Strategy and financial management in the football industry

Abstract

The literatures on strategy and finance have developed very separately, notwithstanding the fact that they have a common economic underpinning. Whilst a number of strategic theorists have looked at how strategic management facilitates the most effective leverage of economic resource, studies of the linkages between strategy and finance literatures are relatively few. This appears odd because finance is pivotal in making the resource allocation decision in management, especially in major business investment and divestment decisions and in the financing strategies needed to accomplish this. Both financial management as a discipline and financing strategies also play a role in influencing stakeholder behaviour, which is critical in strategy. Rarer still are studies of how strategy, financial management, financial strategies and stakeholders interact. With continuing examples of devastating corporates such as Enron and more recently Parmalat, it would seem surprising that theorists have been relatively disinterested in this important border between these disciplines. This paper seeks to make a contribution to our understanding of the topic by focusing on the interesting case of the football industry. Whilst an earlier paper in this journal (Grundy, 2004) dealt with techniques for appraising strategic options to exploit product/market opportunities, financing strategy options warrant separate exploration. Copyright © 2004 John Wiley & Sons, Ltd.