Arsenal Profit Rises 73% to Record $96 Million on Highbury Apartment Sales
Arsenal Holdings Plc’s fiscal-year profit increased 73 percent to a record 61 million pounds ($96 million) as the English soccer club sold apartments on the site of its former stadium.
Sales rose 21 percent to 379.9 million pounds in the year ending May 31, the London team said today in a PRNewswire statement. That’s the highest recorded by an English soccer team, allowing Gunners to reduce their net debt by more than half to 135.6 million pounds.
“The reason these results are important is not for their own sake, it’s because we’re building a foundation, a platform from which we can achieve on-field success,” Chief Executive Officer Ivan Gazidis said in a video on the team’s website.
With only about 60 of the 655 apartments built at the club’s former Highbury Stadium left to market, sales will probably decline next year. Yet, its balance sheet is in better shape than those of league rivals.
Liverpool, which is still planning to build a new stadium, had a loss of 14 million pounds because of interest payments from the 2007 takeover by owners George Gillett and Tom Hicks. Manchester City and Chelsea, bankrolled by billionaire owners, had combined losses of 137 million pounds, according to their latest results.
Manchester United pays more than 40 million pounds in interest annually on a 526 million pound bond needed to pay for the Glazer family’s 2005 leveraged buyout.
Arsenal’s revenue was also boosted by the sales of Emmanuel Adebayor and Kolo Toure to Manchester City. The team made a profit of 38.1 million pounds from player trades, and those funds can be used for new signings, Arsenal said in its statement.
While property sales surged 78 percent to 156.9 million pounds, revenue from soccer operations dropped 1 percent to 222.9 million pounds. The club also benefited from a 5-million pound tax rebate, about the same spent on French national team defender Sebastien Squillaci.
Gazidis said Arsenal’s ‘self-sustaining’ model is the right path for the club because of new financial rules set by European soccer’s governing body. From 2012, clubs have to keep expenditure and costs within strict boundaries or face expulsion from the UEFA Champions League or Europa League.
“We will be well placed when those principles come through,” Gazidis said. “There’s still a lot that remains to be seen but I think it’s certainly a healthy development in the game.”
Arsenal, which has won England’s top league 13 times, played at Highbury from 1913 to 2006 before moving to the 60,000-seat Emirates Stadium nearby. The new facility, which helped almost double matchday sales, allows 20,000 more fans to watch home games.
The 13-time league champion hasn’t won a trophy since the move, with the last triumph coming in the 2005 F.A. Cup. Manager Arsene Wenger has resisted fans calls to spend money on established players, preferring instead to use the club’s youth program alongside young signings from other clubs.
“We do have a policy of building and not buying, and that’s a difficult path to tread sometimes, but as a result of that policy we’re seeing a tremendous number of good young players progressing and developing into the finished article,” Gazidis said.
The club announced its cash reserves have swelled by 30 percent to 127.6 million pounds. That money will be used on the club’s infrastructure and be available for new players should Wenger need it, Gazidis added.
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