Arsenal’s Premier League to lose?

THE HALFWAY stage of the Premier League has still to be reached, but Arsenal have the sort of lead that starts to make bookmakers twitchy. Nobody wants to make a strong or loud case for an Arsenal title win, but it is starting to look like a distinct possibility. Going into 2023, the Gunners certainly look the most composed, confident and effervescent team in a season of transition for a lot of top sides. Of course, everyone fears Manchester City and Arsenal have yet to play the reigning champions, but the Guardiola gang have not been at their best on a number of occasions, as their 1-1 draw with Everton over Christmas demonstrated.

Arsenal’s weak spot may be a lack of strength in depth, something City cannot really ever claim to suffer from. Mike Arteta has a very good starting XI and some of the most exciting players in the Premier League in 2022-23, but one or two injuries could derail their title bid. City, to some extent, could have a problem if Erling Haaland picks up a bad injury – he has been brilliant in the goalscoring stakes, but have they become too reliant on him already after one half season? The giant Norwegian has netted 50% of City’s league goals and 27 of the 63 they’ve scored in all competitions.

It is to Arsenal’s credit that their table-topping team, while predominantly bought from other clubs, was constructed for a couple of hundred million pounds less than other big spending clubs like Chelsea and Manchester City. Arsenal’s most impressive player this season, Bukayo Saka, cost them nothing, but they have shown they are getting smarter in the transfer market, as evidenced by the acquisition of Martin Ødegaard (£ 30 million), Gabriel Martinelli (£ 6 million) and Gabriel (£ 27 million). They also signed Gabriel Jesus and Oleksandr Zinchenko from Manchester City, paying a total of £ 75 million for the pair.

What has really paid off for Arsenal is patience. Over the past couple of years, Arteta’s future has seemed to change game-by-game, with the doubters calling for his head after some bad results, but equally, his supporters singing his praises after every outstanding performance. Arsenal have benefitted from something of a clear-out, with expensive players like Pierre-Emerick Aubameyang and Alexandre Lacazette both leaving and their most extravagant signing, Nicolas Pépé, is currently out on loan at Nice, his £ 72 million fee hanging like a millstone around his neck.

If Arsenal were to maintain their form and win the Premier League, it would be good for football. Admittedly, they remain one of the wealthiest clubs in Europe, paying high wages and spending money on new players – since 2021-22 their gross spend has been £ 299 million (net £ 244 million), but they don’t have the resources of a City or Paris Saint-Germain. The difference today is that they seem to be making better, more forward-thinking decisions around player acquisition and, consequently, they have the youngest team in the Premier League with an average age of 24.6 years (Premier average 26.9). They also have one of the most cosmopolitan squads, comprising 72% foreign players. A total of 10 players were involved in the 2022 World Cup across seven different nations, including three England players in Saka, Aaron Ramsdale and Ben White, who mysteriously disappeared mid-tournament.

Arsenal’s roll-call of success

Year (time lapse)   
1930 (37) FA Cup winners 
1931 (1)FL Champions  
1933 (2)FL Champions  
1934 (1)FL Champions  
1935 (1)FL Champions  
1936 (1) FA Cup winners 
1938 (2)FL Champions  
1948 (10)FL Champions  
1950 (2) FA Cup winners 
1953 (3)FL Champions  
1970 (17)  Inter-Cities Fairs Cup
1971 (1)FL ChampionsFA Cup winners 
1979 (8) FA Cup winners 
1987 (8)  FL Cup winners
1989 (2)FL Champions  
1991 (2)FL Champions  
1993 (2) FA Cup winnersFL Cup winners
1994 (1)  ECWC winners
1998 (4)FL ChampionsFA Cup winners 
2002 (4)FL ChampionsFA Cup winners 
2003 (1) FA Cup winners 
2004 (1)FL Champions  
2005 (1) FA Cup winners 
2014 (9) FA Cup winners 
2015 (1) FA Cup winners 
2017 (2) FA Cup winners 
2020 (3) FA Cup winners 

The World Cup doesn’t seem to have affected Arsenal’s momentum, judging by their results since the return of Premier League football: a 3-1 home win against West Ham and a 4-2 victory down at Brighton. Naturally, Arteta is refusing to talk about title credentials, but there seems to be a fresh belief at the Emirates that they can end the longest run without a league title since the club started winning silverware in the 1930s. If they manage to beat off the challenge of Manchester City and others who may run into form in the second half of the campaign, it will have been 19 years since their last league title, the famous “invincible” season of 2003-04.

If nothing else, an Arsenal triumph win would prove to the rest of the world that English football is not the property of the middle east – City have won four of the last five Premier titles. Arsenal are one of a group of US-owned clubs that include Chelsea, Liverpool and Manchester United, although the two northern clubs could both change hands in 2024 and become the property of oil states. The US contingent could soon find they are unable to compete with clubs with middle eastern ownership models. Therefore, opportunity has to be grasped when it presents itself for a club like Arsenal (or indeed Chelsea under their new owners).

At the moment, Arsenal have a little scope for error, but City are breathing down their necks and are capable of stringing together long sequences of spectacular results. The Gunners have a vital few weeks ahead of them – they face in-form Newcastle United at the Emirates on January 3, followed by a trip to Tottenham on January 15 and a home game with Manchester United on January 22. By the time they go head-to-head with Manchester City on February 15, everyone will know a little more about Arsenal’s ability to last the pace. At the moment, it looks better than at any time since 2004.

Exile from Europe costs the Gunners in 2021-22

ARSENAL were once UEFA Champions League perrenials, 17 consecutive seasons in the competition helping to make them one of European football’s more respected business models. When the Arsène Wenger era started to stagnate, Champions League qualification almost became the club’s main [consolation] target, but things went haywire when Arsenal suddenly became a Europa League club. It got worse, for in 2021-22, for the first time since 1995-96, the Gunners failed to qualify for any UEFA competition.

The absence of broadcasting revenue from Europe was always going to hit the club’s finances in 2021-22. Although a pre-tax loss of £ 45.5 million was a marked improvement on the £ 127.2 million deficit of 2021-22, the figures suggest the club still has significant upside both on and off the pitch.  It was the fourth successive season in which Arsenal have made a loss, an unlikely scenario a decade ago.

Revenues went up by 13% from the previous season to £ 369.1 million, notably match day income, which rose by 2010% on the empty stadium year of 2020-21. The club’s commercial income was slightly higher at £ 143.7 million, but broadcasting was down by 21% to £ 146 million, some £ 50 million lower than the record of £ 199 million, received in 2017. The other big six clubs, between them, earned a total of almost € 400 million from European broadcasting.

The return of fans played a big part in the recovery and Arsenal’s average gates – just shy of 60,000 – were the second highest in the Premier League. The big crowds and the pricing structure means Arsenal’s matchday stream accounts for almost a quarter of total earnings, compared to around 15% for Chelsea and 18% for Tottenham.

Commercial income, which was buoyed by the Amazon production, All or Nothing, went up to £ 142 million, but this is an area that Arsenal trail quite dramatically behind their peer group in the Premier League. Manchester City’s commercial activity totalled £ 300 million-plus in 2021-22, for example, and Manchester United earned more than £ 100 million more than the Gunners.

With something of a clear-out going on at the Emirates, it was no surprise that the wage bill dropped by 11% to £ 212.3 million. With revenues up, this meant the wage-to-income ratio fell by 15 percentage points to a more sustainable level. Arsenal continue to allow some player contracts to run off, thereby missing out on possible transfer income, but this can also have a positive affect on total wages. In the past year, David Luiz, Hector Bellerin, Alexandre Lacazette and Pierre-Emerick Aubameyang have all departed, all of whom would have been paid top wages.

Arsenal’s key figures, last five seasons

P&L pre-tax(45.5)(127.2)(54)(32)70
Net debt20419910842(15)

There does seem to be a change of mood at Arsenal and this bodes well for the club’s finances in 2022-23. There is less noise around “Kroenke Out” these days, which does show success on the field can deflect the wrath of dissatisfied customers, albeit temporarily. However, it should be noted that Kroenke’s KSE Inc. has lent the club more than £ 30 million at favourable terms in order to fund Arsenal’s transfer activities and provide working capital. Moreover, Arsenal also have a £ 70 million facility from Barclays to call upon.

Arsenal need to reverse the relative lack lustre growth at the club since 2017. Their revenues have declined in that time while their chief rivals have all seen healthy growth, ranging from Manchester City’s 35% increase to Tottenham’s 18% hike. Understandably, the club’s decline on the field is aligned to this fall, each a factor of the other, most notably the loss of Champions League football and some poor decisions in the transfer market. And with the pandemic coming along in 2020, the malaise that surrounded the club was very poorly timed.

The club has made some progress in the transfer market, with a stronger emphasis on younger players. In 2021-22, their profit from player sales was £ 22.2 million, better than 2020-21’s £ 12 million, but way off the £ 120 million profit made in 2018.

As for purchases, in 2021-22, Ben White (£ 50m Brighton), Martin Ødegaard (£30m Real Madrid), Aaron Ramsdale (£24m Sheffield United) and Takehiro Tomiyasu (£ 16m Bologna) were all signed. Each player was in his early 20s and most have already made an impact at the Emirates. Arsenal spent another £ 115 million in the summer of 2022, signing Fábio Vieira (£ 30m Porto), Gabriel Jesus (£45m Manchester City) and Oleksandr Zinchenko (£ 30m Manchester City). Arsenal, over two seasons, have been one of the biggest spenders in the Premier League. They have the youngest squad in the division with an average age of 24.5 years, 70% of which are foreign players. They also have sought-after talent in the form of England’s Bukayo Saka and Gabriel Martinelli of Brazil. Coach Mikel Arteta has survived a sticky period to become one of the most popular in the Premier League, although as everyone knows, football is a fickle game.

The signs are that Arsenal’s finances will recover further in 2022-23. A return to Europe will be lucrative, especially if they do maintain their top four position and qualify for the Champions League and this, in turn will create more commercial and matchday income. It is not unreasonable to anticipate a rise in revenues to more than £ 400 million in 2022-23 and while they may not return to profit (success also brings wage demands), the loss will again be eroded. By that time, Arsenal could be celebrating the return of serious silverware to their side of North London. If nothing else, the Gunners are one of Europe’s most exciting and stimulating teams at the moment – should that bring success, the club’s financial position will surely be more robust. We may even hear a chorus of “for he’s a jolly good fellow”.