Arsenal’s reliance on matchday revenue and player sales can’t go on forever

Arsenal released their interim financial results and the story hasn’t changed much from last year. The club are profitable once again thanks to a model which relies heavily on two seemingly juxtaposed positions: matchday revenue and player sales.

Of all the clubs in Deloitte’s Football Money List, Arsenal are the most reliant on matchday revenue. As of the last full accounting, 40.5% of the club’s total turnover was generated by fans at the game.  Moreover, at €117m per year, Arsenal have the third highest matchday revenue in Europe, just behind Man U (€122m) and Real Madrid (€126m). The dream of Arsenal building the Emirates was to move the club into this elite group who generate enormous sums of money from their fans actually going to matches. And it has, until now, come true.

The new stadium paid off immediately and Arsenal have announced a steady increase in matchday revenue every season since moving from Highbury to the Emirates, except this one. We don’t know what the final amount will be this year (if Arsenal get past Bayern they will get at least one additional home match) but with four fewer home matches than the same period last term and getting past Bayern a bit of a dream (thus, no increased home games on the horizon), the club has already lost £7.5m in revenue from £113.5m last interim to £106m this interim.

This is because going to the match is important. In contrast, Milan’s San Siro seats 80,000 fans compared to Arsenal’s 60,000 and yet their matchday revenue is a paltry €33.8m per year. There are a lot of factors for why Milan can’t get people to games but the point isn’t to quibble over why the San Siro doesn’t generate money, the point is that just having the nice new big stadium and a club with a long history of winning European and domestic honors isn’t enough. You need to get people to the games and the best way to do that is to have a product that people are willing to pay to see on the field. Which is why Arsenal’s second business position doesn’t make any sense.

You can slice this fact in a number of different ways but the Swiss Ramble put it thus:


I asked Swiss Ramble for some comment on this number and the financial results in general but owing to his health, he declined. I’m hoping that he can make at least one appearance on a big name podcast and/or perhaps a blog post on the topic but we shouldn’t count on it because, as someone who writes every day about the club, it’s very stressful writing about Arsenal and really it’s supposed to be “Arsenal until I die” and not “Arsenal until it kills me.”

It is important to note that this tweet is consistent with his findings last season where he stated that “In 2011/12, if we exclude the £2.5 million profit from property development and the £65.5 million profit from player sales, the football club would actually have made a sizeable loss of £31.3 million.”

This marks the second consecutive set of financial results, then, which show a clear reliance on a combination of player sales and a very dedicated fanbase attending matches to maintain a healthy balance sheet and that has to be a worry for the board. Player sales as a form of profit generation doesn’t seem sustainable to me and if the team isn’t good enough people will stop attending matches.

Selling players for a profit is dependent on quality (though some players like Andy Carroll buck that trend). And to create players with quality that other people want to buy you have to have a great academy (plus some luck, like Jack Wilshere who is a once in a lifetime talent) or you have to scout them very young and play them in the first team and give them experience (like Cesc). But the problem is that if you sell your players at their peak, then you’re never going to get the results on the pitch.

Meanwhile, poor results on the pitch always means a disgruntled fan base which we are seeing now grow in numbers at Arsenal. Already, the fans are starting to boo loudly at any result deemed “unworthy of Arsenal” and there have been numerous small, although very vocal, protests outside the grounds over a number of issues from ticket prices to the makeup of the board. I have friends who are season ticket holders and who go to every away game who are starting to get very vocal about needing a change in club policy. It’s getting so bad that there have even been fights among Arsenal fans at games.

Matchday income isn’t all generated from ticket sales. There are a lot of shirts, beers, and pies sold at these games and regardless of whether or not official attendance is 60,000 empty seats hurt the club’s bottom line. Empty seats like the ones in the last game between Arsenal and Aston Villa. I can also attest that there are more tickets available for more games than ever before and for the first time since I have been following Arsenal, fans are publicly offering their seats at a discount.

Arsenal are a club at a crossroads. The club have money in the bank to the tune of £120m. The club have also just announced a new deal with Emirate airlines which has some front-loaded money and other commercial income is set to be announced. There are also a large number of big money contracts which are set to expire and the manager is looking more ruthless with certain players, shipping out Andre Santos to Gremio after just a few appearances for the club. This is a club that looks like it could have the money available to spend several years building the squad back up to a level that could challenge Europe’s elite.

But the club are also looking at a tough fight for Champions League football next season, which if they miss out on will be a huge hit to the “sustainable” model. And the club’s reliance on fans paying the highest prices in Europe to see their favorite players play one or two good seasons, competing for fourth place and coming up short in all three knockout tournaments, only to then get poached away year after year is looking like it has worn thin.

But that story hasn’t changed much from last year. These are the same narratives from top to bottom that Arsenal fans have been discussing for 5+ years: players leaving, salaries, ticket prices, trophies, youth coming through the ranks, and the stadium. Some subplots have been amplified but really there has been no major shift in the overall story at Arsenal and I have to wonder how sustainable that plot line is. Personally, I think a team can’t keep selling their best players, not winning any trophies, and expect the fans to keep paying top dollar to go to games.


44 thoughts on “Arsenal’s reliance on matchday revenue and player sales can’t go on forever

  1. Vote -1 Vote +1Ankush

    if I could borrow a line from Niall Quinn: this season could be the last straw which breaks the camel’s back. On the contrary, we could still finish third and go on a summer buying spree. But then, who am I kidding.

  2. Vote -1 Vote +1Yan

    What puzzles me is this: Is selling your best players actually a club’s policy? I don’t think that selling Cesc, RvP, Nasri or Song had just purely profit in mind. Each case was unique, and they all had their reasons to leave, but if the manager could’ve hang on those, maybe he woulnd’t have sold them. So, if that was the case, it means Arsenal would have actually made losses in those seasons, and probably would’ve had a better chance to end the trophy drought.

    Maybe that reconciles the juxtaposed positions, otherwise, it actually makes no sense at all.

  3. Vote -1 Vote +1GoonerNC

    I really don’t understand. The stadium was supposed to not only prevent having to sell the best players, but to buy more of them. If we’re in a position where we have to sell, then why the hell did we ever leave the Emirates? Arsenal was stable, relatively profitable, and DIDN’T have to sell its best players unless they forced their way out. What’s going on?

    1. Vote -1 Vote +1GoonerNC

      And, of course, I meant “why did we ever leave Highbury.” I feel dirty inside having cocked that up.

  4. Vote -1 Vote +1John

    About a year ago Wenger mentioned that the club needed to make a profit of £10-15mio each year. Worrying if we make a loss without players sales. Who is going this summer?

  5. Vote -1 Vote +1AV

    Just to remind people…the 27m loss is more than offset from this summer and next when you consider the new Emirates deal as well as the boost in TV money…this summer onwards should be a time from when if we sell someone, we’re not doing it to generate funds it is likely either a case of the club wanting to sell (like Clichy a couple of years back) or the player forcing his move

    I’d also like to add a reply to a point made above by Yan…if the players like Cesc and VP hadn’t forced moves, we wouldn’t have had to spend on replacements, so the money would have evened out somewhat

    Also the comment Arsene made regarding the 10-15m profit I believe was to cover for the annual repayments for debt which are around 13m a year at present

  6. Vote -1 Vote +1craig

    The way this appears to be shaking out is that the matchday revenue and player sales have resulted in profits, even with selling our best and therefore most valuable players. Going forward, (and assuming continued CL revenue, which is a big assumption right now) the additional commercial revenue should be enough to fund 1-2 marquee signings per season, without have having any impact on the profit margin. By continuing to offload marginal and aging players, we should be able to at least break even without selling any of our key players. Look at the recent report: 2 key players out, 4 key players in, still had a net profit of 16 million. Looking more closely, Hill-Wood said we spent 40.9 million on player acquisition and contract extensions – still less than we supposedly got for Song and RVP. That simple comparison excludesproperty development activity or additional payments from the sale of Fabregas. Add in the commercial revenue, and there is enough there to add key players without losing anyone of the RVP/Song type importance to the team. I’ve been pretty long-winded lately, so that’s the short version, but it looks solid to me.

    The key of course will be convincing our best players they want to stay and our targets they want to come, but the recent contract extensions definitely went well, and Monreal looks like a quality capture… so all that bodes well for the future.

  7. Vote -1 Vote +1Zeddington

    Thanks for this post. There is so much I could say about this. Suffice it to say that, if our business model has thus far relied on selling players, then the model is not sustainable at all. Obviously this depends on how you round the numbers, and we have spent on (possibly inferior) replacements. But even looking at this summer, if we ignored all other factors (increased TV money, Emirates deal), we’d struggle to break even if we expect similar levels of player sales.

    What salable assets (read: players) do we have this summer? Sagna, who many expect to leave, will probably get 7m at the very most. Vermaelen is the only other defender who would command anything near a decent fee – 15m would be generous. In the midfield: Diaby is broken, Arteta’s too old, Ramsey’s not good enough yet (8m tops), Rosicky’s too old for any real money, Coq isn’t there yet. Wilshere is worth millions and millions but right now he’s unsellable. Walcott could go for 20m I’d say, but having just signed a contract it won’t happen. Giroud, Caz and Poldi just arrived, but Gervinho could go for 8-10 (again, generous).

    So I can’t see how player sales will fly this summer. At best it’d be an exercise of shedding the deadwood: Chamakh, Arshavin, Squillaci, Mannone, Fabianski, those on loan (and I will include Diaby and Gervinho, but I doubt Wenger would agree). This will free up space to strengthen the squad, but will by no means generate significant revenue as player sales – most of those would go for free. See it as cost reduction instead.

    The increased TV money may cover the gap – I don’t know the numbers. The new commercials deals (Emirates and shirt) may put into the black without player sales (perhaps – again, depends on the numbers), and new commercial deals will chip in as well. But ultimately, if the product quality falls (read: success on the pitch), matchday revenue will fall, and other revenue streams will also, over time, fall. The club needs to address this, as we all know.

    We have around 120m in the bank. What’s it there for? Who knows. My best guess is as contingency – fall out the CL, not cover the gap thru player sales, etc. The need for such a big number (if there ever was one) may be coming to an end, if we can make a profit without player sales (i.e. only thru matchday revenue, commercial deals, TV money, etc). If that happens, I believe we will see significant investment in the squad – maybe even this summer.

    I think all the talk of personalities (Wenger, the board, Kroenke), while valid, is less important than the business reality. I think we’ll see spending soon, if all the numbers add up satisfactorily.

    Man, I could write pages and pages about this. Maybe I will sometime.

  8. Vote -1 Vote +1Zeddington

    Also Tim: thoughts on Daniel Carvajal? I’ve not seen him play, but makes him seen like exactly our kind of player: short passing, key passes, interceptions, etc. Young, Spanish, represents spain at youth levels, etc. Wiki says Real Madrid have a buyback clause though.

  9. Vote -1 Vote +1jaymin

    Great post, really serves as a primer for people who are newcomers to the Arsenalphere of the central debate we’ve been having daily for the past 5 years, from the moment Milan started tapping up Adebayor. The trend of player sales really accelerated when Fiszman had all the other originals sell out to Kroenke two years ago instead of opting for Usmanov. Commercial revenue will have to increase massively over the next couple of years, otherwise we will have to keep selling marquee talents (we have only three right now by the number of my counting!) to keep afloat with our massively creeping wage bill and presumed declining gate receipts. It would be the biggest irony in the history of European football if the FFP regulations we championed more vigorously than any other club in UEFA of the EPL are the things that end up permanently entrenched in the second-tier of the Premiel League and Champions League/Europa as we start making losses just when the rules kick in, having forgone the opportunity to engage in a spending free-for-all from 2006-2013, when it was permissible. Ah, Kroenke….

  10. Vote -1 Vote +1nycgunner

    I am very pessimistic about squad strengthening this summer – and the reason for that is the way we have conducted our business last summer and this January. We had cash reserves in our books last summer as well and while we were proactive in replacing RVP, we failed miserably in replacing Song. I know there was a lot of buzz around Sahin and it’s possible that we were in for him but it’s astonishing that we didn’t have any other MF player on our radar. Maybe Arsene was thinking Diaby would be the player replacing Song but Arsene taking bad gambles has been one of the reasons why we our performance has fallen from year to year.

    If you look into what we did in January, we only dipped into the transfer market because Gibbs got crocked. Maybe that was a blessing in disguise because at least it got Santos shipped back to Brazil. However, the big picture there for me is that we weren’t even remotely interested in strengthening the squad, when looking at Newcastle, it is painfully obvious that there were quality players available for the taking.

    So pardon me for being pessimistic here but I think we will buy at most two additions this summer – and both will bargain buys. Notice I said additions, not replacements. I’m not saying they won’t be quality players but I don’t expect the club to splash out cash and have a marquee signing, something which we’d all like to see. The question then becomes, what are we doing sitting on so much cash? Well part of it could be because we are planning life without Champions League, but most of that will already be covered by the increase in TV money. When you look at the last AGM (or maybe it was the one before this), Kroenke was asked if he would go on record saying he would never take money of the club and he said he had never gone on record saying that he wouldn’t and refused to commit to a statement like that. The cynic in me thinks that the club is waiting for the correct time to declare dividends. It might be after we have added a couple of players in the summer, which would give them some justification (though obviously not from a fan’s perspective). This is the worst case scenario for me and would cement Kroenke as the type of owner who has no business owning AFC.

    1. Vote -1 Vote +1nihirealist

      No owner, at least a business minded one, will ever give a guarantee that he won’t do something he’s legally allowed to. It just won’t happen. I think you’re reading too much into it. I think dividends are possible, but will Kroenke give out dividends when Usmanov corners a third of those? Unlikely. If he wants to make money directly from the club’s resources, he just needs to create a position for himself and pay himself whatever fees and bonuses he decides.

      1. Vote -1 Vote +1nycgunner

        Good points. The basic premise of my comment was that the worse case scenario is Kroenke taking money out of the club, whether it be in the form of dividends or some kind of a bonus payout, and that given his history with his other clubs it appears very possible.

  11. Vote -1 Vote +1Bunburyist

    Based on how Tottenham are looking (and us), I think it’s a massive stretch to believe we’ll be playing in the CL next season, so we might as well not include that revenue in our thinking.

    Does anyone have the numbers for how much revenue is available from playing in the Europa League?

    It’s depressing how far we’ve fallen, and to realize that we will continue to do so for the foreseeable future. The only way forward is the commercial side, and as we decline on the pitch, there’s zero incentive for big companies to associate with us in the shape of lucrative deals.

    1. Vote -1 Vote +1nycgunner

      Last I checked, you get a miserable 1.3MM EUR for qualifying for the group stages of the Europa League.

      I think TV money is another 1-2 mil or so..

      In other words, there is on comparison.

    2. Vote -1 Vote +1Tim Post author

      From the financial distributions by UEFA:

      In 2011/2012 Manchester United were knocked out of the Europa League in the round of 16 and they made €1.2m
      In 2011/2012 Arsenal were knocked out of the Champions League and they made €28.2m
      In 2011/2012 Atletico Madrid won the Europa League and they made €10.5m
      In 2011/2012 Chelsea won the Champions League, football died, and they made €59.9m

      Matchday revenue is another important factor in this. In the Champions League run last season, Arsenal had 5 home games. That’s about £10m there. How much that would take a hit in Europa League play is unknown, if Arsenal had the same number of home games but didn’t fill the stadium and people bought fewer “Champions League” branded kits and badges it would be fair to say that they might generate 75% of the income, so a loss of another £2.5m which is about one match day.

      All totaled, it looks like a loss of £28m.

      I also want to say something about the television revenue. The new distribution is not really an increase in revenue: every other team in the Premier League is getting the exact same amount of money. So, while it makes Arsenal a few pounds closer to Barcelona it’s not really a huge chunk of money. Sorry, most of that extra income is just going to be swallowed up by increased demands for player salaries (it’s inflationary) and increased transfer demands (it’s inflationary). It might actually drive down the buying power of the English clubs as teams in Spain will be like “yeah, but you have that new TV money.”

      1. Vote -1 Vote +1nycgunner

        But that extra money isn’t going have an immediate effect on player salaries right? I mean that would mean renegotiating everyone’s contracts which probably wont happen now but could happen over the long run. There could be some inflationary push on transfer fees but given they way we do business and the hard valuation we put on every player I don’t see it being too much of a factor – again this might be more of a factor in the long run but I doubt it will happen this summer.

        Bottom line: we will still have enough money to strengthen the squad this summer, but whether we’ll actually do that is another debate.

      2. Vote -1 Vote +1Bunburyist

        My word that’s depressing. So basically the revenue from the Europa League won’t pay the wages of the squad for even one of those pointless games. I wonder if we’ll use it like a training ground? Oh, who am I kidding, we use the PL and CL like a training ground.

    3. Vote -1 Vote +1craig.

      Come on man, don’t give up yet! 10 games, 2 points from Chelski, 4 from the totts, there is a long way to go. Win this weekend and we’re 1 behind Totts. Even if we lose, we’re still close to Chelski. Way too early to write this race off. 10 games is huge. Remember when we beat Man$hitty last season?

  12. Vote -1 Vote +1CarsonWells

    Reading through this site’s comment section is like reading three or four blogs. You folks will keep a guy sane.

  13. Vote -1 Vote +11NiltotheArsenal

    We are winning at something, but it’s the wrong thing. We are winning at making money. Name your sport, name your team, but eventually winning at making money will lead to decline if you can’t win trophies at the same time.

    I HATE to say it – but – Spuds are in form and on fire right now. For this Arsenal team to derail that train on Sunday is a huge ask at this point.

    We are up against again my friends, and in the words of the great Woody Harrelson in Zombieland, money or no, “it’s time to nut up or shut up”.

    Look at Swansea. Fantastic team on considerably lower wages than us, wins a trophy in their 2nd year in the top flight and we are seven years and counting. Maybe Laudrup would be a good choice to succeed Wenger eventually? He’s done a great job there.

  14. Vote -1 Vote +1JV Mauer

    I make it a point never to talk about that team from the back-end of the Seven Sisters until St. Totterham’s Day.

  15. Vote -1 Vote +1caribkid

    Whenever I cut out and discard all the extraneous crap associated with Arsenal at the moment, one thing stands out, our wage bill of £155m.

    Regardless of whom or what is at fault, I am not convinced we have the best team one could build for that financial investment. We can ease our fears by saying we have the 4th highest wages in the EPL and we tend to bat our weight results wise. However, taken into context, most of the teams we are battling with for the 4th place trophy have substantially less wage bills than us, including Tottenham, Swansea, Everton, Newcastle, Liverpool and West Brom. Extrapolate that further and we have the 8th highest wage bill in the footballing world. Are we the 8th best team in the world? Not in my estimation.

    What is even more frightening, is that our team is frighteningly short of balance in relation to other teams around us with 40 – 70 % of our wage bill. We are lacking at GK, DM, winger and striker.

    Everyone is shouting, “SPEND DA TING”. But, with the present situation we could easily fall into the Liverpool trap of 2 years ago, spend foolishly and not achieve our goals. We have a very short window to rectify our weaknesses and I am not convinced the current administration has the ability to do so.

    1. Vote -1 Vote +1nihirealist

      3 factors have led to increased wage bill.

      1. Wenger’s socialist wage structure
      2. Consistency of qualifying for the CL for 16 years.
      3. The highly fluid squad situation. High flux leads to more inefficiencies.

      While it is not as good as it can be, achieving top 4 on a wage bill of 4th, but negative transfer spend suggests that squad management isn’t terrible in itself. Would we have done better if we’d followed a less equitable wage model? That’s debatable. We still couldn’t compete with the oilers in terms of wages offered. meaning some of our better players could have still been lured away. Also, the squad players, at least those of whom performed decently enough would have been at risk of being taken away too. The tradeoff is that now we can’t get them off the books. But at least we had a team to get us into the top 4. It’s impossible to say how it would have worked out if we’d followed a different strategy. It could have been a whole lot better, or a whole lot worse.

      By the way, a question for Tim. (or anyone else) We know ticket prices correlate to the city rather than just the product itself. (London prices higher than Manchester) Would it be economically sound to suggest that the same logic applies to wages as well? Or does it not matter once we reach figures that large?

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  17. Vote -1 Vote +1Darth Wenger

    Here is my 2 cents on the financial results:
    1) If you look at the profit and loss account – the club made a profit of £1m on normal operations excluding player trading and finance charges (interest on stadium debt). If you assume there was no player trading during the summer (i.e RVP and Song had not been sold and Carzola, Poldi and Giroud had not been bought) then our overall profit before interest and tax would have been £1m. Subtracting finance costs of £6.5m would mean we would have made a loss before tax of of £4.5m before player trading.

    2) If you look at the balance sheet – we have cash reserves of £123m but we also have short term creditors due within 1 year of £143m. This represents cash amounts such as salaries, other operating expenses, interest expenses that the club needs to pay in the next one year. There are also short term debtors of £69.7m. This amount represents cash that we are expecting to receive from other clubs for players sold previously etc. Thus if you net out the three figures the actual cash reserves is £51.6m (£123.3m + £69.7m – £ 141.5m). Part of this cash has to be maintained as part of stadium loan agreements. Thus assuming the club needs to maintain a cash reserve of 10% of the stadium loan of £255m i.e. £25m. Thus the actual cash available for spending is £ 26.6m. Part of this cash has been used to buy Monreal in January.

    In summary, the club is loss making if you exclude player sales and the actual cash available for spending is a lot less than the headline figures.

    The figures will not change dramatically in the second half – the extra revenue from the new sponsorship will kick in and we will make some savings from players moving on (Djouro and Chamack). But this will be offset by higher salaries for the “brit pack” and addition of Monreal.

    To sum it all up – the club is in a much more delicate position than most people appreciate. Based on the above view, we should not expect and world class signings in the summer. Our best hope lies in supporting Wenger and hope he can rekindle his Midas touch and sign the next Fabregas, Henry or Viera

    1. Vote -1 Vote +1Tim Post author

      1. You are using the numbers off the headline balance sheet that Arsenal produced. When you look at how Arsenal actually do player amortization instead of the headline numbers the glaring reality is that Arsenal are in a huge loss position without player sales. Basically, I’m telling you that you need to use the Swiss Ramble’s numbers.

      2. This part is all wrong. You don’t have to guess the amount of cash reserves needed, that’s already outlined in the links in the articles above. You are also forgetting that cash on hand increases over the next 6 months as people renew season tickets but that short term debt stays the same. Bottom line is that Arsenal have well over £70m in cash that they could spend on players, they are culling salaries left and right (watch the year end salary figures), several huge contracts come off the books this summer and the number of players on loan is astounding (Arshavin, Squillaci, Djourou, Chamakh, Santos, Frimpong, Bendtner, Park etc). That means that the club are in a position to not only spend £50m to get a big name player but also to pay a big name player’s salary.

      3. Including Monreal’s transfer Arsenal made £3m in transfers this season. As for salaries, see above.

      The figures will change dramatically. As I have outlined many times before these new commercial deals are a huge boon to the club, especially because of the way they write down player transfers. Here:

      Thanks for the comment.

      1. Vote -1 Vote +1Darth Wenger

        I must admit i have taken a very basic look at the headline figures and if I get the time will take a deeper look at the figures.

        However from what you say, aren’t we in a catch 22 situation? We have money on the balance sheet which can be used to buy players. But if we actually use the money to buy players without actually selling players (as we have done in the past) then the club would become loss making as the only reason it is profitable is because of profits from player sales? The new commercial deal and decline in salaries should help the club break even on a “normalised” basis but I am not sure it increases revenues and profits by a sufficient level for us to be able to buy “big name” players without making losses.

        Excuse me if I am missing out on something – as I said, I have not been able to take a deeper look at the figures and am not too familiar with accounting practices in football.

      2. Vote -1 Vote +1Tim Post author

        It’s a catch 22, on the balance sheet. But that’s where the money in the bank comes in. I think we need to make some losses on balance in order to build the squad back up so that we can keep players like Wilshere.

      3. Vote -1 Vote +1Darth Wenger

        Hmmm! I agree that the squad does needs a boost but splashing the cash on new players without selling existing players means our losses could reach the dreaded £40m figure, which could result in exclusion from UCL – as you say, based on Swiss rambles estimates, our normal footballing business is making a loss of £27m and it would not take much to push it to £40m.

        Lots of moving parts, lots of questions! Hopefully things will become a lot clearer when the next set of financial results are announced.

      4. +2 Vote -1 Vote +1karl A

        Darth is correct that we just about break even. Swiss ramble includes player amortisations, but this is only a function of the fact that a lot of players were acquired in the last two summers (for obvious reasons). It says nothing of our financial health.
        Break even means there hasn’t been any spare room in salary budget up til now.

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  19. Vote -1 Vote +1Cliffy

    Excuse me…are we scoring 3 goals at Allianz arena or not…?!?!?
    I heard they allocate a spot in CL for the winners…

    gah…pessimistic people these… :)

  20. Vote -1 Vote +1Jack Action

    Where I think the club has failed financially is with the academy.

    Who are our world-class academy players that have broken into the first team? Wilshere is one. Gibbs is the second … but it is a stretch to call him world class at this point.

    If the academy were able to produce even just a single new first team player year to year, then we would have not only 10+ home grown players in the first team reducing our need for transfer outlays, but also potentially it would be a minor revenue source as for example Ajax has, by selling off some of our prospects. Homegrown players would I theorize ask for less in salary too, the so called “hometown discount”.

    Instead, I look at our first team and Wilshere aside, I see mostly “imports” from other teams. This is what is not sustainable.

    The huge disappointment financially these past 8 years has been the failure of our academy. We are no different than the other British clubs in this regard, but all British clubs are way behind Germany, Spain and Italy on this front.

    1. Vote -1 Vote +1nihirealist

      An academy takes time. Those ‘imports’ were brought in to bridge the gap between the first team and the true academy prospects we could expect in the future. Wilshere, Frimpong and Yennaris are among the first batch of players of the academy since it was restructured by Wenger in 1999. Barcelona restructured their academy in 1989 I think. A full 10 years before we did. The effects of it weren’t really apparent till 6 years ago. They also have certain advantages over us with their regional affiliation, the ability to have a B team playing competitive matches in the lower league, their access to the South American market etc, apart from the fact that traditionally, they are a bigger club. Allowing them to speed up their operations to some extent.

      The reason English clubs are way behind in this is because of the lack of quality coaching at grassroots level. Hence, the even greater need to restructure an academy and build the basics in-house. Which, as I said, takes time. You are judging our academy too early.

  21. Vote -1 Vote +1karl A

    Spot on Darth. It now becomes clear why Wenger hasn’t signed up any superstar despite all the cash – on a going concern level we are barely going break even.
    By the summer the exit of Arshavin and the like + new sponser deal will ensure some room in the salery budget and some big signing will surely be forthcoming. But we shouldn’t bark at the boss for not signing someone in jan och previously summer if we demand that the club should operate at break even – which obviously is the only reasonable way to operate.

  22. Vote -1 Vote +1Tee Song

    The key figure for me from the Deloitte report are the commercial revenues. In terms of matchday income, we are one of only four clubs to make over €100 million with only two other clubs, Chelski and Bayern, making over €56 million. As Time points out, broadcasting revenues are somewhat of a wash for BPL teams since that money is spread out more or less evenly although, reading between the lines, prize money for tournaments such as the Champions League are included in this total which explains some of the variance between teams. Suffice it to say that we will never have the broadcasting revenue of Real Mad or Barca since those two teams swallow up the majority of the broadcasting revenues of La Liga.

    However, we are eleventh in terms of our commercial revenues. Our €65 million in commercial income pales in comparison to Real Mad, Barca, ManUre, and Bayern who generate a minimum of €145 million. I believe that Tim is right in that the club are at a crossroads. Our competitive level will be determined by how close we can get to those four teams. Certainly, at this point, I’m optimistic enough to believe that are brand hasn’t suffered too greatly from our current trophy drought and that we should certainly do better than Liverpool, for example, who’s commercial revenues are at €99M. However, if in the NEXT round of commercial sponsorships are trophy drought has been extended to ten or twelve years, then both commercial and matcday revenues may take a substantial downturn. The key will be whether Arsene and Kroenke have the will and vision to actually start spending now to build a better team in order to ensure that our brand continues to attract lucrative commercial deals.

  23. Vote -1 Vote +1dy

    only way back for Arsenal is spend the money with a loss at the accounts. No matter how one look at the financial statements and interpret the results, just common sense will tell you what’s happening or what’s going to happen in the next few years if Arsenal doesn’t come up with some positive results at the games.
    I absolutely believe there’s not a great deal of money to spend on new recruits (big name players), no matter what the cash reserve is. No CL, dwindle shirt sales, tickets etc. will eat into the bottom line of revenue, it’s a catch 22 like you said, I say bit the dust and to hell with financial prudence. Arsenal will spiral into the deep of no return without taking some drastic actions, and don’t underestimate the effect on team members who’s confidence are low already. Success bleeds success and build up believe in the players themselves that they can compete and win. An extra effort from everyone has to come from some satisfaction that their actions wouldn’t be wasted.

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