Arsenal announce profit of £17.8m but figures reveal reliance on player sales
The Gunners made £23.2m in player trading after selling stars including Robin van Persie
Monday 25 February 2013
Arsenal have announced a profit of £17.8million in the club's latest half-yearly results but the figures are significantly influenced by the changes in the squad which occurred in the summer transfer window.
The Evening Standard reports the Gunners made £23.2m in player trading after selling stars including Robin van Persie and Alex Song while acquiring Lukas Podolski, Oliver Giroud and Santi Cazorla and tying six first-team players including Jack Wilshere and Theo Walcott to new deals. For accounting purposes, the cost of signing a player is spread out over the term of their contract.
Last year Arsenal announced a £49.5m profit for the six months to November 2011, thanks to selling Cesc Fabregas, Samir Nasri and Gael Clichy but the previous half-yearly figures showed a £2.5m loss as there were no major departures in the summer of 2010.
Today’s figures showed turnover fell by £7.4m to £106.1m due to there being four fewer home fixtures than the same period last year and the importance of turning a profit on transfers is underlined by the club’s operating profit falling to just £5m compared to the previous £15.2m figure.
Arsenal already have the fourth highest wage bill of clubs in the country and the full impact of new deals handed to Wilshere, Walcott, Aaron Ramsey, Carl Jenkinson, Kieran Gibbs and Alex Oxlade-Chamberlain will not be felt on the balance sheet until the next set of accounts later this year.
However, to offset that increase, several players on considerable salaries are expected to leave the club this summer, notably Andrey Arshavin, Marouane Chamakh, Andre Santos and Sebastien Squillaci among them.
And Arsenal believe they have reached something of a financial watershed. The club’s healthy cash balance, £123.3m according to the accounts, reflects the dividends yielded by the property development scheme at Highbury Square, where all but one flat is sold and that is expected to be retained for private use.
Instead of relying on player sales to boost their financial position, Arsenal will instead be able to use funds from the new Emirates sponsorship deal, worth £150m over five years. The payment structure is frontloaded, meaning the Gunners will receive £30m this summer which has been earmarked to spend on players.
The process of paying for Emirates Stadium has been slow with Arsenal usurped by cash-rich clubs Chelsea and Manchester City only too willing to spend beyond their means in the transfer market but they now believe their self-sustainable model will soon achieve results that enables them to compete.
Chairman Peter Hill-Wood said in the report: “While we have our sights set on a 16th straight season in the Champions League, our aims are higher; our ambition is to win trophies. No one is more focused on that than our manager Arsene Wenger, our majority shareholder Stan Kroenke and the board and it is what we work towards every day.”
He continued: “Our ability to compete at the top of the game here and in Europe is underpinned by our financial performance
“Let me be quite clear that our intention is to keep our best players and recruit new talent to make us stronger. Although we were disappointed to see Robin van Persie leave, we have taken steps to secure our best players going forward and have recently signed Jack Wilshere, Theo Walcott, Kieran Gibbs, Aaron Ramsey, Alex Oxlade-Chamberlain and Carl Jenkinson to new long-term contracts.
“During this financial period we also invested £40.9m in the acquisition of new players, Lukas Podolski, Santi Cazorla and Olivier Giroud, and the extension of other player contracts. More recently we added Nacho Monreal to our ranks from Malaga. This is a strong indicator of our ambition to compete and win trophies.”
Arsenal are also confident of further boosting their position by announcing a new kit deal — possibly with adidas — to replace the Nike contract which expires in 2014.
It is expected that the contract would be similarly frontloaded as with Emirates to ensure Wenger is given immediate access to newly‑generated funds.
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