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Exeter Chiefs' Stadium, Sandy Park, Exeter. Ex...

Exeter Chiefs’ Stadium, Sandy Park, Exeter. Exeter chiefs Rugby club moved to this state-of-the-art stadium in October 2006. It has a current capacity of 6,000, with plans to expand to 10,000. (Photo credit: Wikipedia)

A few weeks ago, I was filming for a forthcoming massive open online course (MOOC). The setting was the home of English Premiership rugby union team, Exeter Chiefs, and it is where there is currently a major construction project underway to the stadium and all of its facilities.

As I looked around at this significant ‘building site’ the more it dawned on me just how much management accounting must have been needed before (during and after!) the construction began.

It might seem intuitively obvious why a major sports team elects to extend and upgrade its ground. Let’s assume for instance that a larger stadium will introduce more spectator seats, and a higher quality of supporter experience, which in turn the club administrators will hope converts into more income generation. In this respect, there are certainly strategic dimensions to any such decision as extending a sports stadium.

Nevertheless, the senior executives of this growing rugby club will have no doubt required much more information form their management accountants than just expected new income flows that might flow from expansion of their stadium.

For instance, they’d likely want to know the overall cost of the construction project, including the cost of financing it. They’d also want to know the nature and magnitude of different running costs involved in having a larger and more state-of-the-art stadium.

The senior club executives, those who are tasked with deciding (or not) to go ahead with ground expansion, will also want to gauge roughly how many years it will take before the predicted extra income generation eventually covers the initial outlay of the project; in other words, when will ‘payback’ occur.

These, and many more, are the sorts of demands for information that managers and any key decision-makers in all types of organisations will require, rather they will demand it. And it is normally management accounting that is expected to deliver such decision-relevant information.


Source: own experience/observations