Gold Coast Fined For Salary Cap Breach Marketing Symposium: Global Sports Events Pacquiao Makes Pro Basketball Debut Executive Transactions West Indies Women Focused On Cricket Real Zaragoza Granted Meeting Swimming Australia Guarantees Bonuses SA Denies Interest In Hosting AFCON London Olympic Stadium Costs Soar IOC Seeking Bid Cities For 2024 Games
SBD Global/March 28, 2013/FinancePrint All
EPL Arsenal's billionaire majority shareholder Stan Kroenke "is one of a new generation of foreign owners who have bought into the game in Britain, but while some of them have spent with abandon to get results on the field, Kroenke expects the club to stay true to sound financial principles," according to Keith Weir of REUTERS. Arsenal, nicknamed "The Gunners" after the munitions factory workers that founded the club in 1886, last won the Premier League in '04 and lifted the FA Cup in '05. They "have won nothing since," and supporters who pack the plush Emirates stadium, the club's home since '06, "want a better return on some of the highest ticket prices" in English football. Frustrated fans said that "the club is the victim of a lack of drive and investment by Kroenke," who took control two years ago in a deal valuing the club at £731M. Those who work for the 65-year-old Kroenke, who owns sports teams on both sides of the Atlantic, "dismiss claims he is out of touch" with English football and its passionate fans. Arsenal CEO Ivan Gazidis said, "The guy I know is phenomenally ambitious for this football club and has given it support at every possible level." Gazidis, 48, believes that Arsenal "will soon benefit from the completion of a financial transformation that began with the move to the 60,000-seater Emirates stadium." Gazidis said, "We will have a football club that will certainly be one of the leading clubs in financial power in Europe." Gazidis "points to a new" £150M ($227M) sponsorship deal with airline Emirates signed last year, while a new kit supply deal "is also being negotiated." Gazidis said, "We have a vision of a football club which stands on its own two feet, which relies on its own resources. We think that football is about more than simply who is prepared to lose the most money" (REUTERS, 3/27).
How Arsenal Compares With Rival Clubs*
Clubs Revenues Wage Costs
(Fees Paid And Received)
-£131M Manchester City
*Between seasons '07-08 and '11-12
Premier League Newcastle United "recorded a profit for the second successive year, despite the club's wage bill rising" 20% to £64.1M ($92.9M), according to the PA. In the financial figures for the year ending June '12, Newcastle "made a profit after player amortisation" of £1.4M -- significantly down on the previous year's £32.6M, though that was due largely to the £35M sale of Andy Carroll. The results showed Newcastle "re-entering the list of the world's top 20 revenue-generating clubs," having increased turnover by 5.4% to £93.3M ($141M). That figure includes a rise of 14.6% in TV income "as a result of their fifth-placed finish." However, while operating costs "remained steady" at £21.6M, operating profit fell from £13.3M to £7.5M, and the club's wage bill hit £64.1M as a result of the addition of the likes of Yohan Cabaye, Sylvain Marveaux, Davide Santon, Papiss Cissé and the now departed Demba Ba (PA, 3/27).
Int'l sport brands "continue to make gains in China despite a shrinking market," with Nike posting profits in its third quarter financial report, according to WANT CHINA TIMES. Adidas "also reported a 15% jump in its China sales last year." Chinese Key Solution Sports Consulting Founder Zhang Qing said that Nike's orders have increased by 4%, although "its overall revenue in the mainland has decreased due to its price war with its rivals." However, Nike has announced that it will "open 40-50 factory stores in China this year offering heavy discounts of up to 70% off and shifting its retail focus to second- and third-tier cities." Adidas has "announced a similar move and will open 800 new stores, with the majority located outside major cities" (WANT CHINA TIMES, 3/27).
The New Zealand Rugby Union has announced a NZ$3.2M ($2.6M) operating profit for '12 -- its first since '08 -- "and is already planning for another Rugby World Cup win" in '15, according to William Mace of FAIRFAX NZ NEWS. NZRU CEO Steve Tew said that rugby's governing organization "had budgeted to break even" after posting an operating loss of NZ$3.1M last year, but last month he signaled there would be a surplus. CFO Jannine Mountford said that the NZRU's income rose to NZ$106M while expenses fell to NZ$103M and the organization's cash reserves position "had been restored." The NZRU's reserves "had previously benefited from a positive foreign exchange movement which kept the union afloat throughout the global financial crisis" (FAIRFAX NZ NEWS, 3/26). The AAP reported a new relationship with U.S. insurance company AIG "played a major part in the improvement." The decision to advertise on the chest of the All Blacks' playing jersey "upset traditionalists but was defended by the NZRU as a necessity if the game was to continue flourishing at all levels." Tew said that "the NZRU would not need to dip into its reserves to the same degree that has been required in recent years" (AAP, 3/26).
PAINT IT BLACK: The BUSINESS DESK reported Tew said that "the nine of the 15 provincial unions in the ITM Cup were in the black last year," with a combined surplus of NZ$626,000, compared to a total deficit of NZ$631,000 a year earlier. Tew: "There has been a clear focus by the unions on living within their means. We are not out of the woods by any means, and it remains a very challenging environment for any union to grow revenue from sponsorships and crowds." As part of its strategy plan towards '16, "the rugby union wants the sport to be financially self-sustaining across all levels." To help achieve that, it plans to build a shared-service model for back-office functions, "and create real-time reporting and forecasting tools for all provincial member unions to use" (BUSINESS DESK, 3/26).
The next generation of the Black Caviar family "will pass though the Inglis sale ring next month," and it is expected "he will break the record price paid for a yearling," according to Chris Roots of the SYDNEY MORNING HERALD. Lot 131, a Redoute's Choice colt out of Helsinge, "will be the highlight of the first day of the Easter sale on April 9 at Newmarket." Black Caviar "was the result of a mating between Bel Esprit and Helsinge." The Australian record of A$3M ($3.13M) for a yearling "is jointly held by a Redoute's Choice colt out of Deja Slew in 2006 and a Rock Of Gibraltar colt out of L'on Vite in 2007." Inglis Dir & Auctioneer Jonathan D’Arcy said, "I know there are a number of syndicates being formed to have a go at him, and when you consider there were four bidders above $2m for this colt’s sister last year ... She brought A$2.6 million and given that, you would expect the record to be under threat." Gilgai Farm boss Rick Jamieson has indicated that "he will be retaining the fillies from Helsinge in the future, starting with a sister to Black Caviar, which is at foot after being born in October last year." This colt "may represent the last time a sibling to Black Caviar and All Too Hard is available at public auction." The auction will be shown by Channel Seven on its digital channel (SMH, 3/28).