Skip to main content

Record profit at Arsenal

Arsenal's 2017/18 accounts show profit before tax increased from £45m to £70m, despite revenue falling £35m (8%) to £388m, mainly due to participating in the Europa League rather than more lucrative Champions League, as profit on player sales surged £113m to £120m. Profit after tax improved from £35m to £57m.

£70m profit before tax is not only a record for the club, but is the highest profit reported to date in the 2017/18 Premier League, just ahead of Chelsea £67m, followed by Manchester United £26m and West Ham £18m. In fact it is the third highest profit ever registered in the Premier League. Judging by vox pop comments by Arsenal fans before last night's cup game, many of them would like to see some of this profit invested in the team.

The last time Arsenal made a loss was in 2002, so they have recorded profits for 16 years in succession. Even so, the authoritative Swiss Ramble notes, 'However, 2018/19 is likely to see a large loss, due to lack of Champions League and no major player sales.'

The £120m profit on player sales is actually the highest ever made by an English club. Excluding players sales and property development, there would have been a £55m loss.

All the club's revenue streams decreased: broadcasting was £19m (9%) lower at £180m, mainly due to lower Europa League distributions; commercial dropped £10m (9%) to £107m; match day declined by 1 per cent to £99m. Commercial revenue fell largely because of penalty clauses in sponsorship deals for not being in the Champions League. Since 2015 the club's commercial income has basically been flat (only up £4m), while this important revenue stream has grown significantly at the other leading clubs. The club will have improved commercial deals from 2019/20: extension of Emirates sponsorship at £40m (up £10m) and Adidas kit supplier (reported £60m vs. Puma £30m).

The importance of match day revenue to Arsenal is very clear, as shown by 25% of their total revenue coming from this category. This is much higher than any other leading club.

Tottenham Hotspur are now only £9m behind Arsenal in terms of revenue, as their revenue increased £73m in 2017/18 to £379m, while Arsenal declined £35m to £388m, producing a net swing of £108m. The gap was as much as £141m just two seasons ago.

The wage bill increased by 12 per cent to £223m. There were also £17m exceptional leaving payments to Wenger and his support team. This increased (worsened) the wages to turnover ratio from 47% to 58%, though not as high as 64% in 2013.

The property next to Holloway Road was sold, contributing net £5m, meaning the Hornsey Road site is the only remaining development. In addition, net interest payable was £6m lower, mainly due to an interest-rate swap.

The Swiss Ramble states, 'While this is a very good set of financials, Arsenal do face some challenges. The self-sustaining model is very dependent on Champions League qualification – or profitable player sales. Without these, the wage bill will come under pressure, making it more difficult to compete.'

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s
1 comment
Read more

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day income is
Post a Comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to depl
Post a Comment
Read more