Club Finances Reviewed
Arsenal
Arsenal is one of the so called ‘big six’ Clubs in the Premier League. This is highlighted in their accounts to the year ended 31 May 2024, where their group income, in Arsenal Holdings Limited was a massive £615 million.
Income
The income has seen a significant 32% rise from 2023, where it was £466 million, which was up 25% from 31 May 2022 when group income was £372 million.
As highlighted in my blog around where income is generated, the key stream is broadcasting, which in 2024 was £262 million being 43% of total revenues. This included £80 milli on of income from the Champions League which compared to the 2023 year, which was £191 million as Arsenal only received £22 million from their participation in the Europa League. This simply reinforces what is widely discussed level of money in the Champions League and the importance this plays to the finance of the Clubs.
The second largest form of revenue for Arsenal was £218 million of commercial income, making up 35% of the total generated. Arsenal saw a significant rise here too in 2024, as the 2023 level was £169 million, so an increase of £49 million. Again, this could be a knock in effect of being in Europe’s elite competition.
The third major income stream is tickets and matchday income, which was 21% of the total income, at £132 million in 2024 and £103 million in 2023. One of the key changes here would have also been ticketing for Champions League home games versus Europa League games the year before. This would also be impacted by the number of home games in both the European cup and domestic cups.
Expenditure
There is £171 million of amortisation of transfer expenditure in the year, compared to £157 million in the year before, albeit the 2023 figure included £18 million of impairment of a player’s registration fee.
The total wage bill was £212 million, which is £17.7 million a month or £4 million per week.
Arsenal employed 826 staff in the year. This was up on 723 the year before and 649 in 2022, showing a significant year on year increase in staff numbers. The biggest increase was in the Commercial and Admin staff. Of that total 117 were playing staff.
Balance sheet
Arsenal have a strong balance sheet with over £127 million of net assets. This does include £857 million of fixed assets, which includes the £389 million of tangible assets, which includes stadium and training facilities, and the largest number being £486 million of player registrations.
The player registrations are amortised annually, but also reviewed for impairment, i.e. looking for any registration which is beyond the estimated value of the player, for instance if they suffered a career threatening injury or similar. The player registration asset does not suggest the market value of the squad, as this is likely to be much higher than this number.
The commercial element of the Club is highlighted with over £11 million of merchandise stock, which is based on the lower of its cost price and its net realisable value, so whilst this sits in the books at £11 million given the selling mark up it will generate a much higher level of income when sold.
Within other debtors sits £38 million of transfer debtors, being amounts owed by other Clubs for players they have purchased from Arsenal. Whilst in creditors, being the amounts owed by Arsenal to other Clubs, the transfer amount was £267 million, so a much larger number, which is not surprising as Arsenal have been actively strengthening in the transfer market in recent years. Finally, there is a £45 million provision for additional transfer payments, these amounts will have an uncertain timing so will be the variable add on fees which are considered to probably end up being paid, but the uncertainty on the timing leaves them as provisions and not creditors.
Arsenal regularly complete transfers in currencies other than sterling, which they manage by the use of currency bank accounts, they were not in 2024 using forward contracts.
PSR considerations
Taking into account the losses before tax, adding back depreciation and interest for the last three year period, 2024, 2023 and 2022, my calculation of the Arsenal PSR three year rolling loss is £30.9 million, so well within the £105 million allowed.
FfF insights
Arsenal have reduced their loss in 2024 due to considerable increase in the broadcasting and commercial revenue streams. This is on the back of their return to the Champions League, which is a significant income generator.
The balance sheet contains £67 million cash at bank which is a healthy balance to cover usual working capital, although clearly doesn’t cover too many transfers at the price of Gyokeres. The accounts do suggest there is credit facilities and support from the US parent available.
Player registrations are the largest asset as would be expected given some of the players transferred in, but as noted above this does not provide the market value of the Arsenal players.
Strong compliance with PSR will mean Arsenal are well place to spend big (as they have) in the 2025 summer transfer window.
Aston Villa
Villa are a team which has improved performances in recent years, with 7th, 4th and 6th place finishes in the Premier League, but are not considered to be part of the traditional ‘big 6’. Aston Villa’s financial statements are in its parent company NSWE Sports Limited.
Income
The income has seen a significant 29% rise to £280 million from 2023, where it was £218 million, which was up 22% from 31 May 2022 when group income was £178 million. I should be noted that Aston Villa amended their year end in 2024, moving from May to June, so the current period accounts are for thirteen months not twelve, which of course will impact income and expenditure levels. The 2024 figures would be £259 million if pro-rated down to a twelve-month period.
As highlighted in my blog around where income is generated, the key stream is broadcasting, which in 2024 was £170 million being 61% of total revenues. This clearly shows the importance to Premier League Club’s like Aston Villa, as over half the income is from TV deals.
The second largest form of revenue for Aston Villa was £62 million being commercial income, which includes sponsorships, making up 23% of the total generated. Villa saw a significant rise here too in 2024, as the 2023 level was £46 million, so an increase of £16 million. Again, this would be impacted by the extra month included in the 2024 period.
The third major income stream is tickets and matchday income, which was 15% of the total income, at £42 million in 2024, £18 million in 2023 and £16 million in 2022. One of the key changes here would have also been ticketing for Champions League home games in 2024 as the fourth place finish in 2023 qualified Aston Villa for the European elite competition.
Expenditure
There is £96.5 million of amortisation of transfer expenditure in the year, compared to £92.5 million in the year before, showing a good degree of consistency here.
The total wage bill was £252 million, which is £21 million a month or £4.8 million per week.
Aston Villa employed 609 staff in the year, excluding part time and seasonal staff members. This was up on 561 the year before and 505 in 2022, showing a reasonable year on year increase in staff numbers. The biggest increase was in the Commercial and Admin staff which increased from 191 to 253 from 2022 to 2024.
Balance sheet
Aston Villa have a strong balance sheet with over £210 million of net assets, albeit this was up from the prior year of £147 million, showing the benefit of Champions League football to the asset base. This does include £65 million of tangible fixed assets, much lower than Arsenal’s assets, but perhaps representative of the age of each of their Stadium. The largest number being £281 million of player registrations, a number which has been relatively consistent over the three-year period, with £228 million in 2023 and £287 million in 2022.
There is a clear difference between Arsenal who hold over £11 million of stock, Aston Villa hold just £66k of stock at 2024 and nil in the two previous years. This would suggest either a much lower stock holding, or a just in time delivery system or that the merchandising is largely handled by either an external party or another connect company.
There are no transfer debtors disclosed in the accounts, whilst there are £61 million of transfer creditors, showing that Aston Villa owes more in transfers than they are owed.
PSR considerations
Taking into account the losses before tax, adding back depreciation and interest for the last three year period, 2024, 2023 and 2022, my calculation of the Aston Villa’s PSR three year rolling loss is £109 million, so this would suggest this is over the £105 million allowed. The exact numbers required are not fully published, so there may well be additional expenditure to be deducted to bring them inline, however, Aston Villa would appear to be right up at the limit.
FfF insights
The summer transfer window has seen speculation of Aston Villa’s limited ability to spend, my calculation of their PSR would suggest this is accurate.
The income levels at the Club mean there is limited scope under the PSR regulations for Aston Villa to spend big, especially given their wage bill.