Arsenal Revenue Statistics- Why are Investors Interested in the Club

September 11, 2008 at 1:19 pm | Posted in Arsenal | 8 Comments

Arsenal have been subject to interest from a takeover in recent years and that seems more likely know Chairnman Peter Hill-Wood has said the club may sell ‘if the price is right.’ Here Arsenal Column looks at where the revenue comes from to Arsenal Football Club.

Source: Sport-Magazine, Issue 65, Feb 2008.

Arsenal posted £41.6 million in operating income (earnings before interest, taxes, depreciation and amortization) on £177.6 million in revenue, making it the fourth most profitable soccer team in the world

Matchday Revenue £90.6m: (tickets, merchandise, concessions and corporate hospitality sales): Hill-Wood has said: Our repayments on the stadium are under £20m a year and it`s producing an extra £50m a year. Our annual costs are fixed for 25 years. They will not rise. Our income will rise and our gate income will rise. Those payments are fixed. So in not too long it will look like a few pennies.”

Broadcasting Revenue £44.3m:

• Champions League- £1.5m each club got as a participation premium, £750,000 surplus revenue saw each club receive this extra fee in 2006-07. £300,000 for every group match played, £450,000 for every group-stage victory, £226,000 for every group-stage draw. £1.6m for reaching the knock-out stages and £1.8m for reaching the quarter finals. Potential £2.2m-£7.4m if go further. (The other half of the prize money depends on the value of each club’s ‘national market’, the number of clubs in that association, the team’s position in their previous domestic league season and the number of games they played in the Champions League.)
• Premiership:- Each team was paid an almost £9m share automatically, as well as £4m for overseas TV deals. The rest was paid out in ‘facility fees’ and based on the team’s fi nal standing in the league. As ‘merit’ payments, champions Manchester United earned £9.7m more, with last-placed Watford receiving £486,563. In 06/07 Arsenal recieved £28.9m from broadcasting.
• FA Cup and Carling Cup: Arsenal recieved around £40,000 for losing the 4th round and less than £40m for losing the Carling Cup semi-final.

Commercial Revenue £42.7m

Potential Earnings

“Manchester United have 300m overseas supporters but do not make as much money from them as possible,” said Deloitte’s Alan Switzer. “Even £2 extra from each fan would make an enormous difference. That is something all the big English clubs are now focusing on. The idea of a 39th game is part of that strategy.”

Arsenal took £177.6m, mainly from corporate revenue which doubled to £91m in their first season at the Emirates Stadium. Financial analysts expect more to follow in 2008 because of this season’s £300m Premier League broadcast deal. (The Guardian)

The conversion of the old stadium site into 724 luxury apartments opening in 2009 and the redevelopment of property bought around the new stadium is helping the team pay down debt. Forbes estimate Arsenal to be worth $1.2 billion (before deducting debt), up 31% over the past year.

Who owns Arsenal shares?

Red & White Holdings (Alisher Usmanov) c.24.9%, Danny Fiszman 24.1%,  Lady Nina Bracewell-Smith 15.9%,  Stan Kroenke 12.38%,  Richard Carr 4.375%,  Other board associates, family and friends 4.7%.

Peter Hill-Wood 0.804%, Lord Harris of Peckham 0.085%, Ken Friar 0.076%, Sir Chips Keswick 0.064%, Keith Edelman 0.040%, Remainder of shares (split between 1,400 individuals) 12.57%

Is a Takeover Likely?

Usmanov is the front runner in the race to control the Gunners whereas Stan Kroenke looks be a business partner rather than an investor.  However it looks like the board are to try and stop the Russian taking control and an extended lock-down is in place till 2011 though if one offers a bid that is too good to refuse the the shareholders may accept. Usmanov wants to amass a 25% stake, which would be sufficient to veto special resolutions and call extraordinary meetings but well short of the 29.9% stake that would trigger a bid for the whole company under U.K. takeover rules.

Uneducated Arsenal fans may say Arsenal need to splash the cash though they need to look at the bigger picture. We do not want a circus show a la what has been going on at Liverpool, Man Cit and Chelsea and want Arsenal to be controlled in the interest club. In the short term Arsenal seem to be in a good position but sooner or later fans know a takeover may be required though the question is from who. Usmanov has been convicted of various crimes and though we are yet to know his full intentions for the club, moraly the club will not want to sell to the Russian.

The rich list 2008

1. (1) Real Madrid £236.2m
2. (4) Manchester United £212.1m
3. (2) Barcelona £195.3m
4. (6) Chelsea £190.5m
5. (9) Arsenal £177.6m
6. (5) Milan £153.0m
7. (8) Bayern Munich £150.3m
8. (10) Liverpool £133.9m
9. (7) Internazionale £131.3m
10. (12) Roma £106.1m
11. (15) Tottenham Hotspur £103.1m
12. (3) Juventus £97.7m
13. (11) Lyon £94.6m
14. (13) Newcastle United £87.1m
15. (16) Hamburg £81.0m
16. (14) Schalke 04 £76.9m
17. (-) Celtic £75.2m
18. (-) Valencia £72.4m
19. (-) Marseille £66.6m
20. (-) Werder Bremen £65.5m

Sources: Sport-Magazine, Issue 65, Feb 2008, http://www.forbes.com/forbes/2008/0519/107.html