Creation of the first extra-financial rating agency for soccer clubs

Ginkyo announces the creation of Ginkyo ratings, the first extra-financial rating agency for soccer clubs

By Pierre Caillet, Director of Methods (Ginkyo Ratings), September 15, 2018

Ginkyo, an independent company that evaluates the intangible capital of companies, announces the creation of the first extra-financial rating agency for soccer clubs whose analysis systematically includes the Human Capital of players. As such, the rating methodology developed (Thesaurus-Football®) takes into account a rigorous and detailed analysis of the physical, technical, tactical, mental, relational, potential and health capital of soccer players. This methodology is in line with the approach initiated in 2011 by Christine LAGARDE, Minister of Economy and Finance.

The creation of the Agency benefits from the support of major institutional players such as the Direction Générale des Entreprises (DGE - Ministry of Economy and Finance), the Finance Innovation (FI) global competitiveness cluster, the Observatoire de l'Immatériel (OI), and the Fondation pour l'Université de Lyon. It is also supported by two partners of excellence: the Olympique Lyonnais club, elected best training center for the 6th consecutive year in France, and the Camille Jordan Institute (mathematics research laboratory), which is among the leading European mathematics laboratories. Members of the institute regularly receive prestigious awards, such as the Fields Medal awarded to Cédric Villani in 2010.

All of these partners participated in the definition of the standard for the evaluation and accounting of the extra-financial and financial value of the Human Capital of soccer clubs - Thesaurus-Football®.

The Agency addresses the managers and shareholders of clubs who are aware that the Human-Player Capital, in particular from the training center, is under-valued in the financial statements and that this represents a real brake for the investment, the sporting and economic competitiveness of the club.

According to Pierre Caillet, founder and President of Ginkyo, "In the field of finance, training clubs play with only 20% of their workforce. The rating of the Human-Player Capital has therefore become essential."

Mr. Stephano Zambon, President of the Collège des Experts de l'Immatériel (C.E.I.) mentions that "The Thesaurus-Football® standard document aims to be a world first in terms of evaluation and accounting of the Human-Player Capital of a soccer team; it is recognized on a methodological level, particularly in its qualitative part.

Mr. Thierry Sauvage, Managing Director of Olympique Lyonnais, "We need to talk to our investors who do not sufficiently take into account unrealized capital gains. With Thesaurus-Football®, we have a solid reference system recognized by the Ministry of Economy and Finance to give additional visibility and security to banks and investors.

Mr. Pascal Jordan, Chartered Accountant and Statutory Auditor "The IC-Football Report® makes it possible to refine the accounting presentation of "real, unrecognized" elements without calling into question the history of the rules applied. It thus provides additional information, aimed at correcting the shares of non-activatable and therefore non-activated values, in order to come closer to a "market value" asset balance sheet, which is the only way to provide relevant information to stakeholders.

Mr. Jo-Michel Dahan, Deputy Director of the General Directorate of Enterprises (Ministry of Economy and Finance) "It has indeed become apparent that the balance sheet of a soccer club does not reflect its true value because the accounting standards in force do not allow for the valuation of assets produced, in particular within its training center. The DGE supports the work on the theme of intangible assets and recognizes in particular the interest of the Thesaurus-Football® methodology for the soccer community, insofar as this method contributes to a better economic and financial evaluation of soccer clubs."

Mr. Vincent Ponsot, Deputy General Manager of Olympique Lyonnais recommends Ginkyo Ratings: "Nice is already doing it. The others also have an interest in it. Perhaps even more so than us, because they do not own their stadiums like Olympique Lyonnais, and the players' assets are therefore more important to them in proportion to the value of the entire club.

A recognized methodology
Thanks to four years of R&D developed by Ginkyo, this new agency has a robust, transparent and recognized methodology:
It allows to:
- Enrich the club's financial communication with important and significant information on the fair financial value of Player Capital
- Secure the club's relations with its shareholders who do not sufficiently take into account the latent capital gains.
- Demonstrate the club's professionalism and its ability to create value and future cash flow through its training center and trading activities.
Open governance

In order to provide investors with reliable information and to avoid any risk of conflict of interest, Ginkyo Ratings is working to define a diversified governance model. In this context, the agency could integrate the societal dimension of its mission: to value and promote learning through sport.

About Ginkyo Ratings
As an independent third party expert, based on a binding reference framework and a recognized methodology:
- We assess and measure the fair financial value of soccer clubs' player capital
- We integrate the fair value of player capital into the financial statements of football clubs
- We provide our clients with tools to assist in strategic management and investment decisions.

www.ginkyo-ratings.com


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