Assessing the Financial Performance of English Football Clubs: Arsenal and Manchester City

Abstract

Football is a sport and an attractive business with a high turnover of money around it. A football club may earn much from sponsorship, ticketing, and merchandise; however, it may also suffer loss from player transferred. This study aims to analyze the financial statements of professional football clubs in England, namely Arsenal and Manchester City. This study also aims to compare these football clubs' financial performance using the Z-score Altman, Springate, and Zmijewski bankruptcy prediction model. Financial statements of the two clubs in 2015-2017 were used as a sample. The bankruptcy prediction model analysis indicates that the two clubs have a healthy financial performance condition in the three years. The three financial performance models show consistent results in assessing the financial condition that Arsenal dan Manchester City performs healthy in reporting the business. Furthermore, the comparison between Arsenal and Manchester City's financial performance indicates that Manchester City's finances are better than Arsenal's. This paper contributes to the literature by applying the bankruptcy prediction model in the football club.