Arsenal are getting bigger
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Arsenal get bigger In September 2007 Arsenal’s figures were released showing that Arsenal’s turnover made it the second largest football club in the world, just £2 million a year behind Real Madrid. At the same time with shares in Arsenal changing hands at £10,000 per share, Arsenal became the richest club in the world in terms of share value. And there is more to come, because much of this growth has been built on the Emirates Stadium. The club’s plan has clearly been to grow the stadium first, and bring the marketing up later. This approach is seen with the launch of Arsenal TV as a satellite TV station. Whereas there was thought that the club should launch the service alongside the move to the Emirates, the board decided to hold back. And with Arsenal starting the 2007/8 season in such a brilliant way, it was a perfect decision. Man U have retailiated by changing the way their accounts are written up, to make themselves “larger” than Arsenal in terms of turnover. But it is expected there is more to come from Arsenal. Below is the history of this remarkable transformation. The Deloitte Football Money League for 2003/4 showed Arsenal in 6th place with an annual turnover of £115 million. In 2004/5 Arsenal slipped to 10th, and then moved up to 9th for 2005/6. But for the first half of the 2006/7 financial year Arsenal nearly doubled its turnover to £101 million (in the six months to November), helped by higher gate and match day revenues at the new stadium. Interim profits before tax and net finance charges rose £5.3 million to £19.6 million, but ‘ordinary’ finance charges of £6.8 million and £21.4 million of exceptional costs (including £2.6 million of fees) involved in the planned refinancing of the stadium. By 2004 Arsenal were earning £21m a year from commercial activity. This compares with £33m for Chelsea, £39m for AC Milan, £56 for Real Madrid, and £47 for Manchester Utd. Even Newcastle and Liverpool earned more from marketing than Arsenal! But that is now exploding – as are ticket sales with the new stadium. Arsenal held back on commercial development pending the launch of the new stadium. But once that was up and running, the commercial side started to take off with the new enormous shops, the restaurants and a completely new approach to marketing. Not only have Arsenal have a stadium worthy of their name, they also share with Chelsea the fact that they are in London – which attracts huge numbers of overseas fans. There is an uptake of activity which will add at least another £25m a year to the commercial side – plus the fact that at the Emirates Arsenal is now the club that earns more per match day than any other club. Arsenal will undoubtedly be in second spot in the world league when the next figures come out – and quite probably able to outstrip Man U soon after that. As I just said – Arsenal are about to get a lot bigger. Add in the new marketing revenue and the Emirates extra income you get up to a figure around that of Barcelona. So here’s what is happening – exactly as we predicted on day one of opening this site – the day before the Emirates Stadium got its name – October 4 2004. As the chart below shows Arsenal have a turnover for 2005/6 of just under 200 million euros. This was the position after the last season at Highbury. The extra turnover at the WengerDrome per year is about 35 million euros. Additionally there is the increased income from shop sales, restaurants, beer and the like on match day, and the additional sponsorship income from Emirates for the shirt and the stadium. That accounts for around 10 million euros extra. Thirdly comes the deal with Arsenal Colerado announced on 9 Feb 2007. This will take the Arsenal brand into the US. That won’t generate much for 200/7, but by 2007/8 it should make at least another 7 million euros for the club in terms of American deals. Thus for 2006/7 what we will find is Arsenal on something around double their previous figure. The top two clubs from Spain will grow at their standard rate, but the next group will probably decline – all Italian clubs a running into trouble following the scandals and violence, while both Chelsea and Man U looked to have peaked. So that will put Arsenal third or maybe fourth. The following year Arsenal will start to reap the American income and could well see them over take Barca to secure second spot. The rich list – prices in euros 05-06 04-05 1 (1) Real Madrid €292.2m €275.7m 2 (6) Barcelona 259.1 207.9 3 (4) Juventus 251.2 229.4 4 (2) Man United 242.6 246.4 5 (3) Milan 238.7 234.0 6 (5) Chelsea 221.0 220.8 7 (9) Inter 206.6 177.2 8 (7) Bayern M 204.7 189.5 9 (10) Arsenal 192.4 171.3 10 (8) Liverpool 176 181.2 11 (15) Lyon 127.7 92.9 12 (11) Roma 127 131.8 13 (12) Newcastle 124.3 128.9 14 (14) Schalke 04 122.9 97.4 15 (13) Tottenham 107.2 104.5 16 (n/a) Hamburg 101.8 n/a 17 (17) Man City 89.4 90.1m 18 (n/a) Rangers 88.5 n/a 19 (n/a) West Ham 60.1 n/a 20 (n/a) Benfica 58.8 n/a Previous place in parentheses Source Deloitte Football Money League |
