A feasibility study : the possibility for a Maltese football club to develop a professional academy

Abstract

Purpose: The purpose of this study is to examine the possibility of opening a professional academy in Malta and thereby determining whether the project would be feasible and financially viable prior to establishing it. This study was undertaken because presently, there are no professional academies in Malta.

Design: This study will first analyse and review the literature written on the subject. It will then determine all the capital expenditure required to construct the school premises as well as fitting the football pitches with artificial turf. Moreover, the study includes a detailed analysis of the expected annual revenues and expenditures. Such analysis enabled the project’s financial information, such as its Profit and Loss Projections, to be attained. Subsequently, the study utilised several investment appraisal techniques to ascertain whether the project is financially feasible. Furthermore, a sensitivity analysis was carried out. This all led to the study’s conclusion and the fulfilment of the study’s objectives.

Findings: The findings of this study were used to determine the investment appraisal techniques. Such techniques revealed appealing results for the proposed project. In fact, it was found that the proposed academy had favourable financials, including a positive net present value and an IRR greater than the required rate of return Thus, just by looking at these figures, the project is both acceptable and feasible.

Conclusion: As was found in the financial feasibility, the new business will be unprofitable throughout its first four-year operation because of exigent finance costs incurred by the loan taken to finance the initial capital expenditure. However, it will be profitable in subsequent years which eventually lead to a positive result, making the project attainable.

Implications: The study suggests that the risk of investing in the proposed project is worth taking.