Ivan Gazidis has announced Arsenal’s financial results for the year ending 31 May 2011 and established that the club starts its 125th year in a strong position.
Playing up the board’s mission, “to support and fund on field success and to enhance the fan experience,” the Gunners CEO stressed that while the prevailing economic climate had hindered the forecasted profits on the property side of the business, Arsenal were still well placed to compete in the transfer market and were a model of sustainability envied by rivals.
“The way the Club is run is something that we know our fans are very proud of, but they look at the world and they see that player costs are accelerating upwards and they wonder if we can compete. I believe we can, I believe we have a really good financial basis to do that, and I also think the football world is moving in our direction.
“We represent the future of the football world and all the other clubs are trying to get towards a sustaining model like Arsenal already has. They look at Arsenal as a model for how they can do that.”
Justifying his positivity by pointing to UEFA’s new regulations on the way clubs spend money, he continued:
“Uefa is bringing in new Financial Fair Play regulations which mean that clubs will not be able to spend more than they earn. We’re in the good position of already being fully compliant with those regulations so we feel we are well set for developments that are going to happen in the game over the next few years.”
Many fans have expressed concern at Arsenal’s apparent failure to maximise their marketing potential in the last decade, having watched the club tie themselves to long-term deals with the likes of Nike and Emirates airlines ahead of the move from Highbury in 2006. Nevertheless, with a new team of professionals put in place to guide the club forward on such matters, Gazidis believes that progress is being made.
“We’ve been very consistently competitive at the top of the English game, at the top of the European game, for many, many years, and I strongly believe that will continue. One of the real growth areas that we have is on our commercial revenues and we’re already seeing that the investment we’ve made in the commercial side of our business is paying off.
“We have new partnerships and increased revenues developing out of the commercial side and I think that will continue to be the case over the next few years. It will drive the Club forward so as the property money that we have coming in over the next few years begins to come to the end of its natural life we will have really strong commercial revenue streams that come in year after year that can put us right at the top of the game. That gives me great confidence for the future.”
Okay, now pay attention…here comes the economics bit (taken straight from Arsenal.com).
- Group turnover was £255.7 million (2010 – £379.9 million). Reduction was due to the expected lower level of property sales activity.
- The sale of apartments at Highbury Square is in its final stages, with 69 sale completions in the year (2010 – 362) generating £30.3 million of revenue from property (2010 – £156.9 million).
- Operating profit in the property business was £12.6 million (2010 – £15.2 million) including the write back of part of a previous impairment provision in respect of the Queensland Road development site.
- Operating profit (before exceptional costs, depreciation and player trading) in the football business was £45.8 million (2010 – £56.8 million) with commercial gains offset by increased wage costs.
- Loss from player trading of £14.7 million (2010 – profit of £13.6 million) with no significant disposals of registrations in the year.
- Group profit before tax was £14.8 million (2010 – £56.0 million).
- The Group’s property business continues to be debt free and generating surplus cash for the Group. The overall level of Group net debt had been reduced to £97.8 million (2010 – £135.6 million) at the balance sheet date.