Commercial revenue stagnation sees Arsenal overtaken by rivals

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On Friday, Arsenal released their financial results for 2018/19. The topline takeaway; we reported an overall revenue loss (£27.1 million) for the first time since 2002.

Given Premier League clubs, especially those in Europe, have access to bountiful domestic and international broadcast cash and sponsors queuing round the block to be featured on shirts, it’s concerning that we’ve somehow found ourselves in the red.

While a downturn in player trading is a key factor in this year’s loss, it’s no secret that failings on the pitch are taking a big toll on the club’s bottom line.

In the last three season, we’ve had a squad earning Champions League wages playing in the Europa League. Josh Kroenke’s words, not ours.

We’re all familiar with the ignominy of the situation. What’s more, with the current squad struggling to secure even that level of continental involvement next year, things could get worse before they improve.

That’s the ‘problem’ with a self-sustaining model, if you’re not doing well, you won’t have as much cash to play with. The knock-on effect, as referenced by Mikel Arteta, is that established stars might not want to renew their contract while young pretenders might get better offers elsewhere.

Equally alarming is the ground made up by domestic rivals on the commercial front in the last six years and the gap that has opened up between us and a few of the Premier League’s juggernauts. It’s long been an area in which we’ve struggled to keep up with our rivals, and that deficiency has been highlighted acutely here.

Of course there are greater challenges with improving commercial revenue when you’re playing in the Europa League, but this is an issue which goes back to our Champions League heyday and there have been few changes to the commercial department beyond former Chief Commercial Officer Vinai Venkatesham being appointed Managing Director.

At this point, we’ll hand over to Swiss Ramble who, as always, was very quick to run the rule over Friday’s statement and results. The following bullet points / graphs highlight the state of our commercial operation compared to our top six rivals.

  • Arsenal’s commercial revenue rose £4m (4%) to £111m, mainly thanks to the new Visit Rwanda sleeve sponsorship. This is 6th highest in England, but miles behind Manchester United (£275m) and Manchester City (£227m). This is also a fair way below Liverpool (£188m) and Chelsea (£180m), while Tottenham (£134m) have overtaken them.

    [Source tweet]

     

  • In the last 4 years, Arsenal’s commercial income has basically been flat (only up £8m), while this important revenue stream has grown significantly at the other leading clubs: £72-78m at Manchester United, Tottenham Hotspur, Liverpool and Chelsea; £54 million at Manchester City. 

    [Source tweet]

  • Arsenal will have improved commercial deals from 2019/20: extension of Emirates sponsorship at £40m (up £10m) and Adidas kit supplier (reported £60m vs. Puma £30m). Worth noting that Emirates includes naming rights and does not allow separate training kit deal. 

    [Source tweet]


As you can see, we’ve lots of work to do. On the pitch, it has never been more vital to get back into the Champions League. A few more years in the wilderness and we could get cut adrift for the long-term.

Alongside that, our owners and the people pulling the strings in the corridors of power need to get to grips with the mess left by Ivan Gazidis, who, according to Swiss Ramble, probably pocketed around £22 million during his time at Arsenal. At a time when people are rightly wondering if some of big earners on the pitch are providing value for money, it’s easy to see how that was relevant at executive level too.

See the full analysis of Arsenal’s finances in the thread below

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Santori

Once upon a time there was a chap named Wenger who used to guarantee us fourth spot pot.

But media derided it and many of the so called “faithful” were gullible to believe them.

They agitated for change. Anything better than stagnation in 4th they said. Preferred to drop out of CL so they can win things according to their logic.

And here we are (still) in a so called ‘transition phase’.

Be careful for what you wish for.As I said back then, as much as it can get better, it can also get much much worse.

Schadenfreude.

Futsboller

Yikes – well said, Santori! 😉

kaius

“Be careful what you wish for”?

Many Gooners “wished” for Arsene to be replaced with a modern successor like Jurgen Klopp. He went to Liverpool and did okay didn’t he?

Our real mistake was waiting too long to convince Arsene to step down – because that meant the two best options, coaches who would’ve built on Arsene’s slick passing game, joined our rivals City and Liverpool.

Futsboller

Indeed. But we’ve got Arteta now, and he looks the real deal, so hopefully we can put these lean years behind us soon enough.

Vonnie

Wenger was stale and the football was stale. Emery was a disaster but that doesn’t mean Wenger should have stayed, he was on a downward spiral and it was time for change. When Arsene Wenger is in his nineties there will probably still be fans like you who can’t move on. Mikel is building something good, try getting behind him and supporting the team for a change instead of fucking moaning all the time.

arseblog

“Once upon a time there was a chap named Wenger who used to guarantee us fourth spot”

Except by the he left we were in the Europa League. A touch revisionist there.

Love AW but let’s not pretend the time wasn’t right for him to step down.

Rufusstan

Its amazing how Wenger and the club were derided for years over the so
called ‘fourth place trophy’. Now its someone else, suddenly 4th is worth
fighting for, and a success in itself

gooner

in all fairness it was Chelsea, Man U and us plus whoever over achieved between liverpool and spurs. we were the third best team but would finish 4th sometimes. Then man city got rich, pool got better and the other team as well. Before Arsene left we were basically getting the
same points but they were no longer good enough to guarantee 4th.

ArsenesLongSufferingZipper

I appreciate Arsene as much as anyone else, but he didn’t exactly “guarantee” even our much vaunted 4th place in his last couple of years. It WAS time to move on.

Futsboller

We’re low right now, but we’ll rise again. We became less watchable under Emery as we lost our style completely, but this will improve dramatically under Arteta — commercial revenue will improve as our performances do. Persuading Aubameyang (probably the only player on our squad who deserves CL football) to stay and lead the charge is priority number one this summer. We’ll clearly have to trim some players and give youth a chance, something I think Arteta is eager to do. It’s been rough, but it will get better.

catbiscuits

I think it’s optimistic to expect dramatic improvements in playing style. There’s a real lack of technical players in the squad.

Futsboller

I imagine the type of player Emery shifted out is the type of player Arteta will ship back in. We have improved our passing stats and, at times, look to be moving the ball with more pace and accuracy. The style will come as we learn how to walk again.

DPK

Curious what players did Emery ‘ship out’ that you think we shouldn’t have?

Futsboller

I don’t question the transfer business aside from wishing that Cazorla and Ramsey were still with us; I just mean the technically gifted player (Cazorla, Ramsey, Wilshere, Iwobi, even The Jeff) was moved on with Ceballos and Pepe the only step-in players of that ilk. We’re clearly focused on developing youth, so we’re fortunate that Saka has eclipsed the memory of Monreal and hopefully Nelson can find his footing under Arteta and ESR next season, too.

DPK

Ok, your first comment very much read that way, I think there’s a tendency to blame Emery for every single thing wrong with the club which is just not the case. Personally, don’t see any of those players as a mistake other than Rambo….(clearly we would have kept Santi if we had known but anyone who says they knew he would come back the way he has is a liar) which I think was a commercial decision taken by the club, rather than Emery.

Rich

Blind optimism. Our new commercial deals kick in this season, and won’t be up for renewal for another 4 years. Keeping Aubameyang is highly unlikely, he’s 31 this summer, and with 1yr left on his deal, will have plenty of suitors. He’ll be very difficult to keep, and with any offers exceeding £55million, there’s a strong argument we’d be better off cashing in, rather than paying a 31yr old £15million+ per season, for another 3-4 years, at some point his physical stats are going to nosedive. We were on the slide long before Emery showed up, and finishing 5th last… Read more »

Futsboller

Sour pessimism.

If we lose Auba, it will make our regeneration a longer-term project, but Arteta knows what he’s signed up for here. Start playing good, attacking football, and people will want to be associated with you and, dare I say it, will want to play for you.

Things will start to improve, whether you want them to or not.

Rich

Why wouldn’t I want things to improve?

I don’t pay for my season ticket and tv subscriptions, wishing that Arsenal lose.

Being optimistic doesn’t make you a better fan, right now it makes you delusional.

We’re in a pretty bad way on and off the pitch.

And if we miss out on Europe altogether? And then don’t pull off some exceptional business?

Then-next season, things are going to get worse.

And all the blind optimism in the world won’t change anything.

Futsboller

It’s called hope, my friend. There is a doomsday-prediction element about your post that I’m hoping to counter with hope. We have to have hope that things are going to improve now that we have the right man in charge to coach the team and lead us forward. Financial might makes an enormous difference with respect to success, but a well-coached team can make miracles happen in the world of sport. I’m very optimistic about Arteta and Arsenal in the coming years.

C.B.

We may not even have any European football next season, not good at all.

Gazidis was asleep most of the time, compared to David Dein and the MDs of most other big clubs.

Come on Arsenal directors, do something impressive, or we will be struggling for years.

gooner

Gazidis was not asleep nor is he. look how he’s fighting Boban,Maldini and screwing their coach. he just has a thing for talking and another for bad calls.

I’d bet on him selling Donarouma in a bid to compete with the likes of Bayern just before we see a headline like “Gazidis gazumps gladbach in Gazaniga deal”

Ron

Thanks be to the Kronkes

atom

I’m not a huge Kroenke fan by any stretch, but thanks to FFP there aren’t a whole lot of owners writing limitless checks anymore to fund clubs. Take Man U for instance where the Glazers have even taken out close to a billion from the club. The primary issue with the Kroenke’s is they allowed Wenger & Gazidas to run the club into the ground (in the context of the top 6 anyways) via extremely poor squad & contract management. That was somewhat covered up when we had the consistent CL revenue coming in – but it’s been laid bare… Read more »

0o2Be

Looking at the table on commercial income, growth of just 7% on 2015 is very worrying indeed when compared to the other included clubs. Given the level of stagnation across the board financially for AFC in the last few years I think some very serious questions need to be asked of those in charge. Some of this can be affected by an upturn in performances but surely a lot has to do with mismanagement? Even if ignoring lost broadcasting revenue those numbers are dire.

Nketibag

It’s madness, by most estimates we are the 5th most supported football club in the world. How appalling do these execs have to be to not generate a huge commercial income.. Especially compared to the minnows down the road. The combination of Arsene declining and the Kroenkes taking full charge has driven this club off a cliff.

Futsboller

Maybe I’m misreading that commercial revenue graph, but it looks like we kept pace in terms of growth until 2017, when things actually began to decline. Until then, only the Manchesters were outstripping everyone and we all know the legitimate and illegitimate reasons for that. We outgrew Liverpool, Chelsea, and Sp*rs between 2010 and 2015, so I don’t think the plot is as clear until the last 3 years. Companies will want to be associated with us again when we’ve renewed our style and performances on the pitch — we have to become a good product again, a good billboard,… Read more »

0o2Be

I take your points, and I do think that once we improve the level of our football there will be a natural increase in our commercial revenue as a result. The thing that worries me the most though are those last three years – how do you account for Spuds steadily increasing their income while we stagnate for example? They only reached UCL final in the 2019 season, prior to that I don’t think you can make the argument that they were playing radically better football than us. Yes we have been in decline as far as performances on the… Read more »

Futsboller

I hate using this wonderful venue to discuss the Spuds, but yeah, clearly CL football fed them an enormous boost (United and Arsenal are the two teams that didn’t really continue to grow in that period — both suffering post-icon-manager periods and diminished European involvement), the promise of their new stadium is a massive draw, and the promise of that squad over the past 3-4 years under Pochettino had everyone in the media singing. Despite winning absolutely nothing, Spuds having been praised the last few years as the most exciting team, which is utter crap, and something Mourinho will ensure… Read more »

Riku

Many people on here always saying they won’t buy a beer in the stadium or a shirt til kronke goes ( he is here for at least til his Los Angeles stadium paid off ) where as spuds , Liverpool, Chelsea,city fans spending in stadium as they enjoy the recent rise in league position s . Over last few years.. everyone drink more beer for the club

Chuffy

I think we’re on the edge of a precipice.Without the owner stumping up extra money we’re going to fade away and any Hope’s at the title, top 4, even the Europa League are going to disappear. Look at Everton and Wolves, their owners and club management are promising and money is being spent, not great by Everton, but Wolves are a genuine threat to the big 6. That potentially puts us in a battle for the top 8. Our self sustaining model has an in built flaw. We only spend what we earn, but as the new financials prove, we’re… Read more »

Mikel’s shampoo

In short, Ivan Gazidis needs to be given an almighty wedgie.

Modha

If you’re not at the grown up table, it is difficult to convince people to give you money. It is understandable that we have suffered commercially. My hope is next season we really kick on, and even if we lose some established stars, so be it, as long as our youth continue to listen to Arteta, I don’t think this is the end of the world….YET.

Rob67

It was and is also relevant at Managerial level. Or it certainly was when you have to terminate contracts early.

Plainly the exodus of Wenger and Emery will weigh heavy on the balance sheet.

Another reason to hope that Arteta gets it right.

Danger Mouse

Twenty two million for Gazidis! For what ? I could have left the same mess behind that he did and I’d have done it for half the price. Truly he was Ivan the Terrible.

NUDGE

I’m so glad that Gazidis is being seen as the fraud he was. Made so many mistakes. Letting g players leave on FREES instead of negotiating contact extensions. He definitely made the wrong decisions. Maybe Gazidis was on a bonus on Arsenal profits. If you dont renew your stock no business survives. We have not repaired or replaced the foundations of the team for over a decade.

Joan

Tottenham might have overtaken us, but they still have to pay for their ground. We dont owe anyone, just got owners who wont pay out for players etc.