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Arsenal’s profit drops as revenue rises

Arsenal’s profit drops as revenue rises

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English Premier League club Arsenal has announced a near £30 million reduction in its group profit before tax for the year ending May 31, 2013, as its football-related revenues increased by over £7 million.

English Premier League club Arsenal has announced a near £30 million reduction in its group profit before tax for the year ending May 31, 2013, as its football-related revenues increased by over £7 million.

The North London giant said that its group profit before tax was £6.7 million versus 2012’s figure of £36.6 million. This compares to the 2011 figure of £14.8 million and 2010’s £56 million profit. Arsenal said the downturn was due in part to a lower surplus on player transfers of £47 million, despite the sale of Robin van Persie to Manchester United, as compared to £65.5 million in the prior year.

Turnover from football increased to £242.8 million versus 2012’s figure of £235.3 million driven mainly by commercial activity including the club’s extended partnership with Emirates. Arsenal in November agreed a new long-term agreement with the airline to extend its shirt sponsorship until 2019 and its stadium naming rights through to 2028. Arsenal chief executive Ivan Gazidis said the new partnership is worth £150 million and is one of the biggest deals in football history. Arsenal’s current kit deal with Nike is due for renewal at the end of this season and Gazidis said he is confident of achieving a “significant uplift” in value. Arsenal this season stands to benefit from the Premier League’s lucrative new broadcast deals with BSkyB and BT Sport. Gazidis believes Arsenal’s broadcast revenues will increase by around 50% as a result of the new agreements.

Commenting on the results, Arsenal chairman Sir Chips Keswick said: “We must continue to grow commercially to provide the club with the best opportunity to achieve success and we must do this in a way which remains true to our values and which ensures and protects the long-term sustainability of the club. We face a competitive landscape across the top of the Premier League and across Europe’s elite clubs which is tougher than ever. Despite fair play initiatives the financial competition for top players remains intense and transfer prices and player wages continue to move ever higher. It is therefore positive that the strong financial platform we have created in recent years allows us to continue to be competitive at the highest level.”