Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Half Premier League ‘technically insolvent’

Posted by John Beech on August 15, 2009

The latest report from Equifax on the financial state of the clubs in the Premier League (as reported at 1) makes extremely depressing reading.

Details are shown below. The Equifax score is based on accounts data, age of accounts, trading stability, profitability, working capital, gearing, and legal and court information.


Club
Score
out of 100
Aug 2009
Difference compared to May 2009
Technically Insolvent
as at Aug 2009
Manchester Utd 100 SAME
Arsenal 98 SAME
Birmingham 72 N/A
Wolverhampton 70 N/A
Blackburn Rovers 68 SAME
Liverpool 67 UP
Tottenham 50 SAME
Sunderland 45 UP
West Ham 37 SAME
Manchester City 27 SAME
Fulham 20 SAME Yes
Everton 18 SAME Yes
Aston Villa 10 SAME Yes
Chelsea 10 SAME Yes
Bolton Wanderers 5 SAME Yes
Portsmouth 2 SAME Yes
Wigan Athletic 2 SAME Yes
Stoke City 2 SAME Yes
Burnley 2 N/A Yes
Hull City 0 DOWN Yes

This gives an average rating of 35.25, an improvement on May’s 30.88 for the continuing seventeen clubs. The improvement is thus largely attributable to the promoted Birmingham and Wolverhampton being being significantly more credit worthy than the existing clubs, among whom only Liverpool and Sunderland showed an improvement.

All in all, it is a picture of a sector in deep distress. Far too many clubs are dependent on injections from their ‘benefactors’ rather than on sustainable business models, and are therefore in vulnerable positions. The current difficulties Portsmouth are facing in changing ‘benefactor’ exemplifies this malaise.

This report simply adds fuel to the flames of concern expressed by UEFA regarding English club finances (2). How often does the Premier League have to be told it isn’t wearing any clothes before it takes some action to set itself in order?

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