Perhaps no industry is subject to more uncertainties and contingencies than sports. Even if an organization plans its budget, signs its players, and manages its operations flawlessly, in most cases its bottom line results will hinge on the on-field performance of the team. The public loves a winner and is willing to pay to see them. There is no amount of financial or accounting skills that can substitute for success between the lines, on the court, or on the ice. Fans' fickle behavior cannot be accounted for.
Attendance can fluctuate markedly from year to year.
Gate revenue must be recorded in the period in which the fans attend games, even if tickets are purchased well in advance in accordance with a season ticket plan, and matched against such period's costs. In addition, revenues from concessions will fluctuate with attendance. It is not unusual, however, to incorporate provisions of a broadcasting transaction so as to justify the immediate recognition of advances made at the beginning of the contract period. Such contracts further complicate comparibility. The Risks of Losing The road has been far from smooth when it comes to accounting for uncertainties and contingencies in the sports world.