Before we dive deep into What It All Means, some highlights:
- Arsenal turned £70m in profit in 2017/18 (the most recent reporting period), which is the fifth highest profit in PL history. Which sounds great until you see that Spurs almost doubled that profit in the same period (£139m) to record the highest-ever PL profit.
- Arsenal have new kit manufacturer deals and kit naming/stadium naming deals coming into effect this season, which will help boost Arsenal’s commercial revenue.
Yep. That’s it for the highlights. The rest is pretty sobering reading.
That £70m profit in 17/18? It’s entirely because of player sales, to the tune of £120m. Take those out, and Arsenal would have posted a loss of £42m. I’m no mathematician, but I think negative 42 is less than 70?
Last summer (remember, all this data and context is concerning the 2017/18 season) saw no player sales of note. The departures of Lucas Perez, Chuba Akpom, and Joel Campbell, shockingly, did not provide an extra £120m, so this year’s financial report is going to be...bleak. And since the departures of Aaron Ramsey, Jeff Reine-Adelaide, and Serge Gnabry netted the club a whopping £6.5m in fees this year (ED. NOTE: I’m not sure you know what ‘whopping’ means), this year’s numbers won’t be any better.
More bad news, you say? Sure! Arsenal’s revenues have only increased by £38m since 2016. Expressed as a rate stat, that’s an 11% rise in revenues in that time, as compared to Spurs’ 81% increase in the same time period. And yes, you could argue there that Spurs were below where they should have been, revenue-wise, but they have clearly taken steps to remedy that. Have Arsenal taken steps to make sure that gap is wide? They have not.
In the period from 2015-2018, Arsenal’s commercial revenue increased by £4 million. Not £40, but FOUR. That’s almost inexcusably poor for a club the size of Arsenal. To put that number in context, the next-lowest revenue increase in that same time period was Liverpool’s, who saw their revenue rise by £38 million.
Match day revenue was, once upon a time, supposed to be a huge difference-maker for Arsenal. Emirates stadium MDR is approximately £100m/match, which is stupendous. At the time Emirates was opened, that sum put them head and shoulders above the rest of the clubs in the Premier League, but other clubs have rapidly closed that gap, via either stadium expansion, ticket price increases - Arsenal’s already high ticket prices have been frozen several times in the last few seasons, effectively putting a cap on their MDR - or by building entirely new stadia.
Between 2011 and 2018, Arsenal’s MDR has only increased by 6% - in that same timeframe, Liverpool’s rose 97%, Manchester City’s rose 113%, and Tottenham’s went up 64% (and will go up further now that they’re in their new stadium full time).
Sensing a theme here? I sure am! I’ll skip the rest of the revenue parts of Swiss Ramble’s post for now, as we’re writing a much deeper analysis of Arsenal’s revenue growth relative to its peers that you’ll see in the next couple days. Let’s talk about competition income for a second.
Arsenal made it to the finals of the Europa League this past season, of course. Even though they lost, that appearance was worth £32 million to the club, which isn’t nothing. At least, it isn’t nothing compared to, well, nothing; Tottenham’s appearance in the Champions League final and subsequent second place finish netted them £90 million. Arsenal are, in fact, the only team in England to see their European revenue fall over the last two seasons - every other team manages to make more money in the current year than the previous one.
So yeah, the Champions League is pretty important as a revenue stream, but as you can see from all this, it’s not the magic bullet that will solves all Arsenal’s revenue issues compared to their compatriots.
There was a time when Arsenal were famous/notorious for very nearly having more cash on hand than the rest of the Premier League combined. In 2012, that cash value was £154 million as opposed to the rest of the league’s £181 million combined (an average of £19m/team). This is probably the area where there’s been the starkest change - Arsenal’s cash reserves have increased, to £231m, but the lavish Premier League TV deal has rendered that advantage moot, as the rest of the league now has £686m in cash. Granted, that still averages out to only £36m/team, but it’s no longer true that Arsenal are the only team with substantial cash on hand, yet another area where the club’s lead has been eroded.
So back to the question of What This All Means. It means Arsenal, in a sporting landscape awash with money and opportunity, are basically treading water and hoping it all works out fine. Don’t misunderstand: Arsenal aren’t going broke. Posting an operating loss this year won’t change anything dramatically, business-wise, and, well, that’s the problem.
Arsenal have seemingly been coasting on their reputation for a long time, business-wise. “We’re always in the Champions League” is not a sustainable business strategy, and now that the main underpinning of that reputation is no longer applicable, the club seem to be floundering, commercially, with no clear idea of what to do next.
Who’s to blame for this? Is it Stan? Is it the sclerotic front office, who collectively are as good at negotiating as I am at ice dancing? I don’t know, but put this on the list of “Things that are wrong at Arsenal”, and put it at the top, because until the money streams get fixed, this is what we can expect Arsenal to be for the foreseeable future.