Crowdfunding In German Association Football Clubs: Identifying Supporters’ Drivers To Invest
- 2024
- Book
- Author
- Maria Ratz
- Book Series
- Schriften der accadis Hochschule
- Publisher
- Springer Fachmedien Wiesbaden
About this book
This thesis analyses the potential of crowdlending and crowdinvesting to be a valuable financial alternative for professional football clubs in Germany. Given the increasing importance of crowdfunding in other business areas and the necessity for German football clubs to access alternative approaches to financing, the perception of football clubs and supporters with regard to crowdfunding was investigated. The question is whether the fans, who are associated with the club due to their loyalty, could become financing partners. By applying Commitment-Trust Theory, this study examines the antecedents of supporters behavioural intentions to invest and their effect on the key mediating variables of Fan Loyalty and Trust. Semi-structured interviews with financial managers of the football clubs and an online survey with fans (n = 712) were conducted. This sample data was analysed using Structural Equation Modelling. Among three rival models, the partial-mediating model was able to explain 81.4 % of the variance of the sample data. According to the results, the key driver for supporters’ Willingness to Invest is the intrinsic, other-orientated motivation called Perceived Meaningful Contribution. This study has added knowledge to theory by applying the Commitment-Trust framework to crowdfunding motivation within the context of professional German football. Furthermore, the practical contribution is derived from the recommendations for football clubs on how to frame crowdfunding campaigns by highlighting the rewarding feeling of helping their club and the meaningfulness of projects.
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Table of Contents
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Frontmatter
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Chapter 1. Introduction
Maria RatzThis chapter delves into the growing trend of crowdfunding in German professional football, focusing on its potential as an alternative financing method. It explores the regulatory landscape, including the '50+1 rule' that limits external investment, and compares crowdfunding to traditional fan bonds. The chapter also discusses the motivations behind fan participation in crowdfunding campaigns, setting the stage for a deeper analysis of this emerging financial strategy in the sports industry.AI Generated
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AbstractThe idea of people collecting resources for a common goal is as old as humanity itself and at the heart of all communities (Beck et al., 2016). Although it is not a new concept at all, crowdfunding has become especially popular in the last decade. Since the launch of the platform Kickstarter in 2009 and its global expansion, crowdfunding is often considered to be the “new” financing tool which enhances innovation and facilitates funding (Kuppuswamy & Bayus, 2018).This chapter provides the introduction to this DBA thesis about crowdfunding in German professional football. The study will analyse whether crowdfunding could be a valuable alternative in football finance and why supporters may be willing to participate in a fan-financing campaign. -
Chapter 2. Defining Supporter Crowdfunding
Maria RatzThis chapter delves into the definition of supporter crowdfunding, highlighting the need for a context-specific approach due to the diverse research contexts in the field. It examines various definitions and applies an eight-question framework to create a tailored definition for the study. The focus is on monetary return forms suitable for professional football clubs, differentiating between donation, reward, lending, and equity-based crowdfunding. The chapter also discusses the historical evolution of crowdfunding, its classification, and the specific characteristics of supporter crowdfunding in the context of football clubs. By the end, a comprehensive definition of supporter crowdfunding is provided, setting the foundation for further research.AI Generated
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AbstractHowever, crowdfunding is a young emerging research area and has no common definition so far (Moritz & Block, 2016). The research on crowdfunding, its context and scope vary significantly and many different definitions have emerged (Hossain & Oparaocha, 2017). Hence, this chapter provides an overview of various crowdfunding definitions from the literature. For this purpose, eight questions are applied to each definition. This examination leads to a context-specific crowdfunding definition made by the author, which will be operationalised in this study. -
Chapter 3. Commitment-Trust Theory
Maria RatzThis chapter introduces the Commitment-Trust Theory as a framework for analyzing fans' willingness to invest in supporter crowdfunding campaigns. It explains the adaptability of the theory across various research contexts and highlights its relevance to the sports marketing sector. The chapter discusses the key mediators, trust and commitment, and introduces the concept of fan loyalty as a more comprehensive measure of commitment. It also explores the application of the theory to the unique relationship between sports clubs and their fans, emphasizing the importance of trust and loyalty in this context. The chapter concludes by outlining the modifications made to the original Commitment-Trust Theory to fit the specific research question.AI Generated
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AbstractThe proposed model for this thesis is based on the Commitment-Trust Theory. It is one of the most cited theoretical frameworks and has been applied throughout different areas of research. To analyse the potential of supporter crowdfunding and fans’ willingness to invest, the original model of the Commitment-Trust Theory by Morgan and Hunt (1994) has been adopted.The purpose of this chapter is to build the theoretical framework underneath. It builds the rationale why relationship marketing is applicable to this study (chapter 3.2). The adaptive character of the Commitment-Trust Theory is then highlighted (chapter 3.3) followed by a discussion on the appropriateness of the model in this study (chapter 3.4). The antecedents, mediators and outcome variables of the original Commitment-Trust Theory are explained in chapter 3.5. In particular, the mediators trust and commitment are outlined as theoretical constructs. Those theoretical foundations are relevant to understand why the mediator commitment is replaced by fan loyalty in this study (chapter 3.6). In particular, Cater and Zabkar (2009) have provided evidence that loyalty is a more complete measure of commitment. Finally, sports marketing literature prefers the use of fan loyalty in the context of a club-fan relationship which is discussed in chapter 3.7 in further detail. -
Chapter 4. Conceptual Model and Hypotheses
Maria RatzThe chapter introduces a conceptual model and hypotheses for examining fan loyalty and trust in supporter crowdfunding. It emphasizes the importance of accurate measurement development and adapts the Commitment-Trust Theory to the context of football club supporters investing in crowdfunding campaigns. The model includes four antecedents—Perceived Meaningful Contribution, Attractiveness of Return, Desired Involvement, and Social Motivation—and two mediators, Trust and Fan Loyalty. The hypotheses are developed to test the relationships between these constructs and the output variable, Willingness to Invest. The chapter also discusses rival models for comparison and the methodology for testing the hypotheses using Structural Equation Modelling. This comprehensive approach aims to provide a robust framework for understanding the motivations and behaviors of football fans in crowdfunding contexts.AI Generated
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AbstractGood quality research is only possible, when good measures are used, or else as frequently cited you suffer from: “GIGO - garbage in, garbage out” (Churchill, 1979, p. 64). Churchill (1979) established a well-known procedure for marketing research highlighting the importance of measurement development by understanding the constructs from the literature and even exceeding these.An iterative process is recommended to understand the constructs and measures and how these are linked (Boateng, Neilands, Frongillo, Melgar-Quiñonez, & Young, 2018; Churchill, 1979). Due to its nomothetic, construct-based character, Commitment-Trust Theory seems to be appropriate for this research. The initial literature review is the starting point for this process and was discussed earlier in chapter 3 by introducing the original constructs of the KMV model. The adapted constructs are explained in detail in this chapter. For this purpose, definitions for all constructs are identified and used for their operationalisation.Within this chapter, firstly, the conceptual model is presented (4.2) followed by an explanation of its development (4.3). It describes the proposed antecedents and outcome of fan loyalty and trust in a supporter crowdfunding setting. Chapter 4.4 deals with the individual constructs – antecedents, mediators and output variable. All constructs are specified and defined using the existing literature (4.4). Thereafter, the hypotheses are developed (4.5). A rival model approach is used in this thesis as recommended by Hair, Black, Babin, and Anderson (2014) and Morgan and Hunt (1994) Hence, the two rival models are briefly presented in sub chapter 4.6. -
Chapter 5. Methodology
Maria RatzThe chapter delves into the methodological framework of a study on supporter crowdfunding in German football clubs, grounded in pragmatist philosophy. It discusses the philosophical underpinnings, including ontological and epistemological assumptions, and the choice of a mixed-method design. The research design is explained through Crotty’s framework, which includes epistemology, theoretical perspective, methodology, and methods. The chapter also elaborates on the specific methods used, such as semi-structured interviews and a quantitative survey, and provides details on data collection and analysis processes. Additionally, it addresses ethical considerations and the validation of the research instruments, making it a thorough guide to the methodological choices and processes of the study.AI Generated
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AbstractBased on the development of the hypotheses and the conceptual model, this chapter explains the philosophical underpinnings, including the ontological and epistemological assumptions that influence the research design. Based on the philosophy of pragmatism, the research questions will be answered by using a mixed-method approach which was identified to be most appropriate for this study.The development of the interview guide, the questionnaire as well as the origin for the measurements is presented. In addition, information on the data collection process—including the pre-test as well as the sampling technique—are discussed. Furthermore, the data analysis is described and finally, ethical considerations complete this chapter. -
Chapter 6. Interview Analysis
Maria RatzThis chapter delves into the qualitative data gathered from interviews with senior management representatives of German professional football clubs. The interviews, structured around general financial evaluation, fan-based financing, and supporter crowdfunding, revealed common themes and insights that informed the development of a quantitative survey. Key findings include the importance of project meaning, attractiveness of return, desired involvement, and social motivation in supporter crowdfunding. Additionally, the chapter presents a 4R Matrix that categorizes the financial managers' perceptions of supporter crowdfunding as a financial alternative. These insights contribute to the understanding of supporter crowdfunding's potential and challenges within the context of professional football clubs.AI Generated
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AbstractThis chapter outlines the findings from the semi-structured interviews with senior management representatives of German professional football clubs. As mentioned in the methodology, the interview guide consisted of three main topics: general financial evaluation, fan-based financing and supporter crowdfunding. Common themes were derived from this data, mainly emerging from the notes during the interviews as well as the recordings and the transcriptions. -
Chapter 7. Survey Data Analysis
Maria RatzThis chapter delves into the statistical analysis of survey data, employing Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM) to validate hypotheses rooted in Commitment-Trust Theory. The analysis begins with a thorough examination of the dataset, including data cleansing and normality checks. The chapter then moves on to the reliability testing of constructs and the specification of the measurement and structural models. A rival model strategy is applied to compare three different models, ultimately leading to the selection of a partial mediating model that best fits the data. The chapter concludes with a summary of the empirical findings, highlighting the significant role of Perceived Meaningful Contribution in influencing Willingness to Invest. This detailed and methodical approach makes the chapter a valuable resource for professionals seeking to understand advanced statistical techniques in survey data analysis.AI Generated
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AbstractThis chapter discusses the statistical analysis of the results taken from the survey. It explains the statistics that were conducted to test the hypotheses and explains the causal relationships within the established theoretical framework based on Commitment-Trust Theory. For this analysis Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM) are applied. However, the analysis can only provide evidence for the proposed model from the sample data taken. Furthermore, SEM does not calculate the size of any effects or reveal a better model, it only tests whether the data is consistent with the proposed model and whether there is a better fit for the one or the other model (Hair et al., 2014; Kline, 2015). Therefore, the alternative model approach presented in this study will be helpful for the comparison of three different models using the goodness-of-fit measures. -
Chapter 8. Discussion
Maria RatzThe chapter delves into the statistical findings and interviews conducted to assess the use of crowdlending and crowdinvesting as alternative fan-financing instruments for German professional football clubs. It reviews significant and non-significant hypotheses, discusses the overall model, and highlights key implications from the research. The primary driver for fans' willingness to invest is found to be Perceived Meaningful Contribution, emphasizing the intrinsic, other-orientated motivation of fans to support their club. Additionally, the project-driven nature of crowdfunding is acknowledged as crucial for supporters' engagement. The chapter also explores the influence of psychological factors such as trust and fan loyalty, concluding that while trust is relevant, it does not significantly impact investment decisions. Overall, the research provides valuable insights into the motivations and behaviors of football fans in the context of crowdfunding campaigns.AI Generated
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AbstractAs mentioned in the beginning, the research objective of this study is to make recommendations to German professional football clubs concerning the use of crowdlending and crowdinvesting as alternative fan-financing instruments. Therefore, the perceptions held by clubs and fans’ willingness to participate have been analysed. This chapter discusses the implications of the statistical findings and the interviews presented in previous chapters in relation to the research objectives, the theoretical model and underlying hypotheses. It contains a critical evaluation of the results in comparison to the relevant literature in this area.Within this chapter, firstly, the significant and non-significant hypotheses will be reviewed. Secondly, the overall model will be discussed and thirdly, the key implications from the research will be outlined. -
Chapter 9. Conclusion
Maria RatzThis chapter concludes a DBA study exploring the viability of crowdlending and crowdinvesting as financial alternatives for German football clubs. The research employed a rigorous approach, including a literature review and empirical analysis, to define supporter crowdfunding and identify key motivations. Financial managers' perceptions were analyzed through interviews, revealing varying attitudes towards crowdfunding and its comparison to fan bonds. The study also surveyed fans to understand their willingness to invest, identifying intrinsic, other-orientated motivation as the primary driver. The findings have significant implications for football clubs considering crowdfunding and contribute to the existing literature on crowdfunding and relationship marketing. Future research directions are also discussed, emphasizing the need for further segmentation and cross-cultural analysis.AI Generated
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AbstractIn this final chapter of the thesis, the findings will be summarised in the context of the research questions are summarised. For this purpose, the rigorous research approach as well as the research questions and subordinated research objectives will be reviewed.Furthermore, contributions to knowledge will be outlined and discussed. More importantly within a DBA study, the managerial implications will be highlighted in detail. This adds in particular to the overall research objective which was to make recommendations for German professional football clubs with regard to the use of crowdlending and crowdinvesting as an alternative fan-based finance instrument. Finally, this chapter will point out limitations and future opportunities for research in the rapidly emerging research area of crowdfunding. -
Backmatter
- Title
- Crowdfunding In German Association Football Clubs: Identifying Supporters’ Drivers To Invest
- Author
-
Maria Ratz
- Copyright Year
- 2024
- Publisher
- Springer Fachmedien Wiesbaden
- Electronic ISBN
- 978-3-658-45882-9
- Print ISBN
- 978-3-658-45881-2
- DOI
- https://doi.org/10.1007/978-3-658-45882-9
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