By Tony Attwood
There’s a lot of talk around about Arsenal have the highest ticket prices on the planet and yet won’t buy the players “need” to help Arsenal win the league.
As with so much in football, such a statistic is misleading – both in terms of ticket prices and in terms of overall financial performance. I thought that I might try and explain a little.
Clubs, as we all know, can get money from
- The match day
- Domestic and overseas broadcasting deals
- Prize money for league table position, FA cup results, Champions League results
- Commercial revenue from sponsors
- The club owners.
In the briefest summary, Arsenal are just about top of the league in terms of match day income because the Emirates was built to accommodate very wealthy individuals and companies buying the most expensive seats, as well as regular fans, and because it is a comparatively large stadium. So when people talk of the most expensive club to watch, they are talking of the overall income per game, the cost of the very expensive seats which come with full wining and dining, or the total take on the day. Comparing like for like is difficult because some clubs in older stadia have “restricted view” seats which are cheaper than Arsenal’s.
On the other hand in terms of income from the largesse of the owner Arsenal are near the bottom of the league, although not at the very bottom.
Let’s start in detail with the owner issue. Arsenal’s owner purchased the shares in the club and as I understand it takes a payment of around £3m per year for consultancy fees which are fully declared on the books. It may not be liked by some supporters, but it is legit, and that’s how it is.
Indeed this is fairly mid-range in terms of what is possible. At the top end of donations we have Chelsea and Man City, at the top of the “taking money out” league is Man U.
Roman Abramovich, in the season before last, increased his interest-free loan to Chelsea to £1.097bn since 2003. As a result Chelsea paid out the most in wages in the Premier League, despite having an income lower than Manchester United, Manchester City and Arsenal. But money can’t always buy titles or equanimity as last season saw with the Eva Carneiro affair, the departure of the manager and 10th place in the league.
Manchester City have Sheikh Mansour bin Zayed Al Nahyan who has spent £1.232bn since he bought the club in 2008. And that money is still pouring in. In 2014-15 alone Mansour invested £80m and City have become part of a four-club franchise based in Australia, New York, the Middle East and Manchester.
One can of course crave for investors such as these, or one might have doubts about using money in this way, and one might indeed argue for alternative uses for such money in the home country of the investors, but that is a matter of one’s ethical standpoint.
At the other extreme – the extreme of removing money from the club – we have Manchester United.
In 2008-09, Man U paid £69m interest on the £525m loans the Glazers imposed when buying United in 2005. In 2015 this was down to £35m interest not because the loans had halved (they still owed £411m) but because interest rates were down. With a huge turnover from worldwide marketing Man United then spent net £97m on players and ended up outside the Champions League.
So yes, some might cast an eye at Chelsea and Man C and wish Arsenal were like that with an owner who would invest unheard of billions. And such investment can bring in titles – although as we have seen, these are not guaranteed. But the reality is we don’t have that model, nor the opposite model of an owner who takes money out of a club such as Man U.
Man U’s financial success comes from the fact that they developed their worldwide marketing long before other clubs thought of it. Again we might blame Arsenal’s past boards of directors for not being so inventive, or we might praise the memory of Sir Henry Norris for building a new stadium for the club in 1913, which enabled the club to become the biggest earner in the league in the 1930s and secured our long term future in the top division. But however we see it, it makes no difference and we have what we have.
What we might see however is that with resources that are far smaller than Man C, Man U and Chelsea, last season we managed to come above all three of them in the league. One might consider that could be a moment of pleasure, the proof that money alone doesn’t buy the league.
And yet the reverse has happened, and oddly some fans of the club, goaded on by the media, want Arsenal to adopt the model which has been taken to unheard of extremes, and yet failed last season. (Of course that doesn’t mean it will fail again this season, but we do know it is no more guaranteed to be successful than any other system).
Certainly we can be sure that for the moment Arsenal’s financial model won’t change under the current owner, but we cannot be sure that any other manager will do better with the resources available than the current manager or his financial team.
Arsenal were the biggest earners from the Premier League last season, making £100,952,257. Here’s the table of what the League gave its clubs….
Leicester got less than Arsenal because although they got the most prize money, for coming top, they received £9m less than Arsenal in facility fees as only 15 of their matches featured live on television, whereas Arsenal got 27 live games.
We don’t have 2015/16 figures for other sorts of income but in the year before there was the £100.4 million from match day revenue – also the highest in the league (as noted above). And beyond that commercial revenue jumped from £77m in 2012/13 to £103.3 million in 2014/15.
Some years ago I had the temerity to argue with Swiss Ramble – the blogger who is quite rightly considered the expert on financial football matters, arguing that Arsenal’s financial future was bright as the club still had a long way to go in raising its income. I argued it had under achieved during the time at Highbury and the early days at the Ems when it had accepted reduced front loaded payments for marketing, in order to pay off more debt more quickly.
I predicted then that once those deals were over Arsenal’s marketing revenue would rise – and indeed aside from money given by oil rich billionaires this is the one way clubs have of increasing their wealth in comparison with other clubs.
Doing well on the pitch (Arsenal earned an extra £1.2m from coming second rather than third last season) and having a highly presentable marketing proposition, are the factors that differentiate the clubs, once we get beyond the largesse of the owner.
Overseas television revenue and central commercial revenue are also divided across the teams, paying out another £29.4m and £4.5m respectively to every club – but playing in the Champions League does bring in extra.
Indeed it is highly ironic that the same people who chant “Spend some fucking money” also announce that “Fourth is not a trophy.” And yet “fourth” (or third or second) is what brings in a lot of the money that they want spent.
Arsenal are seventh in the Football Money League, with all that money earned by the club. Since the owner we have isn’t going to change his ways or sell his investment, that is that. Some might complain, but rather like my presenting arguments with statistics, it won’t do any good to those who don’t understand numbers.
What we might notice however is exactly where we can get more money from – and this area as I suggested remains marketing. If we just take one example – the shirt sponsorship arrangements for last season (I don’t have this season’s figures as yet) we could see a further jump in a few years time. Here’s the top ten.
|1||MANCHESTER UNITED||Chevrolet (US)||£53m||2014-21|
|3||ARSENAL||Fly Emirates (UAE)||£30m||2014-19|
|5||MAN CITY||Etihad Airways (UAE)||£20m||2011-21|
|7||NEWCASTLE UTD||Wonga (UK)||£6m||2012-16|
|8||WEST HAM||Betway (Malta)||£6m||2015-17|
|9||EVERTON||Chang Beer (Thailand)||£5.3m||2005 – ?|
|10||ASTON VILLA||Intuit Quickbooks (US)||£5m||2013-2015|
We are third, but a long way behind the two clubs above us. So this is something that can be enhanced in 2019 – another chance to grow income, given the reality of the owner’s position.
Thus overall, Arsenal is developing its income – which is what is needed to pay for the higher salaries that are paid each year, and for when the next Ozil or Alexis comes along. I’ve no idea when that will be, but when it comes along the money is there. Had it not been earned through performance related income, we’d not have got as far as we have.