Arsenal losses hit £54m as broadcast income plunges

By David Owen

March 6 – Arsenal, still stuck in mid-table in spite of recent promising signs, have become the fifth Premier League club so far to report pre-tax losses of more than £50 million for the covid-disrupted 2019-20 season.

The North London side posted a loss of £54 million for the year to end-May 2020, up from a loss of £32.2 million a year earlier. This was in spite of a near five-fold increase to £60 million in profits on player disposals.

The Gunners’ operating loss tripled, from £32.6 million to £99 million, largely because while expenses, including player trading, continued to rise, broadcasting income nosedived. The near 35% reduction, from £183 million to £118.9 million, was attributable partly to the shunting of the end of the 2019-20 season – including Arsenal’s 14th FA Cup win – into the 2020-21 financial year, but also to the club’s comparatively early Europa League exit, having been finalists in 2018-19.

Commercial income, boosted by the renewal with Emirates and a new kit deal with Adidas, comfortably outstripped broadcasting as the main turnover stream, generating £142.3 million. Matchday revenue, affected by covid, dipped from £96.2 million to £78.7 million.

The US-owned club said pre-tax losses of £35 million were attributable to the pandemic in 2019-20. However, £34 million of deferred broadcasting revenue should instead be recorded in 2020-21.

Wage costs were essentially flat at £234.5 million, even though the figure included £9.5 million of exceptional costs as a result of management changes, presumably the replacement of Unai Emery by fellow Spaniard Mikel Arteta.

Total year-end debt at the entity Arsenal Holdings Limited was put at £179.6 million, while year-end cash fell from £167 million to £110 million. Notes to the accounts also revealed that creditors included £153.6 million in respect of player transfers, up from £76.7 million the previous year.

At the year-end, the club had well over £100 million of fixed-rate bonds and exactly £50 million of floating rate bonds. The accounts serve notice, however, that last August it redeemed all of these “and the related interest-rate swap”. Funding for the refinance was “largely provided through a loan from the group’s parent undertaking, KSE UK Inc”. As previously disclosed, the club has also borrowed £120 million via the Bank of England’s Coronavirus Corporate Finance Facility. This matures in May.

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