Exactly How Healthy are Arsenal’s Finances and which Clubs might Threaten their status?

Arsenal finance (17/18 season thoughts and projections)

The new season is nearly here, and we can hope we get in more players readily.

However, what can we expect financially for 17/18 season? I talk about financial issues in football here, and have spoken about our recent financial history also (yes, this includes that lot too, but I analyse this from a generic standpoint).

I’m not a financial accountant, and I only have a cursory understanding of reading financial accounts, so this should be taken with a pinch of salt. But then in this article, I wish to point or highlight aspects of our accounts for last season, and how we performed vis a vis other clubs. With this aforementioned caveat in mind, I also wish to show how the club is deemed healthy by the media and accountants alike.

Figures for 16/17 are also projections, since official accounts wouldn’t have been released yet. The latest official figures are for 15/16 season.

Revenue

Our turnover for 15/16 was £350 million (392m euros and $457m USD at current prices).

This is very healthy in both national and world terms, and in England, only Man Utd and Man City reported higher turnovers. Our revenues were higher than Chelsea’s in 15/16, considering our higher league placing and greater match-day and TV incomes.

Image result for Premier league income

16/17 and 17/18 projections

16/17 would also be high, though Liverpool would edge closer to us, due to the Anfield expansion. Moreover, Spurs may edge closer, as they gained revenues from playing at Wembley. The Europa League for 17/18 for us will reduce income somewhat, but not to any critical level. Chelsea would be intriguing, since they won the league, and hold a new enhanced kit deal. It may be a toss-up between us and them in the next few years for which holds the higher revenues.

If ranking Premier League clubs for these two seasons, it could be thus:

1 – Manchester United

2 – Manchester City

3 – Arsenal/Chelsea

5 – Liverpool

6 – Tottenham Hotspur

7 – Newcastle United

8 – Everton

The Toon’s return, coupled with their large stadium, will enable them to post high revenues. Everton will be a club to watch in the future, given their new backing and stadium in the offing.

This is of course a projection, though I don’t see much different occurring otherwise.

 

Revenue breakdown

15/16 Arsenal annual report

June to November 2016 Arsenal report

The links above are our annual report for 15/16 season, and the half-year report from June to November 2016. The club breaks down revenues via Football (match-day income from games), Property (Highbury Square flat sales), and Joint Venture (income from community and related commercial operations).

Deloitte defines Arsenal’s income as thus:

  • Match-day – £99.9m
  • TV – £143.6m
  •  Commercial – £106.9m

 

The official figure for TV income for 16/1, based on league placements is below:

 

So if assuming the actual figure of £139.6m for TV revenues, and a presumed figure of £105m for match-day revenue, and £110m for commercial income, this £360m as our prospective 16/17 revenue total. The FA Cup win, with the TV rights, prize money, and match-day income accrued, may raise the figure; however I’d imagine it’s not greater than £370m for this period. Manchester United, Man City, and possibly Chelsea may post higher figures, though Chelsea’s total is moot based on our higher match-day revenues.

17/18 projection

The TV deal will continue to boost inflows, and should we reclaim a Champions League spot, we can look to increase our merit payment (based on how high we finish, essentially). As a club with many fans, we are bound to be shown on TV numerous times, so our facility fee payments will be high also. Securing the most of the TV pie, as it were, would be based on how many times we’re on TV, and if BT Sport/Sky believes we’re worthy enough to be shown.

If presuming Premier League sell-outs, reaching the Europa League knock-out stages at the least, and domestic cup games, then this projection could result:

  • Match-day – £110m
  • Commercial – £109m
  • TV – £145m

Total projected revenues for 17/18 – £364m

It may seem like a modest increase, though we should account for the fall in Champions League income, and a need to boost commercial revenues.

 

Issues to highlight

Leaving the number-crunching aside, what do we need to do to improve either this season, or in coming seasons?

The priority in my mind is commercial sources.

The tour to Australia and China showed how large our fan base is globally. We need products and services to help tap into and connect with our global fans, possibly even licensing food and beverages as Manchester United do. Man U is a level above us in many ways, though there is no reason why such a venture could not succeed or gain traction in foreign markets.

Kit deals are another factor in commercial sources. Chelsea’s new deal dwarfs ours, however our arrangement with Puma was the biggest recorded of any English club. As this is due for renewal in a couple of years, it’s an opportunity to boost our potential in this regard.

Man City’s commercial income is heightened by links with Qatar, similar to PSG in France. Liverpool, a club with slightly less overall revenue than us, but with more trophies on the contrary, posts higher commercial accrual. It clearly is something we need to monitor and enhance in the coming periods.

Click the image to win a 2016/17 Arsenal shirt signed by all the players .

Click to win a 2016/17 Arsenal shirt signed by all the players .

 

Global ranking

I suspect our global ranking, in the next Deloitte listing, won’t be that much different to previous years. We won’t catch Man U, Real Madrid, Barca, Bayern or PSG soon. City is inflated via commercial deals in the Arab world, and Liverpool, Chelsea and even Spurs will look to rival our income. Juventus could be another rival, should they continue to dominate Serie A.

However, as an ambitious goal to end this piece, there’s no reason why we cannot overhaul City as the second grossing English club. If we can improve our commercial standing, and win the league, Champions League (or more immediately Europa League) in coming seasons, it could well be the boost we need.

, , ,

No comments yet.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: