by Tony Attwood
Last year there was a lot of celebrating as it was announced that overall Premier League clubs made a profit of £113m in the 2014/15 season.
Now in the complete analysis of club finances made by the Guardian and published today for 2015/16, 12 clubs are shown as making a profit totalling £153m, while eight clubs made a lost which in total came to £270, leaving Premier League clubs back in loss overall to the tune of £117m, as compared with the total profit of £153m last time around.
I’ve taken the Guardian figures, which they in turn have taken from the annual reports filed at Companies House (a legal requirement for companies registered in England and Wales), and set them out in a table which, I hope, leads an easier comparison.
The figures have had a little work done on them by me – not everyone separates out the interest clearly, and Arsenal separate retail from commercial and property income – I have added them together – along with player costs which I have also added into commercial.
Because it is up to each company how it reports its activities the figures are never directly comparable between clubs, but as a broad way of seeing the finances of each club I think this is a fair way to do it, and I am grateful to the Guardian for doing the hard work!
All figures are in millions of pounds.
Manchester United of course have the largest turnover because they have the benefits of the biggest stadium, plus the benefit of having introduced world wide marketing of the brand way before any other club in England ever thought it possible, back in the 1960s.
Arsenal’s turnover is below Manchester City’s not because of the stadium prices, player trading, or selling matchday scarves, but because of the sponsorship fees paid to Manchester City by the airline that is itself part of the country, itself virtually owned by the owner of the club.
In a strictly commercial world Manchester City’s sponsorship from the airline would be far less, and indeed the fact that, as part of the deal the airline agreed with Manchester’s local authority, it would expand the number of flights it arranged to and from the regional airport. Thus revealing just how muddied these waters can be.
Arsenal paid the fifth lowest wages of the group, not least because of their ability to bring through young players who naturally attract lower wages at the start of their careers. In one very real sense this is a good thing, not just to allow the club to make money but also because it has the chance to increase wages – should it wish to – to retain key players.
To give an example of how this works in the season just finished, Holding would have been on modest wages in footballers’ terms, but these will now rise rapidly. Just having a few players like this who come through each year helps keep the costs down, and leaves more money for transfers.
Arsenal’s profit is shown as modest, and some way behind Manchester City (again due to their inflated sponsorship fees), Manchester United (again worldwide marketing) and Tottenham (player trading).
In terms of matchday funding Arsenal are only behind Man U (with its bigger stadium, and its own worldwide TV channel). However Arsenal’s growth area continues to be in the commercial (including sponsorship) sector. The club tied itself into long term deals to help with the building of the Emirates, and for a long time had a marketing office whose hands were tied by these deals. Now the growth is back on, and will continue – especially in the short term, as both Tottenham and Chelsea have yet to develop their new stadium. Tottenham will then certainly have the same long term sponsorship deals which are front loaded to help pay for the stadium. Chelsea’s new stadium still seems years away.
As you would expect, Chelsea’s debt is in the billions of pounds league. They pay no interest on it (if they did they would be bankrupt) but it is a debt to the owner, and one day he, or perhaps his inheritors, might call it in. You never know.
Arsenal’s interest payment however is high, and I suspect this was due to the way in which the interest was scheduled to reduce the burden on the club in the earlier period at the Emirates. But their debt has now almost gone, leaving the club in an extraordinarily powerful position (if it wishes to exert it) in terms of player trading in the future.
Much of the work on the new training and development facilities for Arsenal is done. For myself I’d love to see some of the profit diverted into a second stadium to be used by under 23s and under 18s and the women’s teams.
Chelsea want a new stadium, but certainly are not going to start doing anything this year (unless they have given up on the rebuild of their ground and are moving to Potters Bar or somewhere like that. So the three years away from home is still on the cards.
Liverpool could still extend their ground further, although it is also possible that having built some executive boxes, and then had great difficulty with local resistance to increased prices, they might hold on until they are able to edge the prices up to the level the owners want.
Man City were of course given their stadium, and have built an extra tier, and have their airline deal – and their second stadium. I suspect the owners will continue their policy of finding a club in every continent, having successful franchises in the USA and Australia, to go along with the one in Manchester.
Manchester Utd have it all – the stadium and the worldwide trading. Nothing more to build.
Tottenham on the other hand have it all to do. At least one season away from WHL is coming, but they have the benefit of some very excitable supporters for whom coming above Arsenal and runners up in the league does seem to be a trophy.
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