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Untold’s “Money League” predictions concerning Arsenal’s finances come to pass

By Tony Attwood

Warning, this article includes a bit of crowing… although with a certain degree of caution.

Having been caught out saying that I had an exclusive yesterday, when seemingly I didn’t as Arseblog beat me to the particular story by half an hour, I take today’s piece with caution.

However the point about Untold has always been that it aims to go places where others don’t (hence the name), which means sometimes we go into unknown territory and do get it wrong, but equally, just occasionally, we do see things before others do.  And when that happens I say so.  Sorry to readers who find that rather tedious, but not crowing when our predictions come to pass seems a bit restrictive and I quite like the occasional glass of champagne.

So off we go…

In 2011 I published an article Could the Swiss Ramble have got it wrong? in which I suggested various ways in which the highly esteemed financial reviewer of football might have made a mistake.  I did so with trepidation, knowing the man’s reputation, and of course got a fair bit of criticism for it.  For no one argues with Swiss Ramble.  Or at least no one did.

My point was simple: Arsenal’s finances were far lower than some other clubs because the revenue from marketing was far lower than elsewhere.  Now in the parlance of football that meant Arsenal are useless, stupid and pathetic in marketing.  Sack everyone.

Swiss Ramble didn’t say that of course but his view seemed to be that Arsenal’s marketing would stay at the modest level it was at and therefore the only thing to be done was to clear out some of its “dead wood” players and accept that future growth will be modest.  “Offload under-achieving players, even if they are sold cheaply or given away, in order to have some room to manoeuvre in the wage bill,” was his exact point.

But, I argued, marketing is the one area in which a club can make rapid growth when compared to others.   If broadcasting revenue goes up, it goes up for everyone.  The amount of money that can be made from match days is controlled by the stadium – Arsenal had built a new stadium, so that was done.  Arsenal had a good record in player trading, often bringing in players for next to nothing and then either turning them into superstars or moving them on to realise their value.

So my point was that underachieving in marketing (because all the deals up to that point had required the marketing partners to pay in lots of money up front, to help reduce the borrowing costs which were there due to the stadium), meant that the opportunities for the future were great.  Increasing our marketing revenue vis a vis other clubs was a lot easier than increasing our revenue from other sources (short of selling most of the squad, which is what some commentators wanted), because Arsenal created a stadium with two levels that catered for corporate customers, and this was an audience the firms with marketing money wanted to impress.

Now to be open and honest, I must add that in the article I did suggest also that Man U might find it hard to increase their revenue much more in what I perceived to be the hard times after Ferguson left.  They did have hard times on the pitch, but their worldwide marketing has (of late) grown and grown as the worldwide profile of the Premier League has grown.  Even dropping out of the Champs League hasn’t really hurt them.

Thus one prediction was wrong, but the other – that Arsenal’s marketing revenue was about to take off when Swiss Ramble said it wouldn’t – turned out to be right.

Looking back a bit, in 1996/97, Arsenal were 20th in the table generated just £30m in total revenue.  Now Arsenal are in 8th place and their 10% increase in revenue this past year (£30.8m) is bigger than the total revenue 19 years ago.

85% of this year’s growth in revenue comes from additional commercial revenue, which rose by £26.2m (34%), the second highest commercial revenue growth of all Money League clubs in 2014/15.  (Commercial revenue here includes  sponsorship, merchandising, stadium tours and other commercial operations).

As Deloittes says about Man U, “Their ability to generate commercial revenue in excess of their domestic rivals continues to be the primary factor behind their success.”   Arsenal are still a long way behind, having entered the field of worldwide marketing about 30 years after Man U, but the club is clearly making progress.

Thus Man U now have the largest commercial revenue income, having overtaken PSG whose income is exaggerated by over-the-top payments for various rights from Qatar Tourism Authority (payments which are so excessive even Uefa got uppity about them).

Arsenal’s growth in commercial revenue has been driven by the launch of the deal with Puma.  There has also been renewed shirt and stadium sponsorship agreements with Emirates and a number of new regional partnerships around the world, which has meant a 66% increase over the last two seasons.

This narrows the gap in commercial revenue to Manchester City (sponsored of course by a country, and having done its deal with the local airport), Chelsea and Liverpool.  This is hugely significant because Arsenal have only recently paid for the stadium, and so had the chance to arrange sponsorship deals which go into funding the club at large.   Yes Chelsea will get a boost from their new stadium, but that is still three and a half years away if not more.

Income can go down as well as up

And lest anyone still thinks that Arsenal are still laggards in this regard and that enhancing commercial revenue is easy remember this: Bayern Munich’s revenue from commercial sources actually went down by 5% in the year being analysed.  Chelsea’s commercial revenue remained static, and Liverpool’s rise was slight.

Meanwhile at £100.4m Arsenal recorded the highest matchday revenue of any club despite the club playing two fewer home games than in the previous season. No other football club has as much of its revenue from matchday sources – which means there is still a massive opportunity for expanding the marketing revenue.

The importance of this ability to grow marketing revenue is further emphasised by the fact that broadcast revenue for the year under discussion rose only by 4%, and is largely out of Arsenal’s control.  Of course the figures in a year’s time will show a massive rise in broadcast revenue, but in that regard all of the English clubs will benefit.   It is the marketing that takes Arsenal up the league table vis a vis the rest of the Premier League.

Arsenal is also only the second English club ever to earn over £100m in each of the three core revenue areas in the same season and the prediction is that in the next couple of years Arsenal could reach the top five.   Not bad considering where we were in 1996/7

Deloitte Football Money League Table

Rank +/- Team 2015/16 Revenue (£m) 2014/15 Revenue (£m)
1 +2 Manchester United 515.3 395.2
2 = Barcelona 463.8 426.6
3 -2 Real Mad 463.8 439
4 +1 Bayern Munich 442.7 360.6
5 +1 Manchester Airport 392.6 352.6
6 -2 Paris Saint-Germain 389.6 365.8
7 = Arsenal 350.4 331.3
8 = Chelsea 334.6 319.5
9 = Liverpool! 302 298.1
10 = Juventus 255.1 246.4
11 = Borussia Dortmund 212.3 213.5
12 = Tiny Totts 209.2 195.9
13 +3 Atletico Madrid 171.0 134.4
14 -1 Schalke 04 167.9 167.1
15 = Roma 163.2 136.3
16 -2 AC Milan 160.6 151.5
17 +1 Zenit St Petersburg 147 127.7
18 N/A State Aid Utd 143.8 122.4
19 +1 Inter Milan 134 125.4
20 N/A Leicester City 172.1 128.7

 

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30 comments to Untold’s “Money League” predictions concerning Arsenal’s finances come to pass

  • para

    Steady growth and having great principles – a rare thing these days.

    Arsenal can start to keep the money coming in, in the club’s account and not belonging to the bank, so do less borrowing than before.

    Looks like a foundation is being relaid and fortified.

  • Brickfields Gunners

    Keep on crowing , Tony ! I have always believed that we ARE in good hands , and that we are progressing as per expectation.

  • silentstan

    well done (again)

  • Yo

    Now we only need an adept manager capable of competing and winning at the highest level. Not someone finishing the league on average 13,57 points off the league winner over the past 13 years, apparently irrespective of what players he brings in (özil, sanchez, Mustafi, xhaka…) and the (growing and massive) amount of money he has at his disposal.

  • Yo, that might seem a fair point but it misses the main question. Where does one find such a manager. Many people suggested that the current managers of Manchester Utd and Manchester City could do that job, but at the moment it seems not. No one suggested the manager of Leicester could do that job, but he did last season.

    So I fear you are stating an obvious point but not looking at the difficulty. Mr Wenger will of course leave sooner rather than later, but that most certainly does not mean a change for the better.

  • para

    It should be obvious to all that barring sickness, losing money or (near)relegation, AW will continue to steer Arsenal.

    Arsenal are aware that there is probably no one out there that can take AW’s place, no doubt they will be looking very carefully at prospects and possibly rearing their own?

    Maybe the consistency(evenness, steadiness, stability, constancy, regularity, uniformity, equilibrium, unity) of Arsenal is a thing to fear by the others, they surely are imagining(dreading) Arsenal winning with that same consistency. 🙂

  • Mike T

    A cleaver bit of writing jumping from one year to the next but why let the facts get in the way? We all knew that a new Emeriates and Puma deals would uplift income but!
    Arsenals accounts show commercial income in 2013/14 was ££59.2 million, 2014/15 £78.6 million and in 2015/16 was £82.2 million.
    Arsenal are one of two teams ( I am not sure who the other is) that is not able to take advantage of the opportunity to raise up to an additional £10 million that will be available from season 2017/18 from shirt sleeve sponsorship.
    Chelsea post the static periods out talk about have seen additional £10 million in respect of training kit sponsorship, an additional £22 million from the Yokohama deal and in season 2017/18 an additional £30 million a season from the Nike deal.

  • insideright

    It does remain a key fact that it’s what you do with the money that counts as much as anything.
    Arsenal have moved to a zero net debt situation (in double-quick time) by putting money aside that other clubs may have just splurged on players who may or may not have worked out. Man Utd. are in the process currently of clearing out several such players and may make significant financial losses as a result. If they continue to struggle to make the Champions League their revenues will potentially take a backward step. And when you have debts as big as theirs that can be a problem.
    Looking at only one side of the balance sheet will always give you a lopsided view and not looking at the general economic situation (which can impact on the availability of sponsorship funds) can also deceive.
    Always examine all sides of a clubs financial situation and never assume that everything will always be the same.

  • Jammy J

    @ Yo – Why have you taken the points total of how far we have been off of the top stop for the last 13 seasons, but then gone on to say irrespective of the great players Wenger has brought in in only the last 3 seasons? It’s a ridiculous comment and one made clearly to only make things look worse than they actually are.

    Since we have started spending money, we have won 2 FA cups and are slowly improving on our league position, season by season. And bear in mind, that that is against teams that have been spending hundreds of millions for 10+ years, whilst we have been doing it for only 3 (and still nowhere near the amount spent by these other clubs).

  • Stan

    So manchester airport ( your cheap name) had a higher turnover Last year than the croker piggy bank..

    And for all your money ie; turnover.. your just making it for your american owner..not team building..

    As for manchester city.. here is a statement.. you can choke on.. WE WILL BECOME THE CLUB WITH HIGHEST TURNOVER IN THE WORLD.. look at uniteda kit deal 75 mil a year ours is about 12 mil a year.. the new deal will be in the 50 to 60 mil class..( united are about 80 mil over us at the momeny league)

    And as a club we are on the up.. stadium extension.. up to 85 k .acadamy campus.. with all teams from u12 to u 23 top class the future is blue

  • Goonermikey

    Congratulations to Man U who have made loads of money and frittered it all away in a bid to make it into the Europe League…….again lmao

  • Stan, thank you for your comment. Could you please provide some evidence for your allegation that ” your just making it for your american owner..not team building..”

  • Samuel Akinsola Adebosin

    Despite Chelsea’s Yokohama and Nike, or is it Adidas? marketing deals, and Arsenal’s Puma sponsorship being their only major marketing deal closely followed by that of the Emirates airlines, Arsenal are still above Chelsea in the table of marketing revenue generation. And are 3rd in the domestic table behind Man C & Man U I suppose. Therefore, Arsenal have not performed weakly as the table of marketing revenue generation has shown the progress they have made so far.

    But there must still be other rooms out there in the marketing world which they can explore to keep upping their marketing revenue generation further still to match the bigger picture outlook the two Manchester giant clubs are currently attaining despite the fact that their own yearly marketing revenue generation has been on the increase in the last three years.

  • Nik

    Tony
    One finds a manager that can improve arsenal the same as one finds players that would improve Arsenal.Do you not think we can atract the top managers in europe with a salary of 9 million a year??Do you not think we can atract the top managers when we are one of the top 10 teams in world football ( in revenue anyway).If not someone at Arsenal wouldnt be doing their job properly.Do you not think there would be a highly likely chance someone like Diego Simeone,Jochim Low Massimiliano Alegri or a Thomas Tuchel could take us to the next level??Our manager at the moment doesnt look like he can do that and hasnt for a long while so why not take the risk??

  • Samuel Akinsola Adebosin

    Stan.
    Are you saying Arsenal are planning to increase the Emirates Stadium seating capacity to 85,000 and also provide residential campus accommodation for their academy schools soccer pupils? If so, you known what? This will be something else. Arsenal’s Emirates Stadium is said will be retractable sun proffed as from the beginning of next season campaign. And already they have taken the delivery of a big jet Airbus airliner to transport themselves to any part of world to play games. This is audacious and unrivalled by any standard. Not rivalled by any of their rivals top six club sides.

  • Samuel Akinsola Adebosin

    Nik.
    You said risk. But we known that anything that is risky to undertake is a gamble. And supposing Arsenal take a risk to enlist one of the managers you’ve listed as their manager, but we all know in our hearts that those managers often than not buy the title from the transfer market and that’s the gamble Arsenal don’t want to risk despite the fact that the clubs which those managers are managing are mostly playing in a one or two clubs league. So, they always win. But Arsenal don’t have the kind of money those managers are using to gamble with it in transfer market. Because in the Premier League, it is not guaranteed it will work. Even if Arsenal have some money which they have rigorously earned through hard work and not been given or dashed, it is not in the philosophy of the club to gamble with their money, is it?

  • Nik

    Samuel
    Have you any facts to back up you wild claims that Diego Simeone has tried to buy the la liga title.Hes a manager that has done a damn site better than Arsene Wenger both domestically and in europe on a fraction of the budget..Do your homework.Hes a young dynamic manager that tactically is great and brings an energy to his team the likes of Arsenal is crying out for ,and hes on a fraction of the proposterous wage our manager is on !!

  • Nonny

    So says Nik the know all.

    Same was said of Mourinho and Pep and not withstanding that they both spent over £150m last summer for shiny new players, they are outside the top 4 at the momemt.

    Like it seems, they can’t win the league (at least this year) irrespective of what they spent or how much they are paid (Note that they are the 2 most highly paid football managers in the world at £13.5m & £15m per year respectively http://www.totalsportek.com/money/highest-paid-football-managers/)

    There is therefore no guarantee that any of those coaches you mentioned can do better. By the way, have you noticed where A.Madrid and Dortmund are in their respective leagues. So much for miracle coaches better than Wenger

  • @Nonny, Pep and Mourinho have won champs league, league titles in different countries….

  • Nik

    Nonny
    Both the coaches you mentioned are in their 1st year at their respective clubs.You know that given time ( maybe 13 years )you know deep down they will get it right just like some Arsenal fans think Wenger will eventually get it right.Great managers know how to find a way.Lets hope Wenger for his and Arsenals sake can get it right.Mind you you can see in Kronke’little worlds getting top 4 is deemed a sucess and a new contract will be on its way!!

  • ClockEndRider

    Klis,
    Yes they have. Both managing teams playing no more than 6 competitive league matches a year. I rather think this helps somewhat.

  • omgarsenal

    I am amazed that guys like Nik,Stan and Yo can barely spell two words correctly and compose a short sentence without serious errors of syntax and grammar and here they are telling us how brilliant their opinions are!

  • Nik

    And what are your opinions omg on how arsenal are performing and tactically where we are going wrong???

  • Yommex

    Amazing how shallow some people think. If you are going to be fair to Wenger then compare the performances of these so called great managers with what he did over his first seven years. THREE league titles and FOUR FA Cups. That means by extrapolation, if he had not been saddled with the task of PAYING for a new stadium, he would have won SIX more league titles and EIGHT FA Cups after fourteen more years!

    Having to balance the books while keeping the squad competitive over the years is nothing short of a miracle. Besting some of these so called great managers in the process is out of this galaxy.

  • Menace

    Give them loads of money & many years & they will still be all mouth & no entertainment. All of you who prefer other managers & clubs please support them. I love Arsenal & Wenger & the fact that there are ordinary shareholders in our club.

    City has so many shareholders & they are all wet with oil. United are owned by caravan park blood suckers & stupid non voting ordinary shareholders. Get over there quick & enjoy the ride before it spirals into oblivion.

  • Nik

    Yommex
    Managers are like players and peak at certain times .Our once great maager peaked in the early 2000’s and was young at the time ,dynamic and one of the best managers in world football.Now sadly, like with all players he has lost his edge and his tactics that worked 15 years ago dont have the same effect in this era and football has moved on.Tactics have changed ,the way teams defended has changed and you either have to move with the times or you get found out.Young dynamic managers have evolved who arent scared to make tough changes when needed and do more than play around with their zips on the sidelines and blame anyone and everyone for their failings.They are accountable and are under pressure in football because at the end of the day its a results business and troghys mean everything.

  • Nik

    Menace
    You mean ordinary shareholders Stan kronke and Alistair Usmanov..But i would like to commend you on your first ever post without any referral to referees..Keep it up.

  • Hands up anyone if you can remember what it feels like to win the league.

    71 was my first, and the FA cup, Charlie George who can hit them, Fairs cup to. All with Bertie Mee in charge. Just goes to show.

  • Polo

    There are interesting analysis on Arsenal’s tactical plays written in The Arsenal Column website, for strange reasons I can’t paste a link. Worth a read.

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