Arsenal confirm exec pay cuts and warn of financial hardship ahead

82

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.

guest
82 Comments
oldest
newest most voted
Inline Feedbacks
View all comments
CoNr

If only we had an owner whose personal net worth was about 10 billion, who happened to be married to one of the Waltons who own Walmart who has a personal net worth of 8 billion to bail us out….

Oh wait….

Russ

I was about to say the same thing….

Goo-nerd

What everyone (Blogs included) is missing is that the owners ARE taking a cut. They’re on the line for every penny of lost revenue. The players are 100% completely protected by virtue of their contracts. In context, Arsenal players’ salaries = 63% of total turnover (source: The Athletic). If the season is abandoned (~75% complete), the owners stand to lose ~90m pounds of revenue. The players should do their part – more than just making undefined “contributions to charity” or the NHS. Nobody is asking them to take a 63% cut, or a 50% cut, nor a 30% cut. Obviously… Read more »

Parlour’s Pay Packet

Boo hoo my investment vehicle is broken and my assets won’t mitigate my potential losses. This is just business, you have to take the rough with the smooth.

Goo-nerd

Arsenal have always been proponents – and largely adherents – of the self-sustaining model. Wenger drew attention to financial doping starting with Abramovich and consistently warned about the loopholes in FFP. I think any enterprise should be run in a sustainable way. It’s precisely because petromafia clubs like Chelsea and Man City haven’t been that our position in world football has declined. Look, I’m not particularly fond of Silent Stan or KSE, but I’m reluctant for this moment to become the first shot of an arms race in who has the richest owner. Because for as wealthy as Kroenke is… Read more »

kaius

Trying to shame Premier League players by highlighting Juve is very misguided.

Juve didn’t announce an agreement on pay cuts early because they’re generous “stakeholders” of the game. It’s because their shares are listed on the stock exchange and there were advantages for the club not reporting losses.. When the new financial year starts, the players will get back over half the wages they deferred.

There will be a Premier League agreement eventually but negotiations take time, some players prefer wage deferrals to outright wage cuts, things like that. It’s not a straightforward process.

John C

Shall we use the example of Barcelona instead then?

Or Bayern Munich? Or Dortmund? Or Atlético Madrid?

kaius

I see you’re maturing John C… you managed to leave a comment without taking a dig at Mesut Ozil or calling all players “selfish”.

Being slightly less obnoxious than usual counts as progress for you!

John C

What a great argument, not answering the question because you don’t have an answer

Goo-nerd

Seemed pretty straightforward for Juve players. And if they get over half of their wages back… unless I’m missing something that’s still ~50% cut, no?

John C

Totally irrelevant

CoNr

How is it irrelevant, the club is facing a financial crisis, floating ideas of players taking a big cut, based on unrealistic targets being met.. one of the saving graces from us not being Champion league regulars was the fact we could offer high wages to attract better players, something going forward we likely wont be able to do any more. there is no guarantee football will be back by end of may, so what about non playing staff, are they still going to get paid after that. so yes it would be nice and very relevant given the current… Read more »

John C

Because neither Kroenke or his wife are the club, not difficult to understand is it?

The losses will have to be covered from within the club, why should every other employee other than the biggest beneficiaries (the players) be isolated from the losses?

No one has explained as to why premier league footballers should be uniquely immune to the financial cost just about everyone in society is facing?

Players across Europe have quickly managed to do it. All this does is shows what a cesspit the premier league has become!

Voldemort

Couldn’t agree more. Another reason to fall out of love with football. So
many selfish players. Those that
have donated and done something
should be applauded, those that
continue to protect their salaries
should be ashamed.
Fans of all clubs are struggling and unless players make a massive
statement during this crisis then i
doubt fans will forgive or forget and football will never be the same
again.

Riku

I wonder if this continues for months or years ( read yesterday a ‘expert’ predicting no live audience s attending sport or music concerts til Autumn 2021). If Stan won’t take a loan on club in similar ways that Glazers do at man utd…!? To cover matchday gate receipts , season tickets etc.. thoughts

Torterrier

It is completely relevant. Please explain how it is irrelevant.

Jelvis

Self-sustaining operating model?

kaius

It’s a crisis situation – no-one is saying Arsenal should permanently change their operating model.

The ironic thing is after this global financial downturn, just like in 2008, it’s billionaires like Kroenke with their bottomless cash and equity that will end up reaping the rewards of a recovery whenever it happens.

Clockendrider

BI cause they are the owners of the club. If there is no money flowing in, it is not a going concern. The owners have no responsibility to continue funding a business out of their own pockets. Why is this so hard to understand?

Badaab

if they are not interested in accepting responsibility of sustainability of their own properties, perhaps they should be relieved of them, as they are proving to be incapable or unwilling to do the necessary work.
don’t be a billionaire’s bootlicker.

kaius

I mean, If there’s no point in a billionaire investing at a critical time like this, when that investment might give the club a competitive advantage when other clubs might be financially weaker, then there’s no point in having a billionaire owner at all.

Clockendrider

The point is for the owner who sees it as a way of making money No owners are there to make individual supporters dreams come true.

John C

The exact same could be said of the players, first at the trough to gorge themselves on the riches but last to help when outside forces threaten its prosperity and in fact its survival.

Maybe if you weren’t such a millionaire’s bootlicker you’d see?!

A Different George

There is a fundamental difference in power between rich footballers and the people who run the clubs, the corporations, and–let us not be too naive–the governments. Yes, a player like Aubameyang or even Rob Holding can live lavishly by ordinary standards. But they don’t have the kind of wealth that alters the way society functions, their wealth has little effect–good or bad–on the rest of us. That’s just not true of the Walton family and Kronke, not true of Abramavich, obviously not true of the rulers of the UAE.

Rich

Footballers do have the type of wealth that alters the way society functions in a positive way. They pay much more tax in a year, than most of us will pay in a life time. Wealth creation is needed to pay for public services. There also needs to be money in the economy for the economy to function. The idea that if you cap players salaries at £1,000,000 p/a, then tax them at 80%, somehow everyone else would be better off, really doesn’t stand up to any type of scrutiny. Tax avoidance needs to be stamped out, but if you… Read more »

A Different George

I am not sure of your point. The fact that football players (or rock stars) make a lot of money does not affect the shape of our lives: our pay and working conditions, the condition of our medical services, our ability to obtain a bank loan, even whether we go to war or not. The wealth of the Kronkes and their like absolutely affects those things, and is in some cases determinative.

Rich

There’s no such thing as government money, there’s just tax payers money that government collects, and then there’s money the government borrows, which has to be paid back with interest at a later date, with tax payers money. Football players and rock stars who are registered UK tax payers, make a huge contribution to our standard of living. Plenty of players will smash the 45% tax barrier within a week, most will within a month, the majority of PL footballers will pay more in tax in a single year, than most people will pay across 50 years. You then need… Read more »

A Different George

Rich, I don’t want to debate the point you are making, but it is quite different from the point I was trying to make. I think your point is that rich people pay taxes and that helps all of us. As I say, I wasn’t talking about that, and I really don’t want to. My point is that the decisions made by “ordinary” rich people like football players have little or no effect on the rest of society, while the decisions made by the kind of people who own football teams affect crucial aspects of our lives–they have inordinate influence… Read more »

Clockendrider

Here we go with the 4th form politicking. No amount of wishing the world was different or 70s style politics of envy changes a thing.

Clockendrider

You are suggesting removing gtheir ownership. So who wants to take it up? With what wherewithal? So you are talking about nationalisation of organisations which have no purpose ultimately than to provide a social outlet. Genius. I look forward to reading your original solutions to world hunger and climate change. .

Clockendrider

Exactly.
if only we could all live in grown up world.

Badaab

“the capitalism defender has logged in to the chat”

John C

“Russian troll farm has logged into the chat”

Clockendrider

I am not married to any economic system, but i won’t go along with one which us based on the dreams of the gullible and the credulous.

Eternal Titi Berg Pat Nostalgia

I am not defending Kroenke but riche people have all their money invested. If he was worth 10 billion at the beginning of march, he would now be worth around 3 billions. If he invests 50 millions these days, it will be like him investing 150 millions. He is not going to do it. Let’s do not waste our time here. It is more relevant discussing who are the players who will be sold and replaced by youth.

John C

Well exactly, i predict the first player to go will be Saka, followed closely by Auba

Richie

Selling 18 year old Bukayo Saka to replace him with youth; typical Arsenal!

John C

Well they won’t be buying Ozil unless he’s prepared to take a pay cut will they?

Clockendrider

Another grown up joins the conversation. Thank you.

Coolhand

Not sure who you think we are going to be able to sell to. Unless a club has owners putting their hands in their own pockets surely just about every club world wide is going to be in a similar position to us.

John C

Those players who won’t require a pay cut or are underpaid. I’ll let you draw your own conclusion as to who they might be!

SB Still

Billionaire owner and millionaire players are being defended by fans.

However, this raises well above football and it’s the common people making the difference.

https://www.bbc.co.uk/news/uk-england-beds-bucks-herts-52303859

All the farce about premier league football saving the NHS! Other leagues and clubs have done it already.

bobbyp55

A good start!

John C

Good to see the Executive team showing leadership and an understanding that no one is isolated to the loses incurred, hopefully the players will follow suit very soon and put the future of the club above their own personal greed.

John C

Losses*

Chrispy

Totally irrelevant

Clockendrider

Because? Because you don’t understand how business works? Because “working class heroes” are immune to the economic impacts of Coronavirus?

Sanket Gujar

Players should take pay cut without even a single thought. 12.5% is nothing compared to what current situation is. Even with what they receive they are among the 0.10% of the richest population of the world with money enough to run their next 7 generations without hardships.

karl

Agreed, but I’d like to see bankers etc mentioned by the Hancock instead of singling out just footballers. They never paid back the money that kept us in austerity for a decade.

Gutbukkit Deffrolla

You talk as if all of the players in the squad are amongst the 0.10% richest people in the world. Most, if not all of them fall well short of that level of fortune. The 0.10% is the Kroenke’s of the world, not their employees. Also please consider that if football doesn’t resume for, say, 18 months then some of our squad will be ready for retirement by then, all of them will be out of contract if they are contracted until 30 June 2020 or 2021 so essentially unemployed, and don’t forget that some of them may well be… Read more »

Sanket Gujar

Gutbukkit
0.10% is 10 persons per 1000 persons
Considering the whole world’s population with countries other UK. Fyi people are poor in countries other than uk

Also kroenke might be in .000001% of the world population

Also these players make lot of money doens’t seem bad to repay by 12.5% of their salaries. When there are people who even though being in good compnies have to take short salary and delayed salary

karl

The players will have to follow in the end if they are doing nothing for an extended period of time. Without our TV subs and stadium attendance there is little income. Maybe even sponsorship deals will invoke force majeure clauses.

Gutbukkit Deffrolla

No doubt they will. All of the sponsors will be looking after their own interests, as will the TV companies, the PL and the Clubs. There’s going to be some serious changes all round by the time the dust settles. Its going to be like a shark feeding frenzy as they all try to save themselves from going tits up. I’ll be happy if our Club manages to survive in some form.

thw14

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. Ha.

Rich

The Kroenke’s paid an estimated £1,050,000,000 for Arsenal. The Club is now valued at £1.8 billion. They’ve made roughly £750 million They’ve never put a penny in, while taking out £6 million, for services no one could explain, and hitting the club up for the fees involved in their takeover. Now is the time for Stan to put his had in his pocket and invest. You should be fearful when people are being greedy, and greedy when people are being fearful. Spending £200 million this summer, will be the equivalent of spending £400million last summer. There will be plenty of… Read more »

John C

The club might have been worth £1.8bn before Covid-19 but it isn’t worth that now.

Even if we can finish this season all matches will have to be played behind closed doors leading to refunds on tickets and going forward it’s very likely we’ll have social distancing measures until 2022 meaning a whole season behind closed doors denying the club 25% of it’s income

Gutbukkit Deffrolla

….and we are immune because?

John C

Because billionaire

Martinelli fanboy

Well said @Rich. That is the difference between passion and using arsenal as a money minting tool. @John c states that arsenal will loose value as if other clubs won’t suffer same effects. The fact is that the model of the club has always taken advantage of other clubs in dire situations. That’s how we landed carzola. But even the question posed by Rich isn’t on Kroenke’s mind anyway. We are allowed to judge a man by his conduct and history. My prayer is Arteta and the recruitment team work miracles like wolves and RB Leipzig. Get two to three… Read more »

John C

The problem is owners don’t use football clubs to make money, in fact they make none, it’s the players and their hangers on that make the money.

The question of judging people by their actions goes 2 ways. The players are asking the owner to do something they’re not prepared to do themselves, which is to put their hand in their pocket. So they’re being hypocritical.

Rich

Man City owners paid £220million, they’ve spent £1 billion, and the club is now valued at £2 billion Abramovich paid £140 million for Chelsea, invested £900million, and the club is now worth £1.7 billion. Kroenke has made roughly £750 million in 13 years, and he’s never put in a penny. Fenway group paid $480 million for Liverpool in 2010, they’ve quadrupled the value of their asset. Glaziers paid £800 million for a United, the club is now valued at £3 billion. There’s plenty who’ve lost money, but these billionaires generally know what they’re doing. Of course they’re in it for… Read more »

John C

None of those owner have made anything, they will only make money if they sell or if they borrow against their asset but it has to be used as collateral. Any borrowings will have to be paid off in cash or lose the asset. Why is it so hard for you to understand? The only people making money from the income football generates is the staff, with the vast majority of that being the players, which is why they have had to take a pay cut. Thankfully if reports are to be believed they recognised this basic truth and done… Read more »

Fatgooner

The execs have do the right thing by taking the large pay cut: the players should now follow suit and do the same. As I’ve said before, the players can’t justify picking up a full wack every week while not actually playing. You could argue that a contact is a contract but nobody could foresee what has happened. The contracts were offered on the assumption that normal football business would take place. BTW: wouldn’t it be great if this was the beginning of the end of the Krankies at Arsenal? Stan was already in deep financial do do before this… Read more »

Rich

I’m with the players on this.

I wouldn’t accept a pay cut either, Kroenke needs to pay his staff.

He’s worth $10 billion, and his wife isn’t short of a few quid either.

KSE have made roughly £750 million from Arsenal, but now there’s a difficult moment, staff are supposed to take a hit? And not the owner?

That logic seems like utter nonsense.

If Kroenke has to sell a couple of his ranches to pay his staff? Then so be it.

Riku

More likely sell players , hopefully the dead wood

Gutbukkit Deffrolla

They’re all dead wood if this goes on for 18 months or more. No club is going to be out there buying players for as long as this situation continues because why would you hire somebody to do a job when that job cannot be done?

Just a thought, but, how long can the Premier League itself survive with no football? It is, after all, a company which is indefinitely forbidden to continue its one and only business.

La Défense

Rich my dear boy, you have no idea how the real world works.

Clockendrider

I would like to ride my magic carpet to work and then use my hover board to ensure I move quickly from meeting to meeting. Back in the real world we are all in real life and no amount of this childlike wish fulfilment nonsense is going to change anything. For those under 15, sorry to ruin your dreams.For the rest of you, grow the fuck up.

Fatgooner

Big business just doesn’t work that way. Stan could now start laying off non-playing staff and blame the players. And he would have a point. With a significant loss on match-day revenue the club need to make savings as do the players need to do their part. Yes, Stan should help, but so should the players.

Rich

KSE don’t have the political capital to start laying off staff, it would be a public relations nightmare. Which brands are going to want to be associated with a club, owned by a billionaire, who laid off the working class, to save himself a few million quid, during an epidemic? Stan wouldn’t have a point, he’s a multi billionaire, the players are multimillionaires Its not for the players to pay the staff, it’s for the owner to pay the staff. If Kroenke wants the players to take a cut? He should issue them shares in the club as compensation. He… Read more »

John C

You’re totally wrong, the owner is not personally liable to pay the staff or debts, Arsenal is a limited company. It’s completely irrelevant that our owner is a billionaire or how he earned his money or which politician he donated to, all that does is highlight those who bring it up’s own personal prejudices. And as for this statement; He was happy to accept the increase in the value of his asset over the past 13 years, its for the owner to accept the fallout from any losses. You have to take the rough with the smooth. Thats a finger… Read more »

Rich

If the owner doesn’t pay his staff or his debts.? Bailiffs will be sent in. The loans secured against the club will need to be met, and if an agreement can’t be met? The official receivers will be sent in. Its unlikely banks would rip up an asset like Arsenal and sell it off for parts, therefor the club would be put up for auction, So the banks would be able to claw back the money they lent. But if you think Kroenke would be willing to throw an asset like Arsenal away by defaulting on any loans or payments?… Read more »

John C

What you’re saying is all true but it’ll never get to that.

Instead saving from within the club will be found to cover the costs.

Instead of 4 fitness coaches there’ll be 1, Instead of the club doing the laundry the players will have to take it home to wash. Women’s team, sorry got to go as we can’t afford you etc etc

Arsenal’s outgoings will be adjusted to their new income.

Rich

The Kroenke’s only have an asset worth £1.8 billion, as long as they have a stadium sold at capacity, and they sustain or grow their revenues. Stripping the club off for parts instead of investing would be suicide. Women’s football certain isn’t to my taste, but the popularity of it seems to be growing at a rapid pace, the idea that we’d scrap our women’s football team, is just bizarre. There’s never been a better time to invest and capitalise, And now Kroenke has 100% ownership, let’s see what he does. I don’t see him pumping in silly money, but… Read more »

John C

The Kroenke’s only have an asset of £1.8bn if there’s a market strong enough to support one.

It certainly isn’t a given that once the stadiums have reopened the public will still have either the means or desire to spend as they did before.

brett

the top earners such as ozil are a disgrace if they cant take any kind of pay
cut ffs,they earn millions. l agree that if they dont then the club should just do
it, thereby breaking their contracts and letting them leave on a free if they so wish. ok we might lose a couple of great players but would also clear out
some of the shit and start again. l also agree that this is the perfect time for silent stan to actually invest some of his own cash on the team for a change or just sell up!!

Jdog

I love how people come onto forums (the bbc is a treat) to moan and bitch about a capitalist system that they feed into, and in many cases benefit from. Blaming the very people they idolise for all of the worlds problems when it suits them as if they wouldn’t do the exact same thing in their situation or compassion ever had anything to do with a business decision. I’m not saying it’s right, but every time you spend 60 quid on a match day ticket or renew your sky subscription you become part of the problem. So if you… Read more »

Clockendrider

Exactly. Many of us remember the wonderful socialist experiment in the UK. How wonderful the 70s were. You could travel very cheaply from one end of the country to the other if you didn’t mind taking days because the trains were on strike. Or you could go by car, apart from the fact that most of the people drive British Leyland cars put together by people who couldn’t give a flying one about quality and which, for some reason, were impossible to export. This idea of some socialist nirvana in the 70s is nonsense. Some of us were there. And… Read more »

Diaby's Left Peg

And the 2010s were joyful. What with zero hour contracts, no employment security and private landlords taking the piss. The players will probably end up taking a pay deferral but the attitude that just because I’ve been ripped off so should everyone else absolutely stinks. Good for them that unlike most of the rest of us the players still have some influence on their terms of employment. The strikes in the 70s were because of antagonistic relations between management and workers. Something car makers like Nissan ended by bringing staff with them. The whole footballers should take a pay cut… Read more »

Brett

I know everyone should be worried about Covid…but I’m really concerned about Saka. Is he really not going to sign a new deal?

Riku

P.e.auba. contract will run down. Potentially
If no money to spend between clubs because of rightly paying staff , swap deals can be a good answer, would you swap him for X or risk losing him for nothing

E.g.
A- to Madrid for Dani Cab

.b – Or the Serb striker , ‘joka’

C- Barca for Dembelle

Sure those clubs would be happy to take money off there wage bills also

David Hillier's luggage

Agents have been conspicuous by their absence throughout this whole episode, haven’t they?