Equifax, the online credit information provider, warned that a number of Premiership football clubs should look closely at, “how they are scoring off the pitch as well as on it in the coming months” as many of the top football clubs owe more than the value of their assets.
The online credit information provider has ranked Premiership clubs from one to a hundred on how much a club owes to the value of their assets. The lower the score, the more likely a business is predicted to default on payments. Only nine Premier League clubs are classed as ‘solvent’ with the rest with credit ratings less than 25 making them ‘insolvent.’
Equifax External Affairs Director, Neil Munroe, believes this latest data is an important reality check for the clubs. “Football has more investment from wealthy individuals, but if there’s a sudden crisis, those individuals may struggle and this would impact on the clubs. Not even Premiership football is safe from the recession if investors decide to withdraw funds.
“We have listed 10 clubs as insolvent because they would struggle if everyone came at once to ask them for the money they owe. Of course, that is unlikely to happen, but the reality is that no firm is safe these days.”
“Every business is facing tough times and our latest analysis shows that the business of football isn’t immune,” says Munroe. “A consumer-driven business, like retailers, the football clubs might struggle in the coming months. As households tighten their belts to cope with the rising cost of living, many fans could decide to watch the match at home, instead of splashing out on a season ticket. And, of course, if they’re not at the football ground there’s less chance of them spending on other club items.
“Even some of the most successful clubs need to take a look at how well they’re scoring off the pitch to make it through the recession, in particular keeping a close eye on cash flow management and ensuring that they don’t fall foul of bad debt themselves. Arsenal prove that good money management goes a long way in times like these.”
The data should come as further proof of the necessity of Arsenal’s model of sustainability and hopefully bring more understanding to the situation that the Gunners are in regarding their transfer policy. Arsene Wenger has done a commendable job under these cicumstances where youth policy and developing players has allowed the club to better compete amid the changing and increased wealth of the Premier League, all the while getting the more harder to win.
The Equifax Table: Clubs Credit Ratings
(Insolvent clubs in red)
- Arsenal- 98
- Man Utd- 93
- WBA- 71
- Tottenham – 65
- Blackburn Rovers – 43
- Man City- 40
- Sunderland -37
- West Ham – 37
- Liverpool – 26
- Everton – 18
- Stoke City – 17
- Chelsea – 10
- Middlesbrough -7
- Newcastle United – 5
- Bolton Wanderers – 5
- Aston Villa – 2
- Wigan Athletic – 2
- Fulham – 2
- Hull City – 1
- Portsmouth – 0: No accounts filled at Companies House
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