Academic journal article International Journal of Sport Finance

Willingness-to-Pay for Memberships in Nonprofit Sports Clubs: The Role of Organizational Capacity

Academic journal article International Journal of Sport Finance

Willingness-to-Pay for Memberships in Nonprofit Sports Clubs: The Role of Organizational Capacity

Article excerpt


Research has shown that the financial situation of nonprofit sports clubs can threaten their operations. In 2014, 24% of German sports clubs did not achieve a balanced budget, and 12% had (very) serious financial problems (Breuer & Feiler, 2017a). Similar financial problems can be observed in other European countries (Breuer et al., 2017). In light of these issues, the low levels of club membership fees compared to other sports and leisure providers might be an effective leverage point to address financial problems (Breuer, Wicker, & Swierzy, 2016). For example, the fee for one training session amounts to approximately €1 in nonprofit football clubs, while the corresponding fee is €13 in for-profit football schools. This difference is not only a result of the legal form and corresponding outcome orientation (i.e., nonprofit versus for-profit), because other providers of leisure programs in the nonprofit sector also charge comparably higher fees. For instance, the corresponding fee for one session amounts to approximately €7 at nonprofit music schools and is, thus, only slightly cheaper than the €10 charged at their for-profit counterparts (Breuer et al., 2016). Hence, the fees charged by nonprofit sports clubs are relatively cheap compared with not only commercial sports providers, but also with other providers of leisure opportunities in the nonprofit sector.

However, raising membership fees is a delicate topic within sports clubs (Wicker, 2011). Therefore, club managers need information about member financial scope and the fees members would be willing to pay. In order to make informed decisions, club managers should be aware of the factors that determine individual willingness to pay for a membership. While individual determinants of WTP, such as income, education, sport biography, and current membership fee level (Kiefer, 2015; Wicker, 2011), have already been studied, the role of organizational characteristics is less clear. However, knowledge about organizational factors is important because these factors can be actively adjusted by club management.

Existing theoretical approaches support the relevance of contextual factors to different forms of individual behavior, including voluntary engagement (Studer & von Schnurbein, 2013) and sport participation (e.g., Dallmeyer, Wicker, & Breuer, 2017). According to ecological systems theory (Bronfenbrenner, 1979), lower-level individual behavior is dependent on a constant interaction between individual features and social ecologies on the higher level surrounding it. The social context consists of different systems enclosing the individual at the center of the model. The ecologies which are closest to the individual-microsystems such as sports clubs-influence individual behavior immediately and directly. Consequently, knowledge on the relationship between organizational characteristics and individual behavior is valuable to club managers. However, the effect of organizational factors on individual financial behavior and member willingness to pay, respectively, has not yet been studied.

The purposes of this study are to estimate the willingness to pay for a sports club membership using CVM and to investigate the influence of organizational-level factors on stated WTP. The major research questions: (1) what are the absolute and relative WTP for a sports club membership? And (2) how does organizational capacity affect absolute and relative WTP for a sports club membership? The specific research context is North Rhine-Westphalian football and track and field clubs and their members. The present study aims to contribute to the body of research on financing sports clubs and on CVM in sports.

Theoretical Framework and Literature Review

The conceptual model of organizational capacity of nonprofit and voluntary organizations by Hall et al. (2003) is utilized as theoretical foundation for studying the role of organizational factors. …

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