Press Release

RECESSION HITS SPL CLUBS

Equifax reveals the Credit Ratings of the Scottish Premiership Football Clubs

www.equifax.co.uk

London, 22nd June 2009 - As clubs prepare for the opening of the transfer window on July 1st, leading business information expert, Equifax, is warning that some Clubs could find it hard to source new funding, based on their current credit scores. In a review of credit ratings for the SPL, conducted using the Equifax ScoreCheck service, a quarter of the clubs were listed as insolvent. However, a number of them do seem to be performing better than their English equivalents.

Despite preparing to splash the cash on new players, many of the top football clubs already owe more than the value of their assets. As such, Equifax External Affairs Director, Neil Munroe, believes this data could provide an important reality check for the clubs.

"Our Equifax ScoreCheck review of the SPL credit ratings certainly rings some warning bells about the Scottish clubs who could be facing financial difficulty for the next season. Not even Premiership football is safe from the recession if investors decide to withdraw funds.

"We have listed 3 clubs as insolvent because they would struggle if everyone came at once to ask for the money they owe. Of course, that is unlikely to happen, but like most other sectors of the UK economy it is likely to be a difficult year ahead for the nation's favourite sport. Also, with the possibility of Setanta going into administration, the smaller clubs may find it increasingly difficult to make payments and remain solvent."

St Mirren, despite narrowly avoiding relegation this season, achieves full marks (100) in its credit score along with newly promoted St Johnstone. However, although finishing the season third in the SPL, Hearts has a score of zero and is therefore listed as insolvent. Hamilton Academical also fared badly, scoring just two points. In general, the lower the score the more likely a business is to experience difficulty meeting its financial obligations.

When compared with English Premier League clubs, the performance of Clubs in the SPL is, however, quite positive. Just one team scored 100 - Manchester United. And 11 teams had such low scores that they are technically classed as insolvent.

Clubs rely on revenue streams from ticket sales and merchandising. However, consumers are still not spending** as much as they have been, which can impact heavily on a club's bottom line. Indeed, a recent survey*** by Virgin's Inflation Index, which shows the average cost of a shirt across all leagues is £27.50 found that 19% of football fans said they would not buy as much merchandise next season. The relatively high cost of annual Season Tickets could also be an issue. Although a number of clubs have placed a freeze on prices for next season, the average cost for an annual season ticket is still around £300.

Munroe concludes, "Every business is facing tough times and our analysis shows that the business of football isn't immune. As a consumer-spending 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 in the SPL 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. A loss in revenue from season tickets, corporate hospitality and commercial sponsorships will all have a major impact on a club's financial status, with many potentially facing a tough 2009/2010 season."

EQUIFAX'S SCOTTISH PREMIER LEAGUE CREDIT RATINGS TABLE

Club	Score out of 100	Technically Insolvent
St. Johnstone	100
St. Mirren	100
Hibernian	87
Rangers	84
Celtic	79
Aberdeen	78
Kilmarnock	71
Falkirk	57
Dundee United	42
Hamilton Academical	2	Yes
Hearts	0	Yes
*Motherwell	0	Yes

*Motherwell Football and Athletic Club Limited is a company voluntary arrangement, so automatically given zero points and insolvency rating.

EQUIFAX'S PREMIERSHIP CREDIT RATINGS TABLE

Club	Score out of 100	Technically Insolvent

Man Utd	100
Arsenal	98
WBA	78
Blackburn Rovers	68
Tottenham	50
Sunderland	37
West Ham	37
Manchester City	27
Liverpool	26
Fulham	20	Yes
Everton	18	Yes
Newcastle Utd	12	Yes
Aston Villa	10	Yes
Chelsea	10	Yes
Middlesbrough	7	Yes
Bolton Wanderers	5	Yes
Portsmouth	2	Yes
Wigan Athletic	2	Yes
Stoke City	2	Yes
Hull City	1	Yes

Equifax ScoreCheck
Equifax ScoreCheck delivers a dynamic score for all limited companies based on all the information available. It examines a number of financial indicators, which build a complete picture of a company's risk status. These include:

Accounts Data
Age of Accounts
Trading Stability
Profitability
Working Capital
Gearing
Legal and Court Information

Guide to ScoreCheck Grades
ScoreCheck calculates risk based upon a scale of 0 to 100; the lower the Score the higher the credit risk.

ScoreCheck Ratings & Grades
95 - 100 A+
85 - 94 A
80 - 84 A-
75 - 79 B+
70 - 74 B
65 - 69 B-
60 - 64 C+
55 - 59 C
50 - 54 C-
45 - 49 D+
40 - 44 D
35 - 39 D-
30 - 34 E+
25 - 29 E
20 - 24 E-
15 - 19 F+
5 - 14 F
0 - 4 F-

ScoreCheck codes
A - Very Good Score
B - Good Score
C - Higher Than Average Score
D - Average Score
E - Lower Than Average Score
F - Low Score

** Spending by British households fell at the fastest rate since 1980 in the first three months of the year, official figures showed (May 22nd 2009) Data from the Office for National Statistics (ONS)

*** Virgin Money Survey of 4,000 fans across 125 clubs including all premiership clubs

For further press information please contact: Cecile Stearn, Jenny Staniforth or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: margot@harrisonsadler.com