Risk analysis
Risks are factors that when an organization or a business is exposed to may lead to failure to
achieve its objectives. This can be in terms of likelihood and consequences. Risk management on
the other hand refers to the steps, be it cultural or structural, taken by organizations or businesses
to mitigate the associated risks. (Bogodistov and Wohlgemuth, 2017)
This report discusses the likelihood of the occurrence of adverse events and the potential of such
to cause harm to the economic, social and financial values of the Coast Stadium. This is
purposed to improving safety and management of potential risks in the facility.
Central Coast stadium is a sporting entertainment and community events center located in the
Gosford suburbs overlooking the Brisbane water. The facility was built in the year1999 and
launched in the year 2000 and has seated capacity of twenty thousand and fifty-nine people. The
facility is currently the home ground to the Central Coast Mariners which plays in the national
A- league football competition. The facility has rectangular set up with the seating occupying
three of the four sides leaving the side overlooking the Brisbane water open for view.
(yourvoiceyourcoast.com 2021)
The facility is owned and managed by the Central Coast council. Other stakeholders include the
Central coast community and the tenant team Central Coast Mariners.
The facility generates revenue through various of sources including the gate tickets sold through
ticket agent Ticketek. In addition, the stadium has facilities such as three corporate lounges with
thirty-nine premium seating and fifty-eight open air corporate enclosures, six bars and food
outlets, public toilets, parking lots and a field size of 133m by 82 m. (yourvoiceyourcoast.com)
The stadium is located in the corner of Dane drive and the Central Coast Highway and
approximately 300 m from the Gosford train station that connects up to Sydney and Newcastle.
(yourvoiceyourcoast.com)
Risk analysis
Risk name
Risk impact
Risk rating
risk severity
Medium
Risk
likelihood
60%
Strategic risk
Moderate
Exposuremoderate
Compliance risk
Low
5%
Very low
Exposurelow
Reputational risk
High
80%
high
Exposurehigh
Human risk
Medium
60
moderate
Exposuremoderate
Political risk
High
80%
high
Exposurehigh
Natural risk
High
85%
Very high
Exposurevery high
Mitigation
measures
Upgrade stadium
into modern
entertainment hub
this to entice the
tenant to continue
using the facility
and attract more
hirers
Ensure all
regulatory
requirements in
terms of capacity,
environmental
guidelines and
health requirements
such as covid
prevention
guidelines are met
Beef security
during events to
control unruly
behaviors of fans
providing safety for
customers
Avail First Aid
services,
employment of
medical staff in the
facility.
Standardize pricing
to avoid
overcharging; avoid
fluctuation of ticket
pricing and control
food and beverage
pricing in the bars
and food joints in
the facility
Adopt insurance
cover to cushion
against destruction
of structures and
equipment as well
Risk analysis
Technical risk
High
80%
high
Exposurehigh
Financial risk
Medium
60%
Moderate
Exposuremoderate
Procedural risk
Medium
60%
Moderate
Exposuremoderate
Project risk
low
20%
Low
Exposurelow
as medical
coverage for staff.
Adopt modern
technologies in
terms of advances
in lighting of the
facility, screens and
seats.
Increase equity, the
council should
leave management
into private hands
to maximize on
revenue collection.
Increasing the
quality of services
in the facility.
Perform internal
and external
auditing
Carry out planned
improvements this
will prevent
crushing of
finances.
-
Strategic risks- business normally operate according to plan model of which they have to comply
to in order to achieve the desired goals (Songling, Ishtiaq and Anwar, 2018) The set strategies
should therefore be feasible and adaptable to the changes in the environment. Strategic risks may
occur either in the scenario where a competitor comes in an environment, undercuts the existing
business strategies therefore offering consumers better options than the existing businesses or
when the consumer preferences have changed thus no longer needs the service or product
provided by the business (Brown, 2004). For instance, if another stadium is to be set near the
Central coast stadium this will post strategic risk to the existence of the Central Coast Stadium.
Study by Delotte and Touche LLP research on one hundred global companies concluded that the
largest declines were involved sixty-six companies that pointed out to strategic risk as the major
type of risk. (Deloitte The future of strategic risk management in financial services, 2021)
Environmental risks – these are risks associated with natural occurrences such as floods,
earthquakes, pandemics, storms and adverse events caused by various human activities which for
Risk analysis
instance mining may lead to landslide. (Bigler, Babendreier, and Kuhlmann, 2006) Such may lead to
destruction of structures in the facilities resulting into catastrophic loses which may be difficult
to recover from. Disease outbreaks may prevent consumers from accessing these services (Bigler,
Babendreier and Kuhlmann, 2006). Mitigative measures by government to curb the effects of the
disasters such as lockdowns affect the operations of most businesses such as the outbreak of
COVID-19 Corona virus that has led to overall decline in worldwide business especially in
sports where stadium capacity has been reduced in order to comply to the social distancing
regulations.
Operational risks – these are risks brought about by inefficiency or breakdown in the internal
processes, people or system. They depend on how business operate internally. (Schwarzkopf,
2006). They include destruction of physical assets due to poor maintenance or vandalism, process
management errors such as accounting and data entry errors, health and safety policy, data theft
or hacking and fraud (Lai and Samad, 2010). This risk puts the business in inconveniencies and
can even lead to the collapse of the business. The impacts of this risks losses associated with
dealing with system failure, damaged reputation as well regulatory overhead (Lai and Samad,
2010).
Compliance risk and regulatory risks – this are risks associated with the legislations and
regulations set by regulatory bodies that can sanction business (Callahan and Soileau 2017). This
may relate to the regulation related to the environmental safety as in the relation to pollution, the
disposal of waste and general environmental protection. Others may include health regulations,
labor regulations among others. These risks can have general impacts such as increased cost of
operations such as licensing fee, illegalize a business operation say in the case of new regulation
on riparian land use may make business in such areas to be illegal (Schwarzkopf, 2006).
Compliance risk can impact business in various ways including court fines, damaged reputation
or even asset loss. (Schwarzkopf, 2006).
Financial risks – these are risks associated with instability, fluctuations in the stock market,
interest rate and currencies (Bogodistov and Wohlgemuth, 2017). This kind of business risk is
categorized as project, liquidity, market and credit. Market risks are financial risks that relates to
the likelihood of incurring losses due to factors such as increased raw material cost, increased
interest rate and fluctuation in currency values (Gatzert and Martin, 2015). Credit risks are likely to
be incurred due to the possibility of defaulting payment by the consumer to the business or the
business to its creditors and lenders (Gatzert and Martin, 2015). Project or operational risks are
associated with financial losses resulting from unintended effects of policies, procedures or
systems in the business (Lai and Samad, 2010). Liquidity risks are likely to be met due to the
inability to solicit short-term financial demands necessary for business transactions (Lai and
Samad, 2010). Financial risks have the impact of affecting the ability to fulfill its financial
obligations (Lavanya & Malarvizhi, 2008).
Risk mitigation strategies
Strategic risks – these are risks associated mostly by the change in consumer demand (Songling,
Ishtiaq and Anwar, 2018). In this case, say a hirer of the facility opting for another facility with
Risk analysis
more modern amenities than the Central Coast stadium, say to the more funded NSW and
privately owned stadiums. The mitigation strategy for this kind of risk may involve transference
(Lai and Samad, 2010). e, where the council shift this risk by conferring management and
ownership of the stadium to the private sector. This will enable high level management and
transformation of the Central Coast Stadium into a more modern and sophisticated facility that
can compete against other well-funded stadia. Recently, the council conducted a strategy plan
involving thoughts of the community on the state of the stadium, and is suggested that
management should be conferred to private managers in order to maximize on revenue.
Operational risks – these risks arise from the inefficiency or failures of system within the
business. they can be mitigated through the strategy of control (Callahan and Soileau 2017). This
focuses on detecting the causes of unwarranted events prior to the consequence, that is to identify
the root causes of failures that can be avoided. Such controls focus on management and decision
making processes (Mikes, 2011). The controls should focus as well in the employees conduct as
well as the modes of acquisition of supply. Auditing to detect fraud and accountancy errors may
apply as one of the controls (Mikes, 2011).
Compliance and regulatory risks – these arise from rules and regulations set to control operation
of business (Fuller, Junge and Dvorak, 2021), they can be mitigated by the control strategy
(Callahan and Soileau 2017). This takes into account the regulatory and compliance risks identified
and accepted and then work to eliminate the impact of such risks for instance the Central Coast
Stadium in response to COVID-19 regulations has taken control to meet the health requirements
in order to operate as COVID-19 safe thus avoiding impacts like
closure.(yourvoiceyourcoast.com)
Financial risks –these risks are mitigated through acceptance, avoidance, control or transference
to cost (Callahan and Soileau 2017). In acceptance to risk impacting cost the strategy is applied to
identify risk to project budget hence lowering risks of over budget (Lai and Samad, 2010). In
avoidance to risk impacting cost all anticipated costs are accounted for so that consequences of
over budgeting are avoided. In controlling risks to cost, focus on management to find flaws in
funding of the project. In transference the consequences regarding cost include holding of
accountants accountable for budgeting issues.
This report focuses on the risks associated with the sports facility business and the impacts of
such risk on the survival and management of such facilities. The Central Coast Stadium as a case
study, demonstrates the possible risks and appropriate mitigation measures that are worth
considering in the sports facility management.
Risk analysis
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Risk analysis
Risk analysis