Arsenal’s star has risen again in recent years thanks to a revival on the pitch – and their finances are beginning to reflect the Mikel Arteta-led renaissance.
Two successive 2nd-place finishes in the Premier League have breathed life into ailing commercial income, not to mention the prize money for lucrative Champions League participation.
Their success has come at a price in terms of owner Stan Kroenke‘s finances.
Missouri-born billionaire has had to put his own cash into the club to fund transfers, a departure from his usual self-sufficient philosophy.
But this summer, while Arsenal have made a handful of signings and with Mikel Merino’s arrival to the Emirates seemingly imminent, there has not yet been a blockbuster addition.
Finance expert and former Man City adviser Stefan Borson recently suggested that this was because Arsenal were trying to prove their business model and demonstrate they can consistently generate profits.
Kroenke has always seen Arsenal as a capital appreciation project and will one day flip the club for a profit – but when?
To discuss the future of the club, TBR Football spoke exclusively to Liverpool University football finance lecturer and Price of Football author Kieran Maguire.
Why haven’t Arsenal spent huge this summer?
Arsenal’s finances, claims Maguire, are not an indication that Kroenke is looking to sell up any time soon but rather an indication of prudence in the market.
“There is an annual game information and misinformation chess played between clubs every summer,” he said.
“No one wants to have had their trousers taken down when it comes the transfer market.
“Therefore, Arsenal making briefing client journalists that they have been constrained in terms of PSR seems like a strange approach to take.
“It ignores the fact that Arsenal qualified for the Champions League in 2023-24. Thy have done the same for the expanded Champions League this season.
“This has a significant impact on the club’s finances.
“They have also been able to get the wage bill down significantly, so I would take the claims of poverty at the Emirates with a large dose of salt.
“It is more likely that, if they are trying to get any deals over the line before the end of the window, they just don’t want to pay over the odds.“
Stan Kroenke’s sports empire – why Arsenal aren’t the jewel in the crown?
Sportico recently ranked Kroenke’s LA Rams franchise as the 4th-most valuable sports team in the world at a staggering £6bn.
Arsenal did not make the top 50.
Why is this?
Maguire said: “NFL teams are subject to significant valuations premiums compared to football clubs for myriad reasons.
“First of all, it’s a closed league. Therefore, there is no risk of relegation. And while we can be 99.9 per cent certain, there is another form of relegation in the Premier League – not qualifying for the Champions League.
“This season, qualification could be worth up to £150m. There is going to be at least one, possibly two home games and extra sponsorship money and so on.
“That is seen as a tipping point that doesn’t exist to the same extent in the NFL.
“Secondly, the NFL is a franchise sport where all the owners have identical aspirations, which are to make money.
“If you contrast that to the Premier League, some owners treat their clubs as trophy assets and therefore are happy for them to lose substantial amounts each year.
“That is reflected in wages that have set higher and higher benchmarks that Arsenal have to compete with. That results in 19 out of 20 clubs losing money at an operational money.
“Thirdly, the NFL is a sport which was created for the benefit of TV. If you look at the number of advert breaks throughout a match, it is substantial.
“You have four quarter instead of two halves and intervals in play between those quarters as well.
“Therefore, when you come to sell the rights, it is not just one block of adverts at half time.
“As the TV companies can sell more adverts, they are willing to pay more for the NFL rights. accordingly.
“I think in 2022, 19 out of 20 of the biggest live broadcasts were sporting events, out of which nearly all were NFL matches.
“All of these are positives for the NFL over a Premier League club like Arsenal. This is the reason Florentino Perez wanted to make football four quarters of 15 minutes in-play time each.”
A new era at the Emirates?
Stan Kroenke’s son, Josh, who has taken charge of his father’s day-to-day responsibilities in North London recently revealed that Arsenal are considering expanding the Emirates Stadium.
This has placed the relationship with the Emirates airline in the spotlight.
The naming rights and front-of-shirt partnership has run for nearly two decades.
The company also recently struck new deals with Benfica, the FA, and the US Open, indicating they are still confident in sports sponsorship.
So are we likely to see the deal between the UAE company and Arsenal extended?
“Emirates are a global brand in their own right,” said Maguire.
“They have had a fantastic association with Arsenal. They are synonymous with Arsenal in terms of both front of shirt sponsorship and the naming rights.
“You would imagine they would want to sign a further long-term association with the club.
“We have seen similar with Brighton and Amex, who have an 11-year brand. Arsenal is a much bigger brand.
“With the success on the pitch and the exposure that comes with being back in the Champions League, they are attractive to sponsors.
1. Pics below are Florentino Perez Rodriguez, President of Real Madrid looks on as Real Madrid new signing, Endrick Felipe is unveiled at Estadio Santiago Bernabeu o…
Photo by Mateo Villalba/Getty Images
2. Pics below are Arsenal Owner Stan Kroenke who also owns the Los Angeles Rams, waves to fans in the tunnel prior to an NFL football game against the Tampa Bay Buccaneers at Raymond Ja…
Photo by Kevin Sabitus/Getty Images.
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