Analysis by the Arsenal Supporters’ Trust (AST) predicts that Arsenal will register a £19 million loss for the year to the end of May if the rest of the current campaign is played behind closed doors.
Looking further ahead, the potential damage caused by COVID-19 is very worrying. If supporters are unable to attend matches for the entirety of next season – not out of the question – it is projected the club could lose £144 million over the course of the next 12 months.
That estimate rosily assumes that we qualify for next season’s Europa League and that broadcasters are able to make good on upcoming payments. If those scenarios don’t play out it could be even worse.
To combat losses of an entire season behind closed doors, the AST predicts the club will have to enforce a significant reduction in costs, most likely by player wage cuts, and/or lean on tangible financial support from the owner via a loan or new capital. They also make clear that supporters should not be expecting big transfer deals.
Given the fluidity of the situation, it’s hard to know for sure what will happen, but the AST’s breakdown is worth a look all the same.
- Estimated to be £92m for 2019-20. Reduced to £80m as a result of the club having to refund ticket holders for the final four Premier League games of the season & refund of cup credits.
- If 2020-21 is played BCD there will be no matchday revenue.
- Estimated to be £169m for 2019-20 (same as last season) despite early Europa League exit. This is because the value of overseas rights slightly increased.
- Revenue stream should be the same for 2020-21 if Arsenal qualify for Europa League. Could be issues if broadcasters struggle to pay.
Commercial & Retail revenue
- A working assumption of a reduction of 12.5% in revenue from sponsors as some will seek refunds and deferrals as they weather their own storms.
- Unlikely to be a lucrative summer tour.
- If 2020-21 is played behind-closed-doors revenue from this stream could fall by a third.
Football costs (inc. wages)
- Player and executive committee wage cuts to save club £2.5m in April and May 2020. Should club qualify for Europa League (predicted by AST) the 12.5% cuts by players are reduced to 7.5%. Therefore estimated 5% drop in figures for year to May 2021.
- There is a predicted £5m reduction in operating costs for 2020-21 if games are played BCD, but could be bigger.
- Estimated £10m in player sales in summer 2020 due to suppressed market.
- Residual cash reserves estimated to be £69 million at the moment.
- Cash flow to suffer from suspension of exec club / club level renewals & season ticket renewals.
- Arsenal owe £120m in transfer fees, £40m owed this summer.
- Heading into the summer of 2020/21 cash reserves could be wiped out and a new borrowing requirement of over £50m being required by the end of July if the club is to meet its commitments to pay other clubs instalments due on player transfers and finance wages in June and July.