The Club has announced its half-year financial results for the six months ended November 30, 2009.
For an insight into the latest figures, we spoke to Arsenal's Chief Executive, Ivan Gazidis.
All visitors to Arsenal.com can now watch our FREE interview with Ivan by clicking on the PLAY button in the image above. Below is a transcript of the interview:
Ivan, in the current climate this is a very positive set of results. Can you talk us through them?
It’s a good set of results for the Club. We have delivered a profit before tax of £35million for the first half of the year. But it’s important to note that this isn’t our primary objective. The reason we run a responsible, profitable and self-sustaining business is so that we can deliver success to the Club and invest in the Club and ultimately deliver success on the pitch, something that our fans can be proud of. That’s what we’re after. So while we’re satisfied with the results, that’s not the end objective.
What stands out most is the revenue from Highbury Square. What’s the position of our property portfolio?
Well, Highbury Square has been selling very, very well and we’ve reduced the debt on Highbury Square from £123million as of May 2009 to around £13million today, so that’s on its way down very, very rapidly as we sell those flats, and we’ll soon be delivering a profit back into the football side of the Group.
We’ve also sold the affordable housing development at Queensland Road on the south side of our stadium and that means our property business going forward is debt free. So the property developments we are still engaged on – and there are a number of them – again will be delivering pure profit back into the Club and that’s very healthy for the next two or three years.
Will any of those proceeds be available for further investment in players?
The Club has never taken dividends out in recent years, so all of the money that’s generated by the Club is available for investment – investment in players and also investment in long-term assets like the stadium and other infrastructure. We’ve actually been investing quite significantly in the existing playing squad – we’ve signed 17 existing players to new, long-term contracts since the end of last season. While that goes under the radar screen, it’s a very significant investment. We have the youngest squad in the Premier League and tying down those players to long-term contracts ensures the stability and security of our playing squad going forward.
On top of that, we have money available to invest in the transfer market when we can identify the right players to add into the mix that add something to the squad. So we’re in a healthy position.
What can you tell us about Arsenal’s debt as a whole and what’s your view on the level of football club debt in general?
Arsenal’s debt position is very healthy. We have reduced our net debt from £330million in May 2009 down to significantly below £190million today. So that represents tremendous progress, largely through the sale of flats at Highbury Square. The debt that we’re left with is what I would call ‘healthy debt’ – it’s long term, low rates, very affordable for the Club, and it’s effectively a mortgage on our stadium which generates revenue for the Club. Not all debt is bad and I think Arsenal’s debt delivered an asset to the Club that will be an asset for generations to come in our stadium, and we’re very comfortable with that.
I think it’s important that clubs act responsibly with respect to debt. The important things that everybody needs to ask are: Is the debt affordable? Can the repayments be met? And provided clubs act responsibly then it’s not true to say all debt is bad.
Taking all of that into account, how do you think the broader football landscape would have changed once we’re through the current financial climate?
I think those clubs that act responsibly, who consider their duties as custodians, who take care of the fundamentals and think of not just the short term but also the long term, will be well-placed. We’re in a very difficult economic climate at the moment, but as we emerge from that I think the clubs that have been run responsibly will find themselves well-placed. Certainly I count Arsenal in that category.
So lots of positive results off the pitch in financial terms; hopefully positive results on the pitch to in the months to come.
That’s what it’s all about. We’ve got a very young squad and we’ve had some setbacks and disappointments along the way this year but we’re still very much in the race for the Premier League, we’re very much in competition for the Champions League. Every single game for us now is a Cup Final, we’re going to be giving everything we have to deliver the results we need, and who knows? The end of the season could get very interesting.Copyright 2017 The Arsenal Football Club plc. Permission to use quotations from this article is granted subject to appropriate credit being given to www.arsenal.com as the source