Scoring from the Sidelines : Managing Risk through an Uncertain Environment

Abstract: Sports clubs face numerous challenges, including economic fluctuations, shifting supporter preferences, and changes in regulations and policies. However, the unpredictable nature of athletic performance makes it difficult to forecast future financial outcomes, which can negatively impact planning and operations. Effective risk management is crucial for clubs to navigate these uncertainties and maintain long-term sustainability. The limited ability of Swedish clubs to access external funding sources, due to regulations on ownership and governance, poses challenges in managing risks effectively, as it restricts investment in new projects and response to unexpected and volatile events. Swedish clubs' managers face distinctive obstacles compared to their international counterparts due to the unique context they operate in.  The purpose of this thesis is to investigate what risks Swedish elite football clubs face due to the uncertain and volatile environment of sports, and to explore how these risks are managed. By identifying the various risks these clubs encounter, this study aims to shed light on how they maintain their competitive edge through proactive risk management strategies.  This thesis’ methodology is structured as a qualitative interview study consisting of eight semi-structured interviews with eight Swedish elite football clubs. The study uses a purposive sampling method, in order to focus on the unique regulations of Swedish sports clubs, as well the largest sport in Sweden, football. Moreover, the thesis employed a thematic analysis approach to analyse the data and draw conclusions.   The results of the study show that managers in Swedish elite football clubs adopt a hybrid approach to risk management, leveraging an experience-based approach and complementing it with a long-term strategic approach. This allows them to align decisions and risk management practices with their objectives and stakeholder expectations, and through balancing competitiveness and risk-taking, they establish attainable objectives that gradually lead to sustainable success. Moreover, the results show that larger clubs with a substantial number of members prioritise the opinions and interests of their members, who serve as a crucial source of income and primary stakeholders. In contrast, smaller clubs with fewer members rely more on sponsors and partners for income.