Arsenal most solvent club in Premiership

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.
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Emirates Stadium

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)

  1. Arsenal- 98
  2. Man Utd- 93
  3. WBA- 71
  4. Tottenham – 65
  5. Blackburn Rovers – 43
  6. Man City- 40
  7. Sunderland -37
  8. West Ham – 37
  9. Liverpool – 26
  10. Everton – 18
  11. Stoke City – 17
  12. Chelsea – 10
  13. Middlesbrough -7
  14. Newcastle United – 5
  15. Bolton Wanderers – 5
  16. Aston Villa – 2
  17. Wigan Athletic – 2
  18. Fulham – 2
  19. Hull City – 1
  20. Portsmouth – 0: No accounts filled at Companies House

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13 thoughts on “Arsenal most solvent club in Premiership

  1. They still have a lot of money jack!

    This shouldn’t come as a suprise to anyone, the club is well prepared for the toughest economic situations. Anyone who thinks we should change our economic policy should look at the likes of Leeds or Newcastle – how a club can fall when they outspend their means.

  2. Man Utd still make bank as a club itself because it’s arguably the biggest club in the world with the best marketability. Arsenal though are the best operated club and really they have to be because they are the only top four side who have to pave their own way. If anything goes wrong the other clubs have their billionaires to back them up. Arsenal cannot afford that and the board knows that, which is why they hire the best to deal with their finances. It is also one of the reasons why Wenger is so shrewd in his transfers – because the club cannot spend blank cheques from rich owners. We do everything out of pocket so anyone saying we need to spend big have no idea how Arsenal operate as a business.

  3. The stats are not suspect. They are the same used by Equifax who as far as I know used the figures from each clubs accounts filed at Companies House. Anyway it says value of assets not what they have currently. Correct me if I’m wrong

  4. This has all been a bit simplified.

    Yes, Man Utd as a club have a lot of realisable assets but do not forget that the Glazer’s bought the club by BORROWING excessive amounts of cash.

    The banks own more of Man Utd than The Glazer’s do!

    So much cash was borrowed that, since the purchase, the club’s annual profits have not been enough to afford to even pay off the interest on the loans. To some minds this has lead to speculation that the Glazer’s might have to hand over shares in the club to the very hedge funds from which they borrowed some of the money.

    The club recently was forced to refinance their loans – asking the banks for more money so they could pay off the money they borrowed from hedge funds. As with any restructuring this puts the annual payments at a higher rate.

    With the refinancing completed the Glazer’s still only had enough cash to pay the ‘hedge funds’ half of the GBP 135m which they owed – effectively halving the annual interest owed to these investors to GBP 28m (down from circa GBP 63m).

    This was an important move, not least as the interest payments were owed to the hedge fund investors in the form of ‘payment-in-kind notes’ or PIKs.

    The principle behind PIKs has existed in financial markets for years but they are considered rather risky. They take their name from the fact that PIK notes or loans do not pay out at the coupon date of the bond or loan. Instead, they pay out in the form of more bonds or loans. Putting it simply if you default you owe shares in the club rather than money – VERY risky.

    Thus far, the Glazer family have remained bullish about concerns from fans and the media regarding the clubs finances and they will hope the restructuring has appeased doubters.

    I’m not convinced – in effect all they have done is borrow a greater amount from elsewhere in order to reduce the amount of risky invetment.

    Man Utd’s annual interest payments will fall approximately GBP 90 million to GBP 62 million, but overall borrowings will RISE another GBP 80 million to GBP 660 million.

    The REAL question is how long can they continue to spend more than they owe in interest before the banks get really fed up?

    As for Liverpool how they are not classed as insolvent I will never know…but that’s another story.

    It’s thrilling times we live in – the big 4 as we know it could be totally screwed in a couple of years but The Arsenal will still be sitting pretty.

  5. Yeah it’s simplified hence the quote: “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.”
    However Man United are not in as good a position as it shows as pointed put by Jonny while Liverpool should be insolvent or could be when they find out about their loan deal. Even Villa with their rich owner who is 15th on the most richest gut in premiership yet they are so low.

  6. There has been a lot of confusion about the figures on show.

    The report was based on each club’s respective credit ratings. What has to be remembered is that if you do not borrow, your credit rating automatically drops to zero. This is why clubs like Hull, Fulham and Wigan – all of whom are in the black – appear to have such poor ratings, whilst the likes of Arsenal and United – clubs in heavy debt – have such high ratings.

  7. I love very much Arsenal club .
    But some times not winner at this time I am very sad.please try to until winner club in the world.
    Thanks!

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