Arsenal are often praised for their "sound" and "self-sufficient" financial model. In reality, though, this "model" might be the most efficient and quiet swindles in football history.
Gooners always had doubts about Arsenal's handicap in the transfer market, but preferred to ignore it in leiu of the "moral high stand," such a financial policy offered. After all, they had little else to brag about. But the wolves in the boardroom shed their sheep clothing this season.
Just after Arsenal's capitulation in the Carling Cup final, Arsenal announced a small loss in their latest financial report. For some reason, it didn't receive adequate media attention.
It should have set off alarm bells in the minds of Arsenal fans, but such is the hype surrounding the "model," that it has yet to sink in. Arsenal are heading for a downward financial spiral that will stabilize in mid-table mediocrity.
The official reason for this loss was "fewer home games." While this seemed to satisfy most people, it begs the question—Are Arsenal's margins so fine?
It is understandable if the likes of Leyton Orient are overjoyed because of an FA cup replay at the Emirates, but surely, a big club like Arsenal should not be so sensitive to the number of home games.
The construction of the Emirates stadium was supposed to help Arsenal compete financially with the likes of Manchester United and Real Madrid. While the stadium has allowed more fans to see their team play—it seems to have failed in the aforementioned objective.
Is Arsenal's current financial model viable?
Arsenal's financial report at the end of the 2009-10 season indicated record revenues of £382 million. But of these, £156 million were one time property sales at the Highbury. So even when the entire loan is paid off, one doubts if the profits will be enough to compete with Europe's best, if there are any profits, of course.
The commercial revenues were a mere £31 million, compared to the £81 million made by Manchester United in the same period.
Arsenal got what now looks like a raw deal from Emirates Airlines, but it is understandable given the urgent need for cash during the Emirates construction.
However, one doubts if perennial chokers Arsenal will get commercial deals on par with Manchester United, Barcelona or even the Standard Chartered deal obtained by Liverpool when the time comes for renewal.
The owners don't mind of course. David Dein was the one man who genuinely cared about Arsenal's success and wanted to bring in Usmanov to inject cash into Arsenal's transfer dealings.
He also knew the perils of the Emirates construction cost and wanted a cheaper move to Wembley, which would have generated a lot more revenue with the 90,000 capacity.
Instead, Hill Wood et.al. decided to build the Emirates, oust Dein (which in turn resulted in an exodus of the invincibles), sideline Usmanov and handicap Wenger in the transfer market.
The owners then sold the club to another 'custodian' and pocketed a neat £234 million, without putting a penny into the club.
In spite of all this, they never gained the unpopular image of the Glazers or Gillete-Hicks and also managed to make Arsenal appear a 'model' and well run club—talk about a smooth operation!
Now the situation is that, Arsenal are struggling to pay an addition £20,000 a week to Nasri to keep him at the club. With the Highbury flat sale almost over, one wonders where the money will come from.