Arsenal Announce Record Profits

By: Martin | September 28th, 2009

Arsenal Holdings, PLC just released a summary of the financial results for last season. It all seems to be good news, and it sounds like the club improved in pretty much every financial category over 2007-2008:

–Overall income increased to £313.3 million from £223.0 million the year before, largely due to deep cup runs and increased merchandise sales
–Overall matchday/ticket revenue increased to £100.1 million from £94.6 million the previous season.
–The sale of some of the Highbury apartments contributed £7.8 million to the operating budget.
–Overall operating profit was £35.2 million, up from £25.7 million the season before.

Hmmm. 35.2 million. So, um….why didn’t we get Felipe Melo again? This is all well and good, and I’m glad the club is doing so well financially, but the fact of the matter is none of us are Arsenal fans because the club is well-run or profitable. We root for the club because we want the club to win matches and trophies. On the pitch. We’re not jumping up and down in bars high-fiving each other because the directors are getting higher dividends this season.

It’s not that simple, of course. The club does still have quite a bit of debt from both building the Emirates and developing the old Highbury property. And if and when that debt is paid off, the club is going to be a real cash cow, and hopefully at that point there will be more money going into the club’s on field product. The club is saying all the right things–Chairman Peter Hill-Wood says:

This is excellent news although I should perhaps stress that making and reporting profits is not in itself the primary objective for the directors. First and foremost we are supporters of this great football club and, as such, our main goal will always be the achievement of success for Arsenal on the field. The Group’s profitability is important because it is a by-product of running the Club as a solvent and successful business, which in turn allows us to maximise the level of investment in the playing staff and in the future development of the Club.

Wenger echoed a similar sentiment:

I am encouraged by the fact that the financial results are good because on my side I try to contribute to that. I am quite proud that I work in a company that is in a strong financial situation. I have always worked in clubs which make money and I would not feel that I do my job well if we lost money at the end of the season. However the sporting side is always the most important thing. To be completely happy you have to do well on the sporting side but never, no matter what happens, can it be accepted from any manager that to do that you put your club in trouble.

I guess I see their point, and I don’t necessarily disagree. It just seems like a club in Arsenal’s position can do one of two things–either (1) keep the profit within the club (I’m assuming it’s staying in the club, and not going straight into the shareholders’ pockets, which may not be a sound assumption) to guard against a rainy day when some debts get called in or the club fails to make the group stages and loses a lot of revenue; or (2) put the money back into the club, by say, buying Felipe Melo and Marouane Chamakh, and try to reach even greater heights–after all, if Arsenal were to win the league or Champions League (or even, to a much lesser extent, the FA Cup), it would greatly increase attention and marketing revenue.

The club has clearly chosen to be risk-averse and go with option (1). And I can’t say that it’s wrong. But of course, from a fan’s perspective, it is deeply unsatisfying to have a team on the precipice of great things, the money to improve the team in a way that could potentially put it over the top, and yet the team sits on its pile of money, arms folded, and still says with a straight face that the on-field product is the most important things. Sigh. I guess Biggie (R.I.P.) was right…