Резюме. The research results on the improving managers’ education related legal and financial aspects of sports clubs in Romania are presented in this article. Our analysis evaluates the income structure of sports clubs and investigates the proportions gained from public sources and from the club’s own resources. It is known that gifts and sales of advertising facilities represent the largest part of their own private resources and we have analyzed their impact on total income from all sources and business relations issues related to the sale of advertising facilities based on sponsorship in Romania. These studies are needed by club managers for comprehensive information on funding sources. When setting up sports organizations’ budget, they include spending of its own private and public resources. The greater the volume of income, the broader the spectrum of activities that can be offered by a sports club. In the formation of the budget is needed experience for create one’s own private financial resources, which come mainly from gifts, the sale of advertising media, rented premises, sports activities and enter prise revenues such as transfer of players. The results of our research (2015-2016) were verified by statistical methods in combination with socio-psychological aspects: comparison of structures, the test of proper identity, the estimate of parameters of the basic complex, socio-professional aspects. Based on these data we have generalized the results for all sports clubs.

Ключови думи: education; legislation; financial sources; advertising; sponsorship

Introduction

The Sports clubs in Romania have been concerned with creating their own financial resources after 1990, compared to the First World War, when our entire sporting activity was completely reduced (Firică, 2011). These organizations have learnt to make good use of these sources of private income and to increase their profits. Sport entertainment becomes more and more attractive to the public (Firică, 2005). Nevertheless, there are important differences between the taxation accountancy and its assessment. Every other gift, received in sport represents free purchases which may be a donation of money or a similar contribution. For this gesture, the donor does not expect any reciprocal service for the gift and the recipient does not render a service. Therefore, the gift is an undetectable cost for the donor.

At taxing physical person tax who are resident in Romania, is specified that the taxpayer may deduct the value of the gift from the tax base, if the total gift value exceeds \(2 \%\) of the tax base and these will be donated to municipalities and legal bodies in Romania in order to finance the following areas: education, science, health, culture, police, environmental protection, youth protection and support, physical and sport education. In the aggregate it is possible to deduct \(20 \%\) at the most from the tax base. Sport in Romania is considered the source of social integration (Firică, 2012). A different rate of taxation is assessed for the income tax of corporate bodies which aim to invest in the above mentioned fields. In the aggregate, it is possible a deduction from the tax base. But, this deduction cannot be applied by the tax payers who are not established for the purpose of business objectives. Our sporting and Olympic principles have determined “sportification of culture” (Firică, 2003).

From here we notice that gifts may only be given to corporate bodies operating in the field of physical education and sport. So a sportsman can not receive funding individually. Therefore, any contractual relationship should be solved via the corporate body (e.g. a sports club, whose member the athlete is). The negotiations should be conducted with regard to the right of according to IEG, the premier global consultancy in partnership strategy, evaluation and measurement for leading sponsors and rights holders, the term Sponsor, represent: An entity that pays a property for the right to promote itself and its products or services in association with the property. The same IEG defines the Sponsorship: A cash and/or in-kind fee paid to a property (typically sports, entertainment, non-profit event or organization) in return for access to the exploitable commercial potential associated with that disposal concerning the a forenamed gift.

Our legislation includes the Sponsorship law, but it is hard to implement because the Fiscal Code is constantly changing. In Romania we have the Law of sponsorship: Law no. 32/1994, has a threshold of \(0.5 \%\) of the turnover and \(20 \%\) of the profit tax; and Law no. 227/2015 refers to the Fiscal Code. Globalization in the world of sport is becoming more and more pronounced (Firică, 2006). The sponsorship fee can reduce the profit tax with the full amount of sponsorship offered. Sometimes, we find this activity within the advertising concept. The incomes from advertising are also classier as entrepreneurial activities of non-profit organizations. Our sporting identity in the European space was influenced by the culture and civilization of ancient Greece (Firică, 2011).

For these reasons, we believe it necessary to mention the opinions of the renowned sport marketing experts who define sport sponsorship in a more comprehensive way. property (International Event Group 2000,1). Then it refers to Sponsorship Agency: A firm which specializes in advising on, managing, brokering or organizing sponsored properties. The agency may be employed by either the sponsor or property. While the tax, called Sponsorship Fee, represents: Payment made by a sponsor to a property.

According to other authors, sponsorship-linked marketing as “the orchestration and implementation of marketing activities for the purpose of building and communicating an association to a sponsorship” (Cornwell, 1995). Sponsoring sport is today an indispensable means (Firică, 2008). Other specialists, Crimmins and Horn (1996) have argued that strengthening the event-sponsor link is accomplished mainly via packaging, public relations, promotion, advertising, direct marketing, and merchandising, and explain the connection with the sponsor.

The purpose of these financial and material means is to achieve entrepreneurial marketing and communication objectives. This form of communication creates a specific form of partnership in which the sponsor and the sponsored achieve their objectives by means of a reciprocal deed. The entry into the partnership is expressed by the sponsorship which contractually provides for the output and counter output of both partners. In this form of financing or commercial sponsorship, we meet the terms “leverage” and “activation” are often used interchangeably. These terms are found in the literature (Cornwell, Weeks, Roy, 2005; Miloch, Lambrecht, 2006) and in practice (Fry, 2006; Parry, 2005) when reference is made to marketing communication sin tended to capitalize on sponsorship investments.

Certain specialists use the term sponsorship to refer to the acquisition of rights to affiliate or directly associate with a product or event for purpose of deriving benefits related to that affiliation or association (Sutton, 2011).

Usually, the sponsor then uses this relationship to achieve its promotional objectives or to facilitate and support its broader marketing objectives. The rights derived from this relationship may include retail opportunities, purchase of media time entitlement, or hospitality. The Romanian sports movement cultivates equality of opportunity and respect for all (Firică, 2007).

Sponsorship agreements may include, without limitation, to the following provisions and benefits with the right to:

– conduct certain promotional activities, such as contests, advertising campaigns, or sales-driven activities, in conjunction with the sponsorship agreement;

– services (use of the product or exclusive use of the product) or the right to use the purchaser’s product or service in conjunction with the event or facility;

– use various designations or phrases in connection with the product, event, or facility such as “official sponsor”, “official supplier”, “official product” or “presented by”;

– entitlement to an event or facility;

– exclusive association within a product or service category;

– use a logo, a name, a trademark, and graphic; representations signifying the purchaser’s connection with the product or event. These rights can be used in advertising, promotion, publicity, or other communication activities employed by the purchaser.

On the occasion of sponsorship, sponsors seek to leverage their associations whilst asserting a degree of control over the communication of their brand to future and existing consumers (Donlan, 2010).

In particular, advertising delivers a straightforward commercial message, whereas sponsorships get to people through a different source. Sponsorship involves a company being prepared to make a commitment and support an activity. We believe that companies are moving towards people in several ways, so that sponsorship is longer lasting in terms of its commitment. Through this study we have noticed: the frequency of gifts and incomes from the sales of advertising; the degree of sports clubs dependence on state subsidies, the frequency of incomes from entrepreneurial activities; the incomes from sponsorships, the purpose and exploitation of sponsorship money; and we evaluated the proportion of all these total income sources in an individual sports club.

The data obtained was processed using the statistical method and we obtained the results that can be valid for our clubs.

Methods

The methods of data collection and analysis used of the investigations were divided into four groups:

1. Method of written response to a questionnaire

The questionnaire included questions on the characteristic features of a sports club (legal form, a non-profit-making organisation or a business company; a stock company or limited liability company profit-making organisations). At sports clubs that promote their activities independently, we watched the way we exploit the services of professional marketing specialists. We have noticed that the predominant revenues of sports clubs, based on unprofitable organizations, come from gifts. The Clubs call and use recommendations and personal contacts in companies through their knowledge, club members, friends, parents. While, business companies, make the most of advertisements representing sports as they satisfy great public interest and is frequently encountered in mass media. Sports clubs look for sponsors according to their own marketing plans. Besides the legal status of the clubs we were interested in the size of sports clubs, the number of their members and the competition performance level in the given sport branch, but also the analysis other income sources and ways of doing business in these organisations. We’ve recorded the size of sponsors ad types and genres of ads sold by sponsors. We have studied the list of all the usual services offered. We have carefully analyzed the opinions of the sports club’s employees regarding the economic development of the sports club and the economic situation in our country. We also recorded the number of sponsors who made a financial donation or a gift to a sports club.

2. Descriptive methods of the selected group and objectivity check.

The selective sample was described by means of tables and charts giving absolute and relative frequencies. The veracity our study has been verified by the comparison of the structure of investigations and of the whole sample (all sports clubs) and by means of the Chi-square Goodness of Fit Test (\(\chi 2\) ). If the differences are too high and exceed the value of the test criterion, then the alternative hypothesis can not be considered as proven, because the analytical investigative studies do not correspond to the division of the core group to a certain level of significance:

Chi-Square goodness of fit test using the following formula: \(\chi^{2}=\left[\tfrac{(O-E)^{2}}{E}\right]\)

Where: \((\chi 2)=\) Chi-Square goodness of fit test, \(\mathrm{O}=\) observed value, \(\mathrm{E}=\) expected value If \(\chi 2\) applied, we will consider the conditions:

– composition of all groups (intervals),

– all intervals should roughly express the relations

-at least \(80 \%\) of all intervals provide high values

3. Descriptive method of information obtained by research.

The description of the information obtained was done with the standard statistical methods:

– level measurements (position measurements) achieved by the weighted arithmetic mean (x);

– variability measurements (changeability) achieved by means of the standard deviation means by of mubality (M).

4. Methods investigating the relations and the dependences among the data obtained.

The correlation coefficient was used as a method of analysing the relations and dependence between two signs (the relation between the number of sports club’s members and the size of incomes from gifts).

Results

The questionnaire data provide a whole series of information. To be able to formulate the conclusions we will process the data. Data processing belongs to the basic information on the division of members from a legislative point of view. It divides them i nto civic associations and trade companies (see Table 1. Distribution of the number of members in sport clubs legally circumscribed).

Though the percentage of civic associations represents \(85 \%\) (trading companies represent only \(15 \%\) ), it is interesting that the structure of the two entities has similar tendencies, as more than \(50 \%\) of all civic associations and companies are concentrated in sports clubs with a membership up to 200.

The following data correspond to other features:

– average number of members \(=260\), on average 287 in civic associations, 184 in commercial companies;

– the smallest organizations: civic associations with up to 15 members, commercial companies with up to 15 members;

– the largest organizations are: civic associations with over 5,000 members and companies with over 1,500 members.

In addition to these data on the status and structure of all sports clubs in Romania, we also present other data. We propose a comparison between the research structures and the base set in Table 2. Comparison of basic and research structures.

After comparison, we observe two clear trends:

– differences in the structure are not significant, they do not exceed \(18 \%\) at any interval (the largest difference being in the first interval up to 50 members – 9.2 percentage point);

– in the basic set the number and the structure of small sports clubs equals 200250 members, which is about \(81 \%\) of the whole membership, while medium and larger sports clubs are represented in a more expressive way.

We believe that the results of our research are objective and have good information capacity. To express the quality of the selective set and the assumption that the conclusions can be generalized, we used the good quality test. The results are shown in Table 3, Sports club identification test.

The conditions were not fully met because the method was applied only to \(75 \%\) and not to more than \(80 \%\), so the number of members is higher (namely, \(\chi 295=\) 30.45 and a total structure of \(14.1 \%\) ).

Our results are easy to accept. The test did not infringement the agreement of the two distributions (structure and the number of members in the selected and basic sets). However, our study is representative and includes important information about individual income sources of civic associations and trading companies (trading companies’ data are combined) and they can be seen in Table 4, Total sources of income and subsidies for sports clubs and in \% (\(26.5 \%\) expresses the total percentage of all subsidies).

The results show that the relation of incomes from the membership subscription, gifts and incomes from advertisements is almost identical (about \(18 \%\) ), while all types of subsidies make up about \(25 \%\) of income sources. The rest is constituted by other incomes coming from sports clubs' activities (about \(12 \%\) ).

The proportion of incomes from public sources to the sports clubs’ own incomes is \(25.5 \%: 74.5 \%\). Members' contributions and actual club activities increase their own revenues and represent \(58 \%\). To achieve sports goals, clubs need around 5 different sources of funding because the relative variability of 1.70 does not significantly influence the conclusion. The revenue structure is often formed from membership subscriptions, it is followed by association subsidies, gifts from physical persons and corporate bodies and advertisement revenues. With the help of correlation coefficients or determination coefficients, we analyzed revenue from subscriptions and advertisements or gifts (from individuals and corporations). The summary of the results of the correlation tables is presented in Table 5.

Average income (expressed in percentage) is substantially higher from advertisements (\(25 \%\) ). The incomes from gifts (\(15 \%\) ) are not insignificant either. At the same time the variability of in comes from advertisements (\(20 \%\) ) is much greater than the variability of incomes from gifts. From these characteristic data, we infer that advertising revenue is more dispersed than that from gifts.

If we analyze at the dependency ratios between sports club members and income levels (%) from advertisements or gifts, we will notice that they are not equal. Increasing the number of members’ leads to a good increase in gifts (\(45 \%\) ), while the same can not be said about announces. Besides increasing the number of members with more than \(10 \%\), advertising revenues will rise by more than \(11 \%\).

At the beginning of the evaluation of the results, we believe that we have a partial income contradiction, namely advertising revenue exceeds \(1 / 5\) of all revenues on average, while their growth is considerably slower than that of gifts.

Increasing revenue from creative and gifts is subject to the following factors:

– the ratio between the number of members and the level of advertising revenue is very low, so they can not be considered as correlations;

– significant dispersion of revenue (0-70%) and concentration over half the total number of members at two levels.

The representative ness of the research using the questionnaires and the calculated values of the individual characteristics and the reliability estimates are presented in Table 6, Quality of results with a probability of over \(95 \%\).

Consequently, based on the results in Table 6, we will issue the following conclusions:

– standard deviations and variation coefficients of members of sports clubs are quite small;

– the study of over 130 sports clubs is quite representative and allows us to generalize the results of all civic associations or commercial companies;

– the average number of 358 members represents the average membership status reasonably reliable.

From the analysis of the data in Table 6 we note that the study was not based on probability, it was largely random. The results in this table confirmed the findings of the good practice test (Table 3), which is not depending on the probability choice.

Not all data were computed using statistical methods, although these methods evaluate sports club offers to sponsors and express equivalence in their sponsorship relationship (Table 7, Offer for sponsors or different partners. In terms of advertising sales we note: over 100 sports clubs use their own job of selling the ad; over 20 clubs use the services of advertising agencies; over 25 sports clubs did not answer this question, although they did advertising activities for a long time.

The use of gift funds and sponsorship is presented in Table 8, The objects of using financial amounts obtained from gifts and sponsorship.

Some sports clubs were analyzed individually. At nearly 100 clubs, there was a tendency for stagnation to attract sponsors to Romanian sports clubs. Many sponsors are found through personal recommendation of contact persons, so over 100 sports clubs have found sponsors through this action. It is not surprising that and sports clubs that operate as commercial companies practice personal recommendation, but there are few clubs that have made an offer for sponsors in line with their marketing plan. The number of sponsors with one sports club varies from 0 to 50. The theory of sports marketing is under development. More than 100 sports clubs have developed relationships with sponsors. The conditions imposed by sponsors in the contract are increasingly difficult to meet.

Discussion and conclusions

The data processing of the questionnaire is presented as a distribution of the interval and is based on the following aspects:

– the aggregate characteristics were calculated on the basis of all data;

– distribution of the number of members in all legal subjects, advertising revenues, gifts etc. is considerably uneven and slightly confusing (over 160 questionnaires). Survey through questionnaire was done randomly, without the probability aspect.

Estimates and generalization of the results concerned other methods (structure comparison, adequate identity testing), and it was not possible to verify the complete reliability of the questionnaire data because anonymous query methods were used.

Some specialists it is considered that the return of the questionnaires is minimal if the respondents are approached by names. Instead, the investigators made an exception to this rule because they are motivated financially.

We have several reasons to believe that the results of our study are significant:

– the results assess the conditions and possibilities to create their own resources in sports clubs in Romania;

– athletic managers from Romanian sports clubs with less popular sports than football are advised to develop relationships with sponsors and partners;

– the results show the attitude of our sports clubs towards valuing sponsorship and gifts.

This study and others with subjects from sports legislation and sponsorship contracts were presented at international conferences.

In terms of legality and sports marketing we have been following:

– the views of a sports club on the legal status of sponsorship contracts, the collection of gifts and the relationships of these forms in relation to another fiscal and accounting concept;

– development of the legal framework to increase own income sources from sports clubs;

– jurisprudence and tendency to distribute state subsidies.

Because the distribution of subsidies falls within the competence of the state institutions, we have signalled two additional trends. The questionnaires included equally structured questions in the economic and legal field to receive qualified answers. Methods of processing and evaluating responses were adequate to our topic. The mathematical and statistical methods fixed by us were combined with the socio-psychological aspects: we compared club structures; I correctly tested the identity; we estimated basic parameters; we analyzed the socio-professional aspects. All results can be generalized at all our sports clubs.

The results show that sports clubs are focused on increasing their own sources to come after 1995. The legal study of marketing shows that most types of income on average are sufficient if the sports club is to run successfully from a financial point of view. A club’s revenue may include: membership subscription, association subsidies, gifts from people and corporate bodies and advertisement incomes. Each club distinguishes the largest source of income and different from club to club.

The frequent source of income consists of sums from sporting activities, rental equipment or transfers from players. Thus, we will have predominant incomes from our own sources (75%) and from public sources (25%).

Another trait shows that most sports club revenue is provided by income from their own activities and income from gifts and advertisements. Certain companies in our economic environment offer sponsorship to sports clubs for advertising and image.

Based on the results of our study, we exclude some significant differences between profitable and non-profitable organizations in physical education, although they have different tax laws and rules.

After a short comparison, it’s noticed that advertising revenue is more consistent than that of gifts. They represent \(30 \%\), namely more than \(1 / 5\) of all revenues, while the gifts represent an average of \(15 \%\). Lately, club revenues have grown from gifts and their members become donors and contact persons who negotiate possible gifts.

Over \(85 \%\) of the sports clubs investigated supports the use of contacts and mention a contact person. Our sports clubs often provide sports facilities to sponsors in their advertisements on sports tapes and articles, just like equipment, sports facilities, halls, stadiums, etc. Also, other mutual services are also practiced, such as renting, accommodation, rehabilitation, SPA etc. Most of the revenue from gifts and advertising sales are used for the purchase of sports and technical equipment, their maintenance and operation. More than \(50 \%\) of the sporting clubs surveyed feel a standstill in the expansion of sponsorship. For these reasons, a careful assessment of sports club managers is required for a future comparison.

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