By Matthew Forbes, Matthew ForbesAudit and Assurance Senior Manager
4 August 2020
Recently we have seen the return of both the National Rugby League (NRL) and the Australian Football League (AFL) after months of stand-down in order to protect players and the public from infection of COVID-19. In what has proven to be a welcome distraction, sporting enthusiasts in Australia are once again discussing player positions and debatable referee decisions, with the added conversational bonus of whether we appreciate the fake crowd noise or not!
As a British expatriate new to these shores, Australia’s love for sport is immediately apparent. Inevitably, this deeply ingrained passion makes sport big business and results in a greater level of focus and scrutiny, particularly on how its leading organisations are run.
The recent headlines regarding financial difficulties currently being experienced by some of Australian sport’s most high-profile institutions has done little to dispel the public’s sense of scepticism surrounding the industry’s financial planning and governance foresight. COVID-19 has served to accentuate these underlying flaws.
If ever there was a time for the sports industry to revisit its risk performance, governance, culture, leadership and operational structures it is now, and the virus outbreak presents a unique opportunity.
Firstly, management should be asking themselves and the Board what lessons can be learnt. How can we better plan for such a scenario? Was such an apocalyptic event included on our risk register? Do we even have a risk register? If not, how do we document our policies and procedures in place to mitigate financial, integrity and other risks?
Stuart Coventry, COO at Basketball Australia, agrees: “The onset of the COVID-19 crisis has certainly highlighted to us the importance of our departmental business continuity plans to ensure all considerations are actioned to meet all challenges and potential scenarios as part of good governance.”
Invariably this will lead to a greater focus on financial planning and sustainability. Outside of government funding, national-sports organisations in particular are heavily reliant on in-game commercial sponsorship, television rights, and wagering fees. COVID-19 has highlighted the problems that can arise when games and events cannot be held, the importance of having significant cash reserves available as well as the need to develop new innovative revenue streams in order to become more self-sufficient. Such innovative schemes could include increased focus on online merchandise sales and hosting virtual events.
This is not solely an elite-level requirement either. The grass roots level also has a part to play, and this is where collaboration and governance education, from Sport Australia to state sporting organisations to local community leagues, is imperative. Children are the future of sport in Australia and the need to divert them away from Netflix to well-run community sports initiatives is paramount.
As we all work towards a new-normal of social-distancing, and where communities are disparate and in desperate need of feeling re-connected, the sports industry has a unique opportunity to be the driving force behind this. Strong leadership and governance will place it in pole position as this test of endurance henceforth continues.