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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.'

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