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”.

Football club ownership is about to widen the chasms in the game

WITH Manchester United and Liverpool now on the market, both valued at well over £ 3 billion, another tranche of English football is about to move into the hands of investors from either the Middle East or the United States of America. As it stands, it looks as though both clubs may become part of the asset portfolio of an oil state, which would probably take both clubs to a comparable level to Manchester City and Newcastle United. The competitive advantages that Manchester City have may become eroded and two of the clubs that have complained vehemently about the uneven playing field that state ownership creates will move much closer to their despised rivals. It’s a contemporary version of “if you can’t beat them, join them”.

If, as expected, the new owners of Liverpool and Manchester United emerge as Middle Eastern petrostates, it reinforces the strength of both clubs and also becomes a wedge between them and those scrambling below. In other words, the already substantial gulf becomes wider as more clubs become beneficiaries of Arab money. The protests over Newcastle United’s takeover by the Public Investment Fund (PIF) sovereign wealth fund will surely be replicated in Liverpool and Manchester. Or will they?


Club ownership now has a kind of league table of its own. The Middle East is top of that league as the owners rarely want much in return. They see a successful football club as good for their image, something which can provide positive public relations, enhance their relationship with football authorities and help smooth the path of business. Call it sportswashing, manipulation or disingenuous, but a club owned by a country with a challenging reputation will undoubtedly receive lots of money. Roman Abramovich had a similar relationship with Chelsea, although his one big requirement was the indulgence of impatience. Managers were not allowed to “fail” but Chelsea fans consider the Russian was a good owner, delivering plenty of success.

The second level of ownership comes from the United States, a growing group of investors who are very different from the oil states. Arsenal, Chelsea, Liverpool and Manchester United, among others, are in this group at the moment. Typical US sports team owners demand success on the field, but they also want to run their club as a fairly sensible business, use modern methods to buy and sell players and they also expect some sort of return from their investment. If things go well, the fans sing the praises of the owners, but as soon as success dries up or becomes more spasmodic, criticism of the owners’ lack of investment or financial priorities starts to dominate the narrative. Arsenal fans were very vocal and demonstrative about Stan Kroenke over the past couple of years, but with the Gunners flying high and playing well in 2022-23, the noise appears to have subsided. Kroenke’s name has barely been in the press this season. Fenway were praised when Liverpool won the Champions League and Premier League, but recently there have been suggestions they should move on. Manchester United’s dislike of the Glazers dates back to the very beginning of their relationship, but with almost a decade of aimless wandering, the popularity of the US family has never been lower. It was no surprise when the news was released of the Glazers’ desire to look at fresh investment in the club, a comment that could be translated as, “we want to sell”.

For the few

The sale of Chelsea to a consortium fronted by Todd Boehly, for a very lucrative price, has been the catalyst for a number of potential divestments in the game. At the very top, football clubs are very cash generative and they can be good for your image, although the vast majority of football followers can see the  agenda of countries who want to deflect from criticism of their human rights record and social/political conditions. Sadly, football sells its soul all too cheaply and too many fans choose to ignore the moral hazards of aligning clubs with regimes that discriminate on a grand scale. The winning of silverware should not be more important than the crimes and misdemeanours of intolerant societies. It is also wrong to turn a blind eye if its suits your own purposes.

Modern football is a capitalist game that relies on the generosity of benefactors and investors. Clubs no longer “belong” to fans, apart from those that are bespoke fan-owned models. If you open yourself to the benefits and perils of the free market, then you have to take your chances. Manchester United benefitted from their forays into the capital markets back in the early 1990s and this helped create the empire that dominated football until the departure of Sir Alex Ferguson. But in doing this, the club also became an asset that could exchange hands and be the subject of takeovers or hostile takeovers.

The Glazers reputedly used a technique known as a Leveraged Buyout (LBO) when they bought United, loading debt onto the club borrowed to acquire their stake. While this was a much-used method for M&A markets, it was largely unknown in football at the time.

With clubs now worth far more than they ever were, prospective buyers start to become scarcer and in those circumstances, the net has to be cast wider and into territories that may not be wholly compatible. A club worth £ 4 billion only has so many takers and the appetite will also be largely governed by macro-economics as much as personal wealth.

The more owners of the type that have made Paris Saint-Germain and Manchester City into clubs with extraordinary resources, the more football leaves behind its past and solidifies the elite. Fans may complain about their owners and also those rivals that have unfair advantages, but deep down, they really want their own club to enjoy the same sort of status and that often means some have to eat their words. Be prepared for campaigns of justification in the weeks ahead if the Middle East rolls into town once or twice more.