Data released in Creditsafe’s Credit Worthiness Premier League, has revealed that Chelsea is set to be relegated from the 2017 Premier League – if the final standings were based on company credit ratings.
Despite having a turnover of over £335million, the football club finds itself with the third worst credit score in the Premier League, with a poor debt/asset ratio and an average of paying invoices 28 days beyond the agreed payment terms, contributing to the club’s low credit rating (45).
The credit scores have been calculated using Creditsafe’s rating model. It combines financial variables including trade payment information, financial ratios, industry sector analysis and director history to assess the risk of insolvency. The algorithm then provides a rating between 0-100 – the higher rating, the better the score.
The teams joining the 2016/17 Premier League champions in the relegation zone are Premier League new boys Newcastle United and Brighton Hove Albion, who have a credit rating of 27 and 21 respectfully.
At the other end of the table, Manchester City (96) is crowned champions just ahead of Leicester City (93), who were the champions of last year’s Credit Worthiness Premier League, with the same credit score. Manchester City who finished 6th in last year’s table with a score of 89, has taken the title this year while enjoying a second successive year of profit and a strong debt/asset ratio which has helped its credit score increase.
Rachel Mainwaring, Operations Director at Creditsafe UK said: “Unfortunately the success of Chelsea last season has not been reflected in its position in our alternative Premier League, as they slip in to the relegation zone, down from 13th in last year’s table.
“As we have seen through the release of clubs’ financial reports and the transfer fees being paid this summer, football clubs are now dealing in extremely large sums of money. With this being a trend set to continue, having a credible credit record will enable Premier League clubs to demonstrate solvency, secure funding and deliver success to the fans.”