Arsenal’s pre-tax loss significantly reduced for the second year in a row, falling from £18m to just £1m, so they effectively broke-even. The Zurich-based football finance guru Swiss Ramble has provided his usual forensic analysis. For much more depth, go to his Substack pag. Here are some highlights.
The improvement was driven by good growth in (football)
revenue, which shot up £76m (13%) from £614m to a new club record £690m, while
profit from player sales also greatly increased by £30m from £51m to £81m. Arsenal’s
revenue growth in the last three years has been very impressive, as income has
surged by a massive £321m (87%) from £369m to £690m, easily a new club record.
Arsenal’s £690m revenue is now the third highest in England,
having overtaken Manchester United £667m, Tottenham £565m and Chelsea £491m.
They have basically caught up with Manchester City £694m, while they are not
far behind Liverpool £703m.
However, this was partially offset by substantial growth in
operating expenses, which rose £91m (14%) from £663m to £754m, though net
interest payable was largely unchanged at £18m.
All three of Arsenal’s main revenue streams set new club
highs. The largest increase came in commercial, which rose £45m (21%) from
£218m to £263m, as the new commercial strategy has started to pay off. Success on the pitch led to growth in both
match day, up £22m (17%) from £132m to £154m, and broadcasting, up £11m (4%)
from £262m to £273m.
Although it’s rarely good news to lose money, Arsenal’s tiny
£1m loss is actually the best result to date for the Premier League in 2024/25,
as all the other clubs that have so far published accounts have all suffered
larger losses, ranging from Manchester City’s £10m to West Ham’s horrific
£104m. Even better news is that last season’s loss was the club’s best
result for seven years, representing a considerable improvement on the £127m
they lost in the COVID-impacted 2020/21 season.
Furthermore, according to UEFA’s Club Finance and Investment
Landscape report, the likes of Chelsea, Tottenham and Aston Villa have all made
enormous losses in 2024/25, which will be confirmed when they publish their
detailed accounts.
Arsenal’s improved bottom line benefited from profit from
player sales, which increased from £51m to £81m, their best result for four
years.
Importance of
Champions League
Arsenal earned €117m for reaching the Champions League
semi-final, where they were eliminated by the eventual winners, Paris
Saint-Germain. This was made up of participation fee €18.6m, prize money €63.8m
and the new value pillar €34.6m. Their
income was the highest of England’s Champions League representatives, ahead of
Liverpool €98m, Aston Villa €84m and Manchester City €76m. Arsenal’s excellent performance in the
Champions League in the last couple of seasons has been a major factor in the
smaller losses. this is a club that
absolutely needs to be in the Champions League if it wants to be
self-sustainable.
After an 8-year period where ticket prices were frozen,
Arsenal have now raised prices in five consecutive seasons. Although an increase is to an extent
understandable, given the steep rise in the cost base, it has to be considered
disappointing after the club has once again set a big new revenue record. In
particular, Arsenal already generate significantly more match day income than
any other English club with the exception of Manchester United, so they could
have easily avoided the temptation to squeeze even more money from the fans.
Following this substantial growth, Arsenal’s £347m wage bill
is now fourth highest in the Premier League, around the same level as Chelsea
£353m, but still a fair way behind Liverpool £428m and Manchester City £408m. It might sound strange to say that a club
with a wage bill of almost £350m is punching above its weight, but Arsenal have
actually over-performed in the last couple of seasons by finishing in second
place.
Each of the Big Six now pays out more than £130m in other
operating expenses, though Arsenal’s £201m is actually the highest in the
Premier League, ahead of Manchester City £197m (possibly including substantial
lawyers’ fees) and Manchester United £170m.
Looking at the last five seasons, Arsenal have spent £1.1 bn
on new players, but this is still behind Chelsea £2.0 bn, Manchester City £1.2
bn and Manchester United £1.2 bn. Nevertheless, it’s fair to say that the board
has backed Arteta.
Stan Kroenke
Up to 2019 Kroenke had put nothing into Arsenal (apart from
buying the club), but he has provided £347m of loans since then “both to
underpin transfer activities and for working capital purposes as required”. In fact, Kroenke has been one of the more
generous owners recently, as his £332m funding in the last five years was one
of the highest in the Premier League.
That said, all of his money to date has been provided in the
form of loans, while other owners have injected capital (which does not need to
be repaid). It is likely that Kroenke’s loans are not quite as “friendly” as
those provided by some other owners.
There is plenty of good news in Arsenal’s latest set of
figures, as the club just about broke-even, while setting a new club record for
revenue for the third year in a row, with new highs in all three revenue
streams. The club has clearly come a
long way, but the process will have only truly worked if Arsenal manage to get
over the line after so many frustrating near misses.
Comments
Post a Comment