Tuesday, May 24, 2022

Arsenal announce post-tax loss of £107.3 million

Arsenal have announced a record post-tax loss of £107.3 million for the year ended 31 May, 2021.

As expected, the club attributes the results to the effects of the Covid-19 pandemic, which caused the majority of matches for the 2020/21 season to be played behind closed doors.

In addition to lost matchday income, the club experienced reduced commercial revenue and incurred costs as part of KSE’s refinancing the stadium debt. There were also costs associated with introducing Covid-19 protocols and staff restructuring.

Some cash was recouped from running a skeleton operation on matchdays compared to normal and the wage reduction that was agreed by the majority of Mikel Arteta’s squad.

Having lost £47.3 million in 2020 and £27.1 million in 2019, it’s not been a good run for the club. In each of the seasons from 2002-2018 we turned a profit.

Despite the poor performance, the club maintains that thanks to KSE ‘unwavering support and commitment’ we should be able to ride things out.

The full report can be downloaded here.

Topline figures

2020 2021
Matchday revenue 78.8 3.8
Broadcast revenue 118.9 184.4
Commercial revenue 142.3 136.4
Wages 234.5 244.4
Player sales 60.1 11.8
Player loans 3.5 3.1
Net finance charges 13.6 39.8


Matchday revenue

Only a handful of matches in 2019/20 took place with supporters present and even then with reduced capacity, hence the huge drop.

Broadcast revenue
There was an increase as a result of additional matches fitting into this financial year following the earlier season hiatus and our run to the semi-finals of the Europa League.

Commercial revenue
A slight drop based on pandemic-related factors.

Wages
The club’s wage bill increased despite the first team squad taking a wage cut for a period of the 2019/20 season. Given our recent policy of recruiting younger players and ridding ourselves of those on big money, we’d expect this to come down a fair bit next year.

Player sales / loans
The club point out that on average over the last five years, we’ve made £42.2 million from sales. The suggestion is that it’s been harder to flog players for big cash when all clubs ar struggling financially due to the pandemic.

Net finance charges
Back in July 2020, KSE took the decision to refinance the outstanding £144.5 million stadium debt. There was a hefty charge for doing so and we don’t currently know the terms of the new interest rate.

In related news, the club earlier announced a 4% increase in the price of General Admission season tickets.

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Jeremy

Completely expected considering the circumstances (no big player sales, no CL and covid). Hopefully figures will look alot healthier this year with fans back in the stadium and some big wages off the books.

A.P.

Plus Arteta’s penchant of paying off players that he can’t manage.

Portnoy

YAWN

GoonerMcGoonFace

If we still have £150M left on the stadium…spuds are honestly NEVER going to payoff the toilet bowl.

Qwaliteee

Good.

I hope they have to sell the window licker to put milk in the fridge.

Ealing

Interest rates are much lower now than when we financed ours

MeatOnlyDiet

Nah. Buy Haaland.

MeatOnlyDiet

Seriously though, could this result in a management restructuring? The current crop has shown the business acumen or is it just misfortune?

Brady’s bunch

Covid Covid Covid

Andy

Also we are unsuccessful

IamsterdamGooner

Harsh, but true! With CL football those numbers would’ve looked different, covid or no covid 🤷🏽‍♂️

Monkey nuts

Sell Saka and ESR for 110 million.. joking!

Noni

Surely you mean £110 million each.

ArsenesLongSufferingZipper

And surely, you can’t be serious. Sell each of these priceless gems for roughly the price of one Lukaku?

Q3 Technique

Basically, since KSE took full control, Arsenal have been making a loss… they must be really working hard for that dividend payment.

Chrispy

I thought the loss would be more to be honest.

BongoGooner

What does it mean compared to other teams?

JCNY

I believe FFP requires us to limit our losses to £105m over three years. Hopefully, we can get back to Europe and limit our losses going forward. My only worry is that we will still need to spend money on transfers and I just want to be mindful of not running foul of the FFP rules

Tommmy

I believe they have changed the rules or will do for the next few seasons to offset the Covid losses

chepetin

The breakdown isn’t as bad as I feared it might be. The loss is mostly driven by player sales and finance charges. Looks like the reduction in matchday revenue is almost completely offset by higher broadcasting revenue. I’m less bothered by the player sales line because it is a one-time instead of recurring item. Would be interesting to get some detail about the refinance of the stadium loan and the resulting debt charges. Also still interested in how our solid summer business has funded/financed. The current financial year should look quite good given that fans have returned to the stadium.… Read more »

Peter Cechs helmet

KSE will like all the other owners who don’t spunk their own money into a club will drive us into debt.

Is this really a suprise? We ask for a player that costs 50m.. We get them.. Where does it come from..?
Anyone that thinks last summers big spend was from their pocket is alas deluded.

Brady’s bunch

Simple business economics that some don’t understand

Qwaliteee

I honestly thought it would be more.

Still, hopefully that will mean lessons learned, no more Chelsea Pensioners, the roof gets fixed and we crack top four.

Onwards.

Gabigol

How much of it was agent fees and how much of it was pay off?

Honestly. Why are they making fans pay for the corruption that was Raul?

Hantal

I expected far higher losses given the £150million spent in the summer, I wonder how much of that has been pushed forward

Johan

Arsenal’s fiscal year ends at the end of May. Last summer’s spending spree will show up in the 2022 report.

SG_Gooner

It’s not the calendar year? Why did they take 10mths to compile the annual report

chepetin

Am wondering the same. Does anyone know how transfer and related fees are paid? In my industry we would typically get a loan, pay the other party, and then pay down the loan over time. So for example if they did that with the Pepe fee over a five year period, we’d be paying roughly £15m per annum plus the interest. Would be interesting to learn how that kind of thing is handled and reflected in the financial statements.

Parth

We should get something from Swiss Ramble pretty soon but from what I’ve read previously:

Transfer Ins (i.e. player purchases) are amortised over the number of contract years. If Pepe was bought on a 5 year deal with the 72 MM we paid for him, we’d show 14.4 MM cost each year.
Transfer Outs, on the other hand, is recognized immediately even if the buying club amortizes the payment. Joe Willock was sold at 25 MM and we’d that figure in its entirety.

Parth

include that figure*

PEA14

30% of the mentioned goes to me

Cechmate

How nice of you to share 30% of the club’s losses!!! Will you also be sharing the summer transfer expense when it occurs??

onenil

On the bright side we were nearly owned by Usmanov, whose assets have just been frozen by the EU.
Not remotely a fan of the Kroenke’s but compared to Putin friendly Russian Oligarch?

Qwaliteee

All the more reason we need to get that 4th spot and qualify for the ECL next year.

I’m sure if the lads remain focused and continue to foster the team ethic and spirit that has been evident – especially last Thursday night – then they will do it.

COYG

Qwaliteee

Off topic, but enjoy.

Ladies and Gentlemen, it’s The Muppet Show, with our special Mr Jamie O’Hara……😂

https://youtu.be/DJZNATvz2BA

Bonjour

Just confiscate the £700m we paid Usmanov last year

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