Arsenal’s behind-the-scenes rivalry with Manchester City has taken another turn relating to how Stan Kroenke has financed the North London club in recent years.
After contesting three of the last four Premier League title races, Arsenal and Man City have developed an animosity towards one another on the pitch which has been matched – if not exceeded – by their respective executive branches.
The feud goes back further than Mikel Arteta and Pep Guardiola, however. Arsene Wenger famously accused City of “financial doping” after City, buoyed by an injection of Abu Dhabi sovereign wealth, made a policy of signing players from direct rivals in the early years post-takeover.
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Kolo Toure, Emmanuel Adebayor, Gael Clichy and Samir Nasri left the Emirates in favour of the Etihad in the space of four transfer windows between 2009 and 2011.
The scoreboard at the Etihad Stadium showing the badges of Manchester City and Arsenal
Photo by Michael Regan/Getty Images
Incidentally, the trend has reversed in recent seasons, most notably with Arteta taking his first managerial job at Arsenal after leaving City in 2019, although that move was not exactly indicative of the two clubs trading places in the football finance food chain as had been the case earlier in the decade.
The rivalry has evolved over the years, but the same fault lines have remained, relating primarily to the disparate ownership styles of Stan Kroenke and his opposite numbers at the Etihad Stadium.
While City have become one of the most self-sufficient clubs in world football in recent years, boasting profits of over £200m over the last four financial years, that wasn’t always the case.
Between 2008 and 2014, the club lost an astonishing £617m. Since then, they have soared commercially, partially with the help of a handful of sponsorship deals that can be traced back to their oil-rich owners.
And the latest developments from Man City’s challenge the Associated Party Transaction (APT) Rules enforced by the Premier League is the latest drama in this department – with a knock-on effect for Arsenal.
Arsenal dodge multi-million PSR hit as Man City settle APT case
Currently, Arsenal have no Profit and Sustainability Rules (PSR) worries. UEFA’s Squad Cost ratio rules, however, are a closer-run thing. More on that later.
But historically, things haven’t always been as smooth sailing for Arsenal in the PSR department.
Between 2019 and 2022, they lost £259m. Even allowing for PSR-exempt costs like academy, women’s team and infrastructure development as well as pandemic-related exception items, that didn’t get them huge room for manoeuvre under the Premier League’s spending rules.
Arsenal pre-tax profit and loss figures graph
Arsenal profit and loss account Credit: Adam Williams/TBR Football/GRV Media
Things could have been worse, however.
In October 2024, Man City successfully challenged certain elements of the Premier League’s APT Rules, which were enforced in the wake of PIF’s takeover of Newcastle United three years earlier in order to prevent clubs from striking artificially inflated sponsorship deals with companies linked to their owners.
Among the victories that City scored in the arbitration courts was getting the Premier League to revise its rules on shareholder loans, i.e., low-interest or interest-free loans from an owner to their club, to which they argued should have a nominal interest rate applied in line with fair market value.
Arsenal have been one of the biggest beneficiaries of these loans, with Kroenke providing £324m in funding via shareholder loans to date.
What’s more, City wanted the new rules to be applied retroactively and challenged the revised Premier League APT Rules again, causing consternation for clubs like Arsenal for whom extra eight-figure interest charges would theoretically have pushed them closer to the PSR limit if applied to a period when their losses were large.
This week, City settled with the Premier League on their second legal challenge and agreed that the revised rules should remain in place, meaning Arsenal can now breathe easy in terms of retrospective PSR punishments.
The feud between Man City and Arsenal, according to Kieran Maguire
“Arsenal can certainly be seen as one of the biggest drivers of the Premier League’s fractious relationship with Manchester City,” says Liverpool University football finance lecturer Kieran Maguire in exclusive conversation with TBR Football.
“There are hostilities between the two clubs. Those were evidenced by the Arsenal delegation leaving the PFA Awards early before Phil Foden received his award last year. That doesn’t look great, but I’m sure they had their reasons.
“Arsenal and Stan Kroenke’s regime do their sums very carefully. If we had been in an environment in which interest was being charged, that would have been reflected in their player trading behaviour. We’d have seen different signings in the years covered by the interest charges.
Arsenal owner Stan Kroenke looks on
Arsenal owner Stan Kroenke looks on at a press conference for his NFL franchise, Los Angeles Rams Credit: Irfan Khan/Los Angeles Times/Getty Images
“For me, one of the most intriguing elements of all this is asking: which interest rates would apply under APT? In my view, there is a case for saying Arsenal should be paying a lower rate because they are low-risk. They are never going to be relegated and they have guaranteed revenue every year from the Premier League.
“We have seen Spurs borrow at around 2.5 per cent in recent years, whereas other clubs – like Brighton, who would be considered a much greater relegation risk – would surely not get as favourable an interest rate on the open market.
“So I think Arsenal would have changed their recruitment policy, which could have had a negative impact on the club. They might not have been able to sign Players X, Y and Z before they reached panic stations. They are very well run.
“As I understand it, City weren’t actually bothered about the interest issue. It just gave them a weapon with which to beat the Premier League over the head.”