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Arsenal Announce £2.5m Loss

While Arsenal Chief Executive, Ivan Gazidis tries to spin Arsenal’s latest financial results as positive, a closer look at the numbers show that Arsenal lost £2.5m in the half year to December 2010.

The loss contrasts with a £29.2m profit a year ago when Arsenal sold Kolo Toure and Emmanuel Adebayor leaving to Manchester City.

Without that net transfer revenue, the Gunners ran a loss as player wages increased.

Football operating profit, before depreciation and player trading, was £9.3 million, compared to £18m in 2009. And operating profit before depreciation and player trading was £12.6m, down from £29.3m in 2009.

“We continue to be in a healthy financial position. The Club, as you know, is run on a self-sustaining basis and these results continue to show long-term sustainability and health so there are some real positives.” Arsenal chief executive Ivan Gazidis said on the club website.

One glaring number that jumps out is Arsenal’s weak commercial revenues. For the period Arsenal reported commercial revenues of 15.7 million pounds. Compare that to Man United who reported commercial revenues of 50.4 million pounds last week.

The easiest way to increase commercial revenue is for Arsenal to go on pre-season tours of the U.S. or Asia. Arsene Wenger has been against this in the past, preferring to conduct his training camp in Europe, but I would not be surprised to hear that Arsenal is touring in 2012.

Gunners Financial Results Highlights

  • Operating profit (before depreciation and player trading) of £12.6m (2009 – £29.3m) with, as expected, a reduction in the contribution from property.
  • Sale of 50 apartments at Highbury Square generated revenue of £22.5m (2009 – 261 apartments sales generated £96.6m) and an operating profit from property of £3.3m (2009 – £11.3m) reflecting the lower number of apartments now left for sale.
  • Property business continues to be debt free with all sales contributing to Group’s cash position of £110.4m (2009 – £101.0m).
  • Football operating profits (before depreciation and player trading) of £9.3 million (2009 – £18.0m) reflect this increased investment in football wages and also timing differences in the number of home games played (2010 – 10 home matches in first half of 28 matches, so far confirmed, for full year / 2009 – 12 of 27).
  • Significantly reduced profit on player sales of £4.0m compared to £33.9m for the prior year.
  • Changes in property and player trading, which are essentially one-offs, impact overall result for the period – loss after tax of £2.5m (2009 – profit of £29.2m).

What do you think of the Gunners financial results? A little surprised at the loss?