« Oops, wrote off Chelsea too soon | Main | Chelsea victory means nothing »

Gazidis’ fingers in the till again/Arsenal salary cap points deduction risk

Swiss Ramble has done its annual carving of Arsenal’s full-year accounts. It’s probably too complex and boring for the average fan to read, but here are the highlights:

Arsenal’s cash balance stands at £226m, more than Real Madrid, Barcelona and Bayern Munich put together.

Chairman Sir Chips Keswick explained it’s his “duty to point out” that after excluding debt service reserves and amounts owed to other clubs on past transfers, the balance is more like £149 million.

I would have thought it also his duty to point out what other clubs owe to Arsenal, but then why paint a full picture when you can obfuscate?

Either way, one has to question the wisdom of leaving hundreds of millions of pounds sitting idle in the bank last season when interest rates were touching zero.

Profit before tax fell to a measley £3m. Commercial income rose by a paltry £4m and match day revenue dipped slightly. Most of Arsenal’s growth has come through improved TV deals via a 63% increase in broadcasting revenues.

Despite generating little income for the club, other than what broadcasters give Arsenal for nothing, Ivan Gazidis has awarded himself a 15% increase in remuneration from £2.2 million to £2.6 million pa.

Indeed, Arsenal’s commercial revenues trail badly behind their peers. Of the top 10 wealthiest clubs in world football, Arsenal have the second lowest commercial revenues as a % of total income.

This could soon become a problem for the club as it is part of the Premier League’s Short Term Cost Controls, i.e. ‘salary cap’ programme. The rules prevent clubs with wage bills in excess of £67m from increasing wages by more than £7m for each of the following two seasons.

Yet Arsenal have 15 players whose contracts expire by 2018. And not any old players: Mertesacker, Koscielny, Cazorla, Monreal, Sanogo, Toral and Campbell (expire 2017) and Sanchez, Ozil, Giroud, Wilshere, Szczesny, Gibbs, Jenkinson and Oxlade-Chamberlain (expire 2018).

Presuming those players want to stay – or the club wants to keep them, new contracts would mean salary increases that would likely push the club way over the £7m limit, invoking a points deduction for breaking PL salary cap rules. Obviously, Sanchez and Ozil's wage demands are likely to be a key element of this.

Rules state that salaries can be substantially increased if funded by increases in revenue from sources other than Premier League broadcasting contracts, i.e. commercial deals. However, Gazidis’ does not seem capable of generating sufficient funds through commercial activities.

This could explain why Wenger has come out in the press recently and started mouthing off about Ozil and Sanchez wanting too much money.

Either way, fans should prepare themselves for that fact that not only do Ozil and Sanchez probably not want to sign a new contract anyway (in which case the salary cap is irrelevant), but if they do, Arsenal have put themselves in a position where they can’t pay them the going rate without dumping a host of other players.

On the subject of the wage bill, Arsenal’s has climbed to £195m, £1m higher than Man City, nearly double that of Spurs and £145m higher than Champions Leicester City.

Any good news? Stan Kroenke has waived his £3m annual fee for “strategic and advisory services”. However, this may have something to do with the numerous petitions against him within the stadium during March and April.

Arsenal’s stadium debt currently stands at £233m; requiring annual payments of around £20 million. However, due to those cash balances mentioned earlier, net debt is only £7m. 

Note: Arsenal Truth is now on Twitter @TruthArsenal.


Comments should be intelligible and relevant. All others will be unread and binned.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (11)

And we are playing so badly at the moment, Wenger doesn't have a clue on the pitch.

It's all miserable, and now we have financial woes, thanks for not mentioning our performances.

October 19, 2016 | Unregistered CommenterCB

Let's be honest, the divided fan base in the last few seasons, culminating in raucous scenes at the grounds last season, have not helped the club on the commercial front. Most fans didn't buy merchandise which only strengthened the sponsors' hands in commercial negotiations.

The club will need to look into long term kit/stadium deals that can be reviewed midway, and squeeze out better deals that will bring in the cash now, to cushion the revenues side needed to avoid the salary cap trap.

Overall, the club is in a very good place and can grow things with just minor tweaks and greater supportership.

October 19, 2016 | Unregistered CommenterGoonerEris

Not wishing to rain on your parade, but the remaining £149m cash balance, as explained in the accounts, is as a result of upfront payments (season tickets, sponsorships etc.) that has to be available to cover operating costs (including wages) for the current season. That is why the cash is sitting in the bank in short-term, readily accessible investments.

It is like being paid your salary on first of the month and assuming you have that money available to spend on beer and ignoring the fact that you have a mortgage to pay and a family to feed!!!

The salary cap is unlikely to inhibit us in any way as the allowable percentage of the full-year impact of the increased TV revenue will give us far more than the £7m quoted to increase wages.

I also want Wenger out but maybe you should allow supporters to make their own minds up without misleading them with factually incorrect nonsense!!! WENGER OUT!!


Maybe you should do more research of your own before accusing me of "factually incorrect nonsense".

The FACT is that whilst it's true annual expenses have to be paid from the remaining cash balance, it's equally true that other money, including TV distribution (including the huge new deal) and merchandising sales, will flow into the coffers during the course of the season thus re-inflating the cash balance.

Regarding the salary cap, as stated: "salaries can be substantially increased if funded by increases in revenue from sources other than Premier League broadcasting contracts". In other words, TV revenues cannot be used as an allowance against the salary cap.

October 19, 2016 | Unregistered CommenterDavetheGooner

Can't do tactics, can't motivate poor players, we are never going to win anything.

Why are we so rubbish? Wenger of course. How do we get him out?

Advice please.

October 19, 2016 | Unregistered CommenterCB

I wonder how this piece could derive such pessimism from an article that ends "...this gives cause for quiet optimism for the future, though it’s still too early to say whether this team will deliver." with such pessimism.

"It’s probably too complex and boring for the average fan to read, but here are the highlights"
This is both intellectually insulting and misleading to your readers, you've deliberately missed out anything that might put Arsenal's finances in a favourable light, cherry picking figures to paint Arsenal's finances as bleakly as possible

Arsenal's profits were explicitly stated as lower due to lack of player sales. To get context of profitability, EBITDA is used. "Arsenal’s profitability has improved considerably in the last three seasons after many years of decline, with EBITDA rising from £25 million in 2013 to £82 million in 2016." Manchester United are way ahead of the pack, but Man City, Arsenal and Liverpool form a second tier with around £80M.

The wages:turnover ratio is ignored. TV revenues as a percentage are comparable to Barcelona, Real Madrid, Chelsea and Liverpool. Match day revenue as a percentage is way ahead of the rest of the pack.

Finally, and most absurdly, you've compared Arsenal's current wage bill to other clubs' wage bill last season.

Indeed, why paint a full picture when you can obfuscate?


To illustrate what an idiot you are, you use "TV revenues as a % of total income" as an example of the club performing well, when the whole point of the article is to illustrate that Ivan Gazidis is not worthy of a 15% pay rise because the club trails behind its competitors commercially, and commercial income is where a CEO earns his stripes.

Re: salary cap, commercial income is a potential factor in Arsenal's current player contract mess - the second point of the article.

EBITDA has risen due to renegotiation of commercial deals, which still leave Arsenal trailing behind their competitors and vastly improved broadcasting income (nothing to do with Gazidis).

Re wages: these are Swiss Rambles figures, not mine. Some other clubs have not published their wage bill figures yet - they may be lower or higher than the season before.

The point was really to compare Arsenal's wage bill to last season's closest competitors, Leicester and Spurs, i.e. illustrate how badly the club has performed compared to them.

October 22, 2016 | Unregistered CommenterTheo VanNasrigone

Nice linkin AT... the Ramble tells it like it is, as per.

How many times have we said it.? This club exemplifies mediocrity.

October 22, 2016 | Unregistered Commentermarinersmullet

To clarify, TV revenues as a percentage of income was used to illustrate that that figure isn't massively out of line with other top clubs, much down to the match day revenue which you choose to ignore.

Arsenal's commercial revenue has increased substantially over the past few years. While it plateaued last year it is keeping pace with Liverpool and Chelsea, and deals in the medium term do not raise any cause for concern.

I agree that those are Swiss Ramble's figures, not your own, but to state that Arsenal's wage bill is higher when you don't even know what City's is akin to saying 5 is larger than an unknown number. I'm curious as to why you'd leave a detail like that out.

If you want to compare Arsenal to Spurs and Leicester, then you are comparing clubs that are more dependent on TV revenues. Can you point out where those clubs are financially outperforming Arsenal aside from one year's worth of profits?

Sorry to disturb your echo chamber to the extent that you hurl insults at those who disagree with you.


The whole point of the post is to illustrate how TV revenues are too heavily weighted as a percentage of income and commercial revenues are trailing behind.

Thanks for unwittingly substantiating my point by mentioning match day revenues, which are exceedingly high because Gazidis' commercial deals are so behind his competitors he has to bleed money out of the fans by charging them the highest ticket prices in Europe. Economics for dummies, unsustainable and unethical.

Re: wages, Man City's wages have substantially dropped for three consecutive seasons: 2013 (£233m), 2013 (£204m), 2014 (£194m). Arsenal's have substantially risen for three consecutive seasons 2013 (£155m), 2013 (£166m), 2014 (£192m). Although we don't have the current figure for Man City, going by recent trends it's clearly unlikely to be substantially higher than Arsenal's (maybe less) - yet so many insist on claiming Arsenal cannot compete with Man City.

As explained, I'm comparing Arsenal to Spurs and Leicester to illustrate the vast gulf in finances between clubs, yet both competed for the Premier League title last season, whereas Arsenal didn't.

October 23, 2016 | Unregistered CommenterTheo VanNasrigone

well....errrr....overall I belieeeeeeeeeeeeve Theo VanNasrigone still leetle beet belieeeeeeeeeeeeves....errrr....why do you look at me?

October 24, 2016 | Unregistered CommenterLe Fartpipe

AT: "To bleed money out of the fans by charging them the highest ticket prices in Europe. Economics for dummies, unsustainable and unethical." Undeniable fact.

The reality is working classes are being priced out of a game built on their support when the middle and upper classes used to look down on football. If you're not willing to pay the price someone else will and the prices continue to go up.

Even though my Sky Subscription only contribute a little to the club but still don't have the guts to cancel the same old show. Looks like we have to endure the suffer from the old wenker for another at least 2 years. Simeone is my favourite one if the AKBs master could ever be replaced.


It's ironic how Arsenal piss and moan about about inflated wage demands and transfer fees while shamelessly inflating the price people have to pay to get in.

October 25, 2016 | Unregistered CommenterForeign Gooner

Theo Van Nitwit's post is a classic example of the consummate stupidity of the AKB. He actually says "show me where Leicester and Spurs are financially outperforming Arsenal?"

Good Lord, talk about shoving shit in your own gob! AT was making the point that Leicester and Spurs who, combined, have a substantially lower wage bill than Arsenal yet both competed for the league title last season ON THE PITCH. Yet you deliberately ignore this by creating some sort of "financial sustainability trophy". Pathetic, laughable, transparent.

I understand why he's done this though, much easier doing that than CJ fronting the reality that there can only be one reason Ranieri has managed with little money what Wenker has failed in doing for over 12 years! When was the last time Le Tool had a mathematical chance of winning the title in April of any given season? Answer: 2004! Shocking..

There's more AKB retard gems in there, such as asking why AT is using all known published figures... err he can only use published available information and draw on that.

In Arsene la-la land, you can only compare once Citeh release this year's wage numbers. Imagine if the BoE didn't release any reports ever, because they refused to use projections or last available figures. LOL.

Brexiters and AKBs have sooo much in common: total aversion to facts, an inability to admit they're totally wrong and have long ago lost the argument, and a tendency to dig in even more and become more ideologically idiotic the worse things get!

BTW AT, did you see Lord A-Hole's latest comedy routine? On drawing 0-0 at home to that awful Boro side he said the following:

"It's difficult, as Boro watch you play in the CL on the TV and then they have time to organise a game plan against you."

LOL. Yep, he's complaining that oil money Boro had the temerity to prepare, scout and devise a tactical plan. That's cheating! As for the "leeetle beeet fatigue" I don't understand this. After the Chelski victory the AKBs were talking about "strongest ever squad" etc...so surely, this amaaaaazingly strong squad should have no problem dispatching some amateur team of Bulgarian farmers? And then following that up with Boro AT HOME?!

I mean seriously, could you ask for a kinder double-header?

This is the same incompetent Specialist in Failure that yet again showed off about "20 years in the CL" at the AGM (funny how he never mentions how many times he's won it eh!)

So one minute he's showing off about CL qualification and next minute...he's moaning how hard it is to beat rubbish Boro at home, after a training exercise against a Bulgarian shower. Same as it ever was; he really is a total loser.

Arsenal will never ever win the CL or PL with this mediocre clown in charge. The facts speak for themselves. Ooooh but hold on... AKBs, like their Brexit brothers, HATE Facts! Maybe stick fingers in ears and rock back and forth and maybe, maybe, Lord A-Hole will one day manage to compete with Ranieri's crisp money!


"It's difficult, as Boro watch you play in the CL on the TV and then they have time to organise a game plan against you."

Yet never has it occurred to him that he's being paid £8.5m a season to deal with such monumental challenges.

He burns with hunger to recreate the past, yet continually kicks himself in the bollocks by creating a lack of accountability for himself and his players that enables them to opt out of ever taking responsibility for their performances, resulting in a complete lack of mental resilience or willpower.

You're right to bring Brexit into the equation. Despite the vast availability of information in this digital age, the masses are primarily controlled by baseless emotional impulses, enabling those with power and status to seduce and manipulate them through a duplicitous form of faux-intellectual nepotism - the cult of Wenger all over.

October 25, 2016 | Unregistered CommenterRaskolnikov

Hello AT. Time for one of my infrequent (these days) visits. There has been enough football played this season to make reasoned judgements and I reckon that we are in the same position that we were in in 2007/08. We would have won the Premier League that season if we could have swapped managers with Manchester United and the same could well be true this season.

The swap could be with Man Utd, Man City, Liverpool and probably Chelsea, Spurs and Everton too! Arsenal are unlikely to win the league despite having the squad to do so because, even in the days of Graham's defenders and Bergkamp, Wenger could only win the title by out-classing the rest.

He, like the similarly flawed Don Revie, always comes up short in a close race. The League Cup is eminently winnable and the FA Cup always is, indeed, we only failed to win it three times in a row because of a performance of incompetence and gutlessness by manager and players against a thoroughly mediocre Watford last season.

The reason that I have been saying for years that it doesn't matter who Wenger buys or how much money he spends is that Wenger is the problem and all those getting in a lather about not spending money over the years are missing the point. Leicester showed clearly what can be achieved last season.

All of our top four rivals have issues and, like last season, Arsenal should have a great chance, but I don't believe for a second that we will win the title and certainly not the Champions League. Assuming we do not finish top this season, I am sure that last season and this one will be looked back on as massive missed opportunities.

Guardiola is clearly miffed by some of the attitudes that he has encountered and will make the club in his image next summer. I am sure that Klopp, Conte and Mourinho will also make great efforts to improve greatly by the time next season kicks off. The effect on the players commitment and effort at Liverpool has been obvious to most since Klopp took over. A player who stands still, like Sturridge, is not likely to last long.

Sanchez, Ozil and Bellerin will all be wanted elsewhere and it will be a question of whether they like the easy life in London or do they want to make the most of their careers?

I am much more relaxed about Wenger, Kroenke and Gazides these days because I sell my season ticket to a mad fellow who comes from Norway every match and so I am not as consumed by The Arsenal, at least the present, as I was. And before anyone makes any stupid assumptions I sell the ticket at cost price.

Also, I know that Wenger will never walk away from huge amounts of money and is, no doubt, keeping both of his family's in the style to which they have become accustomed so I am concentrating all of my efforts on outliving the Egocentric One and I am doing pretty well now.

I still watch and enjoy the Ryman's Isthmian League and have long phone conversations with family and friends still utterly frustrated over the last ten years or more. I await the first match post-Wenger. Whenever and wherever it is - I WILL BE THERE!


Hi Ram, good to catch up with you and glad to hear you are well. Like you, I don't think anything has changed this season. Different players, same old flaws.

Under Wenger, Arsenal will never excel, the most you can hope for is that they benefit from the underperformance of others.

I am becoming less and less an Arsenal supporter. Last week, I completely forgot Arsenal were playing until two days after the game. One wonders whether, even after Wenger's departure, I will ever feel the same way about the club again.

The board, with its horrible lack of ambition and greed, has left me feeling completely detached.

October 28, 2016 | Unregistered CommenterRamgun

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>