Written by kelsey

Some out there may not like this, but I’ve had a look at Arsenal’s accounts and they’re not as rosy as everyone is making out. The fortunate thing for Arsenal is that the property portfolio is finally being sold off and is providing additional profit and we continue to be able to sell players.

If you strip out the property portfolio, which is fair as it won’t always be there and it isn’t football related, then you strip out the profit from the sale of players, the club actually made about £6m before tax.

Footballing turnover decreased by £3m on 2009 (5 fewer Home games) and costs increased by approx £7m, meaning their operating profit before interest and Tax dropped from £30m (2009) to £20m (2010).

The interesting thing is the chairman noted that player wages and wage expectations have increased dramatically and Arsène Wenger is aware of Arsenal’s financial model!

Hats off to the club, the overall figures are good, but the underlying footballing business continues to rely on selling players for the majority of its profit.

However, according to the Arsenal financial report: Operating profit before player trading and depreciation, which is a key measure of our financial performance, also rose to £72.0 million (2009 – £70.5 million). The profit reported of £56m is AFTER player trading has been taken into account along with net finance charges etc…. so it’s trading performance does not rely on player sales for the majority of its profits

Players’ wages have probably increased due to signing new contracts, etc. On the whole, the profits are very good, and so is the fact that we have made a massive profit whilst being able to knock £162m of the debt.

But they reduced the debt in what is effectively a retail business – they bought stock (the property) with debt, and then repaid it when they sold that stock.

Arsenal’s original plan was for the Highbury development to help pay for the  building of the Emirates,or at least ,make a sizeable contribution, that won’t happen, but anything else they now sell, will provide a surplus which, looking at previous sales and costs, should be circa £15m next year.

All a bit confusing, but open to discussion.