Arsenal’s return to the UEFA Champions League in the 2023/24 campaign had a huge impact on its financial performance, highlighting that in the business of football broadcasting revenue is still crucial.
The Premier League club reported record revenue as of 31 May 2024 of £616.6m, up from £466.8m for the 2022/23 financial year. This in turn helped significantly reduce its loss by a huge 66% from £52.1m to £17.7m.
While this still means the club is a loss making enterprise, it is a significant step towards profitability, and the Gunners may hope that by securing a Champions League spot again this season, this loss can be further chipped away at next year.
It is also hardly a rarity for a football club to struggle to break even, even in the highly valuable English top-flight. Also helping reduce the club’s loss last year was the absence of £18.1m in ‘exceptional costs relating to impairment of player registrations’ which bit into Arsenal revenue the year before.
However, the importance of Champions League broadcasting revenue to Arsenal’s 2023/24 commercial rebound cannot be overstated. Broadcasting revenue was up 27% from £191.2m to £262.3m, which Arsenal has directly attributed to the increase in value from competing in the Europa League in 2022/23 to the Champions League in 2023/24.
The impact of the Champions League has also been felt outside the field of broadcasting. The club’s participation in Europe’s top flight meant there were 25 home games last season, leading to a boost in matchday revenue from £102.6m to £131.7m, from an average attendance of 60,095.
Arsenal’s financial performance as a result of its team’s on-pitch performance securing reentry to the Champions League lays bare the significance participating these continental tournaments has for clubs of varying sizes.
The business of football is a difficult one however, and a particularly costly one.
Responding to the results on social media, the Arsenal Supporters Trust reacted to the possibility, but some fans can be seen commenting about the perplexity of one of Europe’s biggest clubs, which competes in two of the world’s highest value competitions, continuing to post a loss of £17m.
Outside of broadcasting, sponsorship remains a valuable source of sponsorship for clubs, as shown by Arsenal’s results. Though it is second place to broadcasting, sponsorship is a key revenue driver for clubs and its importance has been hammered home even more in recent years – though it is also facing some pressure.
Arsenal’s results show an increase in sponsorship revenue from £169.3m to £218.3m, with the extension of its deal with Emirates and a naming rights partnership for the Sobha Realty Training Centre particular growth drivers.
Though not stated by the club, its appearance in the Champions League may have also helped in this regard, as appearing in Europe’s premier competition will justify a club putting a higher premium on its sponsorship fees.
Profit and Sustainability Rules (PSR) have put a lot of pressure on Premier League clubs to maximise revenue and avoid penalisation. Clubs are allocated a loss of £105m over three seasons, with those falling below this threshold risking points deduction, as happened to Everton and Nottingham Forest last year.
The means of sponsorship itself has also come under pressure from other rules, such as the Associated Party Transaction (APT) regulations, which relate to commercial deals between clubs and companies which share the same ownership.
Arsenal was one of the 16 clubs to vote in favour of retaining APT rules in a Premier League meeting last year – though the debate has now been revived after Manchester City launched another legal challenge.
The club also remains safe from PSR rule violations with its £17m loss in 2023/24, though as with on-pitch developments in football, anything can change in the business side of the game.
