Arsenal have announced a post-tax loss of £47.8m for the year ended May 31, 2020.

The club say that ‘Pre-tax losses of £35 million were directly attributable to COVID-19.’ The breakdown of which is estimated as follows:

  • Lost match day revenues of £14m
  • Deferral of £34m of broadcasting revenues into financial year 2020/21
  • £6m of other commercial and broadcasting revenue losses, offset by cost savings of £19m, including the wage reduction

Since the restart in June, games have been played behind closed doors, bar a couple which had extremely limited capacity.

Other key points:

– The exceptional costs incurred of £10.4 million (2019 – £3.9 million) were attributable to a number of changes in the First Team coaching and support personnel. This relates to the firing of Unai Emery and his staff.

– Overall wage costs finished at £234.5 million (2019 – £234.9 million) with underlying growth in player wages offset by cost saving measures in response to COVID-19, including a wage reduction scheme agreed by the First Team players and a waiver of remuneration by the Executive management team.

– Commercial gains were partially offset by lower broadcasting revenues as a consequence of exiting the UEFA Europa League at the Round of 32 (2019 finalists).

– Since the year end, the Group has refinanced its stadium finance bonds and undertaken a range of cost-cutting measures. These steps will ensure the club is well placed to respond once the situation starts to improve.

– The club continues to have the unwavering support and commitment of its parent company, Kroenke Sports & Entertainment, and its ultimate owner Stan Kroenke.

With the impact of a full season without fans because of the Covid-19 pandemic, finances next year are likely to be negatively impacted in a very significant way.

Earlier in the year, the club took a short term Bank of England loan which is to be repaid by May. Some of this money was used to negotiate contract terminations with Mesut Ozil, Shkodran Mustafi and Sokratis, all of whom departed during the January transfer window.

The full report can be found here.

guest
36 Comments
oldest
newest most voted
Inline Feedbacks
View all comments
K9ine

Ok

Biggles

Not really. These figures are for 2019-20, the big problems are going to be in the 2020-21 year (the current year) when the full effect of Covid will hit. We know that there’s a big hole in the finances which is why we had to borrow £120 million from the Govt. in January. The 2019-20 result is the starter, not the main course.

ilikecheese

The kronkes didnt have to borrow anythng. They took the loan because ts the lowest intrest loan they will ever get.

Spanish Gooner

It gave them £120m in the bank at a time when 99% of other clubs are struggling for cash flow at a very low interest rate. Even if we didn’t strictly need it, it’s smart management

Biggles

The owners were clearly not going to make up the shortfall in revenue themselves. The loan has still been spent to plug the gap in revenue (and some to pay off several high earning players). It will still need to be repaid at the end of May but the club hasn’t generated the income to do that so the owners will still have to find the money from somewhere.

Nainsley Aitland Miles

The £120m loan was just to cover cash-flow until the summer. I’d imagine the money we pay back at the end of May will largely come from the annual payments received from Adidas (£60m) and Emirates (£40m), and other annual commercial revenue payments.

GraeB

Interesting that match day revenue loss was only £14m; and we wonder why Kroenke doesn’t worry about fans turning up?

Nainsley Aitland Miles

Well that match day revenue loss of ‘only’ £14m was only up until May 31st 2020.
Our last game before lockdown was a 1-0 win against West Ham on March 7th 2020 – so the £14m loss was only for a 3 month period.
The real damage will be shown in the next reports.

ilikecheese

you obviously have very little understanding of how business works

Gooner79

We really need to get into Europe next season and try and make some money in the summer transfer market, but it’s not going to be easy. Edu over to you…

Sancho

And I thought we saved billions by firing Gunnersaurus 😐

Twatsloch

We did save billions from sacking Gunnersaurus and for a while there it looked good but then we hired Willian for 250 million an hour and bought out Özil which tipped it the other way.

Billions in Korean ₩on 😂?

Savage

I wonder what the release of Ozil et al cost us?

Biggles

Could have been worse but, unfortunately, it will be for 2020-21. A couple points from the article, haven’t had a chance to read the full report yet: First, the wage bill hardly moved in 2019-20, despite a temporary wage reduction (I think 7.5%) for the (then) squad, bar one significant player. The overall bill should be lower overall for 2020-21 as we’ve lost some big earners (including the biggest of course), but also gained some others. I suspect there will still be a lot of pressure to reduce it further though – particularly if we don’t get European football next… Read more »

chepetin

Your point about repaying the loan is an interesting one. Will be interesting to see how that one plays out. Given how cheap money is nowadays I would expect them to indeed refinance it with another loan. One your first point I was just running the debits and credits but just realised that there figures are for the year ending May 2020. Why it takes 9 months to release this data is beyond me. Most companies I know do so after about 6 weeks. This means that we will have the run rate reductions from the buy-outs offset by Auba’s… Read more »

chepetin

Sorry for the typos, wish there was an edit function

Biggles

Yes, which is why these figures are just a taster for the 2020-21 results. Money from European qualification (either via a PL place or (even better) winning the EL this year) will become very important.

Spanish Gooner

If the money was used to pay off Özil etc then it presumably will come back into the club anyway. For e.g. if Mustafi had £5m left on his deal, we might have offered £3m to fuck off with Schalke paying the other £2m to plug the gap, meaning whatever revenue was intended to pay the original £5m will still come in and pay of the bank loan, while we get the added benefit of getting rid of Mustafi early and on slightly reduced terms.

Biggles

I don’t understand your point (probably me). We’re borrowing money to fill a hole in revenue and also to pay off a number of high earning players so they will leave early (albeit at a discount on their salary if they had stayed). But that money needs to be paid back, with interest. We aren’t getting the revenue in to pay it back – there are no matchday receipts for example – and haven’t been for months now – which account for 25% of the club’s income. If the club was losing money pre-Covid (about £25 million in 2018-19) with… Read more »

karl

A lot of that could have been avoided with such a bloated squad. Quarter of a billion in wages is insane with many not even playing.

Spanish Gooner

Would be nice to see how this compares with other clubs, if anybody would be able to point me in that direction? I’d imagine Tottenham (no crowds + no NFL, concerts etc) will have been hit even harder than us, so it’s essential we beat them to stop them getting CL revenue as watching Mourinho ruin the club while being too expensive to sack would almost make the last year worthwhile

Biggles

Yes, that’s a glimmer of good news. They took out a bigger Govt. loan than us (I still haven’t read of any other PL clubs taking out loans) and of course they have huge debts/loans from the stadium development – like we did/still do to a degree, but certainly much bigger. Their stadium brought in a rush of sponsorship (as usually happens) and they and overtook us commercially, and their wage bill was lower, but I think they have been hit hard by bad Covid timing. Sad.

Cobwebs

Also, if things get really really bad Tottenham don’t have much talent to sell. Kane must be past his peak value by now? Also hopefully he is jailed before his tip-tackles break someone’s neck.

Peter Cechs helmet

Makes a mockery of Wengers shoe string budget after building the Emirates to get us back on track.

This club has gone to titters financially for no real reason, other than really dodgy deals and bad decisions on so called superstars..

Bet Arsene must be livid. Not that he’d make it public.

Always a gent. How I miss tho.

Well the loss is largely due to Covid. Wenger is great but I don’t think even he could have prevented a disease from spreading around the world.

Santori

All this should put a dent and some reality into many fans but most are in dreamland. They want us to buy buy buy but we can’t sell to mint money with an inexperience transfer chief. And there are so many holes in squad without certain players some prefer to move on. Take Bellerin. Sure we can sell him if Barca can find money these days but whatever we likely earn from an Edu negotiated sale likely will have to be pumped back into a replacement and not necessarily a better calibre. Some in press bleat on about Hakimi but… Read more »

Nainsley Aitland Miles

Why does everyone think Lacazette will leave this summer? He appears to love Arsenal, he’s clearly in favour with Arteta, popular in the dressing room, and only 29 years old.

Santori

All these losses will have co-relation to our transfer kitty as will lack of CL football (possibly Europa) and how high we finish in league (perception) Not to mention poor past deals (Saliba and Pepe will still weigh 18m each season commitments) to complicate things further. As mentioned many times past summers, we should have done the right thing and got in transfer people who have had solid trench experience. Overmaars maybe if not Campos at Lille OSC. People who know what they are doing. Edu has been hit and miss, is learning the trade but in our (parlous) situation,… Read more »

Biggles

You make a lot of valid points. We live in interesting times.

Vonnie

Yes, solid trench experience like Sanllehi……..Edu is doing fine mopping up the mess left by Wenger and Sanllehi, those with solid trench experience. Willian may still come right, at least he looks like he’s trying and looks happy now. In our parlous situation I think we’re on the right track and it would be madness to tear everything down just when it’s bearing fruit so we can sign up the latest trendy solution.

Postman

It underscores the importance of truly integrating Saliba, if possible.

We can ill-afford to spend another £30m on a right-sided centre back when other parts of the team need strengthening or reinforcement.

Fatgooner

Believe it or not this is actually good news for us supporters. If the club continues to make huge losses then maybe Stan and his son will decide to sell up and fuck off. Stan has been an absolute disaster for the club and is holding us back form any possible return to the top of the PL table. Yes, Covid has been a terrible blow to the club, as it has been to every football club in the world, but if you look deeper then you’ll see a football business that has been hopelessly mismanaged for at least the… Read more »

jimbo

In a few years wenger coming in the top 4 every season playing some fantastic football and winning the fa cup 3 times when he was at you put it washed up will look like a fantastic achievement. It already was at the time but deluded fans like you couldnt see it. Its already looking pretty good now seeing where we are.

im sick of the entitled moaning of some arsenal fans just appreciate what he done for the club was immense. We had long enough and spent enough money to sort the team out since he left

Hedgehog

do you know how we compare to others in the PL? I hope we are not too unusual?

If I remember correctly, Blogs said he is taking a break due to family commitments. I doubt he’s available to comment right now.