Ivan Gazidis believes Arsenal’s financial model leaves them well placed to achieve long-term success after the club announced a profit of £36.6 million for the financial year.
Reflecting on the latest figures, the CEO spoke bullishly about the Gunners responsible attitude towards their finances while also making clear that winning trophies, while adhering to UEFA’s new Financial Fair Play rules, is still very much on the agenda.
“Clubs, fans and other stakeholders in the game are demanding a more rational financial approach and this reinforces our conviction that our Club is strongly placed to succeed over the long term,” reads his statement.
“We have qualified for the Champions League for the 15th season in a row whilst off the pitch we have a business strategy and infrastructure that is helping us to grow our revenues.
“This revenue growth will provide sustainable funds for future investment in the team whilst keeping within the UEFA Financial Fair Play requirements. We can and will forge our own path to success.”
Chairman Peter Hill-Wood added:
“We have invested in the team and in the Club’s infrastructure as a whole and this will continue. UEFA’s new financial regulations have added a further emphasis to the need for a sound financial model.
“That is why our activities to increase revenue are important. Increased revenues allow us to continue to be competitive and to keep pace with the ever present cost pressures in the game.”
The key figures
- Group turnover was GBP243.0 million (2011 – GBP255.7 million). Reduction was due to the expected lower level of property sales activity.
- Revenues from football increased to GBP235.3 million (2011 – GBP225.4 million) with Commercial activities contributing GBP5.6 million of this growth.
- Operating profit (before exceptional costs, depreciation and player trading) in the football business was GBP32.3 million (2011 – GBP45.8 million) with revenue gains outweighed by increased wage costs.
- Profit from player trading of GBP26.0 million (2011 – loss of GBP14.6 million) with gains from a number of significant player sales, including Cesc Fabregas and Samir Nasri, partially offset by higher amortisation charges.
- Low key year for property business with an operating profit of GBP2.2 million (2011 – GBP12.6 million) as Highbury Square project draws to a satisfactory close.
- Group profit before tax was GBP36.6 million (2011 – GBP14.8 million).
- Cash and bank balances amounted to GBP153.6 million (2011 – GBP160.2 million) at the balance sheet date and as a result the overall level of Group net debt was stable at GBP98.9 million (2011 – GBP97.8 million).
More to follow…
£36.6m can hardly buy a world class player plus his first year wages in the current climate meaning that there is a thin line between Arsenal making a profit or a loss and for the sake of our debt obligations we have to keep making profits.
Those new commercial deals are very important soon as we get them in 2014 then we can compete.
To be fair it would cover any of the signings we made this summer, it just wouldn’t cover a Hazard, Garcia, Oscar etc… type signing.
We were lucky or fortunate with our signings, the Hazard type signings are the norm at the moment.
I’m not saying we should go out and spend stupid money or spend money just for the sake of it. More that £36.6m isn’t too bad a figure for us, espiecially with the commercial deals coming up for renewal.
Good point Van Gogh but in order to make sure we get those juicy commercial deals, it would help greatly if we actually won a trophy or 2, we would certainly be able to command more if we won in Europe for example (no laughing at the back please).
I would imagine we are already in talks with the relevant sponsors.
I’m sorry, but that £36m profit (in one season) is AFTER loan repayments. While it wont go very far if you’re paying a player’s transfer fee and 5 year wages in one go, that isn’t how it works. Buy a £20m player and pay his 200k/pw wages and you still make £6m profit THAT YEAR. £26m the season after if nothing changes. Which it will in 2014, we’ll make even more money. All well and good making profits but what’s the point if all you do is hoard them in the bank?
I did say first year wages not 5 years………So who is this £20m player you want to buy that will significantly improve our squad?
OK, but don’t forget the depreciation costs of the player’s salary. If Walcott goes on a free we aren’t getting his fee to Southampton back – this will ahve been written off over the time he has been there.
I agree that there is still a profit as in the first year you will have the 10m wages plus the depreciation cost (not the full cost of the player).
@vanGogh Sorry, I read it as five not first. My bad.
It would buy us Llorente for starters. £20m-ish fee, say £100k/pw (£5m/pa) give or take. There is our top class striker the club should have replaced RvP with.
Our back-up for Giroud who, unfortunately is struggling himself, is Chamack. That wont win us the league. Look at Aguero winning City the league or Drogba winning Cuntski the CL, you need a top class CF to win trophies.
Ben,
Accounting for the repayment of bank debt does not work like that. While there may be 36.6m of profit the repayment of bank debt comes from cash profit. Sadly this does not mean there is 36.6m after bank debt. While there is cash at play (per the above 98m of net debt) it isn’t to the extent implied by the net profit number.
If we make a profit of 36 mln each year, that’s plenty of cash for one world superstar (or two top, top talents). You don’t pay out his contact (or for that matter, the signing fee) in one large chuck.
The point isn’t whether we have the money or not…the point is that Wenger in his mind drwas a line with regards to the value of a player that in his assessment is practical, and in most cases (all?) does not want to cross that line. Things that make other teams cross that line: 1. the club with the player does not want to sell (Cesc/torres etc) 2. the player is being chased by many clubs (especially clubs fueled by debt, oil or the mafia (!)) 3. hyper inflation by the club in the hope that the fumes left over… Read more »
But your forgetting the profit from last year and before that
Actually, £36.6 can buy 3 world class players, lPod, Caz and Giroud. Considering we’re one of the few clubs actually making profit it seems, everything seems healthy and Arsene’s judgement sound.
Yes, but do you have any idea what happens to them if we don’t also pay them the wages we promised to them when they signed? Ask Malaga. They just had that problem, and Oh look what happened. Weren’t we lucky?
There’s a key difference between accounting profit and cash, with only the player’s wages and the annual amortization costs for each contract making it into the income statement.
My point being a more expensive player, say Hazard, can be bought without significantly hurting the 36m. It is the 153m that you should be worried about.
Just a small dose of accounting magic there.
We wouldn’t pay everything straight up for any player. And according to the financial report we depreciate the player registration cost over the time of the players cost, so we could actually buy any player in the world if we keep making these kind of profit!
Who cares how much we spend, let’s do a Montpellier and beat our oil-feulled rivals to the title!
No wait, let’s just do an Arsenal and go unbeaten. Yeah! That sounds better! InshaALLAH!
Is it that our gross debt is 153.6 + 98.9 = 252.5 million?
But we currently have 153.6 cash in the bank, so it comes out as 98.9 outstanding?
If anyone could clarify would be very appreciative.
That’s right. Gross debt is down marginally from 258m in 2011. Cash is down from 160m in 2011, so net debt is almost exactly unchanged.
A nice shirt sponsor deal in 2014 and we will effectively be debt free..
we’ll get a new contract for the stadium as well
no we won’t, that’s got years to run compared to the shirts.
and you have to wonder if we’ll actually get much for a renewal, given how ingrained ’emirates stadium’ is.
According to @swissramble without player sales and property profit AFC made a loss of £31m!
That is because we spent money buying replacements. Without property profit and transfer fee’s (in and out) we made about £6m profit.
£36.6 million profit almost the same amount used to get our poldi, giroud and cazorla. So wenger is some economic genius. Already knew what our profits would be and worked in earnest not to unbalance the profits.
So long as you ignore the 40m from RVP and Song sales.
Note there will be a boost in TV money soon.
TV money? As in when we sell Thomas Vermalen next year? I kid, I kid. So say the cunts….
Actually, the boost in TV money is HUGE. EPL did very well negotiating rights contacts.
Sadly the boost goes to all the teams in the league, so we don’t get any advantage over any of them that we didn’t have already (and quite right too, of course).
Gutbukkit
except that Wenger will buy better players for the money
also Moyes and, sadly, Pardew (I actually don’t why know Blogs has it out for him, I’m just following the leader, OK, found it “In 1995, Pardew appeared four times on loan at Tottenham Hotspur in the 1995 UEFA Intertoto Cup, and he was a part of the squad in the Spurs’ record defeat in history, 8–0 ” Wait, that should make him a hero, double agent Pardew)
Rvp and Song are too recent to figure in the accounts anyway surely. Whens the financial year end ?
Year end is the 31st May. Even if Caz, Poldi and Giroud were signed by then the impact of wages and amortisation of the fee we paid would be zero or next to zero.
We have remained a great team to watch this whole time while paying back a stadium, so I have to say that we should be in a great position come 2014 with the new sponsorship deals. I hope we sign short ones but at a good price.
When Arsenal start offering lectures at LSE then I will be lining up to attend.
We could make some money by getting a sponsor for our official underwear and have the players change out of tracksuit bottoms into their shorts at pitch-side just before a subsititution. I can just hear the commentary on Arsenal TV now…. “Arsenal about to make a substitution. The CHEATBROTHERS.NET.COM Arse’n’All undies have appeared, fetchingly modelled by the swashbuckling hunk Olivier Giroud.”. This said as he bends to do some toe touching in a carefully choreographed substitution routine.
Basically we are broke!!!
Right??
No, breaking even isn’t being broke.
I may spend as much as I earn each year but still have cash in the bank and a mortgage.
And am hoping to earn more next year to boost my spending or reduce my mortgage.
Keep it up, mate.
You’re doing better than that twat up north who moved out of his council house into a mansion, paid for by a credit card he found lying around in Abu Dhabi.
(Did I take the analogy too far?)
You mean the one who said “Oh, you found my credit card. Oh well, finders keepers. It’s yours now. By the way it’s a lovely mansion. May if give you 400,000,000 pounds as the grass of your lawn exactly matches the green of the eyes of my second cousin’s third wife’s uncle’s camel Samir. Pardon? Why yes, you know him? Yes, that is right, the ugly one with no chin.”
All seems a rather delicate balancing act if you ask me.
It can’t be that difficult.
Everyone on Twitter seems to have a PhD in club financial management.
I go to twitter with a mole hill, I come out with a freaking mountain. Pulling stories from their arses is what goes on their.
Even a neanderthal from the jungle could tweet something irrelevant but constant retweeting by somewhat senior sources suddenly makes the story relevant………when it’s b/s!
Seems pretty positive to me. Wasn’t expecting bumper profits, we’re making a tidy sum and still being competetive. Show me a title contending club that is doing the same and I’ll show you a club with a sugar daddy that’s fiddling the books.
Plenty to be positive about. Let’s keep winning and keep earning!
It is OK but only with the £65m coming in from player sales last year. However in time the boost in TV money and better commercial deals will help when we have a season when don’t sell off our ‘best’ players.
We profit with outdated sponsor deals we had to make at the time. We thrive within our financial grasp. There are some poorer teams that would love our record and balance sheet. We need to stop the panic. In a worldwide recession we are profiting on the field and off!
With iPod, G-Rude and The Cazbah up front we will hew our path to success and ride on our enemies.
I’d rather ‘ride’ people I was friends with, if it’s all the same to you.
My enemies I would rather trample into the dust.
Chairman Peter Hill-Wood added: “We also continue to invest substantial sums in the Diamond Club wine cellar and this allows me to wander around the Emirates pissed as a parrot on most days. O f course we also have to look toward liquid lunches with the Daily Star when I can confirm that I think the fans are vermin except at Season Ticket renewal time. Actually I still hate them then – but I perfer not to emphasis the point until we’ve banked their cheque. David Dein is the spawn of Satan. Usmanov is a fat twat unless I am… Read more »
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