Arsenal – a great club in urgent need of direction

ARSENAL is a football institution suffering from bad karma and a deep malaise that includes dissatisfaction with ownership, poor team performances, disillusion with the manager, vocalised anger at some players and now, a disappointing set of financials. Nothing seems to be going right for the Gunners.

Arsenal’s football club finances showed a loss for the 2018-19 season of some £ 23.5 million. This is hardly an existential drama, but this is a club unaccustomed to making losses in the modern age. And it has to be noted that in 2017-18, the club posted a pre-tax profit of £ 97.4 million. What should concern Arsenal fans is the size of the differential between those two figures. It adds fuel to the spirit of discontent that currently presides at the Emirates Stadium.

Arsenal’s recently published revenues, which relate the football arm and are not the holding company, totalled £ 367 million, down 5% from £ 388 million. The 2018-19 season was Unai Emery’s first campaign and they reached the final of the Europa League, although their display in Baku was feeble. Obviously, with no Champions League football, the club missed out on the lucrative income streams that UEFA’s premier competition can deliver. Arsenal’s matchday revenues declined by some 31%, quite an alarming figure, to £ 69 million. Comments that this is due to low Europa crowds are not backed-up by the actual attendance figures – Arsenal had seven home games in the Europa and each one was 58,000 or more. However, some games did have big gaps in the stand and Arsenal’s stated crowd figures are often at odds with perception at the stadium.

The club explains the big drop in matchday income as a “consequence of the way certain inter-company revenues were impacted by the delay in season tickets until after the Europa League final”. It would appear that the money is not missing, but allocated elsewhere in a complex company structure. The holding company’s financials are not due for a while.

Although matchday revenues took a dive, both TV and Commercial revenues were up, by 1.6% and 3.9% respectively. Of the £ 183 million in broadcasting income, £ 36.6 million was derived from the UEFA Europa League.

The club’s operating expenses fell by 2% to £ 403 million but Arsenal’s staff costs went up by 4% to £ 227 million, representing 62% of turnover. The club admitted that player trading activity was muted in 2018-19. Total profit on the sale of player registrations was £ 12.2 million versus £ 120 million in 2017-18. The average annual profit from the sale of players over the last five years is £ 34 million, but in another year without Champions League football, the drop in player trading profits is damaging.


Arsenal’s record in the transfer market has been relatively poor over the past decade. Too many big signings have not worked-out and the latest, Nicolas Pepe (£ 72 million) is in danger of going the same way after making a spectacular entrance. There’s no denying that Arsène Wenger went on too long and there was a period of unrest at Arsenal as people recognised the club was in stagnation. However, since Wenger’s departure, Arsenal have fallen further from their pedestal and from being a Champions League regular, they are increasingly seen as a Europa League club. The way they have performed so far this season puts European football for 2020-21 at severe risk.

Fans consider owner Stan Kroenke does not truly care about the club, but US owners tend to expect a return from their investment. Arsenal, in the latter phase of the Wenger era, were accused of being too conservative and wanting to run a successful business rather than a trophy-winning football club. Arsenal were profitable and they were perennial Champions League participants, so the model appeared to be working as far as the owners were concerned. Fans were not 100% happy given they had enjoyed constant success in Wenger’s first eight years. The ethos had changed from hunting silverware to being almost satisfied with a top four position and another tilt at the Champions League.

The building of their splendid new ground meant finances had to be managed differently while the club adjusted to life at the Emirates and loans had to be serviced. By the time Arsenal loosened the purse strings, the scientific advantages that Wenger brought to the club had been eroded by new competition. Arsenal’s position in the hierarchy was slowly diluted by the emergence of cash-rich Chelsea and Manchester City.


Kroenke is seen as an absent owner and is blamed for every negative aspect of life at Arsenal, even though for many elements of, he has no influence. Wealthy individuals like Kroenke pay people to run their investments, including a football club. He has his son, Josh. The fact Kroenke went to great lengths to gain control of the club suggested he really wanted it. A US owner may want to turn a profit, but he will also crave success. This is not guaranteed and sometimes takes time. If an overhaul of the playing squad is needed, existing contract commitments mean the fans may have to be patient. Arsenal’s position is not unlike Manchester United’s dilemma. Both clubs have a culture of success, they have US owners and they have struggled to come to terms with the departure of long-serving, legendary managers.

Arsenal is a systemic club, one that represents football royalty and one that, traditionally, has had a set of values that other clubs aspired to. They have had bad times before, indeed some far worse than their current frustrations. They will come again and eventually find the right manager to take them forward. Talk of relegation is really quite absurd. Their wealth and position in the game means they can hire almost anyone. When that time comes, nobody will give any credit to the Kroenke regime. At present, he gets the rap for Arsenal’s decline, but the root of the club’s problems go back some years and can be attributed to a lack of energy around succession, contract management and transfers. Those responsible for the fall of the house of Hill-Wood are not necessarily currently employed by Arsenal Football Club.




Photos: PA

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