By David Owen
December 8 – Struggling Arsenal have slumped into the red after the bumper profits on player sales that substantially boosted the bottom line in 2017-18 were not replicated in the most recent season.
Arsenal Football Club plc posted a pre-tax loss of £23.5 million for the year to end-May 2019, an enormous negative swing when compared with the huge £97.4 million pre-tax profit recorded the previous year.
The vast majority of the difference was accounted for by profits on player disposals. These yielded just £12.2 million in the latest period, versus as much as £120 million in 2017-18. Francis Coquelin, Olivier Giroud, Alex Oxlade-Chamberlain, Alexis Sánchez and Theo Walcott all departed during that year to 31 May 2018, mainly to Premier League rivals.
The operating loss widened by a comparatively modest £13 million, from £22.5 million to £35.6 million. Operating expenses actually fell somewhat, from £411.1 million to £403.1 million.
The overall picture was not helped by a decline in top-line turnover. This dipped from £388.6 million to £367.5 million, with match day revenues slumping from £99.8 million to £69.3 million. The strategic report sought to explain that the decrease was “mainly attributable to lower receipts of appearance fees from a fellow subsidiary”. This was “merely a consequence of the way certain inter-company revenues were impacted by the delay in renewal of season tickets until after the Europa League final”. For a full picture of the group’s matchday revenues for 2018-19, readers are referred to the consolidated accounts of Arsenal Holdings Limited. At time of writing (on December 7), these accounts for the relevant period appeared not yet to be available at Companies House.
The strategic report described the year-end cash position as “robust”, with balances of £107.1 million, compared with £114 million a year earlier.
The club, now under the full control of US sports team entrepreneur Stan Kroenke, recently parted company with manager Unai Emery after 18 months in charge.
Staff costs dipped slightly from £235.7 million to £230.5 million. One upshot of recent changes is a sharp reduction in directors’ emoluments. These totalled only £1.53 million in 2018-19, well under half the prior year’s £4.34 million.
The highest-paid director appears to have received only £846,000, versus £2.67 million in 2017-18. Remuneration of “Key management personnel” totalled £4.01 million in 2018-19, down from £4.34 million. The accounts explain that those included under this definition “comprise of the Board of Directors and, subsequent to the date of I.E.Gazidis resignation as a director on 31 October 2018, the Head of Football and the Managing Director”.
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