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Why financially, Arsenal are well and truly up against it – but are not alone.

By Tony Attwood

So here is the argument:  Matchday money has stopped.  TV money has stopped.  But salaries continue.  And that is not good news for the clubs.

Just how bad the bad news is can be seen by this table.  We’ve run it before, but now here are two extra columns as the situation has got darker and darker.

It is a table that I have not seen produced in other places – and this new version was brought about because of the news from Barcelona that they were declaring a period of financial difficulty.   So here’s the argument.

Clubs have lots of revenue – that is good.   But as column 3 shows, a lot of that money comes from matchdays, including TV revenue.  So that is why I think this is a bigger crisis than the journalists have been suggesting when they keep going on and on about other players that Arsenal are going to sign.

However even with the media there is some movement.  The Guardian for example, published “Premier League players likely to accept wage deferrals to ease pressure on clubs” yesterday evening.  I’ll come back to that in a later article.

Club Total revenue Matchday plus TV % of total income
What’s left Salaries
Shortfall
Manchester United £627m 55% £282m £296m £14m
Manchester City £538m 57% £231m £260m £29m
Liverpool £533m 65% £186m £264m £60m
Tottenham Hotspur £459m 71% £133m £148m £15m
Chelsea £452m 59% £185m £246m £61m
Arsenal £393m 72% £110m £240m £130m
West Ham United £191m 81% £36m £107m £71m
Everton £188m 78% £41m £145m £104m
Wolverhampton W £172m 84% £27m £33m £6m
Leicester £159m 86% £22 £159 £137m

I have now added Leicester to the list – the only reason they were missing before was that they had not declared their figures for the last financial year, and so could not be compared with other clubs.

Looking at the table it is clear that if matches don’t resume quickly all the clubs above are going into loss.  They have lost their matchday revenue, and what is left is not enough to pay the salary bill.

And maybe in doing this table we can see why Leicester were a little late in filing their figures, because they have huge problems.  In fact the worst of all.   Here is the league table for shortfalls with brief comments…

Position Club Shortfall Comments
1 Leicester City £137m Owners have money but will they spend it?
2 Arsenal £130m Kroenke likes profit not losses
3 Everton £104m New stadium costs not even started.
4 West Ham £71m Poor results and supporter anger
5 Chelsea £61m No new stadium; will Abramovich pay?
6 Liverpool £60m Stadium costs on going
7 Manchester City £29m No problem at all; owners will pay
8 Tottenham Hots £15m Stadium debt repayment has only just started
9 Manchester United £14m Worldwide support should see them ok
10 Wolverhampton £6m Borrowing is high

So which clubs are in danger?

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With Leicester they can be bailed out, although FFP might catch them out.  The money is there, but if the owners think this is a step too far, the grand results of recent years might well slip away.

Arsenal have the problem of an owner who wants to make a profit and will do anything to get that, and these are not the financials he expected.

Everton have real financial problems with these figures.  The new stadium has been lurking around for quite a while, and that has to be financed somehow, but with this level of shortfall and the current crisis, that money could be hard to find.

West Ham just seem in turmoil.  They have a stadium they don’t even have to pay for and yet they still run up this level of shortfall.  It seems hard to imagine what they do next.  New managers are getting harder to find – or at least new managers who will subject themselves to this turmoil.

Abramovich seems not to want to engage with the new stadium now the government have prohibited him from working in England.  He’ll bail the club out but beyond that…?

Liverpool is still planning to spend more money on its ground and this season before it stopped seemed to justify that.  The owner might well just take the hit and then go on building.

Manchester City clearly have no problem because wrongly or rightly they will just spend and not worry about the rules.  Except… if they are kicked out of the Champions League, it is the ego of the owners that is the issue, not the finances.  Remembering that the owners run a country without the civil rights we take as normal.  The rest of the world will tell them what they think of them which will be a new experience, so they could try and sell the club.  But then, who on earth could afford to buy the club and keep it near the top?

Arsenal are in trouble.  The huge transfer spending won’t be repeated but the wages bill is shooting up.  Plus the media is deliberately talking up the notion of a summer of spending and if it doesn’t happen what new protests will the supporters dream up this time?

Manchester United make a fortune from merchandising and that will continue and will see them through, although the owners can’t be very happy about making a loss and thus lower or even non-existent dividends.  But on the other hand the owners are milking the club, and maybe they could do that just a little less to bring it into balance once again.

Wolverhampton look to have a tiny issue but, they were spotted borrowing against next year’s income, which is always a worrying sign.  Maybe the cash reserves are already drying up.

I suspect the top four clubs in the list above will be curtailing their player purchasing for some time to come.  Which doesn’t bode well for the blogs and newspapers that live on the issue of next week’s transfer.  Nor for the rest of the market – it could see prices plummet.

These are troubling times.

7 comments to Why financially, Arsenal are well and truly up against it – but are not alone.

  • Peter

    Very misleading article. It is based on the premise that Arsenal will have no money coming in for many months. At least we don”t have huge debt like Man Utd. Every football club in the world will be having financial problems going forward. May lead to more realistic wages and transfer fees.

  • Kenward Garg

    God bless you, Sheikh Mansour: abusing the human rights of the venal “Breakaway Five” which included Arsenal.

  • Les Martin ( LeMmy )

    Thanks for the encouragement.
    You do realise that a league with 1 team in it playing their reserves for the Man City cup , the Mancy league or the Manky Universe Champion of champions Cup might be a bit pointless . and all taking part in an empty stadium.
    With no media coverage and being totally ignored.
    Where will Mr. Mansour be then ?
    Think about it eh?

  • Chris

    @Peter,

    well, basically I don’t see how Arsenal will get any big revenue in the coming months, at least from TV rights and matchday. We may not have a huge debt, Arsenal has been well managed though the Wenger years – a thank you to Mr Wenger is in order – but the salaries need to be paid. Where will that money come from ? So how is that misleading ?

    The owner may not want to lose the club and finance it, on the other hand he, like many ‘multi-club’ owners is going to take hits with all his teams in the US where the catastrophy is just only starting.

  • Gord

    Apparently, ManUre are going to partially refund season tickets if the season abandoned. Which would seem to indicate they have enough money.

  • Nitram

    All sounds rather gloomy and not a little worrying. Despite the logic and reason behind what Tony says, let’s hope for Arsenal’s sake he’s wrong, otherwise how ironic would it be that a well managed club (which Arsenal are despite the constant assaults by the media) that runs within its means (as is the obvious preferred way of footballs head honchos hence the many various attempts to implement ‘fair play’ ) ends up in what seems to be one of the worst positions.

  • Chris

    Just thinking about all that is happening and more specifically about the PL.
    I guess the Monty Python were right : one never expects the spanish inquisition…

    I believe the PL is dead. Long live the PL

    Something will emerge. But the bubble has burst. And the sports bubble in Europe is in as dire a position.
    Survival of the fittest is what we are now looking at. Maybe next season will have squads with an age average of 20 years….

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