Factors That Newly Relegated Burnley Football Club Faces When Implementing Budgetary Strategies
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In this report I will discuss the difficulties that newly relegated Burnley football club faces when implementing budgetary strategies. I aim to illustrate how financial planning and more specifically Zero-Based budgeting can enhance a clubs management of finances and create financial stability. Equally, I will try and present how variance analysis can be used to measure the success of budgetary projections within organisations and more specifically within the sports industry.
The relegation of a football club has the potential to cause financial instability. Clubs such as Leeds United and Portsmouth, due to inadequate budgeting have found themselves languishing as low as league 2 having found it difficult to budget effectively and then push for promotion. However, through sustainable and appropriate budgeting clubs can gain a more accurate picture of their financial health and bridge what in (Emery and Weed’s 2006) opinion is a “growing divide in the way football is financed”. Budgeting itself does not only encourage a more safe and responsible way of spending money, it also can encourage more cohesive and productive relationships between the many different facets which make up an organisation. However one may argue that a newly relegated football club would be best served with a zero based budget as it enables a high level of critique when dealing with budgetary requests from managers.
3. What is a budget?
"A budget quantifies planned