Swiss Ramble Profile picture
Mar 2, 2018 21 tweets 14 min read Twitter logo Read on Twitter
Arsenal this week announced their financial results for the first half of the 2017/18 season, reflecting the impact of competing in the Europa League instead of the Champions League plus continuing investment in the playing squad. Some thoughts in the following thread #AFC
#AFC profit before tax almost doubled from £13m to £25m, though a substantial 71% reduction in (cash) operating profit from £56m to £16m was compensated by a surge in profits from player sales from £6m to £58m (Oxlade-Chamberlain, Szczesny, Gabriel and Gibbs in the summer).
#AFC H1 revenue decreased 12% (£23m) from £191m to £168m, mainly due to dropping into the Europa League. All revenue streams were impacted: broadcasting fell 19% (£16m) from £85m to £69m; match day down 7% (£3m) from £46m to £43m; commercial down 4% (£2m) from £58m to £56m.
AlthougH #AFC revenue fell, expenses increased, most notably wages, which were £13m higher despite no bonuses for Champions League qualification. Player amortisation rose 21% (£8m) to £44m, largely due to acquisition of Lacazette. Other expenses were £3m higher.
On the other hand, #AFC property profit was up £5m (revenue to £15m), thanks to the sale of one of the two remaining development sites on Holloway Road; while net interest payable was £3m lower at £4m, mainly due to a positive change in the market value of the interest rate swap.
For context #AFC H1 £25m profit before tax is £14m below #MUFC £39m, though individual elements are very different. #MUFC revenue is £137m higher (mainly commercial £90m), which they use to spend £76m more on expenses. #AFC partially closed the gap with £40m more player sales.
#AFC pre-tax profit of £25m for the first six months of 2017/18 is the highest since the £49m reported in 2011/12 and has only been surpassed twice in the last 11 years. In that period the club has had three losses, which were converted into full year profits in the second half.
However, this was heavily influenced by #AFC profits on player sales of £58m, again the highest since £63m in 2011/12. Moreover, second half will be boosted by around £48m for sales of Walcott, Giroud and Coquelin in January window (Alexis Sanchez was swapped with Mkhitaryan).
#AFC moved up one place to sixth in the Deloitte Money League (based on 2016/17 revenue), overtaking PSG, thanks to the new Premier League TV deal. However, they are likely to be lower in the 2017/18 report, due to not qualifying for the lucrative Champions League.
#AFC match day revenue fell 7% (£3m) from £46m to £43m, as there was one less home game compared to the previous season, exacerbated by reduced ticket prices put in place for the Europa League. Revenue reduction will be mitigated by playing more games in 2017/18 (minimum 28).
In 2016/17 #AFC full year match day revenue of £100m was only beaten by Barcelona, Real Madrid and Manchester United. Looking to add 780 seats to Club Level, bringing stadium capacity to just around 60,600 (will be completed summer 2019).
#AFC broadcasting revenue fell 19% (£16m) from £85m to £69m, mainly due to lower distributions from the Europa League, though partially offset by a weaker GBP exchange rate and two more Premier League games broadcast live (worth £1.1m per game).
#AFC actually had the third highest broadcasting income in the world in 2016/17, only behind #MCFC & Real Madrid, though this included £55m from the Champions League. This year’s Europa League income will be lower, though #MUFC earned a healthy £38m from their victory last season
As well as the direct impact that dropping out of the Champions League has on #AFC revenue, it also means that rivals benefit. For example, #THFC have already earned €62m for reaching the last 16, which will increase if they progress any further in the competition.
Despite Sir Chips Keswick noting “a number of new commercial partnerships”, #AFC total commercial income actually fell 4% (£2m) from £58m to £56m, comprising £41m commercial and £15m retail & licensing, largely due to contractual clauses linked to Champions League participation.
#AFC commercial income has long been the club’s financial Achilles heel. In 2016/17 Arsenal’s £117m was miles behind Bayern £295m, #MUFC £279m, Real Madrid £259m & Barcelona £255m. That’s maybe not too surprising, but they’re also below the likes of #CFC, #LFC & Dortmund.
#AFC recently renewed Emirates deal for £40m a year (up from £30m) from 2019 to 2024. Compares to #MUFC £54m, #CFC £40m, #MCFC £35m, #THFC £35m & #LFC £30m. However, includes naming rights & training kit, plus #AFC first in update cycle. Will allow sleeve sponsor (worth £5-10m).
This is important, due to Premier League Short-Term Cost Controls, which restrict annual wage bill increases to £7m – except if funded by more revenue from sources other than PL TV deal, thus increasing pressure to grow commercial income (or increase profits from player sales).
#AFC net cash outflow of £19m in H1, but nothing to worry about, as always a reduction in cash in first six months, offset by increases in H2. In fact, this was £84m lower than previous season, as net player spend was £71m lower, while infrastructure investment was cut by £8m.
#AFC has no short-term debt, while cash balance of £161m (including £23m debt service reserve) was described as “robust”. Although this was £19m lower than six months ago, it was up £37m from the previous H1 position. Figure likely to be even higher at year-end.
Even though club has broken its transfer record twice this season (first Lacazette, then Aubameyang), #AFC approach is likely to continue to be prudent. According to the chairman, “our strategy remains self-financing” and “we need to spend effectively.”

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More from @SwissRamble

Oct 4, 2018
#RealMadrid 2017/18 accounts cover a season when they finished third in La Liga, but won the Champions League for a third consecutive year, the fourth time in 5 years, plus the Club World Cup and European and Spanish Super Cups. Some thoughts in the following thread.
#RealMadrid profit before tax increased by €17m from €26m to €43m (profit after tax up €10m from €21m to €31m). Revenue (Madrid’s definition) rose 11% (€76m), their largest rise since 2000, to a record high of €751m, while profit on player sales was 4% (€2m) up at €54m.
All #RealMadrid revenue streams increased with the largest growth in marketing €41m (16%) to €295m, followed by international & friendly matches €13m (17%) to €100m, broadcasting €13m (8%) to €178m and membership fees & stadium revenue €8m (5%) to €174m.
Read 39 tweets
Sep 25, 2018
Manchester United are the second Premier League club after #MCFC to publish 2017/18 financial results, covering a season when they were runners-up in the league and FA Cup, but were eliminated by Sevilla in the Champions League last 16. Some thoughts in the following thread #MUFC
#MUFC profit before tax down from £57m to £26m, mainly due to higher player costs, as wage bill shot up £32m and player amortisation rose £14m, while revenue only up £9m. Tax bill increased from £17m to £63m as a change in US corporate tax rate led to a £49m non-cash write-off.
#MUFC revenue only grew £9m (2%). Only meaningful increase was broadcasting, up £10m (5%) to £204m. Commercial income was basically flat at £276m, while match day dropped £2m (2%) to £110m. Profit on player sales rose £7m to £18m.
Read 39 tweets
Sep 17, 2018
Ten years after Sheikh Mansour acquired the club, Manchester City’s 2017/18 financial results covered a season when they won the Premier League in some style, won the League Cup and reached the Champions League quarter-finals. Some thoughts in the following thread #MCFC
#MCFC profit before tax up from £0.1m (£1.1m after tax) to £10.4m, as previous season was adversely impacted by change in year-end resulting in an extra month’s costs with minimal revenue uplift. Revenue rose £27m (6%) to £500.5m, only second English club above £0.5 bln.
All #MCFC revenue streams up: commercial income rose £14m (7%) to £232m; broadcasting increased £8m (4%) to £212m; and match day was £5m (9%) higher at £57m. Profit on player sales was up £4m to £39m.
Read 37 tweets
Sep 10, 2018
Prize money for UEFA club competitions significantly increases in 2018/19, including a new coefficient ranking payment that better rewards historically successful clubs rather than those with larger national TV rights deals. Some thoughts follow on Champions League distribution.
The amount distributed to clubs in UEFA Champions League (group stage onwards) will rise €681m (54%) from €1.269 bln to €1.950 bln in 2018/19. This is split: participation €488m (25%), performance €585m (30%), TV pool €292m (15%) and coefficient rankings €585m (30%).
In 2018/19 each of the 32 clubs qualifying for Champions League group stage gets €15.25m plus €2.7m for a win and €900k for a draw. Additional prize money for each further stage reached: last 16 €9.5m, quarter-final €10.5m, semi-final €12m, final €15m and winners €19m.
Read 15 tweets
Sep 4, 2018
Atletico Madrid’s 2016/17 accounts cover a season when they finished third in La Liga and reached the semi-finals of the Champions League under coach Diego Simeone. Some thoughts on their finances in the following thread #Atleti #AúpaAtleti #AtleticoMadrid
#Atleti profit before tax improved from €1m to €5m (profit after tax up from €4m to €5m), as revenue rose €48m (21%) to a record high of €281m, though profit on player sales fell €7m to €37m. No repeat of the 15/16 €27m extraordinary charge linked to stadium development.
The main driver of the #Atleti revenue increase was the La Liga TV deal, up €31m to €99m, though Champions League TV money was €9m lower at €61m. Commercial rose €22m (41%) to €76m, while match day was €4m (11%) higher at €45m.
Read 41 tweets
Aug 27, 2018
A long-suffering Newcastle United fan asked how their financial performance compared with Tottenham Hotspur since Mike Ashley bought the club in July 2007, so here’s a few thoughts in the following thread #NUFC #THFC
Both #NUFC and #THFC have focused on profit. #NUFC have essentially broken even during Ashley’s tenure with £4m aggregate profit, while #THFC have reported an impressive £215m. Worth noting that £188m of that came in last 4 seasons, when #NUFC had a £47m loss in Championship.
#NUFC revenue has fallen by £1m since Ashley’s arrival from £87m to £86m, deflated by the lower money in the Championship. In the same period, #THFC revenue has tripled, rising £203m from £103m to £306m. In fairness, #NUFC 2018 revenue will be much higher (£175-180m estimate).
Read 17 tweets

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