Newsflash: Arsenal Aren’t The Fourth Richest Football Club In The World

(This is my column from issue 235 of The Gooner.)

It’s spring at last, so it must be the time of year when Forbes come out with their bollocks list of ‘world’s most valuable football clubs’. There are two reasons why this list is a giant pain in the arse: firstly it’s full of supposition, guesswork and unjustified ‘reasoning’ about why certain clubs are worth the figures quoted, and secondly most newspapers and almost everyone on Twitter repeatedly confuses the words ‘most valuable’ with ‘richest’.

Most valuable means ‘worth the most’. Richest means ‘has the most money’. These are two very different concepts. As someone pointed out to me on Twitter, his mum is valuable but is certainly not rich. Arsenal were third on this list between 2007 and 2011, then dropped to fourth in 2012 and stay there this year, with Bayern closing the gap. Obviously no one notices this slight downward trend, but everyone who thinks Arsenal are underperforming and wants to sack the manager, the board, Vic Akers and the tea lady, jumps up and says, ‘FFS, Arsenal are the fourth richest club in the world! They should be winning trophies! Sack everyone!’ And I’m forced to explain over and over that in fact a) this is a list of most valuable clubs, not richest, and b) it’s all a load of bollocks anyway.

If you read the Forbes article, they go into reasonable pseudo-scientific detail on the reasons for their valuation of the top three – Real Madrid, Man Utd and Barca – then expect you to just believe their figures for everything else. But what’s this: Real Madrid are worth 76 per cent more than they were last year? Barca are worth 99 per cent more than they were last year? How come? Sounds to me like either they made an almighty cock up with last year’s valuations, or they have with this year’s. There’s no logical reason for Barca to be worth double what they were last year.

Man Utd, meanwhile, are apparently worth 42 per cent more than they were last year. This is not entirely unreasonable, as big TV deals have been talked about and announced in the last year, and the Man Utd commercial department have definitely been earning their bonuses. If anything, their value as a commercial money-making operation should have increased faster than Barca’s.

What about Arsenal? Our dear club is claimed to be worth a mere three per cent more than it was last year. You almost get a better return from the Post Office; Stan will be disappointed, I’m sure. Arsenal are allegedly worth $1.326bn compared to last year’s $1.292bn. This is about £863m, which would mean that one Arsenal share would be worth less than £14k, though they have not traded that low at all in the last 12 months (I’m ignoring debt, which, because of the amount compared to turnover and the long term nature, is a pretty safe thing to do). I’m the first to admit that the Arsenal share price is only indicative rather than gospel, given that the market for the shares is distorted by having two very big shareholders opposing each other. However, I’d have thought that the new TV deals would logically mean more of an increase for Arsenal than three per cent.   

But at least Arsenal and Man U have some publicly traded shares or securities to base a comparison on. Barca and Real are wholly owned by their members, so any valuation is purely hypothetical because no one is going to buy or sell the clubs anyway. Bayern is just over half owned by members, but you can gauge value by how much anyone is prepared to pay for the other half – except of course it’s not an open free-for-all bid process each year, they have ‘partners’ who are firmly in place, so valuations are also only indicative.

All in all, the whole thing is nothing more than a ridiculous publicity stunt by Forbes to get gullible people talking about them. Unfortunately it works. And that’s my final word on the subject.   

Follow me on Twitter: @AngryOfN5


28 thoughts on “Newsflash: Arsenal Aren’t The Fourth Richest Football Club In The World

  1. Also, if we’re talking about revenue generated, we’re behind both bayern and chelsea… oh how we’re so behind on commercial revenue

    • Yes but chelsea revenue is down to teams success. Tbats is down to roman. Ane we have always been behind byern.

      I think spurs catching up is a bigger concern. 5 years of ffp if done properly and chelsea are finished.

  2. As arse wipes go Forbes is up there with the best of them. Like a lot of people in football these days, they know the price of everything and the value of nothing. Thats the same publication that listed Lehman Bros Bank as one of its top five banks in the US , a week before it collapsed !! . That tells me that they know shit about anything and nothing about Arsenal

    • noel conway – ( quote ) ” Like a lot of people in football these days, they know the price of everything and the value of nothing.”

      Sounds like Arsenal’s scouting and transfer policy.

      ” In Arsene we rust.”

  3. Surely the value of a club,company or person must be based on the following
    All assests plus X amount for trade names etc.
    Minus all debt
    I ran a small company in England for 20 years and this is how we/taxman agreed all values at the end of the year would be. We can all say our house or car is worth X amount but it is only worth what somebody is prepared to pay for it less any money owing not some magical figure that some accountant made up at a office meeting.

  4. It might be more instructive to view a list of the world’s most valuable managers. On a “salary paid to on field success” ratio. Wenger would be rock bottom of that list. Seven and a half million a year we’ve pissed against the wall propping up this parasite. And what return on investment have the long suffering supporters had ? Zilch. Unless you count struggling each year to make a competition that we get knocked out from as soon as we come up against a quality team. And some get so excited over this annual exercise in futility.

    Doing just enough. That typifies Arsenal under this current administration. Champion,repeat CHAMPION teams do much more than “just enough.” And they do it when it MATTERS, not when it doesn’t.

    But what do you expect when….. “ In Arsene we rust.”

    • Apart from that he’s been paying off THE BRAND NEW STADIUM WE HAVE WHICH COSTS MONEY.. At a rate of almost £80mill a year they wanted to pay off and it costs £490mill according to Wikipedia, now do the math and it roughly takes 6/7 years, we moved in ’06, and it’s now ’13.

      Did you think we’d just leave a £490mill debt hanging around and not bother paying it off?

      Yes, we have had money to spend, but only as a necessity as he wants that money to go towards stadium. Hence why he’s been saying CL footy is a must.

      Now the debt has gone and it seems we’re going to have a fun summer of transfers. Maybe people like you will sit up and appreciate what he’s done over this ‘barren’ period in the last 8 years. He’s done wonders paying off a stadium and maintaining a squad good enough for CL.

      • Obviously you’ve not been studying the accounts too closely, as the stadium debt isn’t paid off. There’s about £250m of it and it’s being paid off at the rate of about £19m a year, £13m interest and £6m capital. All the bit that has been paid off so far has been paid with property sales, not any magic performed by the manager.He may or may not be performing magic, but paying off the stadium ain’t it.

      • You’re right. This is another myth – that Wenger himself is paying off the stadium, and that due to that, he has been constrained in his ability to spend, because the board haven’t / won’t provide the funds for him because of it. The stadium debt is very manageable. We have negotiated a deal that only requires low interest and modest principal repayments. There is, and always has been, money available for Wenger to buy players with. Obviously not as much as the Chelseas and Citys. But the point is that Wenger won’t even spend what he’s given. Former director and largest shareholder, Danny Fiszman sheds some light on this ; ( quote ) “There is this constant thing that the Emirates is bleeding the club, that we’ve got these repayments — it’s total crap,’’ stressed Fiszman. “Look at our accounts and you will see our net payments are £20m and the revenue increase from the new stadium is close to £50m. Explain to me how that stadium bleeds the club if it’s producing an extra £30 m-a-year. Our wage bill is very similar to Manchester United’s and substantially above Liverpool’s. It’s substantially below Chelsea’s, but that is expected.” ( end quote ) – The Telegraph, August 28th 2008.

        And on who is responsible for spending and signing players ? Wenger. Fiszman again, from the same article – ( quote ) ; “It would be no problem at all,’’ said Fiszman, the club’s second largest shareholder. “It’s not our decision who he spends money on, nor will it ever be our decision. If he said to us ‘I want this guy and he’s £30 million, can I buy him?’ the answer is yes. Absolutely yes. We totally back him. It’s his decision. I’m unfortunately not good enough to be a manager myself but I’d love to be.’’ ( end quote ).

        Then Wenger HIMSELF confirmed this just last January on the club’s website, Arsenal.con – ( quote ) …..“The second thing; can we afford them? Most of them, yes. A few of them, no. Can you afford Messi today? Certainly not. But we can afford 90 per cent of them.” ( end quote ).

        So please Adam, explain why he didn’t see it necessary to strengthen the team during that January window ? We had no net gain to the squad, despite EVERYONE but Wenger it appears, knowing and EXPECTING him to address our under manned squad with some REAL quality. He had at least 70 million* to use ( * well documented ), but said ” we have two good players for each position.” and ” we couldn’t find anyone” e.t.c. That’s excuse making, and the fact that he refused to reinforce the team is disgraceful and amounts to criminal neglect. If he’d done so, we might already be entrenched in that top four ( not that it means much, other than more C.L. revenue for the board ).

        ” In Arsene we rust.”

      • Hmm, both Phil and Adam are partially right. The club have certainly not paid off £80m debt a year, nor reduced the debt total to zero. And the actual stadium bonds can’t be paid down any quicker than just under £20m a year. However, the club have been taking large amounts of money out of football operation since 2006 to reduce the club’s net debt.

        As Swiss Ramble excellently states in this blog, , Arsenal have been making many years of football profits (real cash flow profits, not misleading accounting profits): 2010/11 £33 million, 2009/10 £28 million, 2008/09 £6 million, 2007/08 £19 million and 2006/07 £38 million. This is about £124m, and has mostly gone into cash balances. He points out in other blogs that the cash balances are necessary to avoid loans to fill gaps such as the debt servicing reserve and seasonal cash payments. While he speculates the cash balances are maybe £50m higher than necessary, the club has clearly needed to raise money that would have been less necessary without the stadium.

        As such, contra Phil, Wenger and the rest of the club have indeed been squeezing a lot of money out of the football operation to deal with the financial consequences of the stadium.

      • Given that the new stadium generates more than double what Highbury did, to say that money has been squeezed out because of the need to repay debt is nonsense. There would be less money if Arsenal had stayed at Highbury.
        It’s true that Arsenal have to maintain cash balances for reasons that include servicing debt and cashflow to avoid having to borrow more, which is against the terms of the stadium debt, but a large pot of cash has still built up, and more than £50m could be spent. I am not partially right on this, I’m just right.

      • No, I’d still say partially right. You’re missing a crucial financial element that has meant the move has so far left us with less money to spend on players.

        You claim we’ve had more money each season than if we’d stayed at Highbury. You’re basing this on the fact that the extra revenue from the stadium move (about £50m per season) was more than enough to pay for the structured debt repayments (~£20m per season) and the cash accumulation (~£25m per season, until 2011). So, just on this basis, you can fairly say that our profits were not squeezed out of the football operation because they were entirely driven by the new-found match-day revenue.

        However, this assumes the only revenue effect of the stadium was on our match-day revenues. And yet, it’s well established that we’ve lost substantial revenue opportunities due to the long-term, front-loaded sponsorships necessary to fund the stadium project. Our revenue from shirt sponsorship + kit is currently £13.5m per season (5.5 for sponsor, 8 for kit), and it looks like it’ll be about £55m from 2014 (30 for the reported Puma deal, and 25 from Emirates, assuming we got a sixth in 2013, as widely reported). So, in commercials, we’re currently over £40m per season short as a consequence of the stadium financing. Obviously the gap between what we are earning and what we could have earned is much bigger than it would have been for much of the post-Highbury era, but it’s still reasonable to think we’ve been missing out on substantial commercial money each season due to the stadium move. On a rough, back-of-the-envelope analysis, I estimate we’ve lost about £80-100m between 2007 and 2011 due to the stadium (based purely on how our revenues compared over the period with Man U’s). You can vary that estimate all you want, but you’re not going to be able to erase enough of the revenue loss.

        When you consider the roughly £250m gained in extra match-day revenue between 2006/2011, the roughly £220m in money lost to debt repayments and cash accumulation, and the maybe £90m in lost commercial revenue, it’s clear that the stadium move left us with less money to spend on the squad during that period (about £60m less is a reasonable conclusion). Since then, the cash accumulation element has stopped: Swiss Ramble estimates we lost 6.6m in real cash-flow across 2011/12; it’s likely slightly more this season. But, even considering that, we’re still short on money: the lost commercial revenue has risen to about £40m a season, and we’re still paying off £19m debt. £59m is greater then the extra £50m from the gates.

        There’s no way you can cut it that makes it as if we’ve had more money to spend over the last 7 years than we would have at Highbury. We were a total of about £60m worse off during the cash accumulation period, and are probably about £20m worse off in the two years since then. Even if you assume we have an unnecessary £50m in extra cash, we’ve still been worse off. The stadium move is a longer-term project than you think, and our football team hasn’t experienced the financial benefits from it yet.

        Due to moving, we have so far lost money that could have been spent on players. That’s the only bit you didn’t get right.

      • Firstly you can’t compare Arsenal’s revenue with Man U’s, they’re in a different league globally.
        Secondly, you’ve ignored all profit from property transactions that has come about due to moving from Highbury.
        That more than makes up for commercial revenue lost opportunity.
        Thirdly I’m not going to engage with you further unless you start using your real name.

      • Ah, sorry about the name. I assumed it was unimportant, so I just choose a subject title for a comment I made in the underachievement blog.

        Oh, and I should have been clearer about the Man U comparison. I wasn’t assuming our revenues would have kept pace with Man U over the period (if they had, we’d have had an extra £150m). I was working based on how our revenues compared with Man U’s at the beginning of the period, and how they would have compared in 2011/12 if we’d had about 40m extra commercial revenue. In 2006/7, our commercials were about 75% of theirs; in 2011/12, they would have been about 80%, assuming we had an extra 40m. Based on this, I made the reasonable guess that we could have averaged about 75% of their commercial revenue during the period, had we not been bound by the long-term contracts (I did say it was back-of-the-envelope…). The point wasn’t meant to be how I got the number, I just mentioned how so that you knew I wasn’t making stuff up. The point was meant to be that a reasonable rough guess sees us having lost the best part of £100m between 2007-11.

        Feel free to do your own estimate or to compare our trend with another club. But I’m sure we can both agree that we lost a sizable sum of commercial revenue due to the stadium move, and that the best part of £100m doesn’t seem an outrageous guess.

        On the other hand, you’re perfectly right about the property profits; it was pretty stupid of me to forget something so obvious. However, once the entirety of the property profits has been cashed (and it almost has), it’ll have only amounted to a total of just over £35m (a total that was unfortunately depressed by the housing crash). So I wouldn’t go as far as saying it more than makes up for the lost commercial revenue.

        Though your case is, admittedly stronger, now. If you go by my intial maths and assume we lost, say, £60-90m between 2006-13 from the move, then you add the £35m property profits I forgot about, then you assume that ~£50m of the cash balances is unnecessary, you are at break-even or a slight profit.

        I’d suggest we don’t really know the club’s reasoning behind such high cash balances, so I’d be hesitant to declare they are excessive. For one thing, it’s not club policy to grow them ad nauseum: they did stop making cash profits once the balances surmounted £150m. But you do have a fairer case than I thought, if you make that assumption.

        As such, you may be fully right that the move hasn’t cost us anything on the pitch across the last 7 years, so I’ve been enlightened by this discussion, if no one else has. However, I’m still not willing to say that with as much confidence as you did: there’s a lot of uncertainty with the lost commercial opportunity, and it may be on the high end of my estimate; and the idea of the redundant cash surplus is still quite speculative.

      • I still don’t quite agree on the commercials, because we only sold naming rights to the stadium by moving; we’d have got none of that income by staying at Highbury, as it wouldn’t have been sponsored. So we lost out by suffering a poor Nike deal for years but gained additional money from Emirates for the stadium name. Thus overall I’d still say there is a net ‘profit’ from moving.

        I haven’t checked all the property figures, I’d have guessed profit was higher than you say but I’ll take your word for it.

        Arsenal have never built up huge cash balances before, but have never had Stan as an owner before either. Maybe the two are connected.

      • Well the naming rights were part of the overall commercial revenues that I estimated were the best part of 100m short from 2006-2011. So it seems more like we were the best part of 100m short DESPITE the naming rights, rather than WITHOUT the naming rights. I guess it just emphasizes how much we ended up losing from the shirt sponsorship and kit deals. As such, I’d say my general conclusion from the previous comment still stands.

        I didn’t bother checking the accounts for the property figures, though I got them off Swiss Ramble, so I assume they’re accurate. They’re only the profits; for example, we got about £150m in 2011 in property revenues, but only about £12m of that was profit on what we invested.

        I’m sceptical that kroenke caused the cash build-up: he didn’t have boadroom control during the accumulation period; and, in the two years since he got control, we’ve stopped gaining cash. Though I’ll admit the size of the balances are highly unusual compared with our financial history and those of other clubs.

      • I think cash is still going up, though SK certainly wasn’t in control when it started being accumulated.

        This does all beg the question of whether the move overall has been financially positive, taking into account property, commercials, debt repayment, increased income from tickets. The lost opportunities from sponsorship figure is highly subjective of course, whatever conclusion you draw won’t be universally accepted. If you have time to put all the info together I’ll gladly post it, as at the moment I don’t have time, much as I’m interested.

      • One of the bits of info that can get overlooked in the ordinary profit and loss statement is the actual amount of money gained and lost during the period. The profit and loss statements have consistently shown a profit, so it’s easy to get the general impression that we’ve been accumulating money each time around. They are useful in some ways: for one, they give us a more exact idea of player trading costs, since they aren’t affected by payments that are made over several years. But for the actual amount of money gained/lost we should look at the cash flow statement (Swiss Ramble made an excellent post on this recently, ).

        From there, we can see we ceased to gain money in 2011. The cash flow statement says we made a £6.6m loss (the ‘decrease in cash and short term deposits’ bit). You can see the same result if you look at the ‘cash balances and short term deposits’, which decreased from an all-time peak of £160.2m to £153.6m. I’d guess we also made a loss this season: our wage bill has increased noticeably, and we made a loss on player trading (even had we not bought Monreal, we’d have only made a marginal profit). We’ll find out in the summer.

        Because we’ve stopped gaining cash since 2011, and because it looks like we’re using some of 2011’s cash pile to cover two seasons of losses, it seems the club likes cash balances larger than ~£140m but are content beyond that point. The reasons for that point have never been made fully clear, so your guess is as good as mine.

        And thanks for the offer; I’ll try to find time to write up an article in the next couple of days. Of course, the question is whether the move’s made us financially suffer over the last 7 years or not; there’s no question whether it’s beneficial in the long run, with commercials due to bounce. If anything, it shows how much trouble we’d be in had we not moved: we’d have had a fairly similar amount of money over the last few years, and no future revenue jump to rescue us.

    • Spectrum, you sound like a particularly combustible combination of depressed and angry in your response. It’s fine to be a bit of a critic if you don’t like the way the club is run but you could at least refer to the individuals involved with a level of respect. You do yourself no favours by calling the manager of your team a parasite, and I’m not persuaded that watching arsenal in the CL is an exercise in futility. Presumably neither are those that turn up/watch on TV and cheer on the team.

      Seriously, lighten up a bit, there is much to be proud of as an Arsenal fan and the future is a bright one, just wait and see.

      And stay away from sharp objects, for your own sake.

      • Dynamite_76 – Damn right I’m angry and depressed. This is my club that’s going down the drain. Calling Wenger a parasite was mild compared to the names I could have used, but for politeness, didn’t.

        Two sayings sum you up, Dynamite – “Ignorance is bliss.” and “There are none so blind that will not see.”

        Here’s a link to a site that tells it like it is. It might just ground you in some reality.

        While you’re there, if the culture shock isn’t too much for you, check out his other blogs on the right hand side of the page ( and the readers’ comments ).

        ” In Arsene we rust.”

      • Dynamite – “There is much to be proud of as an Arsenal fan and the future is a bright one.” You really think so, eh ? Well let’s see how the past can be a guide to the future…..( from contributors to “Arsenal “Truth” )……

        Fact: Arsenal is Englands 3rd most successfull club.
        Fact:Arsenal have richer and longer history then any other club in England.
        Fact:17 years in cl, and one miserly final, where everything went wrong.
        Fact: Wenger hasn’t beaten any significant team over two legs for 7 years in cl, yes that is right – 7 years.
        Fact: We lost to Chelsea, Man Utd and Pool over two legs in cl. Not once have we won against any other English team in CL .
        Fact: Wenger has coached 3 european finals and lost them all. Atrocious record for a top manager.
        Fact: Money is there but none is spent.
        Fact: Wenger thinks he can prove everyone wrong and win it on the
        Fact: His arrogance hinders the progress of Arsenal as a team.
        Fact: Wenger is tactically naive beyond the ridiculous.


        “Someone needs to remind him that his beloved boss has now broken a new record – no manager has gone more seasons than Arsène Wenger without a trophy since the club was founded in 1886!! ….Fact !

        Not much “brighter” on the Champion’s league, either, Dynamite…..

        “All this talk about UCL, and only 4 managers have more than a hundred games in this competition. Ferguson, Wenger, Ancellotti and Mourinho.
        Guess who has never won the UCL trophy?
        Tip: 3 of these managers won the UCL twice”.

        Apart from not spending the money he HAS or spending on inferior replacements, what OTHER reasons could there be for our lack of success, I wonder ? Could it be due to Wenger not having the tactical brains, motivational and man management skills of those three ? Or the organisational ability ? Or ambition ? Likely it’s all of these, AND the fact that Wenger is no longer the same man that he used to be. He’s gone stale, and is out of touch after 17 long years. It’s time for a fresh start.

        ” In Arsene we rust.”

    • Thomas Paisley – Wenger said before the start of this season that “this is my best ever squad”. ( he said similar the season before, as well.) Currently his “best ever squad.” are 18 points ( and counting ) behind the champions, after our worst start in 30 years ! The year before, ( despite scraping in to third ), we finished a massive 19 points away from champions Manchester City – following our worst start in 58 years, including an 8-2 thrashing by United !!!

      Still think we’re getting “carried away” ? Please WAKE UP to what’s going on at our club. If Wenger accepts a contract extension in 2014, our decline WILL CONTINUE, and we’ll end up as a mid table club. Or doesn’t that worry you either ?

      ” In Arsene we rust.”

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