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Chelsea and Liverpool among clubs on credit agency blacklist
(Peter Byrne/PA Wire)
Simon Goodley
6 COMMENTS
RECOMMEND? (5)
Seventy per cent of Barclays Premier League clubs have had their credit ratings “suspended”, an investigation by The Times can reveal.
Reports seen by this newspaper and generated by Riskdisk, a credit checking agency, reveal that 14 of the top-flight sides have been blacklisted, essentially meaning that companies trading with them are advised to withdraw credit terms.
The data — calculated using a range of financial metrics including payment history, court records and information contained on company balance sheets — does not take into account whether a club have a wealthy benefactor or are owned by a cash-rich holding company so the line-up contains some surprising entries.
The clubs with a “suspended” rating are Aston Villa, Birmingham City, Bolton Wanderers, Burnley, Chelsea, Everton, Fulham, Hull City, Liverpool, Manchester City, Portsmouth, Stoke City, Wigan Athletic and Wolverhampton Wanderers.
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Rob McLaughlin, the director of Riskdisk, said: “The ratings do not predict what a wealthy backer may do. They are based on information available from sources such as Companies House and from the courts. There is no assumption made that a shareholder may put more money in.”
In addition, clubs including Chelsea and Bolton have County Court Judgments on their records, according to the Riskdisk reports, which will adversely affect their score.
Tottenham Hotspur are not given a rating of any kind because of technical accounting reasons concerning a high level of intangible assets on the club’s balance sheet. In this case intangible assets relate to how the club value their players.
While the analysis seen by The Times is proprietary and will differ from ratings agency to agency, the research highlights the creaking finances of many Premier League clubs after the crisis at Portsmouth, who became the first Premier League side to go into administration last month. It also illustrates the different commercial basis on which football is run when compared with the rest of business.
The discovery of the credit blacklist, which applies to clubs’ operating rather than holding companies, is mirrored by research by another credit-ratings firm, Experian, which concludes that five Premier League sides are on its “financial critical” list, although the identity of the clubs is unclear. In January the agency blacklisted eight clubs.
Joe Myers, the head of commercial credit at Experian, said: “We do not recommend credit to companies in the maximum risk group.”
Many of the blacklisted clubs claimed to be unaware of their ratings and insisted that the score does not affect their day-to-day business operations. Others refused to comment.
When asked about their “suspended” credit rating, Everton said: “That information is commercially sensitive. We simply do not discuss such matters with the media.”
Tottenham said: “The club has very good relationships with all its suppliers and business partners, and would certainly never need to provide up-front payments. Equally, Tottenham is very highly rated by financial institutions as a result of its prudent financial management, very strong balance sheet and substantial levels of cash generation. The club takes a conservative view when valuing its intangible assets and therefore the net present value of the playing squad is also substantially understated.”
Manchester United and Arsenal are considered “good risks” to whom it is “OK to offer your best terms” in the reports, as are Blackburn Rovers. Sunderland are rated a “normal risk” but suppliers to West Ham United are warned that the club are “a little higher than average risk. Proceed with caution.”
Matt Grayson, the head of marketing and communications of Wolves, whose owner, Steve Morgan, has injected £30 million into the club’s holding company, said: “We are one of the most financially stable clubs in the Premier League, with a significant amount of cash in hand which sits on our balance sheet.”
Clubs with strong parent companies can provide “parental guarantees” to lessen credit risks.
Riskdisk, which was founded 11 years ago and employs more than 100 people, supplies almost 20,000 businesses with monthly credit reports on about 50,000 UK companies.
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6 Comments
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Jim Kent wrote:
Man City, owned by one of the wealthiest groups in the world, have had their credit rating suspended? That makes a ton of sense. Brilliant. I can see why so many banks and credit card companies nearly went under.
March 26, 2010 12:17 PM GMT
RECOMMEND? (4)
Sir I wrote:
Spurs don't even have a rating. Sums them up really!!
March 26, 2010 11:57 AM GMT
RECOMMEND? (1)
bob seivwright wrote:
To be fair, a lot of the clubs on that list are well known to be operating on dodgy ground. The trouble is they compete in a market with massive inequality, such as two teams with huge stadiums with high ticket prices and two with money-is-no-object backers. It's no wonder that they are not viable concerns given the odds stacked against them.
March 25, 2010 5:13 PM GMT
RECOMMEND? (1)
JOHN GILL wrote:
This is just, what’s a polite phrase? It’s nothing more than some opportunistic PR from one of the growing number of credit assessing companies.
We will soon get stories from injury lawyers commentating on the compensation that footballers could get from tackles in the workplace and stress disorder created by playing for a nasty manager.
Good grief, the nanny state.
March 25, 2010 3:06 PM GMT
RECOMMEND? (5)
Rushies Dad wrote:
John Gill - how sad are you - getting up early and racing to the computer to see what the latest news about LFC is. 6.18 am!!!! Ha ha ha ha.
March 26, 2010 7:35 AM GMT
RECOMMEND? (7)
JOHN GILL wrote:
liverpool fc blacklisted.They will be getting the electrics turned off for non payment next.
March 26, 2010 6:18 AM GMT
RECOMMEND? (3)
(Peter Byrne/PA Wire)
Simon Goodley
6 COMMENTS
RECOMMEND? (5)
Seventy per cent of Barclays Premier League clubs have had their credit ratings “suspended”, an investigation by The Times can reveal.
Reports seen by this newspaper and generated by Riskdisk, a credit checking agency, reveal that 14 of the top-flight sides have been blacklisted, essentially meaning that companies trading with them are advised to withdraw credit terms.
The data — calculated using a range of financial metrics including payment history, court records and information contained on company balance sheets — does not take into account whether a club have a wealthy benefactor or are owned by a cash-rich holding company so the line-up contains some surprising entries.
The clubs with a “suspended” rating are Aston Villa, Birmingham City, Bolton Wanderers, Burnley, Chelsea, Everton, Fulham, Hull City, Liverpool, Manchester City, Portsmouth, Stoke City, Wigan Athletic and Wolverhampton Wanderers.
RELATED LINKS
Premier League’s credit defence may be insecure
Everton fit to burst into fourth place
Premier League previews: Arsenal turn to veterans
Rob McLaughlin, the director of Riskdisk, said: “The ratings do not predict what a wealthy backer may do. They are based on information available from sources such as Companies House and from the courts. There is no assumption made that a shareholder may put more money in.”
In addition, clubs including Chelsea and Bolton have County Court Judgments on their records, according to the Riskdisk reports, which will adversely affect their score.
Tottenham Hotspur are not given a rating of any kind because of technical accounting reasons concerning a high level of intangible assets on the club’s balance sheet. In this case intangible assets relate to how the club value their players.
While the analysis seen by The Times is proprietary and will differ from ratings agency to agency, the research highlights the creaking finances of many Premier League clubs after the crisis at Portsmouth, who became the first Premier League side to go into administration last month. It also illustrates the different commercial basis on which football is run when compared with the rest of business.
The discovery of the credit blacklist, which applies to clubs’ operating rather than holding companies, is mirrored by research by another credit-ratings firm, Experian, which concludes that five Premier League sides are on its “financial critical” list, although the identity of the clubs is unclear. In January the agency blacklisted eight clubs.
Joe Myers, the head of commercial credit at Experian, said: “We do not recommend credit to companies in the maximum risk group.”
Many of the blacklisted clubs claimed to be unaware of their ratings and insisted that the score does not affect their day-to-day business operations. Others refused to comment.
When asked about their “suspended” credit rating, Everton said: “That information is commercially sensitive. We simply do not discuss such matters with the media.”
Tottenham said: “The club has very good relationships with all its suppliers and business partners, and would certainly never need to provide up-front payments. Equally, Tottenham is very highly rated by financial institutions as a result of its prudent financial management, very strong balance sheet and substantial levels of cash generation. The club takes a conservative view when valuing its intangible assets and therefore the net present value of the playing squad is also substantially understated.”
Manchester United and Arsenal are considered “good risks” to whom it is “OK to offer your best terms” in the reports, as are Blackburn Rovers. Sunderland are rated a “normal risk” but suppliers to West Ham United are warned that the club are “a little higher than average risk. Proceed with caution.”
Matt Grayson, the head of marketing and communications of Wolves, whose owner, Steve Morgan, has injected £30 million into the club’s holding company, said: “We are one of the most financially stable clubs in the Premier League, with a significant amount of cash in hand which sits on our balance sheet.”
Clubs with strong parent companies can provide “parental guarantees” to lessen credit risks.
Riskdisk, which was founded 11 years ago and employs more than 100 people, supplies almost 20,000 businesses with monthly credit reports on about 50,000 UK companies.
YOUR COMMENTS
6 Comments
(Displaying 1-6)
Order By:
Newest first Oldest first Most recommended
Jim Kent wrote:
Man City, owned by one of the wealthiest groups in the world, have had their credit rating suspended? That makes a ton of sense. Brilliant. I can see why so many banks and credit card companies nearly went under.
March 26, 2010 12:17 PM GMT
RECOMMEND? (4)
Sir I wrote:
Spurs don't even have a rating. Sums them up really!!
March 26, 2010 11:57 AM GMT
RECOMMEND? (1)
bob seivwright wrote:
To be fair, a lot of the clubs on that list are well known to be operating on dodgy ground. The trouble is they compete in a market with massive inequality, such as two teams with huge stadiums with high ticket prices and two with money-is-no-object backers. It's no wonder that they are not viable concerns given the odds stacked against them.
March 25, 2010 5:13 PM GMT
RECOMMEND? (1)
JOHN GILL wrote:
This is just, what’s a polite phrase? It’s nothing more than some opportunistic PR from one of the growing number of credit assessing companies.
We will soon get stories from injury lawyers commentating on the compensation that footballers could get from tackles in the workplace and stress disorder created by playing for a nasty manager.
Good grief, the nanny state.
March 25, 2010 3:06 PM GMT
RECOMMEND? (5)
Rushies Dad wrote:
John Gill - how sad are you - getting up early and racing to the computer to see what the latest news about LFC is. 6.18 am!!!! Ha ha ha ha.
March 26, 2010 7:35 AM GMT
RECOMMEND? (7)
JOHN GILL wrote:
liverpool fc blacklisted.They will be getting the electrics turned off for non payment next.
March 26, 2010 6:18 AM GMT
RECOMMEND? (3)