The finances of the top clubs are weird and not wholly sustainable.

By Tony Attwood

It may seem hard to believe but there was a time in the latter part of the 20th century when the Football League Division 1 had a “big four” made up of Arsenal, Tottenham, Liverpool and Everton.   Sometimes that was a big five, because Manchester United were included when they were not malingering in Division 2, but then, after Everton’s golden era of 1984 to 1988 during which they won the league twice, were runners’ up once, won the FA Cup, were runners’ up twice, won the Cup Winners’ Cup and the Youth Cup and were League Cup runners’ up (and I may have missed something, sorry if I did) – their world fell apart.

All that success, all that promise (remember it did include the Youth Cup) and since then, one FA Cup and one Youth Cup in some 30 years.  No one would now claim they were top six, let alone top four.  Apart from by those closely associated with the club, their great days are all but forgotten.

So as the Premier League celebrates having 20 clubs making record revenues totalling £4.827bn in 2017‑18, with all four clubs playing in the two European finals being in the PL (and let us not forget, three clubs all from the same city*) the rest of Europe gets edgy.   Not least because one of the PL’s top six seems might be engaged in some financial hanky panky, while another has an owner who might be losing interest, and yet another is a club that desperately has to stay in the top four just to pay for its new stadium.

It was with this sort of concern in mind that I thought I might put together a little financial table – a table which is a little different from that which has appeared elsewhere.

Like other publications it shows figures for the financial year ending on 31 May 2018 – the latest for which accounts are available from all clubs.  But I’ve included a “Financial” column – not because others don’t mention these details, but because they don’t always put them directly alongside the other factors

Club Turnover £m Wages cost £m Financial Profit for year £m
Arsenal 403 (5th) 240 (5th) No debt; £15m in bank 70 (3rd)
Chelsea 448 (4th) 246 (4th) £1.125bn loaned by Abramovich 30 (4th)
Liverpool 455 (3rd) 264 (3rd) £155m owed to bank and FSG 125 (2nd)
Manchester City 500 (2nd) 260 (2nd) Sheikh Mansour “investment” of  £1.3bn. 10 (6th)
Manchester Utd 590 (1st) 296 (1st) £496m debt 26 (5th)
Tottenham Hots 381 (6th) 148 (6th) £460m debt 139 (1st)

Look at the final column and yes, everyone made a profit – a profit ranging from £10m for Manchester City up to £139m for Tottenham.  And look at the wages and to a fair degree they reflect league position.

But there are, hiding away, little issues.   Like the fact that while Tottenham have a debt of £460m that is nothing to do with the stadium which has been widely reported as costing them £1 billion.  But they have the lowest wages bill which will be hard to sustain if they are to keep in the Champs League.

And all this is far less than the “investment” of Sheikh Mansour in Manchester City – with “investment” still being inverted commas, because investments in the normal sense are set up in order to make a profit.  Quite how that money is going to be returned into profit I am not quite sure.  At the current rate of £10m a year it will take 130 years to pay off the debt – and it will only take that amount of time because no interest is being charged on the debt.

We can’t really say how long it is going to take Tottenham to pay off their stadium costs as we don’t know how much profit they will make – but they, like Arsenal before them, will be dependent on staying in the top four while the stadium is being paid for.  At the current rate of pay it will take about 11 years to clear the debt – but that assumes most of the extra income from the new stadium goes into interest and loan repayments – not into the players needed to sustain their position.

Chelsea of course have a bit of a problem in addition to the £1.125 billion loan, in the shape of a forthcoming transfer embargo, an abandoned stadium project, and an owner who has wandered off into the mists and might not be returning.   And if he does return it is quite possible that he won’t return with anything but a request to have some of his money back.

So what to make of all this?

Each club now  seems to be a special case, and while some special cases can survive not all tend to do.   And that is really my point.  Just as we forget how Everton were for a short time, so we will not quite believe it when one of the current big six get themselves in a tangle, but then they will sink back, and soon their past days as one of the big boys will be forgotten by most – just as Arsenal’s two doubles and the unbeaten season are forgotten by most.   One club – perhaps two – will slip away from the other four… but which one/s is a matter of debate.

And when it has happened it will seem to have been inevitable.   Meanwhile it seems to me Arsenal might not make it back into the top four, but on the other hand they are unlikely to slip back down the league, or go bust.  We’ll see.

* There is a Uefa rule for the Europa League that says that two clubs from the same city cannot play in the same city on the same night.  I presume that means that Chelsea plays the Uefa final on Wednesday and Arsenal on Thursday which should make for an entertaining couple of days.

29 Replies to “The finances of the top clubs are weird and not wholly sustainable.”

  1. “while Tottenham have a debt of £460m that is nothing to do with the stadium”

    Perhaps I’m not reading this correctly but, if not related to the stadium, what are you claiming is the cause of this debt?

  2. Are you saying Arsenal have paid off the whole of the Stadium debt? What about the costs related to Kroenke buying out Usmanov?

  3. All the debt is that which has been accumulated thus far on the stadium project, save for a comparatively small amount that was drawn down to build the new players’ lodge at the training ground.

  4. Being somewhat of a cynic, it seems to me that if Arsenal FC want to succeed, it should advertise for a “sugar daddy” asap.
    Debts don’t appear to matter as long as the sheikh or oligarchy money keeps rolling in.
    (never thought I would ever type the above but these days, unfortunately, it seems the only way to prosper).😎

  5. When it comes to the oligarch money, it’s basically a question of belief and willingness to accept different choices.

    If you want your club to be self-sustainable (like our Arsenal is) – it’s fine.

    If you want your club to be a new toy for an oligarch who wants to spend that spare billion or two of his money on a football club – it’s also fine as long as it doesn’t break any rules.

    That’s the whole point. We can be proud of our path (spend only what you earn, not what your sugar-daddy has given you) but also respect the choice clubs like Man City, Chelsea and PSG have gone with. It’s like being a vegetarian. Don’t eat meat if you don’t want but don’t judge the lad sitting at table next to you who enjoys his rare steak.

  6. @Josef,
    That’s all very well but the object of the game is success. I’m proud of the way Arsenal FC have progressed, particularly via self-sustainability.
    The fact remains though that pragmatically this state of affairs (however worthy) is becoming a non-starter when compared to clubs who are backed by foreign riches .
    For instance, there is no way Arsenal can presently compare with (say) Man City in signing fees or wages.
    All I am saying is, success is being bought and not built and regretfully Arsenal supporters should accept our limitations, however sad that may be.
    To be on the moral high ground is great but these days it doesn’t bring it’s proper reward.😎

  7. By saying AFC have no debt, does that mean the stadium debt is paid off completely?

  8. Nicky, is the object of the game only success?

    Not everyone can win the league every year.

    Only one team can win any competition, so if you know that your team won’t, and the only point is success, why bother?

    Perhaps I am being too altruistic. Surely the object is to play the game and do as well as you can. If you win, great, if you lose, be sad, a season contains both ups and downs, but, in the end, our support of our team, as with most, if not all, supporters is an emotional thing.

    I am sure that most Gooners would rather see a sustained annual performance, rather than the extreme oscillation we are seeing now from the Man$itys, who, if and when the sheikh loses interest or it is lost for him, they will plummet like a rock. Remember Leeds?

    I am very happy that we are self-sustaining, even if we are not winning trophies as often as we used to. Arsenal is still in my blood and will always remain so (I suppose unless it becomes the plaything of some middle eastern ruler, who would not allow me into his country because I am Jewish or visit Israel).

    I, for one, am very proud to see the table you have produced, Tony, and where we stand in the financial stakes.

  9. Kroenke bought out Usmanov using his (Kroenke’s) own money according to reports in the financial press. He could not have used Arsenal money, by my understanding, because he did not own all the club.

  10. Tony, I’m pretty sure our stadium isn’t completely paid off.
    I think around 150-175m is structured in very easy long term payment plan.

  11. The only debt tottenham have is stadium, and that wont be for long, do your homework.

  12. OK Steve, I haven’t done my homework, but clearly implied by your comment, you have. Please tell me, and indeed all of us, the meaning “that wont be for long” and also your source for both assertions.

  13. Tony

    I must admit I’m a bit surprised to read your opinion that “Meanwhile it seems to me Arsenal might not make back into the top four…” Some of us have been saying that for a while now. My reasoning is that Kroenke Sports just won’t spend the money necessary to compete for the top places or the League. It also seems like you’re conceding that the amount clubs spend determine their places in the table. While I agree with your assessment that amount spent is not always a guarantee of success, and, occasionally (L.C.) a team can win the League without spending the most, the last few years in the EPL indicate otherwise.

    I admire AFC’s self-sustaining model but I wish the Club wouldn’t push the nonsense that it is competing for trophies at home and in Europe. That’s more than a bit disingenuous, to say the least.
    Admit who you are and your reasonable expectations and supporters can respect that. The ‘globalisation’ of AFC hasn’t translated into success, has it? Not in titles and if it has in revenue, where is it?

    I’d like to see the Club return to the top in the League but in the current financial climate I have to say I agree, “Arsenal might not make it back into the top four” I wish I could be more optimistic. Your table and analysis aren’t helping, lol. But, thanks for that nevertheless.

  14. Goonersince72, I have been trying to put the point that Kroenke is not a man who puts money into his sports companies, but rather relies on supporters and marketing to provide the dosh, and so without a man like Wenger who could find players at bargain prices, I suspect we might struggle back to the top four. I don’t know if Emery is that man to take us up by a couple of points, but even if he is I fear the result might be more top four finishes, and thus a further revolt by some supporters and a return to “Fourth is not a trophy”.

  15. I’m afraid I took a pragmatic view of success in the modern era.
    I would welcome a return to the old Corinthian form of football where taking part was the be-all and end-all of the game. And money was secondary.
    Now, the mighty dollar (or its sterling equivalent) rules the game. Post WW2, global TV along with its inevitable offspring, advertising, is all important.
    Arsenal FC, sticking to self-sufficiency are holding out but for how much longer?
    In the last decade or so, for example, the two Manchester clubs have been able to sign players from Arsenal at grossly inflated fees…and have generally prospered.
    One day the bubble will burst. Because, in my opinion the spiralling cost of players’ wages alone cannot continue unabated. But until it does, Clubs like Arsenal will struggle to keep up with their rivals, where unlimited funds more or less assures success. 😎

  16. Looking at the wages Bill we are not far behind City. So what we should be competing for the league, Europe and Cups. Are we paying too much for poor players. Hopefully the injured players will be out. Restrucure the loan system so we earn money from the loanees, now that we have some successfull youth proven in Gremany.

  17. Tony

    Thanks for the reply. I’m going to bookmark this article and wield it when those with comprehension problems or just out and out trolls accuse you of looking at AFC through claret-tinted glasses. Keep at the difficult but worthwhile project of fact based commentary.

  18. @Rajesh…wages are very important, clearly! But, you have to get a hold of the players to be able to pay them. So, the ability to pay transfer fees is important even if they do not make up as much of the total.

  19. So the 2 routes to get the big money needed to compete for the CL/PL are;
    1) have a sugar daddy throwing money at the squad like Mansoor or Abramovich
    2) get your commercial side set up to earn the money to throw at the squad like Utd and liverpoo! (with a sugar daddy or squad sales occasionally assisting the purse).
    Both ourselves and our neighbours are desperately trying to do it the second way but without the sugar daddy. It’s a much slower route but it should be possible and it’ll probably be a major benefit when the TV deals finally explode. Although I’d prefer Stan to chip some in now Usmanov has moved out, just to speed the journey up a bit. Maybe he will once he knows we’re in the CL (unlikely but…).

  20. to GoingGoingGooner
    When you pay a very large sum for players your wage bill goes up in proportion. These highly priced players demand wages similar to what Ozil is paid. So what is suprising is Man City wage bill being only a few million higher. So some players are earning much lower ammounts. So differential must be higher. Our negotations need to be tougher.

  21. There are too many factors contributing to a club’s success or failure, and if we only use the criteria of cup and league victories to define what such success or failure is, then we basically exclude everything but the continuously more expensive purchase of ¨world class¨ players like City,PSG,Barcelona and others have done. 99% of clubs cannot afford such profligate spending, lack of frugality and pay now or pay later mindsets.

    Arsenal have always chosen the sustainable model and Kroenke is not likely to change that. We have always relied heavily on finding unheralded gems and under-appreciated players, as well as producing exceptional youth talent and taking marginal players to play above their perceived abilities. This is the hardest road to follow and may not lead to the kind of ¨success¨ some fans mistakenly equate to true performance maximization.

    Hopefully Emery and the Board will continue to build up the team with affordable and highly skilled players, youth potential and the occasional undiscovered gem. Forget the sugar-daddy approach which can lead a club down the garden path if the sugar-daddy loses interest or something happens that forces them to dispose of their play-toy.

  22. When you are running a self sustaining model like we are you cannot afford the kind of mistakes made with Sanchez, Ramsey,Ox and Ozil. That is at least £100 million in transfer fees gone out the window and £60Million in wages. The mis-management of the club in recent years has been pretty bad and if you compare us Liverpool who have sold well and have a self sustaining model we are miles of the pace.

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