Arsenal’s latest financial results sees healthy cash reserves for new signings
PUBLISHED: 13:25 25 February 2017 | UPDATED: 09:53 27 February 2017
Record high of £110.5m spent on players – with a 20 per cent rise in turnover to £191.1m from £158.1m for six months to the end of November 2016. Layth Yousif MBA studies the results so you don’t have to...
Broadcasting revenues amounted for £25m of total turnover with the primary driver being the increase value of the new Premier League television contract.
The club’s profit before tax was £12.6m, compared to a loss of £6.2m for the corresponding period in 2015.
However football operating costs rose by £11.2m as a result of additional salaries relating to new signings.
The results were announced as speculation continues over Arsene Wenger’s future after damaging defeats against Watford and Chelsea derailed a possible title tilt, as well as a humiliating 5-1 thrashing by Bayern Munich effectively ending their hopes in the Champions League.
Under-fire Wenger said in the aftermath of the rout in Germany that his team were ‘mentally jaded’ – despite spending more than £86.6 in the summer after the club signed midfielder Granit Xhaka, defender Shkodran Mustafi and forward Lucas Perez.
The outlay also meant the group’s cash and bank balance was significantly lower at £123.7 compared to £226m at the start of the period.
Arsenal’s underlying cash reserves amount to £100.4m which has fallen from £135.9m 12 months ago – with the amount of £100.5m derived from the cash position of £123.7m, minus debt service reserves which are not available for football purposes of £23.3m.
Commercial and retail revenues were up five per cent on the prior period to £57.1m – with gate and match day revenues rising £41.2m from £45.8m
On the commercial front the club have also signed new partnerships with Octopus Energy – the UKs largest investor in solar energy, and MTN NIgeria.
The deal with West African country’s largest mobile phone network operator offers the club access to its large subscriber base, with Arsenal also sending coaches to specialist clinics in Nigeria as part of the deal.
The agreement with Octopus Energy will see the company working on a long-term plan to develop renewable power supplies for the club including Emirates Stadium.
Fixed assets costs rose £14.4m – mostly due to the extensive redevelopment of the Hale End Academy which is almost completed, with work on the training centre at London Colney progressing well, as a new player performance centre set to open this spring.
Income from property development also fell to a negligible amount as part of total turnover – £775,000, down from £2.1m over the same period in 2015.
This indicates that particular revenue stream is running dry – at least until complex agreements from the sale of development sites at Holloway Road and Hornsey Road are completed.
Plans for the summer tour are well advanced with games already confirmed in Australia and China.
Gunners chairman Sir Chips Keswick said: “The financial results for the first half of the year are robust. As expected, increased Premier League broadcasting revenues have had a direct impact on player costs both in terms of transfer prices and player wage demands.
“We have invested in our playing squad at record levels. It has also been exciting to see more young players emerging from our academy.
“We are very focused on producing a positive and exciting closing run and with the support of our fans, I believe together we can achieve a successful and memorable end to the season.”
Talking about the figures Tim Payton of the Arsenal Supporters Trust said: “One issue tucked away in Arsenal’s results is commercial income flatlining with no immediate change to that [meaning] other clubs moving far ahead.
“Results also show a healthy reserve cash position – next season’s manager will have a transfer kitty of at least £80m before any sales added in.”