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…

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Category: Arsenal News, Arsene Wenger, Backroom, Rants

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Peevish

I guess football in general has just got me down lately - I remember the days of supporting Arsenal purely for the football on the pitch - taking pleasure in winning trophies. I just hate the way that victories lately have to be found in profit, and spending. I'm not having a pop at Wenger, and only partly in the club - I guess I'm just mad at football in general.
Of course it wont help me cheering on the Arsenal as I have done all my life! And it could be worse, I know that - I could be a Portsmouth fan, god love them!
Alexinho

YES. Hopefully we can use the money to make some moves and get back on top. This is a relief, too, because our bottom line must be my biggest worry about the club.
vespo

I think this really all goes back to the new stadium. Arsenal have been quite financially responsible for a long time, at the very least since Wenger arrived. And Arsene's astuteness in the transfer market has always been evident and we've never spent loads with him in charge.

I think that when they decided to take out the requisite loans to build the Emirates, the directors told him to tighten up a bit more, and he's admitted this in the past. He's said that his development of Diaby, Denilson, Bendtner, etc -- ie the young, talented but often criticized players he's developed from a very young age -- would be the core of the team, for better or for worse, until the stadium debt is under control.

I think that the directors wanted to maintain the same level of fiscal responsibility and cash flow at the club, despite building the Emirates, and that Arsene's abilities are perfectly suited for this. He's been able to keep the club playing at a very high level (although not the highest) while the stadium is taken care of. Here's hoping that sometime soon the debt will be under control enough that the directors and Arsene feel they're able to really press ahead to the top level again.

All in all, I think Wenger deserves a remarkable amount of credit and respect for this. He understands and can balance the financial, business, management, and sporting aspects of a huge club better than anyone on the planet IMO.

In Arsene I trust.
Peevish

I guess a lot of it comes down to fan perception vs shareholder perception. For the money-men and women, Arsenal's ability as an organization to be able to stay in the big competitions for a long time without carrying huge debts like the other top clubs, equals a success.
As a fan, it is nice to be able to look at the big clubs sinking huge amounts of money into their talent, and feel very smug about our manager's ability to get decent talent in cheap.
But how long, as a fan, does this keep me happy when my team continues to fall short in what counts for me more than anything - winning competitions. I don't care how much I can gloat over finding such a long list of world class talent early, and for relatively tiny sums of money - if I can't cheer my team winning cups, when we always seem within touching distance, then is my team the success that the shareholders drum into us?
NO.
And worst of all, I hate that I feel that way, because I always go back to the memory of David Dein and Alisher Usmanov smugly announcing that Arsenal will fall behind the big spending clubs. Please don't let them be right, for the sake of my faith in this club.
Homey

Gooner,
Yeah, I think I made that point during the summer. It's not that Arsenal is worse, it's that the rest of England is better. Actually, our results in Europe haven't really dropped off from when we were winning league trophies. It's just that now, we're seeing 2-3 English teams in the Euro semifinals. In the old days, it would be mostly Spanish/Italian/German teams. At least that's how I remember it. But if everyone else raises the bar, I think it's up to us to keep up.
Gooner

homey, its not about the challenge of winning trophies with little cash, it is just the way Arsene Wenger is and it is just the way it has always been. what have really changed between this transfer window and the transfer window 13, 12, 11 or 10 years ago from an arsenal point of view... nothing. For example Henry, Veiria, Petit, berkamp, toure, Anelka, Cole and more, they all became great players from "nothing" wenger made them great players, keeping in mind they were all very very inexpensive. I think the board are provideing the money, but everyone knows that Arsene is arrogant, everyone keep saying that he cant win it with these players, so he wants to prove everyone wrong.

I am not saying arsene is wrong or right by not spending, because "okay" nothing have really changed throughout arsenal's transfer market, but five hears ago arsenal was successful yet now "trophy-wise" arsenal is not. why? the only explanation is that other teams are spending more and more money in tranfer windows.

anyway I still believe in the team I think they can win it "hopefully"
zadster

I'm not a pro at reading UK financial statements, but it doesn't look like dividends were paid out to shareholders this year. Also, it looks like their cash account only went up 6M pounds this year, which was actually less than last year's cash increase of 19M pounds (although that figure is inflated because they brought in 67M pounds in new financing).
Homey

Martin,
What if AW actually likes the challenge of trying to win trophies without all the cash that others have? So they give him enough to build a decent team, and then he takes it from there. I have to wonder about that.
Well whatever the answer, it's certainly very frustrating. And it stinks to the see general type of player we're bringing in. I'd rather see all of the extra money used on 1-2 established butt-kickers, regardless of position. Rather than guys like Ramsey and Nasri and Eduardo. I like all of them, but they don't have a Torres-type impact on the team.
Gigi

martin any prev for olympiakos?
Gigi

i hope martin is right and homey wrong,
even as business men, the goal is not always filling the ockets, but also keeping the machine that poduces them wroking well, and that is a rsik by just letting them be in 4th place, seeing what other clubs do, thats my opinion but of course every business man rfuns his business like he wants to,
it would be a shame, though, cause a name like arsenal does not get overnight,
i still think wenger wants to win trophies as well,
Peevish

I couldnt care less about where the money goes, as long as we make more, if only to warrant more photos like the one adorning this post. Amen to you sir, for some quality old school wrestling shots.

Ok so maybe I do care what happens to the money - i.e. GET MORE PLAYERS!!! Diaby out please, Silvestre likewise.
Homey

If you'll remember some of my posts this summer, I guessed at this exact thing. Everyone was saying that either: a) the debts were worse than we thought or b) Wenger just didn't want to buy players. I suggested maybe the owners just had a pile of money and were using the "debt" as an excuse to hoard more for themselves. I think that's about right. It seems to me the plan is to try to stay in the top 4 and collect a lot of revenue, but not really spend enough to push the big boys.