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Man United sink into late payment relegation zone

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24th May 2017
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Premier League football clubs have racked up £1.3m worth of unpaid invoices, with Europa League winners Manchester United responsible for almost two-thirds of the amounts due.

Research from Creditsafe’s Prompt Payment Premier League of unpaid invoices has found that despite boasting a combined turnover of over £3bn England and Wales’ footballing elite settled unpaid invoices an average of 13 days after agreed terms.

Chief offenders on the Scandinavian credit information firm’s list are Manchester United. The League Cup holders recently finished sixth in the league, but with over £850,000 outstanding the Red Devils find themselves accounting for 66% of the Premier League’s overdue invoices.

Ranked on the number of days beyond terms clubs pay their suppliers this particular table makes for grim reading for the Premier League’s top clubs, with Arsenal, Manchester City and Liverpool all hovering around the late payment drop zone.

According to the Federation of Small Businesses late payments are estimated to cost the UK economy £2.5bn a year. Overall, £26bn is owed to UK small businesses and 50,000 are forced out of business each year as a result.

At the other end of Creditsafe’s table relegation survivors Swansea is sitting pretty at the top paying an average of one day beyond terms, with relegated Middlesbrough, Bournemouth and Burnley following close behind.

The most prompt payers of the Premier League’s top six clubs are Tottenham Hotspur and Chelsea, paying their bills in 12 and 13 days beyond agreed terms respectively.

Credit safe football league

Image: Creditsafe

The only consistency between the actual Premier League table and the prompt payment league can be found at the very bottom, with Sunderland at the foot of both after settling unpaid invoices 25 days after agreed terms.

Late payment ‘rife’

Commenting on the figure Rachel Mainwaring, operations director at Creditsafe UK said that in recent years the firm has noticed the emergence of a late payment culture.

“Even in the Premier League, with all the money that is available to its top clubs, late payment is rife,” said Mainwaring. “This is a problem for businesses dealing with wealthy Premier League clubs, who find themselves with a potentially dangerous financial shortfall.

“As this year’s Premier League season comes to an end, it’s interesting to see that lower placing clubs pay their bills the fastest. In fact, excluding Sunderland, it’s the top ranking clubs of 2017, with turnovers over £250m, that pay the latest and finish in the relegation zone of our alternative Premier League table.”

‘No clear rationale’

Speaking to AccountingWEB, football finance expert Rob Wilson of Sheffield Hallam University said that there was ‘no clear rationale’ for clubs to delay invoice payments.

“There are no problems that mean a club like Manchester United should be at the bottom of that table,” said Wilson. “Their outgoings are significant from a wages point of view, but as a percentage of their turnover they’re still relatively healthy level; there’s nothing which stands out to suggest that they should have issues with their short-term liabilities.

“Their [Man Utd’s] interest payments are relatively high, but that’s no reason to delay payments other than considering themselves a very big football club and perhaps using that to their advantage.

“When Leeds United were having problems a few years ago they had many small creditors they owed money to that ended up going out of business as a consequence of their failure, but that was more indicative of this football creditors rule that says if you go into administration you have to pay football creditors first”.

Replies (2)

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By mrme89
26th May 2017 09:01

The turnover figures are incorrect. For example, for Manchester United, you need to double the figure to be nearer the mark.

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Replying to mrme89:
Tom Herbert
By Tom Herbert
26th May 2017 09:08

Fair point - looking at Man Utd's annual reports their revenue has been over £300m for the last six years. Will check back with those responsible for the research to see how they're working out those figures...

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