Arsenal’s staggering total debt revealed ahead of summer

Arsenal, as everyone knows, have been struggling financially. The impact of the coronavirus pandemic has hit club finances immeasurably, resulting in huge losses across the board. The pinch continues to be felt in north London.

When football fans were no longer allowed to visit matches, there was going to be an inevitable hit. Just how long games would be played behind closed doors wasn’t known originally and only on the final day of the 2020/21 Premier League season were we witness to something remotely resembling normality.

Despite the expected frequency of fans returning to stadiums next season, the impact of what has transpired remains damaging, and will continue to be so.

Arsenal announced 55 staff redundancies in August 2020 because of the effect of the coronavirus pandemic, which came after players and coaches agreed to take a 12.5% cut to their wages. The club then announced in January that they had taken out a ‘short-term’ £120m corporate loan from the Bank of England to help offset the impact of the COVID-19 pandemic, one they since repaid in full back in May.

https://twitter.com/itvfootball/status/1397464115979882496

Arsenal’s staggering total debt revealed ahead of summer of expected squad rebuilding

The issues have continued and in March the club recorded losses of £47.8m for the financial year ending May 31, 2020. £14m of that was from matchday revenue, £6m came from broadcasting and other commercial losses and the final £34m bring due to a deferral of broadcasting revenues. The following year will comfortably surpass £100m.

However, the previous loan that was repaid was revealed to have been paid off with another loan, as their cash flow issues meant they were unable to find other means of repayment.

Losses and debt have continued to climb, and the latest Arsenal Supporters’ Trust meeting revealed the full extent of the problem.

"“Arsenal looking at cumulative losses of circa £250m over last three seasons,” they revealed. ‘Stadium debt and other structural debt’ has increased from £175m to £350m. Total debt including player monies owed and Barclays approaching £500m."

"“Arsenal have provided no details on the costs of this debt or the terms for its servicing. Arsenal’s wage bill still over £200m and fifth highest in PL. Fines imminent from UEFA and PL for Super league disgrace. Very challenging summer ahead.”"

Any amount of debt that high is of significant concern. Of course. But £500m? A season without any European football will only worsen the outcome, adding increased importance on securing a spot in continental competition next year and hoping the safety of the public is stable enough to allow for regular attending fans.

Not shelling out stupidly expensive contracts to 32-year-old’s can also help. Recruitment has played its part in the shambles.

Some of the less cynical will argue the amount of debt is a signal of Arsenal taking advantage of the opportunity presented to them – the offer of extremely cheap money by leveraging heavily. It is a buyers’ market this summer and taking on further debt could be perceived as the smart option. Many will strongly disagree.

The end result doesn’t change: Arsenal are in debt, and lots of it. Sales become vital.