Firstly, The Daily Mail report that Lukas Podolski is ours after Fc Koln agreed to accept Arsenal’s offer of Β£10.9 Million, they suggest that as soon as the Bundesliga finishes, he’ll be an Arsenal player.

All the other newspapers report that Manchester City are ready to offer RvP Β£220k a week in attempt to prise him away from The Emirates. Well, they can whistle, he’s going nowhere, certainly not to them!

On to todays post:

Malcolm Glazer bought Manchester United for Β£790-million which many financial observers thought was too high a price, and even if, according to accountants, Manchester United’s valuation is speculative. It seems clear that the main value to Glazer is in the brand itself, especially in the growing Middle Eastern, Asia and North America, as the surest way to make money.

The brand is a football club’s greatest underused asset. Gates revenues provide a steady and consistent income, but clubs make additional money from three areas that are directly related to the strength of the product on the pitch and the brand itself.

–Β Β Β Β Β Β  TV and broadcasting rights;

–Β Β Β Β Β Β  Merchandising;

–Β Β Β Β Β Β  Sponsorships.

And each of these needs to operate in an international marketplace. Clubs might be based in London, Manchester, Liverpool, Milan, Munich, Madrid or Barcelona, but they are exposed to hundreds of millions global football fans.

The main way that they do this is through TV and other remote communications, including the internet, social networks and mobile phones. TV has been the fuel of football’s commercial development since the inception of Premier League in 1992. For example, Arsenal’s β€œUnbeaten Season” financial results in 2003/04 season included broadcasting income of Β£59.8-million compared with gate receipts of Β£33.8-million. The reality is clear that TV money matters much more to the club than money through the gate. And TV money is the reason why European competition has become such a necessary part of the running of a football club.

Arsenal’s relative lack of success in Europe has cost them financially and missing out of CL Cup qualification in 2012/13 will certainly cost Arsenal dear to the tune of loss of income varying from Β£45-million to Β£50-million.

Arsenal also lacked behind in the development of the dedicated TV channels like Real Madrid, Barcelona, Manchester United, Liverpool and Chelsea. The boundaries between TV and internet are blurring, and in future years we will watch more TV on our computer screens, on tablets and on smartphones.

Arsenal’s investment in its website and the dedicated Arsenal TV channel should be increased to cater for a global audience, and to market its brand name and to spread its popularity world-wide.

The Emirates Stadium naming rights guaranteed Β£90-million over 15 years (2006 to 2021) and shirt rights for 8 years (2006 to 2014). Will Emirates Airline be willing to re-negotiate this shirt naming rights?

Arsenal’s shirt manufacturer is Nike and the deal with Nike in 2004 will raise Β£55-million over 7 years (2007 to 2014).

Before we moved to Emirates for the 2006/07 season, let’s compare Arsenal FC ranking from 2000/01 to 2005/06 season in Table 1.

2005/06 season marked the end of the French Spine, Arsene Wenger’s 2nd Arsenal team; and the rebuilding of Fabregas Era, Arsene Wenger’s 3rd Arsenal team.

Premier League clubs had overtaken Italian and German football clubs as moneyΒ from the new TV contract came streaming in to boost their revenues. Β Premier League revenues were further boosted by the new TV rights contract, expiring in 2012/13; and with growing Middle Eastern (plus Asian interests), TV revenues may set to boost further in the forthcoming TV rights contract.

During the Highbury Era, Arsenal FC is just a 2nd tier club and cannot compete against those Top-8 marquee clubs. This is simply due to Arsenal FC failing to expand their global appeal as in the case of Manchester United, Liverpool and Chelsea. Chelsea FC, since 2003/04 season shot into the rank of β€œmarquee club” due to Roman Abramovich and Peter Kenyon in maximizing their global market appeal. This is most telling as appended below are my compilations for those readers who love to crunch numbers.

A few definitions as indicated below:

Data for β€œDeloitte Football Money League” were obtained by using β€œGoogle Search”. Revenues indicated are solely from football related businesses comprising gate collections, merchandise sales, commercial rights and sponsorships and do not include revenues generated from property development and sale of players.

Table 1: Revenues increase from 2001 to 2005/06 in €-million

2005/06 2001/02 … Increase

242.6 ….. 229.5 … 13.1 … 06% … ManU

221.0 ….. 143.4 … 77.6 … 54% … Chelsea

177.4 ….. 141.4 … 36.0 … 25% … Arsenal

176.0 ….. 154.6 … 21.4 … 14% … Liverpool

Table 1 clearly indicates Arsenal FC increases its revenues is simply due to the successes of the French Spine on the pitch and not additional revenues from global merchandise sales like Manchester United and Liverpool FC with its vast appeal in the Asian market, and of course, revenues generated for summer overseas tours.

I believe that it is Arsene Wenger’s β€œeuro-centric” policy during summer pre-season training (refusing to tour America or Asia) that so hampered Arsenal FC’s global appeal during the halcyon days of The French Spine as the β€œSmoking gun” why the mediocre 25% increase in revenues, in contrast to that devastating Chelsea FC 54% increase in revenues for the same period with their 1st League title in 2004/05 after 50 years. Not that in 2001/02, Arsenal FC and Chelsea FC revenues generated are almost the same.

A nice contrast amongst the Top-5 from 2005/06 to 2006/07 on the impact of Emirates Stadium in our first season is tabulated below:

Table 2: Revenues increase from β€œHighbury” 2005/06 to β€œEmirates” 2006/07 in €-million

2005/06 2006/07 … Increase

242.6 ….. 315.2 … 72.6 … 30% … ManU

221.0 ….. 283.0 … 62.0 … 28% … Chelsea

177.4 ….. 263.9 … 86.5 … 49% … Arsenal

176.0 ….. 198.9 … 22.9 … 13% … Liverpool

104.5 ….. 153.1 … 48.6 … 47% … Tiny Totts

Table 3 below clearly proved that the failure on the pitch with 6 no. trophyless seasons had reduced our football related revenues generated. From 2006/07 to 2010/11, revenues had stagnant and declined greatly from 2009/10 to 2010/11 season in contrast to that 49% increase from 2005/06 to 2006/07 season.

β€œYear-on-Year” increase is to compare previous season revenues with current. E.g. Arsenal’s 2005/06 and 2006/07 season are €177.4-million and €263.9-million. FY2006/07 β€œYear-on-Year” (Y-o-Y) increase is €86.5-million or 49% from FY2005/06 (FY = Financial Year).

Table 3: Arsenal FC Revenues from 2006/07 to 2010/11 in €-million and Year-on-Year Increase

Season … €-mil … Y-o-Y Increase / (Decrease)

2005/06 … 177.4

2006/07 … 263.9 … 86.5 … 49%

2007/08 … 264.0 … 00.1 … 0%

2008/09 … 263.0 … 01.0 … 0%

2009/10 … 274.1 … 11.1 … 4%

2010/11 … 251.1 … (23) … (8%)

Table 4: Revenues comparison from 2006/07 to 2010/11 in €-million

Rank 2010/11 2006/07 … Increase / (Decrease)

(01) … 479.5 … 315.2 … 128.5 … 37% … Real Madrid

(02) … 450.7 … 290.1 … 160.6 … 55% … Barcelona

(03) … 367.0 … 315.2 ….. 51.8 … 16% … Manchester United

(04) … 321.4 … 223.3 ….. 98.1 … 44% … Bayern Munich

(05) … 251.1 … 263.9 … (12.8) … (5%) … Arsenal

(06) … 249.8 … 283.0 … (33.2) … (12%) … Chelsea

(07) … 235.1 … 227.2 ……7.9 ….. 3% … AC Milan

(08) … 211.4 … 195.0 … 16.4 ….. 8% … Internazionale

(09) … 203.3 … 198.9 ……4.4 ….. 2% … Liverpool

(10) … 202.4 … 114.3 … 88.1 … 77% … Schalke 04

(11) … 181.0 … 153.1 … 27.9 … 18% … Tiny Totts

(12) … 169.6 … 104.0 … 62.0 … 28% … Abu Dhabi City

It is a devastating verdict on the failure of Arsene Wenger, Hill-Wood and Ivan Gazidis to grow the revenues of Arsenal Holdings during the β€œEmirates Period from 2006/07 to 2010/11”. Contrast it to that 25% growth from the β€œ2000/01 to 2005/06 Highbury Period” when the French Spine was playing and winning silverware every season except 2005/06.

Since we moved to The Emirates in 2006/07, our revenues grew only by 4% from 2006/07 to 2009/10 and decline by 8% from 2009/10 to 2010/11. This clearly indicates Arsenal FC has no global appeal to generate the equivalent amount of commercial rights and sponsorships like those marquee clubs in Real Madrid, Barcelona and Manchester United.

Otherwise, how to explain that with a brand-new 60,000-seater stadium and the world highest ticket prices, our aggregated revenues only grew by 4% from 2006/07 to 2009/10 season and decline by 8% from 2009/10 to 2010/11 season?

Table 4 compares Arsenal FC with those marquee clubs and their 2010/11 β€œDeloitte Football Money League” ranking in (). E.g. (3) indicates Manchester United was ranked No. 3 from 2010/11 season.

(* Note that Manchester City was out of Top-20 in 2006/07 season and their 2006/07 revenue is assumed to be matching to that of their 2007/08 season withΒ  €104-million revenues.)

Written by Merlin96