Arsenal increased revenue and profits in the year to 31st May. Gate and match day revenue rose from £95m to £100m but failed to meet a total wage bill of £122m, including a £23m loss on transfer activities. But total turnover rose from £225m to £316m, aided by broadcast income of £73m and improved retailing and commercial revenue. The biggest contribution to the jump in turnover was £88m booked on property development, centred on the transformation of the old Highbury stadium into 655 residential apartments.
Arsenal increased revenue and profits in the year to 31st May. Gate and match day revenue rose from £95m to £100m but failed to meet a total wage bill of £122m, including a £23m loss on transfer activities. But total turnover rose from £225m to £316m, aided by broadcast income of £73m and improved retailing and commercial revenue. The biggest contribution to the jump in turnover was £88m booked on property development, centred on the transformation of the old Highbury stadium into 655 residential apartments. Overall net debt fell from £318m to £298m with a net finance cost of £16.6m covered by profits which rose from £37m to £46m.
Chairman Peter Hill-Wood yet again ruled out a rights issue to help fund player signings and pay down debt, insisting that the club’s finances were on an even keel. ‘In the final analysis I believe it boils down to a decision about whether it is appropriate to raise money from shareholders to purchase registrations and pay the wages of footballers,’ he said. ‘This is not something that Arsenal has ever done previously in its history and it would be at odds with our ethos of running the club as a business which is self-sustaining and pays its own way in the world.’ He added that transfer activity was limited on the recommendation of manager Arsene Wenger, not out of ‘any necessity or financial constraint’. Since the end of its financial year, the club has made net gains on player transfers following the sales of Emmamuel Adebayor and Kolo Toure to Manchester City.
30 per cent of the 655 flats at Highbury Square are still available. Part of the overhang has been removed by a deal by London & Stamford, the Aim-listed property company, which has completed the puchase of 146 units from Fraser and Neave, an early stage Singapore-based investor, for £41.4m. Agreements on such bulk sales has allowed Arsenal to book cumulative sales of £172m and extend the term of a bank loan, which has been reduced from £133m to £47m, on the Highbury venture.
KROENKE WINNING STRUGGLE TO CONTROL ARSENAL – 1/10/09
American sports entrepreneur Stan Kroneke is close to winning the battle with Moscow-based billionaire Alisher Usmanov to control Arsenal. He increased his holding in Arsenal to 28.7 per cent yesterday, 1.2 per cent short of the mark that triggers a mandatory takeover bid. The American spent £680,000 on 80 shares, paying about £1,000 above the market price for each one. In a little more than a year, Kroenke has committed nearly £100m to increasing his holding from 12.8 per cent. Once he reaches the 29.9 per cent mark he would be obliged to make a formal offer to other shareholders under Stock Exchange rules. If it came to a struggle for control Kroenke could probably count on the backing of Danny Fiszman, a director who was the club’s biggest shareholder. Usmanov might try to team up with Lady Nina Bracewell-Smith, no longer a member of the board and the third biggest shareholder with 16.8 per cent. However, he would be unlikely to obtain enough support from smaller shareholders to win control. Any takeover bid could well leave the club with more debt.
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