Arsenal release half year results recently (full report here) and there has been much talk about many things to put it eloquently. Too much cash, profits are down, it's all funded by player sales, etc. The recent report is only telling half the story for this season, as many sources of revenue are not reported or finalized until year end. We will have to wait until May to summarize the year as a whole.
Tangentially, many of us know this will be a very important transfer window in the summer. Arsenal have cash on hand and are due to receive large increases in revenue, both commercially and from Premier League Broadcasting rights.
First, what are we building from?
From Deloitte Football Money League 2013, Arsenal were 6th in the world for total revenue at €290.3m (Chelsea 5th at 322.6, United 3rd with 395.9).
Matchday Revenue: 117.7m (3rd in the world)
Broadcasting: 107.7m (7th in the world)
Commercial: 64.9m (12th in the world)
So what can we expect moving forward?
Arsenal's match day revenue will remain fairly flat, as they are freezing ticket prices for next season, and are already getting the most out of the Emirates Stadium. We could see a swing of 10m in wither direction due to number of home games.
TV revenue is about to get real silly in the Premier League.
Here are the figures from 2011-2012 (in pound not euros from above.
The highlights are Champions Manchester City received 60.6m, last place Wolves 39m, and 3rd place Arsenal 56.2m.
What will these numbers look like next season?
Let's assume a safe Overseas TV growth of 30% in scenario 2.
1st place are now getting 95.5m (+34.9m), Last would get 58.9m (+19.9m) and 3rd place is worth 88m (+32.8m)
Those increase are huge for every team in the Premier League, and could even be higher if the overseas deals are more impressive.
Commercially we know Arsenal have signed an extension with the Emirates for a 5 year deal worth up to 150m. (Some have mention there are requirements to be in the Champions League, but I cannot confirm that anywhere)
Some of this money will be paid upfront, but we don't know exact figures yet, so for accounting purposes will will only assume flat line, 30m per year. This is an increase of 24.5m over the previous 5.5m deal.
The Kit manufacturer is also up for renewal (though not until 2014/2015, a new deal from Nike could renew before that expires) and Adidas are rumored to be willing to pay 25m a season, up from the current 8m. Nike may or may not match this and final terms are still uncertain, but it is safe to say that that is a fair market value for a team like Arsenal.
All in all the team should see commercial increases of at least 24.5m next season and 17m the season following.
Adding those numbers back into the year end 2011/2012 figures we can estimate that Arsenal will have 2013-2014 total revenue of 289m (€335m) well above the 234.9m (€290.3m). 2014-2015 will be at about 306m (€354).
There are still many sources of income to take care of to keep pace at the top of World Football (Champions League TV money, additional sponsorships such as practice kits, etc.) but Arsenal will finally be in a strong position to generate revenue, which is exactly what they dreamed of with the move to the Emirates.