The Importance of Corporate Social Responsibility Programs for Football Clubs

There are many different clubs which are committed to Corporate Social Responsibility (CSR) programs such as, Manchester City, Chelsea and FC Barcelona. This is because football clubs are now seen as significant businesses which have a direct impact on the key stakeholders such as the shareholders, government, local community and fans (customers.)

By having a strong CSR programme football clubs can help differentiate themselves to other clubs and help create a better brand image. This is important as the brand image will reflect on how fans perceive a club to be. As if the club stays committed to CSR program/s it will help build a positive brand which will be reflected in fans perception. This will lead to significant benefits in the long term, whereas if the club decides not to be committed to CSR, fans will start to realise and have a negative image of the club. This has substantial consequences, as fans may turn away from the club, leading to a fall in ticket and merchandise sales which will lead to a fall in turnover. Consequently fans may also start to boycott and protest against the club which may jeopardise permanently the brand image of the club. This will have severe implications on stakeholders such as the government and shareholders as a decrease in revenue will lead to a likely fall in corporation tax and dividends.

An example is of Chelsea FC, who had raised £1 million into supporting charities and has helped develop the ‘KICKZ’ programme which helps to target young children in deprived areas to stop racism and knife crime and give them opportunities to play football and participate in educational workshops. This event received strong positive publicity and has helped Chelsea to be the number one team in the world in 2008 to have the highest number of CSR programs in England. Another example is FC Barcelona who donates €1.5 million every year to UNICEF charity which helps to tackle HIV and AIDS across the world. Apart from receiving a positive brand image, FC Barcelona has also increased its global fan base across the world to 349 million fans. This extra fan base can help lead to an increase in revenue and sales from ticket prices and merchandise sales. Therefore significant incentives have led to clubs becoming more committed to CSR programs.

There are many various benefits Manchester City (MC) can gain from their CRS programs. An example is of their Regeneration project, which features creating a wind turbine to help produce renewable energy. This will be used to help power the stadium and help MC to become more energy efficient. This is significant benefit, as the long term benefits of cost savings such as electricity costs will outweigh the short term investment costs. Another benefit of the wind turbine project is that it will also allow MC to export 25% of the energy they generate; this can help MC to gain additional income from the selling of this surplus of energy. Since this will lead them to be environmentally friendly there may be an opportunity to receive tax incentives. This will be a significant benefit as they will have the opportunity to use this additional finance to invest more into the clubs resources or additionally further enhance their CSR brand image.

In addition another benefit MC can gain from their CSR programs will be helping to develop and create a loyal customer base. An example of this is their CITY (City in Community Program) program which has helped to make a “bridge” between the club and towards the local community and young people. This helps MC to create and establish a loyal customer base. This has contributed to the increase in attendance in home match, the recent annual report for 2011 – 2012 shows that the average attendance was a record highest of 47 031. This has led to substantial increase in sponsorship deals which has helped increased the revenue for MC. Therefore it can be seen that CSR programs has benefited Manchester City as they have been a significant factor in the increase of revenue.

Manchester City’s commitment and work on their CSR programs can be compared to other business that also have high values regarding CSR. An example of this is The Body Shop, who offer various fringe benefits to their employees such as free lunch, free drinks and discounts in health care and most importantly they are against animal testing unlike companies such as L’Oreal. This has led to The Body Shop receiving a positive brand image in the media and has helped them to create a new unique selling proposition and create a new target market for their products. As a result their products are differentiated from the market, and have added value which allows them to increase their prices and net profits. Therefore it can be seen as in both cases of Manchester City and The Body shop, investing in CSR, has led to substantial benefits.

In addition Cadbury (now a part of Kraft Foods) also has a strong stand in CSR. Cadbury purchases all their ingredients at a fair trade price in whereby they pay an equal and fair amount with a premium value of 20% to their suppliers. This has benefited Cadbury as they are now allowed to show the fair trade logo on their products. This has led to consumers to be aware that Cadbury offers an equal pay to their suppliers and helps them to differentiate themselves with their competitors. As a direct consequence Cadbury sales and net profits has risen substantially due to this commitment to fair trade. Similarly like Manchester City, Cadbury also invest and give donations. They invest in third world countries such as building water fountains and providing solar panels and giving donations to help develop schools and local infrastructure. This has led to positive media attention and greater consumer awareness of Cadburys strong vales on CSR.

However in contrast, there are certain businesses that are regarded as having poor CSR, an example is of Primark, who have had very bad publicity due to their poor working conditions of their workers who were paid £3.50 for 12 hour shift. When this was revealed to the public, it jeopardized Primark’s brand image which caused some consumers to boycott Primark, leading to lower sales and a fall in profits. Therefore different businesses have different values regarding CSR and those who have invested in CSR have benefited largely.