How do Arsenal stand with regards to UEFA’s pending ruling

It is likely that in 2013 UEFA will implement a new set of fair play rules. UEFA will stipulate clubs to be more self-sufficient. The result will be that clubs with the largest revenues will be able to spend the most money. This has been seen, in many ways, as a fair system and will prevent rich owners from dramatically changing the face of a domestic football league.

This has been seen in England in the last ten years with the extravagant spending by Chelsea and Manchester City. Roman Abramovich and Sheikh Mansour are among the richest men in the world and have had a dramatic effect on English football.

What I want to look at here is the revenue stream of Arsenal. Why is revenue important? It is that figure that will dictate how much money clubs will be able to spend in the future.

In 2010, Arsenal generated the second highest revenue of English clubs and made the fifth most in Europe. They are one of the few Premier League clubs who break even. In the last 5 years, they have climbed 5 places up the Deloitte European Football Money League and now generate more total revenue than Chelsea.

Total Revenue (£m) 2010

1R. Madrid438.6
2Barcelona398.1
3Man Utd.349.8
4Bayern323
5Arsenal274.1
6Chelsea 255.9

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The main reason for their rise is Arsenal’s increased match-day revenue.

2010Match-day£m/home gameAverage£/attendee
(pos.)revenue (£m)attendance
1R. Madrid128.174,894
2Man United122.43.674,30448
3Arsenal114.73.559,76559
4Barcelona97.877,913
5Chelsea82.12.441,42258

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This is largely due to their move to a new stadium, The Emirates. Arsenal have increased their match day income from £37.4m in 2005 to just under £115m in 2010.

Arsenal’s move has created a huge increase in average attendance and the amount of corporate hospitality the stadium can host. They now make more than 100% more each match-day than they did 5 years ago. With the top clubs playing as many as 30 home matches a season this is a hugely significant amount of money. English clubs like Arsenal and Manchester United can compete with any side in Europe in terms of match-day revenue.

Breaking even, though, is not just about increased revenue, it is also reliant on low costs. This is something that Arsenal have achieved and are one of the few top clubs to do so. They have not spent a lot of money on new signings in the last 5 years. Instead, they prefer to develop players rather the buying the ‘finished article’. This means both their transfer fees and wages are lower.

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In the last three years Arsenal have signed a few higher profile players but they have hardly ever bought from top flight European clubs. This is the major reason they do not run at a loss. The likes of Nasri, Arshavin and Vermaelen neither cost as much, nor ask for as inflated wages as players like Yaya Toure or David Silva.

However, Arsenal are not in a perfect position. In the last 5 seasons, Arsenal’s on-pitch performances have been consistently good, but not excellent. They have finish in 3rd or 4th in the Premier League and progressed passed the group stage of the Champions League every year. But, they have not won a major competition.

In 2010, Arsenal had the 13th highest commercial revenue despite being 5th overall. As a club, the amount of money Arsenal generate through commercial income is dramatically lower than most big European clubs. One reason for this, it seems, is that if a team does not win competitions it cannot get massive commercial deals.

This lack of silverware has a large effect on their commercial pull. This is their biggest shortfall at the moment when compared to the biggest clubs.

Commercial revenue (£m)Competitions won in last 5 years
R. Madrid123.53
Barcelona1009
Man Utd81.46
Chelsea56.36
Arsenal440

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While Arsenal, like Barcelona, play a famously attractive style of football, they have not had the same on-field success to rival Barcelona’s marketability. The attraction of Arsenal may be recognised by supporters but Arsenal have not been able to negotiate lucrative commercial deals.

With the FIFA fair play rules, clubs will have to put more pressure on developing their own players. Arsenal are as good at this as anyone, so will surely benefit. If one thing is for certain, it is that other clubs will not be able to strengthen their squads with lavish signings to the same extent they currently do. This can only be a good thing for a club like Arsenal.

Furthermore, what the money League shows is that Arsenal do have an extremely large revenue stream. So while they may not spend huge amounts of money on transfers, they do have enough money to. Arsenal’s transfer policy then is one made out of choice and a commitment to being self-sufficient rather than due to a lack of funds.

All in all, things look promising at The Emirates. They have a great Stadium, and a quality, cost-effective playing team. Arsenal are in a great position going into the new world of ‘FIFA fair-play’ in 2013, because their costs are much lower than other top European clubs. If they can increase their commercial windfall, there is no reason why they cannot become one of the richest clubs in the world.

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