Sunday, May 27th, 2012 « Untold Arsenal: Arsenal News. Supporting the Lord Wenger; coach of the decade

By Tony Attwood

Man City are the richest club in the world, and yet they have increased season-ticket prices by an average 9% for next season.   And just to make sure supporters get the message there was a price rise of 6% 12 months ago. The price rise is an average – some areas have gone up more and some less than this.

Three other Premier League clubs from last season have raised their prices across the stadium.

Fulham have raised them by 5%. Tottenham H have gone up by 3.6%.  Everton by 3%.

Of course prices are dependent on a whole raft of issues including:

• The location (London teams have always charged more than northern teams)
• Success (a team regularly in the Champions League will charge more than one that isn’t)
• Demand (if there are a lot of empty seats it is harder to put up prices than if there is a waiting list)
• Other sources of income (Chelsea and Man C can hardly justify price increases in terms of need)
• Facilities (some grounds like QPR, Chelsea, and Fulham are undeveloped, compared to The Emirates)
• Number of games charged for

Arsenal has always been near or at the top of the price list, and I have clear memories of my father commenting on this in relation to the club both pre and post the second world war.  But Arsenal is not, as the AAA try to tell us, the most expensive club in terms of season tickets.  Tottenham’s season tickets are by and large more expensive – when you take into account that Arsenal season tickets cover seven more games than Tottenham’s.  It is also necessary to try to compare like with like – Tottenham have nothing directly comparable to club level – their boxes are more akin to the boxes we had at Highbury.  And Arsenal doesn’t have anything comparable in terms of the poverty of the sight lines to Tottenham’s cheapest seats.

But to return to Man City, a price rise of 15% over two years from a man who can happily throw £1bn at the club suggests this is not all about glory.  Someone is thinking about balancing the books.

The situation is different of course if fans won’t turn up. Wigan have increased adult prices slightly but reduced prices for younger supporters.  West Brom have cut a lot of prices in an effort to get a full stadium.

Much of the question when looking at financial details is: where could an increase in revenue come from?  For many clubs this is a hell of a question, for they simply don’t have any area where there is an obvious chance to raise revenue.   For Arsenal there is however a chance to raise their commercial revenue other than TV right and gate and match day income.

Arsenal’s commercial revenue for the 2010/11 season was £85m.  Only one club exceeded Arsenal and that was Man U with a revenue of £119m in this area.   Chelsea did not break down their income into segments but their overall income was £34m less than Arsenal’s and given their smaller ground their commercial income might have been similar to Arsenal’s but it is unlikely to be higher.

Liverpool’s commercial income was £65m, Man City’s £69m, Man U, as I say, £119m, Tottenham £54m, the same as Aston villa, and slightly above Everton at £53m and Fulham at £51m.

These figures show that Man U has moved ahead into a league of its own, with Arsenal at the head of the pack below them.  So what might happen next?  It can be argued that Man U will continue to grow, although it can also be argued that each year it gets harder to find new markets and new concepts.  I see the latter as more likely but I recognise that there is the former argument.  Without access to the confidential accounts, it is hard to know.

Arsenal’s case is very different from the rest however.  To raise money to pay for the stadium Arsenal awarded long term marketing contracts which now, as they come to an end, could be seen as too generous.  But they did their job of making the debt sustainable.  After all, when the stadium was built no one was totally sure the fans would buy all the tickets.

But either way those contracts (except for the naming rights of the stadium) are ending now, and that means a huge boost for Arsenal’s marketing in the next two years as new deals come into being – a boost that will take our income up significantly, and bring us closer to the Man U figure.

Looking at total turnover for the last year for which figures are available. Man U were top with £331m, Arsenal second with £256m, Chelsea next with £222m, then Liverpool £184m, Tottenham £163m, and Man C with £153m.   So Arsenal have a lot of catching up to do – and marketing is the obvious area.  Man City’s price rise and recent trading deals will help them rise above Tottenham, who are fairly stuck until they get their new stadium.  Chelsea too have difficulties until they also get a new ground.  As for Liverpool – they have problems all round since the ground deal has fallen down, and their image has been seriously tarnished in the last few years, making new marketing deals at much higher prices harder to get.  Would you want to be associated with Liverpool just now?

So my point here is that the playing field is not level.  If it were just to be about turnover, we would expect Man U and Arsenal to be fighting it out year after year – and indeed that is how it was in the past.  But the money now being thrown at Chelsea and Man C (which does not show up as turnover) allows them to buy and buy and buy.  Indeed if we look at wages for this 2010/11 season Man City’s wages bill of £174m exceeded their turnover of £153m.  Arsenal’s wages bill of £124m was high, but only accounted for 48% of turnover.

High wage bills, like Man City’s can buy the club the league title, but can also buy problems.  Liverpool had a wages bill of £35m – more than Arsenal – but again couldn’t qualify for the Champions League.

That Man City have bought their way to the title cannot be denied – but we also have to note that high spending doesn’t guarantee success.  Chelsea’s £190m wages bill was 86% of their turnover, and like Man C’s only sustainable because of money from the benefactor.

The long and the short of it is, money can help bring success, but doesn’t guarantee it.  The best thing is to get the money, and then spend it very wisely.   Arsenal are, I believe, about to get a lot of extra money, and the record of the past 15 years is that it is always spent wisely.

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