Arsenal will be able to compete with the world’s biggest clubs “within the next two years,” chief executive Ivan Gazidis has told shareholders at the club’s annual general meeting.
Once again Gazidis trotted out the line that Arsenal’s financial philosophy will pay off when UEFA’s Financial Fair Play regulations become more rigorously enforced.
“In the next two years, we will have the financial resources to sit and compete among the leading clubs in the world, which is an extraordinary achievement,” Gazidis said.
“Financial success is relevant because it supports our football vision… the money we make is made available to our manager and he decides how to invest those funds.
“Arsene has done a magnificent job against the spending of our major competitors.”
When Gazidis is saying wait two years, what he is referring to is Arsenal’s shirt sponsorship and kit supplier deals are up for renewal.
When Arsenal was financing the move to the Emirates they signed a long-term deal worth £90 million that covered 15 years of stadium naming rights (£42 million) running until 2020/21 and 8 years of shirt sponsorship (£48 million) until 2013/14. Following step-ups means that the shirt sponsorship deal is worth about £5.5 million a season, which is well below market rates.
Consider that Liverpool, Manchester United and Manchester City all earn at least £20 million from their shirt deals, you would expect that Arsenal’s new shirt sponsorship deal will be worth over £20 million a season, which will add another £15 million a year to the club’s turnover.
The story is similar with Arsenal’s kit supplier, where the club signed a 7-year deal with Nike until 2011, which was then extended by three years until 2013/14. This Nike deal is worth close to now £8 million a season, which is nothing compared to the £25 million deal Liverpool has with Warrior Sports and the expiring soon £25.4 million deal Manchester United has with Nike.
I would expect that Arsenal’s new deal would be in line with these two, meaning around £20 million a year, a nice £12 million jump from current levels.
So in two years, Arsenal’s commercial revenue should jump by at least £27 million due to these two new deals. That is the equivalent of signing one top player per season. Which is why Gazidis says wait two years.