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.
- 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.
- 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.
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
Arsenal’s 2018/19 financial results covered a season when they finished 5th in the Premier League, while reaching the Europa League final. This was first season in 22 years without manager Arsène Wenger, who was replaced by Unai Emery. Some thoughts in the following thread #AFC
— Swiss Ramble (@SwissRamble) March 2, 2020