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Big six have different business models

The contrast in the business models of the ‘Big Six’ comes out in this comparison by the Swiss Ramble.

Arsenal

In the five years up to the 2021/22 season Arsenal had the lowest revenue of the Big Six. As a result, their wages and player purchases lagged behind, being only ahead of Tottenham.

They still had to use £150m of the cash reserve that they had built up in better times. External loans were replaced by an owner loan. This will reduce annual interest payments going forward, though this transaction did incur a once-off £32m, refinancing fee.

Chelsea

This review covered the last five years of the Abramovich era, when Chelsea benefited the most in the Big Six from owner funding with £416m, which was made up of share capital £211m and loans £205m. As part of the sale of the club to Todd Boehly’s consortium, the debt owed to the owner has reportedly been written-off.  However, the Blues were hit by £132m adverse working capital movements.

Chelsea generated the most cash from player sales with an impressive £541m, nearly £100m more than the closest challenger. They had the second highest player purchases of £917m, only just behind Manchester City.

Liverpool

There has been zero owner funding for the Reds in the last five years. In fact, Liverpool were the only one of the Big Six to make a repayment of owner loans of £35m, while taking out an additional £14m bank loan.

In fairness, as outlined earlier, FSG had put in £171m in the preceding seven years, so the recent repayments are by no means the whole story.

Three appears to be the magic number for Liverpool, as they had the third highest revenue, player sales and wages, though supporters would point out the relatively low player purchases (around £300m less than Manchester City and Chelsea).

There was just over £100m of capital expenditure, primarily to fund Anfield expansion.

Manchester City

Manchester City spent the most on wages (£1.6 bn) and player purchases (£942m) in the last five years. They had the second highest revenue (behind United) and player sales (behind Chelsea) in this period.

The owners injected £81m capital, while they also benefited from £116m working capital movements, which helped drive the largest increase in the cash balance of the Big Six of £59m (from £19m to £78m).

Interestingly, both City and United had almost exactly the same amount of cash available with around £3.3 b

Manchester United

Manchester United had the highest revenue of the Big Six, but in stark contrast the lowest player sales in the last five years. Wages were almost identical to Manchester City, but player purchases (in cash terms) were a fair bit lower than both City and Chelsea.

United had the highest “cost of ownership”, as they made interest payments of £94m and they were the only club to pay dividends (£113m).

They took out £91m additional external debt, only surpassed by Tottenham’s funding for their new stadium. They also had to dip into their reserves by reducing the cash balance by £186m.

Tottenham Hotspur

Tottenham’s cash flow has been dominated by their new stadium, which has led to the highest capital expenditure of £1.0 bn, requiring the highest bank loan of £664m and growing interest payments (£94m).

This probably also impacted the low £377m player purchases, while their £922m wages were by some distance the lowest of the Big Six. Their smallish spend was not helped by having the second lowest revenue and player sales.

 

 

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