best recommendations to help alleviate the concern of these clubs especially those which fall on the power tier of the league. 6.3 The sample The sample size chosen for this research entails 20 players, selected from the club under focus were subjected to both qualitative and quantitative research approaches. There are many players within the clubs in UAE. Therefore, the research settled on the use of simple random selection criteria so as to select the 20 sample size across the existing clubs within the country. The sample centered on one gender as the desired component for the study. Besides, the sample included two board members in the club administration departments. The sports administrators were equally selected through the random sampling method so as to be representative of other clubs across the country. The nature of the research questions and the high number of players and clubs within this region necessitated the application of this sampling approach so as to come up with the best representative group for the study. Besides, this method is time-saving and would be convenient in the long run. To factor in the national level of commitment and participation, the president, Marwan Bin Ghulaita will be interviewed. 7.0 FINDINGS The research information generated in the paper concerned the response patterns giving by the various respondents which were then quantified on a scale of 1-7. The scale 1-3 indicated that the respondents strongly disagreed while 6-7 showed that they strongly agreed. The middle of this scale indicated the central position in regards to a substantial agreement and strong disagreement for the research questions sought by the respondents. Table 1: Response from sampled population Questions Respd. 1 Respd. 2 Respd. 3 Respd. 4 With regards to payment of salaries, what can you say with regard to your club 1 2 2 1 Comment on the ability of the club to honor contracts 2 1 1 1 Comment on financial sustainability of club 2 2 2 2 What can you say with regard to financial transparency 2 2 2 2 What are some of the corporate social responsibilities the club is involved in 0 0 0 0 Mean 1.4 1.4 1.4 1.2 Median 2 2 2 1.5 Mode 2 2 2 1 Standard Deviation 0.5 0.5 0.5 0.57735 The Mean, media, mode and standard deviation indicate the analysis from the repines given to the questions sought in the analysis. 8.0 .DISCUSSION There are some things which affect the efficiency and viability of any club in the world. It’s usually the objective of all clubs to perform to the expectation of excellence performance in the particular game. The management of these clubs is also focused on driving this ambitious concept forward by seeking to have sufficient resources to enable the club to achieve their goals. However, this doesn't work for most of the clubs especially those located in UAE following the changes launched by Asian Football Confederation (AFC) in the year 2007. One of the issues of concern was the aspect of financial performance of these clubs regarding their budgetary control and changes. From the analysis provided in Table 1 above, all the four categories of respondents showed that they strongly disagreed with the fact that the clubs were financially stable, transparent nor independent. The respondents unanimously gave a response scaled at 2 or 1 which showed that they strongly disagreed.; the players feel that the clubs have poor financial positions and stability and this makes them less satisfied with the remunerations given to them by the clubs. A closer check at the standard deviation of respondents in regards to this question indicates a negligible 0.5 deviation which implies a little change of the patterns of response. Most of these players and the administrators of the club have difficulty in accepting that these clubs are on the right financial trajectory. The respondents have questioned the budgetary allocation and the manner in which these clubs manage their financial, responsibilities. There has also been a concern in the manner in which these clubs are achieving their financial. Transparency concerns. The respondents showed a negligible scaled of 2 responses which imply strong disagreement with the manner in which the management handle financial transparency concerns. The management of these clubs is always mandated to handle all the finances and become responsible in which such money is used in the club activities. However, the sampled population of the players has low confidence in the transparency showed by the management in how they spend the money meant for the club and how they disclose such to the players. The response given has a similar pattern of repetition indicating that all the four categories of respondents chosen have a similar kind of response to the manner in which they feel this money are handled by the clubs (Wilson et al., 2013). The sporting performance of the club was also one of the variables which were under investigation in the study. The team members have an obligation to make the club achieve their goals. However, all these depend on the kind of treatment and nature of services that they receive from the clubs. For example, a less motivated team would not fully perform to its expectation of becoming excellent in its activities. Most of the team members will play without the morale expected to make them excellent in their activities. The issue of contact and how the clubs manage their contract obligation has become an essential issue in these clubs. The research sought to investigate the views of the respondents in regards to how the clubs manage and honor the contacts. Most of these respondents gave a uniform repines of strong disagreement on the manner in which the club management honor and respect the contract agreements between the players and the clubs. Most of the players strongly disagreed, and this implies that they are not satisfied with the approach given by their respective teams towards the agreements made in the various contracts. The foreign players and the local footballers within this sample gave a uniform response to the questions sought. The standard deviations across he four groups of respondents were barely 0.5 indicating that the response pattern was highly similar. The mode of the response given was majorly two indicating that the most repetitive response pattern among all the sampled groups was 2. According to the quantification scale, the response indicated by number 2 implies a strong disagreement to the questions sought by the questionnaire. It indicates that the most common response given by the various players were similar to the fact that they were strongly dissatisfied. The mean response was also about 1.4 across all the groups which indicate that the entire respondents fell to the margin of strongly dissatisfied or in strong disagreement to the questions sought by the questionnaire. The implication of the response given ion this study indicates that the clubs have a great financial constraint across the UAE. The players are the major stakeholders in any football club, and they usually dictate the performance of such clubs. Whenever the players show that they have less faith or satisfaction to the manner in which such clubs handle their financial obligations, then these points out to a more serious situation within the management level. According to the response patterns given by the players across all the groups’ samples, there are fewer satisfactions in regards to how the clubs honor their contracts, pay their salaries, and retain the foreign players and how the clubs handle their finances as transparent as expected. Most of these players have a less motivated spirit to participate in the football games since the money which is a strong motivator is lacking in these teams. Besides, there is a great concern in regards to the way these clubs handle the interest of the local players. This explains why some of the clubs have collapsed in UAE and the existing clubs continue to face dire financial difficulties. 9.0 Recommendations and Conclusion One of the recommendations is that the footballers need to be recognized as professionals and the footballer career recognized. The footballers need to be enlisted with the Federal Authority of Human Resources (FAHR) which then sets the salary payable and the duration within which a player is viable to the club. This helps to sustain the players and protects their rights as professionals. The other recommendation is to reduce the number of the foreign players and make much use of the local players. The management of the football clubs has proven to be a difficult task, especially in the UAE. Most of the clubs in this region continue to experience the problem of financial constraint across the country. This explains why most of the small clubs in the country have continued to withdraw from the main league while others end up collapsing. This paper sought o investigates the financial constraint challenge in this club by investigating the response given by a sampled player population. It focused on the variables of sports performance, financial performance and changes in the local players. The findings indicated that these clubs have poor financial management and capacity systems and this has plunged them into the financial constraints. 10.0 References Anagnostopoulos, C., Byers, T. and Shilbury, D., 2014. Corporate social responsibility in professional team sport organisations: towards a theory of decision-making. European Sport Management Quarterly, 14(3), pp.259-281. Blecharz, J., Luszczynska, A., Scholz, U., Schwarzer, R., Siekanska, M. and Cieslak, R., 2014. 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European Sport Management Quarterly, 14(3), pp.299-314. Olusoga, P. and Kenttä, G., 2017. Desperate to Quit: A Narrative Analysis of Burnout and Recovery in High Performance Sports Coaching. The Sport Psychologist, pp.1-32. Oueiti, R., 2014. FNC investigates troubled UAE football clubs. The National.Available from: http://www.thenational.ae/uae/government/fnc-investigates-troubled-uae-football-clubs Ribeiro, J., Silva, P., Duarte, R., Davids, K. and Garganta, J., 2017. Team sports performance analysed through the lens of social network theory: implications for research and practice. Sports Medicine, pp.1-8. Wicker, P. and Breuer, C., 2013. Understanding the importance of organizational resources to explain organizational problems: Evidence from nonprofit sport clubs in Germany. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 24(2), pp.461-484. Wilson, R., Plumley, D. and Ramchandani, G., 2013. The relationship between ownership structure and club performance in the English Premier League. Sport, Business and Management: An International Journal, 3(1), pp.19-36. Appendexis Read More