ACCA Strategic Business Leader (SBL)

Preseen Analysis Note

March 2024
Case name: Athletic Transcentral (AT) football club
(SAMPLE)

© Lesco Group Limited & Steve Chen, FCCA

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Lesco Group Limited.

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Content:
Chapter 1 Preseen Material Application 3

Chapter 2 PESTEL Analysis 66

Chapter 3 Porter’s Five Forces Analysis 68

Chapter 4 Porter’s Value Chain Analysis 70

Chapter 5 Governance Scope and Approaches 72

Chapter 6 Environmental Issues 74

Chapter 7 Risk Strategy and Identification 76

Chapter 8 Risk Measurement, Assessment and Management 79

Chapter 9 Technology and Data Analytics 81

Chapter 10 Audit and Internal Control 82

Chapter 11 Cultural Web Analysis 84

Chapter 12 Leadership in the Strategic Change 93

Chapter 13 Financial Analysis and Decision-making 102

Chapter 14 Leading and Managing Projects 110

Chapter 15 Managing Strategic and Process Change 119

Chapter 16 Processes Management and Risks 127

Chapter 17 Talent Management 132

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 Chapter 1 Preseen Material Application

Introduction
• Athletic Transcentral (AT) is a football club located in Kyleland, Wocia.
• Owned by Athletic Transcentral Co, dedicated solely to operating the club.
• …
• For clarity, both the company and the club are collectively referred to as AT in the
document and exams.

Explain the introduction paragraph

1. Similar real life football clubs as AT:

AT:

From preseen: AT’s traditional colours are white shirts with black sleeves and black shorts and
socks.

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 Clubs Location Ownership Kit Design
Juventus (Italy) Turin, Italy Agnelli family (through Exor N.V.)

Newcastle United .. Public … Fund of Saudi Arabia

(Majority Stake)

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2. Changes in ownership:

Manchester United:

• Family Ownership: Manchester United was once owned by the Edwards family. Martin
Edwards, whose father . Edwards had previously owned the club, was chairman of
Manchester United from 1980 until 2002. Under the Edwards family, Manchester United
became one of the most successful .. in English football history.

• Public Listing: Manchester United was first floated on the stock market in 1991 on the
London Stock Exchange, marking its transition from being family-owned to a public
company. This initial public offering (IPO) … a significant move that opened up new
financial avenues for … club. The listing allowed the club to raise capital from public
investors while also maintaining a level of control.

• Glazer Takeover: In 2005, the club underwent another significant change in ownership
when American businessman … Glazer and his family gradually acquired a controlling
stake in Manchester United through a leveraged buyout. This acquisition resulted in the
club being delisted from the stock exchange and becoming privately owned once again
by the Glazer family.

• Re-listing: In 2012, Manchester United was once again listed on the stock market, this
time on the New …. "MANU". The Glazer family retained a significant portion of the
ownership but sold a minority stake to public investors, making it a publicly listed
company once again.

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Implications of selling to individuals using leveraged buyout:
Financial Implications

• Debt: The …ealth and flexibility. Critics argue that this has diverted funds that could have
been used for player acquisitions, stadium improvements, and other investments back
into servicing the debt.

• Ticket Prices…der fan base.

Fan and Cultural Impact

• Fan Opposition: The takeover was met with widespread opposition from Manchester
United fans. The use of leveraged funds and the subsequent debt placed on the club
were particular points of contention. This led to protests and even the formation of a
new club, FC United of Manchester, by disaffected supporters.

• Cultural Shift: There's a perceived shift in club culture from a community and sporting
institution towards a more commercial and profit-driven entity. Long-time supporters
often express concerns that new ownership focuses more on financial returns than on
club heritage and sporting success.

Investment in Players and Infrastructure

• Squad …: While some ownership changes lead to significant investment in players and
infrastructure, .. the club for purchase can constrain these investments. Fans and
analysts often debate whether the owners' financial strategies support or hinder the
club's competitive prospects.

• .. and Facilities: Investment in stadium development and training facilities is crucial for a
club's growth. Changes in ownership can affect these investments, with some owners
prioritizing them more than others.

…: New owners often seek to maximize commercial revenues, sometimes leading to decisions
that prioritize financial gains over club traditions or fan preferences, such as changes in kit
design, sponsorship deals such as the sale of naming rights of the home ground.

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Reasons that it went listed again in 2012:
1. Paying Down Debt by raising capital - One of the primary reasons for the IPO was to address
the significant debt level that had been a concern for fans and financial analysts alike. The
proceeds from the share sale offered a way to pay down some of this debt, thereby reducing
interest payments and improving the club's financial health.

2. Global Brand Expansion - Listing on the NYSE was also a strategic move to further establish …

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3. Strategies of AT

Strategic (Long-term Vision and Planning)

1. Expand Global Footprint: Develop a long-term strategy to grow AT's brand
internationally, focusing on emerging markets with high growth potential for football.
This could involve setting up football academies abroad, international merchandising
partnerships, and digital content tailored to international audiences.

Issue: Cultural Sensitivity and Localization

• Issue: While expanding into international markets, football clubs often …

2. Infrastructure Investment: Consider long-term investments in stadium upgrades or new

facilities to enhance revenue opportunities and improve fan experience. This aligns with
the need for modern, multi-purpose venues that can host various events beyond
football matches.

Issue: Efficiency (Attendance)

From preseen: The average … be full capacity in the industry.

Real-life example: The Tottenham Hotspur Stadium, constructed by the Tottenham

Hotspur Football Club located in …… NFL (The NFL, or National Football League, is a
professional American football league in the United States) games.

3. Sustainability and Innovation: Integrate sustainability into the club’s core strategy,
focusing on environmental, social, and governance (ESG) factors. Innovate in green
technology for stadium and training facilities and engage in community programs that
reinforce the club’s commitment to social responsibility.

Example: Forest Green Rovers. Based in Nailsworth, …the world's

greenest football club."

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 Environmental Sustainability
• Green Technology: The club uses green technology extensively, including solar
panels at its .. electric vehicle charging station. The New Lawn, their home
ground, is powered by 100% renewable energy.
• Organic Pitch: The club maintains an organic pitch, which is free from
pesticides .. The pitch is irrigated using rainwater collected from underneath
the stadium.
• Vegan Menu: Forest Green Rovers was the first football club in the world to
offer a … for players, staff, and fans, promoting animal welfare and reducing
environmental impact.

Social Responsibility - …, including providing electric bus services on match days.

Governance and Leadership - Leadership in Sustainability: The club's owner, Dale

Vince, a green energy …. from operations to outreach, setting a precedent for
environmental governance in sports.

Tactical (Medium-term Implementation Plans)

1. Fan Engagement ….. This includes interactive content, behind-the-scenes access, and
gamification of fan participation.

Example: Real Madrid CF

Digital Transformation with Microsoft - Personalized Fan Experience: Utilizing

Microsoft's …, ensuring that fans receive relevant information, offers, and engagement
opportunities tailored to their interests and behaviors.

Fan Engagement Programs

• Real Madrid App: The official Real Madrid app provides fans with a
comprehensive platform for all things related to the club. Features include live
match updates, player stats, and behind-the-scenes content. The app also

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 integrates augmented reality for immersive experiences, such as virtual tours
of the Santiago Bernabéu Stadium.
• Virtual … Madrid has embraced VR and AR to offer fans unique experiences,
such as virtual matchday experiences and the opportunity to view matches
and player training sessions in 360-degree videos.
• Gamification of Fan Participation: Real Madrid has introduced elements of
gamification on its digital platforms, encouraging fans to participate in quizzes,
fantasy football, and other interactive games. These activities not only
enhance the fan experience but also foster a sense of community and loyalty.

Loyalty … club offers a loyalty program called "Madridista" which provides members
with various benefits, including discounts on merchandise, priority ticket access, and
exclusive content. The program is designed to reward fan loyalty and enhance their
connection with the club.

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 2. Youth …. investing in scouting, coaching, and player development programs, with a focus
on identifying and nurturing local talent.

Preseen information:
Professional clubs in Kyleland
Five … the ultimate aim of producing first team players. Players recruited by
academies have more time to play and be coached than players in under-18 teams of
clubs without academies.

FC Barcelona's "La Masia" represents a premier example of excellence in youth

academy and talent development within the football world.

• Holistic Development Approach: La Masia is renowned for its holistic

approach to … growth. The academy focuses on developing intelligent,
technically proficient players who understand the club's playing philosophy.
• Integration with Club Philosophy: From a young age, players at La Masia are
taught the values … who advance to the senior team, as they are already
familiar with the club's tactical approach and expectations.
• Success …., Xavi Hernández, Andrés Iniesta, and Sergio Busquets, among
others. These players not only became key figures for FC Barcelona but also
had distinguished careers on the international stage.

Lionel Messi

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 3. Commercial …. collaborations with tech companies for fan engagement technologies, or
lifestyle brands that can enhance the club's cultural relevance.

Technology Partnerships for Fan Engagement - Manchester City

and SAP:
Manchester City partnered with SAP, a global software company, to develop the City
Football Group’s global technology infrastructure.

… since the Premier League changed its rules in March to allow coaches to use
handheld technology devices with live data on the sidelines during matches. The
International Football Association Board also approved a similar use of data ahead of
the World Cup, allowing ChyronHego’s TRACAB optical tracking system to be
deployed across the month-long tournament.

Lifestyle ….ends beyond traditional sports merchandise, positioning PSG within

the broader lifestyle and fashion space, and tapping into new markets and
demographics. PSG and Jordan Brand initially announced a three-year partnership in
2018, but that was subsequently extended.

FC … for the Camp Nou stadium and featuring artists on the team's jerseys. This
partnership merges sports with music and culture, aiming to create unique
experiences for fans and broaden the club's appeal to younger audiences and music
fans.

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 Esports …..tive gaming. They field teams in various games, engaging with a
younger demographic and exploring new revenue streams beyond conventional
football operations.

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Operational (Day-to-day Management)
1. Financial … transfers and wages, ensuring compliance with financial fair play regulations.

Leeds United in the early 2000s:

• High Spending on Transfers and Wages: Leeds United, under Chairman Peter
Ridsdale… Keane from Inter Milan for £12 million in 2001, aiming to compete
at the highest level in both the Premier League and European competitions.
• …. 2000-2001 season. Failure to secure a spot in subsequent seasons left the
club unable to meet its financial obligations.
• Financial … to finance player purchases.
• Selling Assets …. for £7 million in 2002. Despite these sales, financial woes
worsened, contributing to relegation from the Premier League in 2004.

2. Risk ….nd mitigates risks ranging from financial instability, reputational damage, to
player injuries. This includes regular reviews and contingency planning.

Rangers Football Club's Financial Collapse:

• … (EBTs) for paying players and staff, which HMRC challenged as tax evasion.
• Financial Mismanagement: The club's management failed to adequately
address … the club's income. This mismanagement led to accumulated debts
that the club could not service.
• Lack of …. from the tax dispute and other financial risks. There was no clear
strategy to mitigate the impact of these liabilities should the club lose its legal
battle with HMRC.

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 3. Performance ……. This operational tactic can inform coaching decisions, player
recruitment, and tactical adjustments during games.

Advanced Data Collection Technologies

• Wearable Tech: GPS and heart-rate monitors for fitness and injury prevention.
(e.g., STATSports)
• Tracking Systems: Cameras and systems for real-time player and ball data.
(e.g., Catapult)
• …….
• Social Media Analysis: Monitoring sentiment for marketing and recruitment.
(Tools: Brandwatch)
Fan Engagement and Matchday Experience
• Fan Experience Analytics: Analyzing stadium dynamics for enhanced fan
experience. (Tools: SAS, Tableau)

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Financial statements – Manchester United in 2023:

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When analysing the financial statements:
Revenue Streams

• …. revenue, broadcasting rights, commercial deals, and merchandising. Overreliance on

one source can indicate vulnerability to market changes or performance dips.

• …. from sponsorships, merchandising, and partnerships is often a sign of a strong brand

and market presence.

Expenditure

• … health. High ratios suggest the club may be overspending on player and staff wages
relative to its income, which can lead to financial instability.

• … spread over the length of their contracts and is a significant expense. Rapid increases
can indicate heavy investment in the squad.

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2 Football sector Information – Kyleland
Sport of football
• Football match outcomes are based on goal scores, with wins, losses, or draws.
• .. (under 18) teams.
• Football clubs operate both professionally and recreationally, with professional players
being full-time employees.

Professional clubs in Kyleland

• In Kyleland, professional clubs typically have men's and women's first and reserve teams,
and under-18 teams.
• First teams feature the club's top players, reserve teams serve as a backup, and each
team has a manager and support staff.
• Five … develop young players from age 9, aiming to groom them for the first team.
• …. players.
• For …yleland league and international competitions.

Applications:
1. Problems of academies, with solution (practical examples)
1. … Training
• Problem: Young athletes need to balance their football training with education, which
can be challenging due to the demanding schedules of both.
• Example… is renowned for its holistic approach
to player development. The academy
emphasizes the importance of education
alongside football training.
• Solution: La Masia schedules training sessions
in a way …. attend school. They also offer
tutoring and educational support to ensure
players can keep up with their studies, highlighting the importance of a balanced
development approach.

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2. Mental Health and Pressure
• … expectations to succeed, fear of failure, and the competitive nature of sports.
• Example: Manchester United’s academy
has been proactive in addressing mental
health by implementing a
comprehensive support system for its
players.
• …., offers workshops on coping
mechanisms, and encourages open
discussions about mental health. This
approach aims to build resilience and
provide players with the tools to manage pressure and expectations.

3. Transitioning from Youth to Senior Level

• … up in physicality, skill, and tactical understanding required.
• Example: AFC Ajax (Amsterdamsche Football Club Ajax), a
professional football club based in Amsterdam, Netherlands’s
academy is known for its success in bridging the gap
between youth and senior football.
• …. of play in a supportive environment, ensuring a smoother
transition. Additionally, Ajax often loans out players to other
clubs to gain first-team experience, further aiding their
development.

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2. Missed opportunity because of selling players to other clubs, without
enjoying later achievements:
Mohamed Salah
• Original Club: Chelsea FC

• Transfer: Sold to AS Roma in 2016 (initially on loan in

2015)

• Outcome: After struggling to secure a first-team spot at

Chelsea … in 2017, where he has since become one of the
premier forwards in the world, helping the club win the
UEFA Champions League, the Premier League, and
numerous individual accolades. Chelsea's decision to sell
Salah is often cited as a missed opportunity, given his later
achievements.

Analysis:

• Lack of Opportunities: Salah was given limited playing time during his tenure at Chelsea.
Critics argue that the management failed to provide him with sufficient opportunities to
prove his worth or to adapt to the Premier League, which is a common challenge for
young foreign players.

• Short-term Performance Evaluation: Football clubs often make decisions based on

short-term needs and performances. It's suggested that Chelsea, under the
management of José Mourinho at the time, was more focused on immediate results
rather than player development, leading to Salah not fitting into the immediate tactical
plans.

• ….

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3. Example of top player transfer:
• … €222 million (about $263 million USD at the time),
which shattered the previous record for the highest
transfer fee.

Additional points to note when the top player is

transferred:
1. Advertising

• ……… clubs.

• Media and Public Statements: Sometimes, the availability of a player is made known
through media, either as strategic leaks or official statements from club representatives.
However, this is more about generating interest and publicizing the player's potential
availability rather than a formal advertisement.

2. Smoothing the Sale Process

• Negotiations: The transfer process involves detailed negotiations covering transfer fees,
player wages, contract length, and other terms. These negotiations are handled by the
clubs' management and the player's agent.

• ………. transfer process. Clubs are required to report transfers and their details to comply
with financial fair play rules.

3. Fees

Money to the Selling Club (Barcelona)

• Transfer Fee……. to any sell-on fees owed to Neymar's previous clubs or training
compensation. They can reinvest this money in acquiring new players, improving
infrastructure, or other club needs.

Money to the Buying Club (PSG)

• Investment: The buying club pays the transfer fee and also commits to a salary package
for the player. The investment is made with the expectation that the player will
contribute significantly to the team's success, brand value, and revenue generation
through winnings, merchandising, and increased fan engagement.

• Commercial Revenue: ……….

Money to the Player (Neymar Jr.)

• Salary and Bonuses: Neymar's contract with PSG included a significant salary, reportedly
around €36 million per year after taxes, plus potential bonuses for achievements such as
winning the Champions League, league titles, or individual awards.

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 • Image Rights and Endorsements: In addition to his salary, Neymar earns money from
personal endorsements and sponsorships. While these deals are separate from the
transfer, moving to a high-profile club like PSG can enhance a player’s marketability.

• Signing Bonus and Loyalty Bonuses: ……..

Distribution of the Transfer Fee

• Agents’ Fees: A portion of the transfer fee, often a percentage, goes to the player's
agent(s) for facilitating the transfer. This percentage varies but can be significant in high-
value transfers.

• Third Parties: If third ……..

4. Transparency Issues and Bribery

• Regulatory Framework: The football transfer market is regulated to prevent issues like
bribery and corruption. FIFA's Transfer Matching System (TMS) is designed to ensure
transparency by requiring clubs to enter transfer details for verification before the
process is finalized……… interest. However, high-profile transfers like Neymar's are
closely watched by the media, regulators, and the public, which adds a layer of scrutiny.

1. Undisclosed Payments and Third-

party …….. a significant legal and regulatory fallout.
West Ham United breached Premier League rules by not
fully disclosing the involvement of third-party companies
that owned economic rights to the players, as the third
party owns economic rights when players are transferred
to others.

This lack of transparency resulted in a record fine of £5.5 million for West Ham.

Carlos Tevez Javier Mascherano

2. ….., making it the world's most expensive transfer at the time. The deal brought
Pogba back to the club he left on a free transfer four years earlier.

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 • Agent's Dual Representation: Mino Raiola,
Pogba's agent, was reported to have
represented all three parties involved in
the transfer: the selling club (Juventus),
the buying club (Manchester United), and
the player (Paul Pogba). This triple
representation led to concerns about a
potential conflict of interest, as it was
unclear whose best interest Raiola was acting in.
• Agent's Fee: Raiola reportedly earned a substantial agent's fee from the
transfer, with some reports suggesting he received €27 million. The size and
nature of the fee, given his representation of multiple parties, were sources
of controversy and debate about the fairness and transparency of the
transfer.

Responsibilities of a Football Agent:

• Contract Negotiations: Agents negotiate contracts on behalf of their clients,
ensuring the best possible terms, including salary, bonuses, and other
benefits.
• Transfer Negotiations: They facilitate transfers between clubs, negotiating
transfer fees …..
• Legal Representation: Agents provide legal advice or secure legal
representation for their clients to handle contracts, disputes, and other legal
matters.

Examples of such agents:

• Mino Raiola: Represented some of the
biggest names in football, including Zlatan
Ibrahimović, Paul Pogba, and Erling
Haaland. Raiola was known for securing
high-profile transfers and lucrative contracts
for his clients, making him one of the most
powerful and controversial figures in
football.
• Jorge Mendes: Often referred to as a
"super-agent," Mendes has a client list that
reads like a who's who of football, including
Cristiano Ronaldo, José Mourinho, and
James Rodríguez. His agency, Gestifute, is
among the most influential in the sport,
known for facilitating some of the most
significant transfers in football history.

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 • Jonathan Barnett: The chairman of Stellar
Group, Barnett is another high-profile agent
known for representing Gareth Bale, Saul
Niguez, and Jack Grealish. He has been
involved in many major deals, including
Gareth Bale's then-world record transfer to
Real Madrid in 2013.

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2 Kyleland football league (KFL)
• The Kyleland Football League (KFL) consists of three divisions for men's first teams, each
containing 18 teams.

• Duration: The league season runs from August to May.

• Frequency: Teams play each other twice per season, once at each team's home stadium.

• Points system: 3 points for a win, 1 point for a draw, and 0 points for a loss.

• The ….

• The top two teams from Divisions 2 and 3 are promoted to the next higher division for
the following season.

• Teams ….onduct.

1. Failure to Pay Debts: Clubs not meeting their financial obligations,

such as unpaid wages, fees, or taxes.
2. Breach of FFP Regulations: Clubs spending beyond their means,
violating rules intended to ensure financial fairness in competition.
3. False Accounting: Manipulating financial records to misrepresent a
club's financial health.
4. …. norms.
5. Illegal Transfer Activities: Conducting transfers that break league or
international rules, including issues with third-party ownership.

• Division winners receive a trophy and prize money.

• .. increased sponsorship and television income.

• Clubs in Division 1 of …, not limited to Kyleland.

Competitions:

1. Domestic Cup Competition:

• All KFL teams participate in a domestic cup within Kyleland.

• … teams drawn randomly.

• Winners progress through rounds to the final.

2. International Competition:

• Top three … in the Wocian International League.

• Includes top teams from other countries in Wocia.

• Offers additional revenue from more home games and live TV broadcasts.

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 3. Other Teams:

• Women's first teams compete in the Kyleland Women’s Football League (KWFL),
featuring two divisions of 18 teams each.

• Not all clubs have women's teams.

• KWFL … domestic cup competition.

• Reserve and under-18 teams have their own competitions.

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3 Industry Body
• Governing Body: The Kyleland Football League (KFL) is governed by the Kyleland Football
Association (KFA).

• …e KFL.

• Corporate Governance: KFA recommends clubs adhere to generally accepted corporate

governance best practices.

• …rning bodies.

Real life Industry Body

FIFA (Fédération Internationale de Football Association) is the international

governing body for the sport of football. It is responsible for overseeing international
competitions, including the FIFA World Cup, setting the rules of the game, and
promoting football globally.

Its functions include:

• Governance of Global Football: FIFA oversees the rules, regulations, and

governance of football worldwide.
• Organizing International Competitions: It organizes major international
tournaments, including the FIFA World Cup and FIFA Women's World Cup.

• Promoting Football Development: FIFA works to develop football globally,

supporting ……. competitions to member associations for football
development projects.

Governance Structure of FIFA

FIFA's governance structure includes several key components:

• Congress: The Congress is FIFA's supreme body, comprising representatives

from each of FIFA's member associations. It meets annually to make
decisions on the rules of the game, statutes, and the regulatory framework.

• Council: The ……., ethics, football development, and more. These

committees assist in the detailed planning and implementation of FIFA's
strategies and policies.

• General Secretariat: Headed by the Secretary General, the General

Secretariat carries out the day-to-day administration and operational work
of FIFA.

Examples of Unfair Situations

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 • Financial Irregularities: For instance, Manchester City Football Club was
banned from European competitions for two seasons by UEFA in 2020 for
breaching …...
• Doping: While cases of doping in football are relatively rare, both the World
Anti-Doping Agency (WADA) and FIFA strictly prohibit the use of
performance-enhancing drugs. If players are found guilty of doping, not only
the individual players but also their clubs could face fines and reputational
damage.

Scandals
FIFA has been involved in several scandals over the years, the most notable being
the 2015 corruption scandal. High-ranking officials were accused of bribery, fraud,
and money laundering related to the awarding of FIFA World Cup tournaments and
marketing and broadcasting rights. This led to several arrests, resignations, and
reforms within the organization to improve transparency and governance.

Impacts on football clubs:

Financial and Sponsorship Concerns

• Sponsorship and Funding: Scandals can lead to a loss of confidence among
sponsors and … with governing bodies may suffer reputational damage,
impacting fan support and commercial relationships.

Governance and Regulatory Changes

• Stricter Regulations: In response to FIFA scandals, football governing bodies
have implemented stricter governance and financial regulations affecting
clubs. For …ns.
• Increased Scrutiny: Clubs face increased scrutiny from regulatory bodies to
ensure compliance with new standards, necessitating more rigorous internal
controls and compliance mechanisms.

Legal and Administrative Impacts

• Legal Proceedings: Clubs may be drawn into legal proceedings related to
scandals, especially if they are directly involved in investigations or if their
officials are implicated. This can lead to legal costs and administrative
burdens.
• … transfer market's operation, including transfer bans and penalties for non-
compliance with rules, directly impacting clubs’ abilities to buy and sell
players.

Fan and Public Perception

• Fan Trust: Scandals at the highest levels of football governance can erode
trust among fans, affecting their support for football institutions, including
clubs. This could impact attendance at matches, merchandise sales, and
overall fan engagement.
• Global Image of Football: As clubs are integral to the football ecosystem,
scandals affecting FIFA can tarnish the global image of football, leading to a

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 broader impact on the sport's popularity and, consequently, on clubs’
international marketing and growth opportunities.

Tutorial note:
One notable reaction was the general outcry and demand for transparency and governance
reform within … While this opposition was not targeted at specific clubs, it did reflect a
growing concern among fans about the integrity of the sport they love, prompting discussions
on governance practices at all levels of football, including clubs.

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Clubs' Income and Expenditure Sources:

1. Clubs' Income Sources:

• Prize Money: Earned based on league position, domestic cup wins, and international
competition performance.

• Ticket Sales: Income from match attendance and season ticket sales.

• Other Matchday Income: Sales from refreshments and hospitality box rentals.

• Transfer Fees: Revenue from selling players to other clubs.

• Advertising and Sponsorship: Income from stadium advertisements, shirt

sponsorships, …

2. Clubs' Main Expenditure:

• Salaries and Benefits: Payments to employees and players.

• Amortisation Costs: Straight-line amortisation of capitalised transfer fees over the …

• Finance Costs: Interest and other financial expenses.

Potential 6 income streams:

1. Digital and Interactive Platforms

• Virtual …s, or training sessions.
• Online Gaming … featuring the club's brand.

2. Fan Engagement and Services

• Membership Programs: Enhanced membership schemes providing exclusive content,
discounts, and experiences to members.
• …s and memorabilia.
• Digital Content Subscriptions: Exclusive digital content platforms with subscriptions
for behind-the-scenes videos, interviews, and match analyses.

3. …

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 Potential 7 expenditure streams:

1. Advanced Technology and Infrastructure

• Data Analytics and Performance Technologies: Investment in data analytics for player
performance, scouting, health monitoring, and fan engagement insights.
• Stadium Upgrades: Implementing advanced technologies for ticketing, security, and
fan experiences, such as Wi-Fi enhancements, digital signage, and interactive fan
zones.

2. …

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Financial fair play regulations (FFPR)
• Purpose of FFPR: Designed to prevent professional football clubs from spending more
than they earn, avoiding financial difficulties and potential jeopardy to their existence.

• Application of FFPR: Applies to a club's relevant earnings, which differ from accounting
profits. Relevant earnings are calculated as relevant income minus relevant expenses.

Components of Relevant Income Components of Relevant Expenses

Prize money …

Ticket sales and other matchday receipts Amortisation of transfer costs

TV revenue …

Income from … advertising Loss on sales of players

Merchandise sales Finance costs

Profit on disposal of tangible non-current assets Dividends

Profit on sales of players

• FFPR Threshold: Allows clubs to have relevant expenses exceed relevant income up to a
maximum of $5 million over a three-year period.

• Monitoring …r period starting from year 3.

• Penalties for Breaching FFPR:

• Fines

• Loss of points

• Loss of prize money in the league

• …al League

• Relegation to lower divisions for very serious breaches

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 Real life example:
AC Milan
• Incident: In 2019, AC Milan was banned from participating
in the UEFA Europa League for the 2019-2020 season due
to breaches of FFPR.

• ...

Consequences of Non-Compliance:
• Financial Sanctions: Clubs can face hefty fines for failing to
comply with FFPR.

• Transfer …

A holistic approach to comply with FFPR: (A few ideas…)

Governance
• Establish Cl…ear Policies: Develop and implement clear financial policies that align
with FFPR, including spending limits and investment criteria.
• Board Oversight: Ensure the club’s board of directors understands FFPR requirements
and oversees … efforts, setting a tone of financial responsibility.
• Transparency: Foster transparency in financial dealings and decision-making
processes, making information accessible to stakeholders to build trust and
accountability.

Risk Management
• Financial Risk Assessment: Regularly assess financial risks, including the potential for
revenue fluct….
• Compliance Monitoring: Monitor compliance with FFPR continuously, using key
performance indicators (KPIs) and benchmarks to identify potential issues early.
• Contingency Planning: Develop contingency plans for financial downturns or
unexpected events that could impact the club’s financial stability.

Project Management
• Strategic Planning: Use project management principles for strategic planning,
particularly for significant investments such as player acquisitions, infrastructure
projects, and commercial ventures, ensuring they align with FFPR compliance.
• … Management: Apply rigorous budget management to all projects, with clear
accountability for budget adherence and financial outcomes.
• Performance …: Implement a structured review process to evaluate the financial and
strategic performance of projects, learning from outcomes to improve future planning
and execution.

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 Audit
• Internal Auditing: Conduct regular internal audits to review compliance with FFPR
and internal financial controls, identifying areas for improvement.
• … Auditing: Engage independent external auditors to verify financial statements and
compliance with FFPR, providing an objective assessment of the club’s financial
practices.
• Feedback …: Use findings from audits to refine financial strategies, policies, and
practices, ensuring continuous improvement in governance and compliance.

Integration and Communication

• Integrated Approach: Ensure that governance, risk management, project
management, and audit processes are integrated and aligned with the club’s overall
strategy and FFPR requirements.
• Stakeholder …: Communicate effectively with all stakeholders, including fans,
sponsors, and regulatory bodies, about the club’s commitment to financial fair play
and sustainability.
• … and Education: Provide ongoing training and education for staff and management
on FFPR, financial management, and compliance, fostering a culture of financial
prudence and responsibility.

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Media Coverage
• Live Broadcasts: Many KFL Division 1 games are televised live, attracting significant
viewer attention.

• Media …ms within Kyleland.

• Journalistic …paper sales and digital engagement.

Impact of media coverage:

• Speculation …olve speculation about potential signings or departures of star
players, such as Cristiano Ronaldo or Lionel Messi, before official announcements are
made, creating uncertainty and distraction.
• Privacy Concerns: Players and clubs often face privacy issues as journalists seek
personal stories or controversies for exclusive … by the media. Stories focusing on
their personal lives, relationships, and off-field activities have led to privacy invasions
and conflicts with the press.
• Pressure on Players and Clubs: Intense media scrutiny can put additional
pressure on players and clubs, impacting performance and leading to heightened
expectations from fans. For example, Players like Wayne Rooney or Neymar have
faced media …. changes, such as Chelsea or AC Milan, also face intensified scrutiny
that can affect team morale and performance.
• .. .. …: Clubs must invest in robust public relations strategies to manage the
narrative, address false reporting, and maintain a positive image in the face of media
scrutiny. For example, Liverpool FC and Manchester City, among others, have
developed sophisticated …age with fans directly through social media, and counteract
negative press to maintain a positive club image.

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Industry …
• Success Imperative: … strong performances in domestic and international competitions.

• Financial Expenditure: Achieving success often involves significant spending on

acquiring top players and affording their high salaries.

• Financial … declining for many due to rising player costs.

Financial Difficulty - Malaga CF (Due to high spending on top players)

Tutorial note: Change management in ACCA SBL syllabus question background, ie
Turnaround strategy.

In the early 2010s…e club struggled to comply

with Financial Fair Play regulations due to its
high spending relative to income.
• Sanctions and Fines: As a result of failing
to comply with … qualifying the previous
season. The club was also subject to
fines and was required to demonstrate
financial stability to avoid further sanctions.
• Player …y players who were part of their successful UEFA Champions League
campaign. This weakened the team significantly.
• Ownership … of the club's finances. There were several changes in the administrative
and sporting leadership in attempts to stabilize the club.
• Relegation … and other income associated with top-flight football.
• Financial ….

Risks and threats

• Performance-Related Income Loss: Lower match attendance and prize money due to
poor performance.

• Competition: Rivalry with other clubs for prize money, supporters, sponsors, and top
talent.

• Sponsorship Issues: Potential non-renewal of commercial sponsorship contracts.

• Key Personnel Departures: Loss of crucial players, management, or coaching staff to

other clubs.

• Player Injuries: Serious injuries to key players affecting team performance.

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 • Television Revenue Decline: Reduced income from TV contracts due to less appeal or
illegal streaming.

• Competition for Sponsorship: Increased competition for corporate sponsorship from

other businesses and entertainment events.

• FFP Non-Compliance: Financial penalties for breaching financial fair play regulations.

• Brand Damage: Harm to the club's reputation and brand value.

• Negative Media Coverage: Impact of players' personal lives negatively covered by

media.

• Health and Safety Risks: Potential for injuries or health issues affecting players and staff.

• Security Risks: Risks related to supporter misconduct at matches.

• Financial Market Risks: Exposure to interest rate changes, currency fluctuations, and
liquidity challenges.

Potential Additional Risks and Threats:

• Digital Security Threats: Cybersecurity risks related to data breaches affecting
club operations and fan privacy.
• ……

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Stakeholders – per Mendelow’s mapping matrix
Keep Informed: High interest and Low power:
• Supporters and Retail Customers: Have high interest in the club's success but generally
low power to influence major decisions. However, their collective actions can impact
reputation and revenues.

• …

• Treatment: Regular updates via social media, newsletters, and fan engagement
events to keep them informed and involved.

Keep Satisfied: High power and Low Interest:

• …

• Treatment: Ensure contractual obligations are met, provide regular performance

and audience metrics, and involve them in key promotional activities.

Key Players: High power and High interest:

• …

• Treatment: Engage in strategic planning sessions, regular performance reviews,

and ensure transparent communication. Decision-making should be
collaborative, considering their input significantly.

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Leading teams in Kyleland

Impact of Stadium Capacity and Facilities on Revenue

• Revenue Correlation: There's a clear correlation between stadium capacity and
revenue. Teams with larger stadiums, such as Maritime Montiemo and 1922 Lervin, lead
in revenue generation. This suggests that investing in stadium infrastructure can
significantly impact a club's financial health.

• Non-Football ……

Sustainability and Brand Image

• Eco-Friendly ……..

Competitive Advantage
• Facilities a……
• Consistent Performance and Fan Engagement……..

Strategic Implications
• Long-term Planning: The move to invest in new stadiums and the associated benefits
underscore the importance of long-term strategic planning. Clubs that anticipate future
growth and invest accordingly in their infrastructure can create sustainable revenue
models and competitive advantages.

• Risk ………

Consequences for Clubs Not Investing in Infrastructure

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 • Competitive Disadvantage: ……..
• Fan Engagement Challenges: Without modern faci…..

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Innovation and sustainability
• Digital Media Strategies: Clubs are … updates.

• Exclusive Television Channels: The to…, accessible via their websites and other
platforms.

Application:
… unique that fans cannot find elsewhere to justify the subscription cost for their television
channels.
• Consideration: Investing in production capabilities and creative talent to develop
compelling content, such as behind-the-scenes footage, exclusive interviews, and in-
depth analyses, that adds value for subscribers.

2. Data Privacy and Security - As club….. protection laws is critical to maintaining trust and
avoiding legal repercussions.

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Key performance indicators (KPIs)

Additional KPIs:
Additional Financial KPIs
• Merchandise Sales Revenue: Tracks income from club-branded merchandise,
offering insights into brand popularity and fan loyalty.
• Sponsorship ……..

Additional Non-Financial KPIs

• Social Media Engagement: Tracks followers, likes, shares, and interactions across
social platforms, reflecting the club's digital presence and fan engagement.
• Fan Satisfaction Index: Surveys and feedback mechanisms to gauge fan satisfaction
with matchday experience, merchandise, and overall club engagement.
• Youth Academy ……….

Operational and Tactical KPIs

• Tactical Flexibility: Analysis of the team’s ability to adapt to different game
strategies, measured by outcomes of games …….

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3. Athletic Transcentral (AT) Overview
• Founded: Athletic Transcentral (AT) was founded in 1895.

• KFL Participation: Its men's first team has competed in the KFL since 1907.

• Ownership: Controlled by the Clicombe family; not listed on Kyleland’s Stock Exchange.

• Colors: ….. black shorts and socks.

• Teams: Includes men's and women's first teams, reserve, and under-18 teams.

• Men's ……. cup win for the last 15 years; not qualified for the Wocian International
League for the last eight years.

Implications:
• Historic Success: Athletic Transcentral's men's first team has a legacy of
success, with a long tenure in the top division and multiple titles, creating a
strong supporter base.
• Recent Struggles: Lacking major wins and international qualifications for the
last 15 years highlights a need for strategic change to regain competitive form.
• Strategic Review Needed: The club should evaluate coaching, player
development, and recruitment to enhance competitiveness.
• ………..

• Women's Achievements: Women's first team established 25 years ago, now in KWFL
Division 1, finished third last season (highest ever), and won the women's domestic cup.
Attracts about 3,000 attendees per game.

Implications:
• Growing Popularity: The team's establishment 25 years ago and its ascent to
Division 1 of the KWFL highlight the growing popularity and competitiveness
of women's football. Finishing third and winning the domestic cup indicates a
significant achievement and positive momentum.
• Increased Visibility: Achieving the highest ever position in the league and
winning the domestic cup can significantly boost the team's visibility. This
success, coupled with average attendances of around 3,000, suggests growing
fan interest and support fo………..
• ………..

• Youth and Reserve: Play in…….

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 Implications:
• Development Focus: The lower attendance figures highlight the primary role
of these teams …s competitive edge by ensuring a pipeline of skilled players
for the future.
• Community Engagement: The smaller scale of these games presents an
opportunity for deeper community engagement. The club could leverage
these matches to strengthen local support, foster a family-friendly
atmosphere, and enhance fan loyalty from a young age.
• Marketing Opportunities: Lower attendance games offer a more intimate
setting for fan interactions, making them ideal for targeted marketing
initiatives, such as meet-and-greets, youth clinics, and community events, to
build the fan base.
• Financial ………..
• .

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Board structure

Comments about the board structure:

Pros:
• Specialized Functional Direc…...
• Family Leadership: Having a member of the Clicombe family as the chief executive can
ensure continuity, stability, and a long-term commitment to the club's values and
success.

• Dedicated Audit Committee: …...

Cons and Improvement Suggestions:

• Limited Board Diversity: The absence of family members besides the chief executive
might limit diversity in management perspectives. Additionally, the board composition
might lack broader industry or external viewpoints.

o ……. and improve decision-making.

• Potential for Over-Concentration in Football Operations: With a single football

director overseeing a large scope of responsibilities, there's a risk of operational
bottlenecks or strategic oversight in football management.

o Improvement: Consider establishing a football operations committee to support

the football director, involving team managers and technical staff in strategic
discussions to ensure a more collaborative approach.

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 • Lack of Comprehensive Committee Structure: Relying solely on an audit committee
might overlook other critical governance areas such as risk management, nominations,
or remuneration.

o Improvement: Establish additional committees (e.g., Risk, Nomination,

Remuneration) to provide focused oversight on these aspects, enhancing
governance and strategic alignment.

• Recruitment and Appraisal Autonomy…….

• IT and Marketing Merger: Merging Marketing and IT under a single director might
dilute the focus from……...

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Information systems
• Adequacy: AT's internal information systems are considered adequate for the club's
current needs.

• Data ……

• Compliance: Believes to be compliant with Kyleland's data protection legislation.

• Digital ……..

Cons and Suggestions for Improvement

Cons:

• Adequacy vs. …….. fan engagement.

• Data Protection Compliance: Assuming compliance without continuous verification or

external audit may pose risks, especially with evolving data protection regulations.

• Limited Digital Engagement: Having a basic digital presence might not fully capitalize
on engagement opportunities or data analytics potential.

Suggestions for Improvement:

• Invest in …..ences.

• Regular Compliance Audits: Conduct regular, third-party audits of data protection

practices to ensure ongoing compliance with all aspects of data protection laws,
including GDPR if applicable.

• Expand Digital …………, especially younger demographics, and utilize emerging

technologies (e.g., AR/VR) for immersive fan experiences.

• Enhance Mobile App Features: Develop additional features for the mobile app, such
as in-……..

Stadium
• Age and Location: AT's stadium, 90 years old, is centrally located in Freenia. No other
Division 1 teams are in Freenia, but three are within 40 kilometers.

• Attendance: Average attendance was 96.5% of capacity (approx. 36,700) for the 20X2/3
season, aligning with industry standards for full capacity.

• Parking and Traffic: Limited parking facilities, with significant traffic congestion and
disruption to local residents on matchdays.

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 • Public Transport: Served by frequent bus services and two train stations within two
kilometers.

• Maintenance Costs: Increasing maintenance expenditure due to age and health and
safety regulations.

• Facilities: Includes refreshment outlets with long queues, 30 hospitality boxes, and a
small shop. Facilities are deemed insufficient for hosting non-football events.

• Land Ownership: AT owns the land of the stadium and adjacent land leased to the city
council.

Applications:
• Strategic Location Advantage: The central location in Freenia and absence of nearby
Division 1 competition offer a unique market position for fan engagement and matchday
attendance.

• Transportation Challenges: Limited parking and traffic issues highlight a need for
improved matchday logistics and potential collaboration with city authorities to enhance
fan experience and local resident relations.

• …………..

Potential exam question: - Corporate Governance and Stakeholder

Theory
Requirement:
Evaluate …….

Apply stakeholder theory and Mendelow’s matrix to propose a balanced approach for
stakeholder engagement.

Answer Plan:
1. Identify Key Stakeholders and Their Interests:
• Outline the primary stakeholders involved, including local residents affected
by traffic and noise, the city council responsible for local governance, fans
attending the games, and AT itself.
• Discuss each stakeholder's interests: residents' desire for peace, the council's
duty to manage city affairs efficiently, fans' access to games, and AT's need to
host successful matchdays.
2. Apply Mendelow’s Matrix:
• …………. the importance of clear communication regarding transportation
options and encourage the use of public transport to reduce traffic.
3. Balanced Approach to Addressing Concerns:

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 • Develop a balanced approach that considers the interests of all stakeholders.
This could include investing in traffic management solutions, improving public
transport ……….

Potential exam questions: - Risk Management

Requirement:
Analyze the financial and operational risks associated with Athletic Transcentral's (AT) aging
stadium and the stricter health and safety requirements. Utilize the COSO enterprise risk
management framework to identify, assess, and propose strategies to manage these risks
effectively.

Answer Plan:
1. Risk Identification and Assessment:
• Highlight the specific risks related to the stadium's age, such as
increased ………, considering factors like unexpected repair costs, revenue loss
from reduced stadium capacity during maintenance, and legal or regulatory
penalties for non-compliance.
2. Application of the COSO Framework:
• Internal Environment: Discuss AT's current approach to risk management,
including its organizational structure, risk management philosophy, and
risk ………. safety and functionality.
• Event …………… standards, and developing emergency response plans.
Highlight the importance of integrating these strategies into AT's overall
operational processes.
3. Strategic Risk Management Recommendations:
• Preventive Measures: Recommend proactive investments in stadium …………
the club's financial health.
• Stakeholder Communication: Suggest transparent communication with
stakeholders, including fans, local residents, and the city council, about
ongoing and planned maintenance activities to maintain trust and support,
particularly during periods of increased construction activity or temporary
facility closures.

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Training facilities
• Location and Upgrade: AT's training facilities, located 14 kilometres from the stadium,
were upgraded five years ago and are considered among the best in Kyleland.

• Usage: The first and reserve teams consistently use these facilities, while the under-18
teams occasionally use additional hired facilities nearby.

Application:
1. Strategic Investment in Infrastructure: The upgrade of the training facilities
represents a … supports the professional development of current players.

2. Differentiation and Competitive Advantage: Having state-of-the-art training facilities

differentiates AT from other clubs, potentially giving it a competitive advantage in
both player performance and recruitment. It signals to players and staff that the club
prioritizes excellence and continuous improvement.

3. Operational Flexibility: The need for under-18 teams to use other facilities indicates a
limitation in … operational strategies to accommodate all levels of the club's
operations.

4. Future Development Opportunities: The current use and status of the training
facilities …ould also open avenues for community engagement and youth
development programs, reinforcing AT's role in the local community and football
ecosystem.

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Commercial activities
• Diverse Sponsorship: AT has multiple sponsors for kits, stadium advertising, and
brand/player identity use, without a primary lead sponsor.

• Merchandise Sales: CCCs provide these kits.

• Club Shop: Offers official kits and a limited range of other items. Only the replica kits are
available for online purchase.

• Licensing and Global … retail outlets.

• Supplier Expectations: Requires fair treatment and good working conditions for
employees by its suppliers.

My analysis:
Improving Revenue Diversification
• Expand Sponsorship Categories: Broaden the range of sponsorship categories to
include … and reducing reliance on any single industry.
• Develop Tiered Sponsorship Packages: Offer varying levels of sponsorship with
customizable … base and fostering long-term partnerships.

Enhancing Brand Control and Quality Assurance

• Regular Quality Audits: Conduct periodic audits of suppliers and manufacturers to
ensure compliance with AT's quality standards, using both internal teams and third-
party auditors.
• Fan Feedback … using this data to continuously improve product offerings and
address any issues promptly.

Boosting Global Brand Expansion

• Strategic …on, considering factors like existing fan base, market size, and local sports
culture.
• Localized Marketing Campaigns: Develop marketing campaigns tailored to target
markets, leveraging local influencers, football icons, and cultural nuances to connect
with fans and drive merchandise sales.

Promoting Ethical Supply Chain Management

• Supplier Code …ectations for ethical practices, including labor rights, environmental
sustainability, and transparency.
• Regular Supplier Assessments: Schedule annual assessments of suppliers to ensure
compliance with the code of conduct, using a mix of self-assessments, site visits, and
third-party audits.
• Public …tices, challenges faced, and progress made, enhancing transparency and
accountability to stakeholders.

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4. AT Website Extracts - Mission and values
Mission: Maintain Leading Position in Kyleland
• Refer to preseen: AT has been in the top division of the KFL for the last 60 years,
demonstrating a consistent performance at a high level, supported by a history of
winning Division 1 of the KFL six times and the domestic cup competition five times.

Values:
1. Transparency: Clear communication of aims, objectives, and challenges.
• Refer to …….. The publication of an annual report further emphasizes this value, offering
insights into the club's strategies, team performance, and community initiatives.

2. Players' Conduct: High …….. to sportsmanship and integrity. This is implemented through
clear conduct guidelines for players and a culture that promotes professionalism within the
team.

3. Safeguarding: Protecting the welfare of young players.

• Refer to preseen: The club recognizes its responsibility towards the welfare of young
players, committing to practices that protect them. This is seen in its structured
approach to youth development in the academy, where players are supported not just in
their footballing career but also in their personal and educational development.

4. Stakeholders: Fair ………making processes where possible. This includes engaging with fans,
local residents, and commercial partners.

5. Community: Commitment to positive community impacts.

• Refer to preseen: AT's commitment to the community is evident in its initiatives and
programs aimed at making positive impacts, such as community outreach programs and
involvement in local events. The club's belief in being a vital part of the community in
Freenia is supported by actions that benefit local residents and the broader community.

6. Environment: Reducing environmental footprint and avoiding adverse impacts.

• Refer to preseen: The club's strategy includes a focus on reducing its environmental
footprint, which is evident in the measures taken to build new stadiums with energy
usage efficiency and reduced carbon footprint in mind. Additionally, AT's commitment to
environmental sustainability is shown in its operational planning, aiming to minimize
adverse impacts on the natural environment.

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5. Financial Information – selected summary

Shown in Excel:

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My Analysis:

Revenue Growth
• Year-on-Year Growth: AT's revenue growth was 3.08% from 2020 to 2021 and slowed to
1.49% from 2021 to 2022. This deceleration indicates a potential plateauing of revenue
growth, which could reflect market saturation, increased competition, or operational
challenges.

Reasons for Changes in Revenue Growth:

From Preseen Material:

• Competitive Challenges: AT has struggled to compete with other leading clubs in
Kyleland, which could limit its ability to attract sponsorships and increase ticket sales,
impacting revenue growth.
• Performance Impact: The men's first team has not won Division 1 or the domestic cup
for the last 15 years and has not qualified for the Wocian International League for the
last eight years, potentially affecting matchday revenue and prize money.
• Market Saturation: Being located in the city of Freenia without other Division 1 teams
may initially benefit AT, but local market saturation could limit new fan acquisition and
revenue growth from local supporters.

Potential External Factors:

• Broadcasting Deals: The football industry heavily relies on TV revenue. Any stagnation
or decline in the value of broadcasting deals could directly impact overall revenue
growth.
• Economic Factors: Economic downturns or financial instability in Kyleland could
reduce disposable income, affecting ticket sales, merchandise purchases, and overall
fan spending.
• Global Reach: While AT has attempted to enhance its visibility in international
markets, the effectiveness of these efforts in significantly boosting merchandise sales
and attracting global sponsorships may not fully compensate for domestic challenges.

Improvement Suggestions:
• Enhancing Fan Engagement: Implementing innovative fan engagement strategies,
both locally and globally, could help increase matchday revenues and merchandise
sales.
• Performance Improvement: Investing in player development, training facilities, and
strategic acquisitions could improve team performance, leading to better competition
results and potentially higher prize money and sponsorship deals.
• Diversification of Revenue Sources: Exploring new revenue streams, such as
enhanced digital content for a global audience or hosting non-football events at the
stadium, could help mitigate the impact of any single revenue source
underperforming.

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EBITDA Margin
• … expenses, outpacing revenue growth.

Reasons for Declining EBITDA Margin:

From Preseen Material:

• Increased Operational Expenses: The significant investments in upgrading training
facilities and maintaining an aging stadium have likely contributed to rising
operational costs, impacting the EBITDA margin.
• Wage Pressure: As AT competes to attract and retain top talent against clubs with
larger …: The preseen material mentions that maintenance expenditure on the
stadium has increased significantly due to its age and stricter health and safety
requirements, directly affecting profitability.

Potential External Factors:

• …

Improvement Suggestions:
• Cost … margin.

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Relevant Earnings Margin
• Relevant Earnings Decline: The margin for relevant earnings also saw a decline, from
18.46% in 2020 to 6.18% in 2022, suggesting that the profitability of core operations
(considered for FFPR) is diminishing.

Reasons for Decline in Relevant Earnings Margin:

From Preseen Material:

• … revenues considered for Financial Fair Play Regulations (FFPR), affecting the
relevant earnings margin.
• Increased Competition Costs: Efforts to remain competitive, including investments in
player acquisitions and infrastructural upgrades, may have escalated costs without a
proportional increase in FFPR-related revenues, such as prize money and
performance-based sponsorships.
• Operational …ease FFPR revenues, thereby affecting the profitability of core
operations.

Potential External Factors:

• Economic … FFPR-related income streams.
• Regulatory .. relevant earnings.
• Changing … success, impacting relevant earnings.

Improvement Suggestions:
• Strategic Focus ..utcomes, increasing prize money and performance-based revenues.
• Revenue ..netization, enhanced matchday experiences, or innovative sponsorship
packages.
• Cost ..PR-related revenues, could improve the relevant earnings margin. This may
involve renegotiating supplier contracts, adopting energy-saving technologies, and
streamlining administrative processes.

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Revenue by Type in 2022
• Proportions: …23%.

Reasons:

Insights from Preseen Material:

• TV Revenue …gests AT's strong market position to negotiate lucrative broadcasting
contracts but also highlights potential vulnerability to fluctuations in broadcasting
revenue.
• Matchday and Sponsorship Contributions: The nearly equal contributions from
Matchday and Sponsorship revenues indicate a healthy balance between generating
income from fans attending games and securing commercial partnerships. This
balance is crucial for financial stability, especially in times when one revenue stream
might underperform.
• Retail Revenue… brand strength and fan engagement, encouraging direct financial
support through merchandise purchases.
• Prize … past achievements, affecting prize money contributions to the overall revenue
mix.

Potential External Factors Influencing Revenue Mix:

• Broadcasting …g, could impact future TV revenue. Negotiating broadcasting deals in
this evolving landscape will be critical.
• Fan ..n football and other entertainment sectors, could influence Matchday revenues
and retail sales.
• Commercial .. sponsorship deals' value and terms, impacting Sponsorship revenue.

Improvement Suggestions:
• Enhance Fan ..nt strategies can boost Matchday revenues.
• Expand Merchandise Range: Diversifying the merchandise available online and in
physical stores … opportunities can augment Sponsorship revenue.
• Competitive ..mprove on-field performance, potentially increasing Prize money
revenue.

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 Chapter 2 PESTEL Analysis

Political:
• Regulations and Governance: AT operates under the Kyleland Football Association
(KFA), ..environment shapes AT's operations, emphasizing compliance and ethical
conduct.

• ..suggests interactions with local government, potentially affecting stadium expansion

plans or training facilities. Political support or changes in local government policies could
impact these relations.

Economic:
• ..other Division 1 teams suggests a captive market for AT. However, economic conditions
in Kyleland, such as inflation or unemployment, could affect fans' spending power on
tickets, merchandise, and matchday experiences.

• Broadcasting Revenue: AT’s significant reliance on TV revenue highlights the

importance ..advertising spending and media consumption trends.

Social:
• Fan Engagement and Community Involvement: AT's commitment to being a vital part of
the community and making positive impacts reflects the social value placed on
football ..responsibility, influence AT’s community and fan engagement strategies.

• Changing Demographics and Fan Preferences: Demographic shifts and changing

preferences could affect attendance and merchandise sales. AT's efforts to maintain a
leading position and enhance its global brand presence align with catering to a diverse
and evolving fan base.

Technological:
• Digital Media Strategies: The use of AT’s website, app, and social media platforms
to ..Technological advancements offer opportunities for enhanced fan experiences but
also require ongoing investment in digital infrastructure.

• Broadcast Technology: Innovations in broadcasting technologies, such as streaming

services, present both opportunities and challenges for maximizing TV revenue and ..

Environmental:
• Sustainability Initiatives: AT’s focus on reducing its environmental footprint and
avoiding ..energy-efficient stadium upgrades or sustainable practices could improve
operational efficiency and align with broader environmental goals.

Legal:

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Copyright: GlobalAPC and Steve Chen, FCCA, ACA (www.globalapc.com)
 • Data Protection and Privacy: Compliance with data protection legislation, as
mentioned ..face of increasingly strict privacy laws.

• Health and Safety Regulations: The increased maintenance expenditure on the stadium
due to age and stricter health and safety requirements highlights the legal obligations
AT ..

Conclusion:
The PESTEL analysis of Athletic Transcentral (AT) underscores the multifaceted external
environment the club navigates. From adhering to regulatory and legal standards to adapting
to ..range of factors. Environmental considerations and community engagement also play a
crucial role in shaping AT’s operations and public image, reflecting the broader societal ..adapt to
these external pressures while leveraging opportunities for growth and innovation.

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