Will Arsenal Go To Wembley After All? - 03/11/03

News that Arsenal will not be able to relocate to its planned new stadium at Ashburton Grove for the 2005-6 season as planned has renewed speculation that the club may eventually end up as tenants at Wembley, despite strong denials from the club. Highbury can only seat 38,500 fans compared with 68,200 at Old Trafford. The resultant gap in match day revenue has given United more purchasing power on the transfer market. Old Trafford with its capacity of 67,599 generates £1.8m every time it sells out. Matchday revenue last season was £56.3m. Arsenal's matchday revenue was £24.6m, a difference of nearly £32m and the club lost £22m.

Arsenal has already spent £48m acquiring the land, a rundown industrial estate, for the new ground. The project drained away £32m of cash reserves last season. The club has worked out that the lost year will cost an additional £24m, most of that in terms of lost additional matchday revenue of £20m. A statement from Arsenal said that due to the project's complexity, a number of delays had occurred not just on the construction of the stadium itself but also with legal, financial and property issues, transport infrastructure, relocation of existing local statutory services and businesses, provision of affordable housing and significant regeneration of the local area. It is understood that there have been hold ups in the laying of electric cables and a delay in relocating leaseholders on what are actually three distinct sites involved in the construction of the new stadium.

Six month results for Arsenal Holdings showed an increase in group turnover of 28.5 per cent to £43.6m. However, when player transfers are taken into account, the club's pre-tax loss for the half-year period to November 2002 was £9.4m. Moreover, net borrowing was significantly up to £28.3m, mainly due to Ashburton Grove cosrs. The club's net debt was just £5m for the same period a year earlier, while there is also a separate outstanding debt for the redevelopment of the North Bank more than a year ago. The first team squad and management bill increased by £2.6m over the six month period. There will be little scope for further major pay rises. Arsenal's ability to compete on the pitch with Manchester United will continue to be constrained by financial factors.