Arsenal have warned that the suspension of football and its economic impact on the club’s revenue streams is putting our self-sustained operating model under pressure.
The Gunners have long been committed to funding the team and the wider club using incoming revenue from matchday, broadcast and commercial revenue.
Having not played a match since the 1-0 win over West Ham on 7 March and with domestic football on hold indefinitely while the government wrestles with the coronavirus pandemic, cash flow problems are starting to bite.
It has been reported that Premier League clubs could lose £1.137bn if the season is cancelled and while the determination remains to complete the season, nobody at this point, is able to say how and when that might happen.
Outlining the challenges ahead, the club said:
“The suspension of football and the broader global economic impact of the virus mean that many of our revenue streams are on hold or are at risk. We have always aimed to operate on the basis that the money we earn is reinvested in the team, the wider club and invested into our community. The potential impact on our revenue streams puts our operating model under pressure.
“We know that this crisis will pass, and normality will resume, but timeframes cannot be known with any certainty. The potential financial impact is significant so we must be responsible and act now to best protect Arsenal from what might happen in the months ahead. What is clear is that this is one of the most challenging periods in our near 134-year history.”
While the wait for clarity goes on, the club have outlined their stance on a number of issues. By and large, it is a positive reflection of the club’s values.
Executive team wage cuts
The club has confirmed that the executive team have committed to a 33% wage reduction for the next 12 months. We’ve no idea if there are plans to rebate them at a later date but it’s great to see them leading by example.
Discussions with players are ongoing
At the weekend, it was leaked that the players had rejected a performance-related pay cut proposal that would see them commit to a 12.5% salary reduction for the next 12 months. It was reported that they are willing to defer wages and would be happy to give up a week’s wages to help pay other club staff. This is on top of individual donations to the #PlayersTogether charity. We expect they will also accept wage cuts at some point, but it could take some time reaching an agreement given the individual idiosyncrasies in their current contracts. For example, many have performance bonuses in their deals which aren’t coming into play at the moment because there are no matches.
The club is not considering redundancies
Arsenal have made clear that all employees will continue to receive their full salaries during the lockdown and that they are not having to let anyone go. After Liverpool, Sp*rs and Bournemouth reneged on their decision to use the government’s furlough scheme, they’ve said they currently have no current to use it either. There’s enough wriggle room in there to change their mind if football is delayed for months to come.
Casual workers to be paid until end of May
Arsenal have extended their commitment to paying their casual workers for another month. This means they will get paid for work which would have been undertaken on the four Premier League matchdays that were scheduled for May. Furthermore, if the games are played at a later date, these staff will be paid again for working them. The Guardian reported earlier this month that hospitality and catering staff working for third-party contractor Delaware North, some of whom are on zero-hour contracts, had had shifts cancelled and were not being paid. As of 10 days ago, the situation was unresolved.
Ticket refunds / credit for fans
Arsenal say that all tickets held for postponed matches will be valid once these matches are re-arranged. They also confirm that if any matches are re-arranged are cancelled or played behind-closed-doors, those that have bought tickets, whether as part of a season ticket or for an individual match, will be offered a credit for next season or a refund.