A significant challenge affecting sports managers is fluctuations in the cost of construction or renovation of sports facilities. The valuation of stadiums is overstated, depending on the economic viability of the community. For instance, stadiums constructed within developed communities in terms of resources such as capital investments, labor, and natural resources tend to be expensive regardless of whether the stadium is productive. Construction of sports stadiums in areas such as colleges requires high spending despite that the venue is only used for training, which does not yield income ( Bruning & Chen, 2016) . As such, its ability to generate revenue is negative despite the need for finances in its management. Tax exemption and subsidization attract franchises to the community; however, the stadium developed using the technique only generates local consumer satisfaction rather than alternative investments. Subsidizing sports facilities also leads to a monopolistic structure in the sports industry despite local and state governments' financing.
Financing sports requires an organization that is stable financially. Despite an increase in support from private entities, sports management faces a decrease in revenue for running sporting activities due to technological advancement. Notably, most people do not subscribe to watch sports in the field like in the past. Nowadays, most people prefer to watch games in the comfort of their homes through media platforms. As such, it results in a reduction in revenue, thus posing a financial challenge to sports management. Nonetheless, private funding of the sports industry in some cases is not guaranteed. Private entities are driven by the desire to make profits, unlike public subsidies ( Imbroda-Ortiz et al., 2015). Therefore, in the case of negative stories common in the sporting industry, the revenue expected might decrease due to pulling off key stakeholders. Even so, the franchise owners are mainly concerned with improvement in success among the team to increase funding mobilization. Thus, issues such as continuous losses have been realized to cause downgrading of the team subsequently, leading to a reduction in funding. The challenge mentioned above causes financial constraints in sports management.
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References
Bruning, J. K., & Chen, S. (2016). Trends in Funding Renovations and New Facilities for National Football League Team Venues. Kentucky Association of Health, Physical Education, Recreation and Dance , 45. https://www.researchgate.net/profile/Steve_Chen16/publication/303401649_Trends_in_Funding_Renovations_and_New_Facilities_for_National_Football_League_Team_Venues/links/5740cb0b08ae9f741b34e429.pdf#page=45
Imbroda-Ortiz, J., Castillo-Rodríguez, A., & Chinchilla-Minguet, J. L. (2015). Sports management, leadership in the organization. Journal of Physical Education and Sports Management , 2 (2), 56-65. http://dx.doi.org/10.15640/jpesm.v2n2a5
