Welcome to the second issue of S&P Capital IQ’s Credit Football League report. In the last issue, published in October 2014, we explained how ‘following the team’ has taken on a whole new meaning as the share prices and financial standings of football clubs are increasingly monitored. Whether it’s a bank lending to a club or would-be investors buying a stake in clubs directly, the football industry is fast emerging as an investment sector in its own right.
Now that the 2014/2015 European football season has drawn to a close, we have reassessed the credit and financial risks of the world’s largest football clubs by updating our virtual Credit Football League of 44 European football teams and looking at how the original rankings have changed since September 2014. As in our previous report we use our proprietary peer ranking methodology, Credit Health Panel®, to determine the relative credit health of each club in the league. Clubs such as Manchester United, Arsenal, Bayern Munich, and Juventus are all included in our ranking.
In this issue we have also introduced a new proprietary statistical-based methodology, ‘Probability of Default Fundamentals’ (PDFN) to assess an additional nine privately-owned and one publicly-owned clubs. Our report now includes a separate credit analysis of Chelsea FC, FC Barcelona, Real Madrid FC, Liverpool FC, PSG FC and three Latin American clubs.