Research On The Causes And Countermeasures Of Financial Dilemma Of Professional Football Clubs

Sports industry since 2010,the State Council promulgated the "twelfth five-year" plan"and" sports enterprise development "twelfth five-year" plan ",after ten years of development,our country sports industry marketization effect is remarkable,the growth rate are more than 13.4% in 10 years,and all the national GDP growth rate is higher than the previous,more than one trillion yuan GDP in 2019,As a new economic growth point in China,sports industry shows a strong rising momentum.However,at present,professional sports in China is in the early stage of development,and professional sports clubs have poor profitability.They rely on the parent company to carry out input benefit transmission to major professional clubs.If they only rely on their own cash flow,they cannot support the daily operation of the clubs.Most professional football clubs,on the other hand,rely on financial support from real estate sponsors,which provide interest-free loans to the clubs.In addition,because professional football clubs belong to capital intensive industry,and the professional football clubs in China can not generate positive cash flow,which leads to the major professional football clubs into financial difficulties.In 2019,for example,the total revenue of CSL clubs was 5 billion yuan,while the total expenditure was more than 8 billion yuan,and the club’s overall financial situation was beyond its income.Therefore,in view of the current situation of financial distress of professional football clubs in China,this paper selects Guangzhou Evergrande Taobao Football Club as a case to analyze the causes of financial distress through typical analysis.Guangzhou Evergrande Taobao Club is the professional football club with the highest commercial value in China.Although it is the first club in Asia to be listed successfully,it is still in a state of loss and the loss is constantly expanding after listing.The accumulated loss has reached 4.5 billion yuan in five years after listing,so the club is also facing the risk of delisting.The concrete manifestation of the financial predicament of Evergrande in Guangzhou mainly includes the following four points: tight cash flow;Poor cost control;Poor earning capacity;Facing delisting risk.Based on the financial statements disclosed after the listing of Guangzhou Evergrande,this paper analyzes the financial difficulties of Guangzhou Evergrande from the financial and non-financial perspectives.Summarize the internal and external factors that cause the financial distress of Evergrande in Guangzhou,the external factors include the intensified competition among competitors;The administrative color of the league is strong,the marketization is insufficient,the internal factors include the management lack of capital planning,the transfer cost is too high;The proportion of players’ salaries and bonuses is too high;The income structure is unreasonable;The club’s professional player structure is not reasonable.Then,combined with the causes of the financial distress of Guangzhou Evergrande,this paper gives some suggestions for China’s professional football clubs to get rid of the financial distress,mainly from the perspectives of the club,the football association and the local government:From the club’s point of view,we should improve the cost performance,develop diversified income channels and perfect the construction of professional player training system.The club can adopt diversified management strategy,take the excellent Evergrande league results of Guangzhou as the core competitiveness of the club,expand the development of ticket income,peripheral merchandise income,characteristic tourist line income and theme hotel and other related industries,increase the income level of the club and improve the financial situation of the club.From the Angle of the football association,the salary cap should be increased moderately to avoid excessive reform of the salary system.The CFA can discuss with the players’ union and clubs to conduct a collective study on the spending limit of clubs,so as to protect the right of speech of professional players and clubs,and avoid the decline of the overall attractiveness,competitiveness and attention of the Chinese Super League caused by the excessive implementation of the Salary Limit Order of the CFA.From the perspective of the government,the local government and the club can use the theory of city brand,carry out enterprise linkage,build local football brand,expanding urban and social influence and commercial club,club relying on sets up the city brand expanding income,the local government also gain characteristics of the city related achievements,form a win-win situation.Finally,the thesis is summarized and the research conclusion is drawn.Through the case of Guangzhou Evergrande,relevant experience and lessons are given to professional football clubs in China,so as to expand the income scale of professional football clubs,enable them to realize independent operation as soon as possible,and improve the level and influence of professional football clubs in China.