- 50 players now coming Arsenal’s way and 12 leaving. Arsenal nearly half way there.
- What happens when a club starts to go wrong? A work in progress.
By Tony Attwood
According to Swiss Ramble (whose reports I absolutely recommend to you especially if you want a more detailed account that I can give here) Arsenal were absolutely fine in terms of the financial rules in place for 2023/24 which means that although they made a loss it was within the allowable limits of loss-making for a club, and there were no suspicious issues within the accounts, such as players moving back and forth, large numbers of youngsters coming and going, buying and selling between linked clubs or sponsorship payments that looked totally out of proportion.
So what we ended up with was a €36m profit for accounting purposes, while the club was actually expecting a loss. And there is money to spend on more players if the club wish.
But Arsenal now have to satisfy both the Premier League and Uefa in terms of its finances, and just for the hell of it the two organisations have totally different ways of calculating the losses clubs make.
There are also regulations for the percentage of the income spent on players’ salaries – it is not supposed to be more than 80% (but don’t tell Leicester). Arsenal were sitting at a comfortable 63% which is why the club is free to buy some players this summer. Also the good run in the Champions League in the past season took Arsenal’s turnover up further, so next summer all should be fine when the accounts are looked at, just as they are this summer.
Liverpool, Manchester City, Chelsea, Tottenham Hotspur and Newcastle United are also in the Champions League next season and will all be benefitting from the extra allowances that bring. But we might note that the name Aston Villa is missing from the list – they will be in the Uefa league, and that is why they might be worrying, because I haven’t found a single accountant who thinks that Villa passed the Uefa PSR target.
Villa are estimated to have lost a whopping great £140m, after allowable deductions – or in foreign money €161m which is something around €100m over what they can lose. Of course they can make adjustments for player loans but even that doesn’t help them because of the squad cost rules which limit how much a club can spend on player salaries – they are way over the limit of 80% even with some clever bookkeeping.
Now the problem for Villa is that they seem to have kept themselves within the Premier League’s PSR rules but just forgot about Uefa. And forget is probably the right word because they were fined €60k by Uefa for being late with their homework, sorry, financial data.
Now this really is droll, I can tell you, as in recent years I was a director of both a plc and a Ltd company, and the head of finances in each case would have gone utterly berserk if she had not had the financial data in place well before the Revenue required it – and “before” is right because she would often need to clarify one or two items before handing the accounts over.
Of course in a year’s time Villa will have a bit more leeway having made it to the quarters in the Champs League and sold Jhon Duran to Saudi Arabia for a ludicrous amount. But their wages bill is still very much on the rise.
And it isn’t just Villa who play fast and loose with Uefa money rules, Chelsea do much the same. But recently they’ve been going round selling hotels, their women’s team and anything else they can think of. But even with all the larking about with the numbers Chelsea still made a loss of almost €200m in a year when the limit was €60m. So it is clever to get rid of their youth set up to a supposed outside agency, but it still didn’t help.
Chelsea are now trying to play the game of putting their hands up and saying “It’s a fair cop” and then coming up with excuses. They’ll probably be ok in the future because clubs in the Club World Cup are raking it in, but that will make life easier next financial year, not this.
One other interesting thing is that while the English authorities seem willing to accept all sales of anything as part of the accounts, Uefa doesn’t. They might be ok in a year’s time having made a lot of profit on player sales, but that is probably coming too late this time around.
Liverpool on the other hand seem to have no problems in meeting the targets so we can instead move on to Manchester City, and the word is that with some clever re-financing they too are going to meet all the requirements by making mega profits. It looks like they have seen the warning that led to the 125 or so charges, and changed their ways – although whether that will continue through this summer remains to be seen after last season’s modest league position.
How they have done it is not hard to see – they have been selling off the squad and the youngsters throughout the last couple of years. Eventually, they will run out of players to sell, but for this set of accounts, they are ok, it seems. And they are getting $$$$$ from the Club World Cup.
Manchester United are reckoned by those in the know just to have scraped inside the financial limits, but there are suggestions that next season won’t be nearly so easy, unless they can off-load a large number of players – although that in turn could mean a further descent down the league table. And they are without Europe.
Chelsea and ManC survive through their sponsorship deals – and one day maybe the league will reach a decision on those, but in Uefa terms Chelsea’s “sale” of their women’s team won’t help. But the fines are tiny, so no one is worried.
Chelsea and Aston Villa will also get irrelevant fines, and Newcastle United and Nottingham Forest be put “on notice” and that will be that. In short, quite a bit of fuss about nothing. Everyone will carry on as before.
