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.
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