An audit, consulting, and diligence guide to troubled Football Clubs

Everything you need to know to avoid requesting something unworkable without practical results.

STEP BY STEP: DIAGNOSIS

A couple of experienced professionals visit the club for about two weeks, analyzing the numbers and mainly talking to all relevant people. It is necessary to see all sites (training centers, headquarters, Olympic park, and any other activity type).

The product of this technical visit will be the mapping of problems, creating some way of signaling their severity and relevance and presenting managers with the most significant possible number of red flags that deserve their attention.

The visit needs to be done by professionals with previous club experience. A newbie would be lost in those two weeks.

You need a few days for a brief analysis of the financial statements. With the aid of trial balances and a general ledger, you can quickly identify points that require more in-depth analysis procedures.

The interviews with directors, managers, and coordinators give you a good idea of the control environment and offer several indications of conflicts between a club’s areas. With a bit of luck and using your experience, you can get valuable insights from this process.

Formal visits also help to identify operational problems, control failures, signs of abandonment that indicate a lack of more severe resources, and even the environment around football (advisors and business people), who in some way exert influence.

The result of these two weeks is usually a long list of problems, which will be discussed with the management to outline a scope that meets their priority needs. It must be remembered that even if the club has a positive cash flow, its spending priority should always be in sports practice. It is necessary to adapt the projects and consultancy so that they do not harm these sports investments.

In the case of clubs in critical financial conditions, adjustment is necessary between the two parties. As long as the club has scarce resources, the service provider cannot take credit risk, as default can cause projects to be suspended and all effort to be lost.

There is an analogy that these two weeks are the courtship between the club and the service provider. The idea at the end of the day is to make a kind of pre-nuptial contract. Well, every wedding is subject to bad weather.

This relationship between the club and the service provider will be much tenser than the most problematic marriages, hence the need for this diagnosis and work plan to be done with four hands as frankly as possible.

No planning is put into practice 100% in the Brazilian football clubs. The difficulties are enormous, ranging from the lack of documentation to relationship issues. People are exceptionally quickly resentful, and because it is an amateur management environment, everything is complicated with absurd ease.

In projects from 6 to 9 months, it is widespread to replace vice presidents, financial managers, accountants, and new political arrangements within a club, with a redistribution of critical positions. Everything happens. New people appear who have no idea what was going on or even do not understand football management and fall on parachutes in the club. Football clubs don’t go wrong for no reason.

Amateurism is the shortcut to failure, but that matter is for another day, in another thread.