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Finance & Accounting
Pages 12 (3012 words)
The paper will describe the financial performance of Arsenal Football Club through analyzing the historical record and conducting financial ratio assessment. The objective of this paper is to describe how Arsenal Football Club has performed financially in the football industry in comparison with other competitors and how it has managed the financial resources to generate revenue (Ward, 2007). …
Historical Record of Arsenal Football Club
The financial performance of Arsenal Football Club was quite strong in the year 2010 and the club has also experienced significant drop of debt. From the historical viewpoint, the earnings of Arsenal Football Club have fluctuated. In the year 2001, the club had a profit of almost 24.3 million Pounds but in the subsequent year the club experienced loss of 20.5 million Pounds. The reason of loss in that financial year was rise in wages due to growth in the number of players (London Business School, 2009).
Since initiation the club’s group turnover has progressed gradually. In the year 2005, the group turnover of Arsenal Football club was almost 138.4 million Pounds which had become more than double by 2010 to almost 379.9 million Pounds. The club also experienced growth of operating profit in that period.
The low sales in the property development business were the main reason for decreasing operating profit in 2006. Arsenal Football Club operates in two prominent segments which are football and property development. Since the operating loss in the year 2006, the football segment has shown increased growth. In the year 2007, the turnover of football segment was almost 207.7 million Euros which had become 229.9 million Euros in 2009. The increase was generally motivated by new television series. In the year 2010, almost nineteen “Barclays Premier League”, 4 “UEFA Champion League”, 3 “FA Cup” and 2 “Carling Cup” matches were telecasted. The revenue of football segment mostly comes from the sales of tickets. The Emirates Stadium of Arsenal Football Club also hosted two international friendly matches (Arsenal Holdings PLC, 2007; Arsenal Holdings PLC, 2010). ...
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