Arsenal announced an interim loss of £2.5m for the six months to the end of November 2010. The club is in good financial shape overall, but what worries fans following the Carling Cup defeat to Birmingham City is that its prudent financial policy is getting in the way of success on the pitch.
Arsenal announced an interim loss of £2.5m for the six months to the end of November 2010. The club is in good financial shape overall, but what worries fans following the Carling Cup defeat to Birmingham City is that its prudent financial policy is getting in the way of success on the pitch.
The comparative figure the previous year was a £29.2m profit on revenues of £197m, as against £120m this year. The difference in revenues is explained by the absence of a big one-off gain from player sales, coupled with the winding down of apartment sales at Highbury. Sales from property were down from £99.6m a year ago to £22.5m with just 35 of the 655 flats remaining to sell.
Arsenal made £34m from player sales in the summer of 2009, primarly from the transfers of Kolo Touré and Emmanuel Adebayor to Manchester City. Most of this remains unspent in a transfer proceeds account that ring fences money for reinvestment in the squad. It is also the club’s policy to use cash reserves and profits from the sale of apartments to invest in the squad. Total cash reserves are £110.4m, but £26m of this is restricted to repaying debt on the Emirate.
Footballing operating profits of £9.3m mean that the club should have no difficulty in meeting Uefa’s financial fair play rules. However, Manchester United, Chelsea and Liverpool are pulling away in terms of commercial revenue. Commercial revenues of £15.7m were dwarfed by Manchester United’s £50.4m for the same period.