Sea ports and the related areas have become the center of modern transport systems nowadays. For each country, including the Republic of Croatia, the development of port and port area determines the development of economic activities with multiplier effects on the development of the whole economy. Therefore, the aim of every state is to encourage the development of sustainable and competitive port system with legislation and strategic documents. The establishment of state port authorities in Republic of Croatia is one of the measures which are necessary to create economic, legal and theoretical basis for the development of the national port system and individual ports as a part of whole port system. The management of ports and organization and structure of the port authorities as administrative body depend on the geographical features of ports system, the ownership structure and the importance of a port for the whole community. Through the management of ports, the owner achieves the strategic goals of maritime development, while the economic functions within the port area are given to the concessionaires or the private sector, which is in line with the best practice of maritime countries. Thus, on the one hand, the port authority is public institutions, on the other hand, is the operator who operate under the basic economic principles to provide appropriate services and make a profit. In this context, the financial sustainability of the port authority is one of the key factors determining the extent to which the port authority can effectively operate without the need for state subsidies. Given the above, the question is how to redesign the sea port management model to make port authorities profitable. The proposed model in this dissertation follows the knowledge of previous empirical research on business efficiency and financial sustainability of port authorities and the impact of corporate governance on increasing business efficiency. The business efficiency is measured by the economic indicators and the financial sustainability by the port authority's income from state budget.