Despite Losses, Arsenal CEO Maintains Club's Finances Are "Sound"
Arsenal CEO Ivan Gazidis said that the EPL club's finances "are 'sound,' despite a two-thirds fall in pre-tax profit following reduced property sales and player trading losses," according to Christopher Thompson of the FINANCIAL TIMES. In its results for the year ended May 31, Arsenal Holdings reported that group revenues "were down" from US$589.7M (all figures U.S.) last year to $396.9M. That was "due to 'the expected lower level of property sales activity' and a [$22.7M] loss on player trades, although this did not include the sales" of Samir Nasri and Cesc Fabregas over the summer transfer window. Pre-tax profit fell from $86.9M to $23M. Arsenal "benefited from bumper property sales" in '10 of $243.5M -- which fell to $47M this year -- as it "sold land around its former stadium." The club said that it had cash of $248.6M and net debt of $151.8M. Arsenal's operating profit from its football business "fell from nearly" $88.5M to $71.1M as its wage bill climbed by $21.3M to $193.1M, while broadcasting and commercial income "remained nearly flat." The club's wage bill "accounts for 55 per cent of its football revenues, up from 50 per cent the previous year" (FINANCIAL TIMES, 10/1). In London, Jim van Wijk noted Arsenal's Emirates Stadium "continues to more than pay its way as continued improved matchday income helped to reduce the group's overall debt, down" from $210.5M to $151.8M, much of which is "secured on low, fixed-interest rate bonds paid back over a long period against the cost of relocation in 2006." Gazidis said, "We didn't have the same kind of profit from player sales that we had in the previous season and that explains the slight reduction in profit, but this is a very solid, very healthy set of results and it gives us a good platform to move forward from." Gazidis "feels the Arsenal brand will continue to develop as the north London club look to keep pace with the likes of Manchester United in terms of sponsorship deals" (London INDEPENDENT, 10/1). But the BBC's David Bond noted, "Many fans fear that soon the financial gap with the rest of the top teams in the Premier League will soon be too big to close" (BBC.co.uk, 9/30).
ALL IN THE FAMILY: In London, Jeremy Wilson noted both the Nuggets and Avalanche will be "passed to" Josh Kroenke from his father Stan Kroenke, but Josh also is "attracted to the idea of eventually becoming involved" in Arsenal. Josh Kroenke "repeatedly praises the Arsenal executives and stresses his focus on the job in Denver." But he said of having a role with the EPL club, "That would be great. I don't pretend to possess the knowledge base that the people over there who are running it do but, from a business stand-point in sports, it's all similar yet different. I love London. I would love to be involved at some level but I have to understand what I am doing on the most intricate levels before I get involved in something like that." He continued, "My dad's philosophy is to hire the people you think will do the best job and let them do their job. I've had a few conversations with Ivan. He is very smart. It's fascinating to learn about and I'm sure at some point I'll be itching to get involved. I just can't say how yet. For the time being I'm really happy with where I am." Kroenke Sports & Entertainment President & CEO Jim Martin said soccer is "already there as a global product. Stan thinks globally. It's a huge opportunity in Mr Kroenke's mind, far beyond what we could ever achieve with the teams here. I'm an NFL fan, I love (American) football and think it is the greatest game around. We think of that as the pinnacle. Well, internationally, it's not. It's football but it's not our football. It's soccer. It (Arsenal) is an opportunity that is beyond the rest of the organisation, at least at this stage." Josh Kroenke added, "I know my dad has a certain vision. He's in it for the long haul in everything he does, from his wineries to real estate to his sports investments. He is a competitive person. ... He wants to win and that won't be any different at Arsenal" (London TELEGRAPH, 10/1).