Financial expert Kieran Maguire has claimed that Arsenal’s deficit this year isn’t as bad as it looks.
The Gunners announced a loss of £107 Million for the 2020-21 season with much of the campaign having been affected by the Coronavirus pandemic, with matchday income being wiped out almost completely.
Maguire has now added that while much of the deficit can be explained, there is also financial penalties which the club had to suffer after being unable meet loan repayments, and without those penalties and the lack of matchday income we could well have made a profit.
“These figures need to be treated with caution,” Maguire told FootballInsider247.
“Arsenal would usually be hoping to get close to £100m on matchday revenue but they only got £4m.
“That would have wiped out a significant portion of the loss.
“It is intriguing that Arsenal have moved away from a lot of external borrowing and are now borrowing from companies in Stan Kroenke’s group.
“There was a very significant one-off break clause too. Let me explain that a little further.
“If you have a three-year mortgage at a fixed rate and you break that then there are financial penalties.
“The financial penalties for Arsenal were quite significant because the overall interest charge jumped from £13m to £40m.
“So if you strip that out and you take into consideration the impact of Covid, Arsenal might have made a profit.
“They were hit hard by Covid and by not being in the Champions League for a few years.”
The club are clearly happy with the finances of the club, especially with their willingness to splash out in the transfer market of late, although that will certainly have been helped by offloading some of the surplus of the squad, including many of the higher earners.
It is interesting if these financial penalties actually went to another of Kroenkes companies, which could explain why he isn’t fussed about the loss, but it will be interesting to see how our finances our after this campaign after our spending last summer.
Patrick
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Mikel Arteta’s FULL pre-Watford press conference 11.45 mins
ever since “transparency” has become a catchphrase, organizations have learned how to massage the narrative so that it best suits whatever underlying objective they wish to project to their respective fanbases
If the players truly love the club they all could have taken a 99% pay cut for two years. They clearly love money too much to truly love the club.
No clubs would have done very well last year. We weren’t immune to what was going on.