pandemic – GAME OF THE PEOPLE

FOOTBALL clubs talk of a commitment to ecological issues and a desire to be carbon neutral and proactive about emissions. With this in mind, the pre-season fixture lists, notably the summer jaunts of some Premier League clubs, look a little extravagant, although some have gone to considerable lengths to ensure they appear very responsible.

Take Manchester United, who have purchased more than 1,800 tonnes of “carbon offsets” to cover all flights by players and club staff for their tour of Thailand and Australia. Most people won’t know what carbon offsets are, but United assured everyone they recognise the impact of international travel on climate change. The purchase of the offsets eases any PR pressure United might have experienced, but emissions are still emissions and how long does it take to neutralise emissions?

The carbon offsets will be drawn from the Yarra Yarra Biodiversity Corridor situated in Western Australia. United have achieved 13 consecutive years of reduction in carbon emissions and is ranked among the top five most sustainable football clubs in the Premier League.

All clubs seem to have an environmental policy and include in their annual accounts statistics and progress reports on performance in this sphere. Chelsea, for example, have worked on offsetting carbon emissions by planting 3,500 trees at their training ground. Tottenham, early in 2022, committed to be carbon neutral by 2040. They also revealed a goal of having only 23% of their fans travelling to home matches by car. This would certainly depend on the quality of public transport which in England lags behind much of Europe.

In this age of global tension and conflict, macro-economic turmoil, oil price volatility and climate deterioration, surely we should be looking to reduce unnecessary air travel?

However, Liverpool and Tottenham are the most sustainable clubs according to the BBC/UN compiled Green League 2021, both clubs also signing up to the United Nations’ Race to Zero initiative. They are two of the five major clubs (as per Deloitte’s Football Money League) who have signed the UN Sport for Climate Action Framework Signatory. The others in this year’s report were Paris Saint-Germain, Juventus and Arsenal.

Unsurprisingly, the clubs with the most resources are at the top end of the Green League, although Southampton, Brighton and Norwich City are placed in the first eight. However, the most “green” football club in the world, judged by FIFA, has been named as Forest Green Rovers of England’s League One (2022-23). FGR are a relatively modest outfit, but their efforts to be a fully sustainable club are mightily impressive and should be replicated across English football. It may be easier to achieve at a lower level on a smaller scale, but it has to be remembered it was not so long ago FGR were a non-league club.

There has to be a discussion around the wisdom of clubs venturing to Asia and the US for a pre-season tour, a meet and greet exercise to build the global franchise of the respective clubs. Understandably, the fans in these countries love to see their heroes – witness the welcome Liverpool received in Asia – but Liverpool will be playing, amongst others, Manchester United and Crystal Palace, Chelsea will face Arsenal in the US and Manchester United also have meetings with Crystal Palace and Aston Villa. Obviously this is also about responding to the popularity of the Premier League in places like Bangkok and Singapore, but is it REALLY necessary. Surely, in this age of global tension and conflict, macro-economic turmoil, post-pandemic employment issues, oil price volatility and climate deterioration, we should be looking to reduce unnecessary air travel? A flight from London to Sydney, for example, produces 1.79 tonnes of carbon dioxide equivalents. A Boeing 747 jet emits 100-150 grams of carbon dioxide per mile, per person.

Perhaps they would be better advised to stay closer to home and use alternatives to long-haul flights? Maybe games against junior clubs in their own country to help boost the football eco-system in which they live? Across Europe, many clubs opt for summer training camps in Austria and other lush countries, with friendly games against other travelling teams. Only last week, Werder Bremen were in the Tirol playing a fellow Bundesliga side and a Turkish team. The presence of clubs of the status of Ajax, Borussia Dortmund and Young Boys Bern in towns in Austria and Switzerland also provides a much-needed economic boost to holiday resorts. It was a practice that former Arsenal manager Arsene Wenger favoured in his early years at the club.

In all probability, big clubs would say a tour to Asia represents part of their core business proposition – playing football as entertainment for the people. These tours are also significant revenue generators, with the biggest names in Europe capable of receiving match fees of up to £ 2 million. It certainly seems like nice business if you can get it, but the effect on the planet, not to mention the physical aspects of long-haul flights (no flights over Russia has a big affect on flights to Asia) must surely be questioned, especially as these games are friendly matches with a diplomatic and commercial agenda. It’s worth thinking about.

ARSENAL went into 2021-22 knowing they were not going to benefit from European competition for the first time since 1995. Finishing eighth for the second successive season, the club is still struggling to find consistency in the post-Wenger era. The latest financial report from the club emphasises that the Gunners’ continue to lose ground.

In 2020-21, Arsenal made a loss for the third consecutive campaign and the deficit increased to £ 127 million (pre-tax), up from £ 54 million in 2020 and £ 32 million in 2019. This was partly due to exceptional expenses of £ 39 million, but it also demonstrated the impact of covid-19. Since 2018-19, the last “normal” season, Arsenal have seen their revenues drop by 17% and between 2019-20 to 2020-21, they fell by 5% to £ 327.6 million. It is estimated the pandemic may have cost Arsenal around £ 80 million.

In the past five years, Arsenal’s position among the elite (aka the big six) has come under threat and they are now sixth in terms of total income and have been overtaken by their fierce rivals Tottenham.

The club rearranged its debts and repayed some bank debt, which incurred a big chunk of exceptional items in the form of refinancing break costs. Arsenal rely on significant funding from KSE UK Inc (owned by Stan Kroenke) and they have a £ 70 million working capital facility with Barclays Bank. Their net debt has increased by 84% to £ 199 million due to a big reduction in cash.

On the pitch, while Arsenal have won four FA Cups since 2014, their league form has declined and from being a Champions League regular, they have spent five seasons outside the top four and four years in the Europa League. Rather clumsily, they went out of the Europa League at the semi-finals stage in 2020-21 to Villareal. Coach Mikkel Arteta still divides opinion among fans, although generally, he is popular and people appear to be buying into his “project”. His win rate, though, is 53.8%, lower than his predecessor Unai Emery, and there will be no silverware in 2021-22. Arsenal could still qualify for next season’s Champions League.

Revenues down 5% year-on-year
Pre-tax loss totals £ 127.2 million, net loss £ 107.3 million
Only Chelsea have posted a bigger loss in 2020-21
Wage-to-income ratio up to 73%
Profit on player sales drops by 80%.

Arsenal’s European run benefitted their broadcasting revenues, which increased by 55% to £ 184.4 million. Absence from Europe will obviously hit the club’s income in 2021-22, hurting almost as much as the ignominy of exclusion. Given the current climate, it was no surprise the Gunners’ matchday earnings fell dramatically from £ 78.7 million to just £ 3.8 million. With the return of crowds, Arsenal should see this revenue stream head towards the £ 100 million mark once more in the current season. Commercial income fell slightly to £ 139.5 million in 2020-21, but was at a historic high level.

Arsenal’s profit on player sales fell by some 80% to £ 11.8 million, a far cry from the £ 120 million they made in 2018 and far less than the average over the past five years (£ 42 million). The club’s transfer market activity was relatively muted, their biggest signing being Atlético Madrid’s Thomas Partey, who cost £ 45 million, and Lille’s defender Gabriel, who was signed for £ 23 million. They sold goalkeeper Emiliano Martínez to Aston Villa for £ 20 million. Gross spend, according to Transfermarkt, was £ 77.4 million, the seventh highest in the Premier League, while their net outlay was £ 60 million. The club’s accounts show £ 115 million in additional player registrations.

Even though revenues were 5% lower in 2020-21, Arsenal’s wage bill rose by 6% to £ 238 million, representing 73% of income. To the credit of the players, they agreed to a 12.5% pay cut during the peak of the pandemic. At the same time, the club made 55 people redundant, including their popular mascot, Gunnersaurus Rex. Since 2016, the Gunners’ wages have gone up by 22%, far less than the growth rate at the other big six clubs. For example, Tottenham’s salaries have grown by 105%, Manchester City’s 80% and Liverpool’s 51%. Interestingly, directors’ pay more than doubled in 2020-21.

The financial news will do nothing to increase the popularity of the current regime at Arsenal, especially as they announced a 4% increase in season tickets for 2022-23 just before releasing their financials. However, Arsenal’s current malaise is a temporary thing and they will be bounce back. Whether they can become more successful depends on a more dynamic transfer policy that identifies talent at the right price as well as a longer-term view around developing a team that can be more competitive. A big change is also needed in the relationship between the club’s owners and the fans. If these factors can be improved, then Arsenal’s Emirates Stadium will be a happier place.