Arsenal have caught up with their peer group on the pitch in recent seasons but, in the financial stakes, they remain some way behind the rest of the so-called Big Six.
A seven-season absence from the Champions League was only ended in 2023-24, and the lack of UEFA revenue has taken a heavy toll on the North Londoners’ balance sheet.
We don’t yet have access to their 2023-24 financial data, which they will release early next year and is expected to showcase a club moving in the right direction in the business department.
Arsenal's revenue from 2012-13 to 2022-23
But we can relay the 2022-23 figures. The Gunners revenue was £467m. That was a significant step up from the previous financial year, wherein Arsenal earned £369.1m.
However, that total was still £50m less than Chelsea, the Premier League‘s fifth-biggest earners.
Rivals Tottenham meanwhile are streaking away, with their revenue of £550m at the last count expected to continue to soar in seasons to come.
Liverpool and the two Manchester clubs are streets ahead too – and the trend, based on the data to hand, only looks to be going in one direction.
Arsenal recognise this. Stan Kroenke has departed from what historically has been a break-even approach to help the Gunners compete with their rivals on the pitch.
Arsenal owner Stan Kroenke with manager Mikel Arteta after a training session at the LA Rams Training Facility on July 24, 2023 in Thousands Oaks, ...
Photo by Stuart MacFarlane/Arsenal FC via Getty Images
The Missouri-born billionaire, whose son Josh Kroenke is now the public face of KSE in N5, has bankrolled losses of almost £280m over the last five financial years.
Arsenal have made a number of Hollywood signings in that time, with mixed results. Declan Rice has delivered. Nicolas Pepe, not so much.
But under Mikel Arteta and, until recently, Edu Gaspar, the Gunners have found the magic formula and have finished 2nd in successive seasons in the Premier League.
They are some way behind leaders Liverpool this season, but the margin is not insurmountable.
Looking to January, Arteta will be looking to strengthen and galvanise his squad for the second half of the campaign.
With Kroenke and KSE unlikely to sustain their more charitable approach to funding the club for long, future recruitment and retention budgets will be contingent on what the club earns.
Commercial income – i.e., money from sponsorship, merchandise sales, and events – is going to be a huge part of that.
And developments elsewhere in the football finance ecosystem bode well for Arsenal on that front.
In sponsorship, clubs tend to have three primary sources of income – kit, front-of-shirt, and sleeve.
Clubs, including Arsenal through their deal with Emirates, are increasingly extracting big value from stadium naming rights. But the ‘big three’ will remain the primary earners for some time.
As well as the front-of-shirt and naming rights deal with Emirates, Arsenal are partnered with Adidas in a £60m-a-year kit deal, and Visit Rwanda in a sleeve deal worth around £10m annually.
Significantly, the Visit Rwanda deal expires at the end of the season.
The partnership with the Rwandan tourist board has come under political and social pressure due to the nation’s human rights record.
Incidentally, the alliance is believed to have been personally engineered by Rwandan president Paul Kagame, who is a big Arsenal fan and a regular in the hospitality suites at the Emirates Stadium.
However, it was reported earlier this year that both parties expect to renew the deal. And, with Rwanda increasing not decreasing in marketing, that looks all the more likely.
In their biggest sports investment move yet, Rwanda are now planning to bring Formula One back to Africa for the first time since 1993, as reported by BBC Sport.
That cost of constructing the circuit alone is set to cost Kagame’s government £118m, and expenses would be far higher in the aggregate.
Do Arsenal have funds to spend in January?
Arsenal certainly have the PSR headroom to make moves in January.
Whether the owners have the inclination to make that happen is a separate matter, although there is nothing concrete to suggest KSE are considering tapering spending at Arsenal at present.
Chart showing the squad cost of Liverpool - wages plus amortisation - for 2022-23, the last financial year on record.
Their squad cost – wages plus amortisation, which is how clubs account for transfers over a period of time – is the fifth highest in the Premier League.
There is a sizable gap between themselves and Liverpool in fourth, indicating that, although there has been an increase in expenditure in recent seasons, there is still room for upward momentum.
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