Arsenal announce losses after stadium move

February 21, 2007

Arsene Wenger only has to ask for funds to strengthen the Arsenal squad at the end of the season should he feel the need, according to managing director Keith Edelman.

The Gunners parent holding company today announced their half-year financial results for the six months up to 30 November 2006.

Although they showed an overall lost of £6.2million, pre-tax profits before net finance charges are up year on year from £14.3million to £19.6million.

Despite the associated costs of some £390million following the move to the impressive new, 60,000-seater Emirates Stadium, operating profits before depreciation and player trading were up 150 per cent, while group turnover increased from £57million to £100.8million.

The north-London club attribute the latter figure partly to increased gate revenue, which was due to relocating to a ground with a capacity more than a third higher than their previous home at Highbury.

Edelman maintains, while there has to be an ongoing commitment to the project, off-field activities only serve to improve the options available to the manager in terms of signing new talent.

'We have always found funds for the manager when he wants funds,' said Edelman, whose manager elected not to make any moves during January.

'But, at the moment, we have got a very big and talented squad of players. It would be his judgment call towards the end of the season, and he says what he would like to spend in the transfer window.'

Edelman added: 'We are a profitable business and, against that, Arsene looks at his squad and works out what he wants.

'Arsene is one of the managers who builds his squad very carefully, and works from what he requires to produce the kind of team he wants - and, let's face it, he has produced some pretty good teams over the past decade.'

There have been calls for top-flight clubs to slash ticket prices to battle falling attendances, with both Chelsea and Bolton announcing some measures aimed at appeasing the growing protest against `rip-off' costs to watch live football.

The Gunners have been close to capacity for the majority of their games this season.

Edelman commented: 'We knew that there were so many fans who wanted to come and watch us - we still have that problem today with 60,000 capacity. Secondly, the aim was to promote us to one of the largest clubs in Europe.

'We have achieved both of those objectives. Our membership has grown dramatically over the last three years and are also selling out international matches as well.

'We increased our gate and match-day income from £15.6million to £38million, and that is the impact of Emirates Stadium.'

He added: 'We have always been very careful about our ticket prices. We were full at Highbury and are full at Emirates, which shows there is more demand than we have got supply of tickets.

'Last year, we froze our prices, and were one of the few clubs which did. We always review our prices in March of every year.

'If you look at our ticket prices, the cheapest one for an adult is about £32, which compares very favourably with all clubs in London.

'You will not find many clubs who have got entry price levels as low as us - and we also produce a fantastic product on the pitch.'

Arsenal incurred one-off 'exceptional costs' of £21.4million relating to the refinance of all of the group's stadium-related debt, which was the main reason behind not posting a profit.

Edelman said: 'There are a good set of figures - to make an operating profit for the first half-year is outstanding because the second half is much more profitable.

'The exceptional finance charges is more of an accounting entry really, and is the cost of getting to much cheaper financing, which will save us about £10million of cash over the next 25 years in each of the years.

'It is a great thing to have done, but unfortunately the accountants make us write off all of the costs of raising the previous finance.

'Most of it is really book entries on the balance sheet, rather than where we have to pay money out.'

The club say they do not expect to reach their final targets for operational efficiency at the new stadium until the end of the season.

Meanwhile, the redevelopment of Highbury into over 700 residential units is now under way, with demolition work completed.

Approximately 90 per cent of the units released for sale at Highbury Square have already been pre-sold.

Edelman reflected: 'It has been a rocky road to get there, and we had a lot of obstacles put in our way, as you do for any regeneration project.

'By the time we get to 2010 and have finished the Highbury development, we will have completed the task and it will very satisfying.'