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Arsenal set up for £260m Champions League bonanza thanks to what Stan Kroenke has done in private
On an extraordinary, history-making night at the Bernabeu, money was the last thing on the minds of anyone connected with Arsenal – or at least, almost anyone.
Stan Kroenke didn’t get into this football finance racket for sporting glory, though it is presumably a nice bonus for the owner of Arsenal and a sprawling £12bn-valued sports empire.
Victory over Real Madrid in the Champions League will be seen first and foremost as a commercial boost, one that delivers both prize money and prestige.
And while that might jar with fans who see their club as a vehicle for moments of ecstasy like those inspired by Bukayo Saka and Gabriel Martinelli last night, the two worldviews do have mutual interests.
Under Kroenke’s ownership, the Gunners are being steered towards a self-funding model. Basically, the plan is for the club to stand on its own two feet, spending only what it earns.
The 77-year-old has underwritten several hundred million pounds’ worth of losses since he took full control of the club in 2018. In his view, that can’t go on much longer.
That’s the reason Mikel Arteta didn’t get the world-class striker he wanted in the January transfer window.
Budgets had already been set seven time zone away at Kroenke Sports & Entertainment’s headquarters in Denver and, based on an expense-income analysis, a £100m outlay wasn’t seen as good value for money.
That will probably change in the summer, and substantial extra income from the Champions League campaign will be a decisive factor, as will the input of new sporting director Andrea Berta.
2023-24 was Arsenal’s first season back in the European big time since 2016-17. Looking at the North Londoners’ balance sheet, it shows.
Revenue soared, up by almost £150m to £616m, driven by substantial increases across the three primary revenue streams: media, matchday and commercial.
UEFA paid Arsenal close to £80m for their Champions League campaign alone. Not bad for 10 matches in total, throughout which they will probably have also banked around £30m in matchday income.
Thanks to a new format, the Gunners had already banked about the same amount after the league phase of this year’s competition.
By 31 May, when Arsenal hope to be lifting the Champions League trophy in Munich having bested Paris Saint-Germain in the semi-finals and one of Barcelona or Inter Milan in the final, the total could far higher.
Arsenal at £160m in Champions League cash already – with far more to come
With the new 36-team format in the Champions League came a new financial distribution system.
Over £2bn is shared between the clubs, an increase of approximately 20 per cent on the previous season when Bayern Munich knocked Arsenal out in the quarter-finals.
The money is split along three lines, which UEFA calls the ‘value pillar’, ‘equal shares’ and ‘performance-related’.
Arsenal’s equal share and performance-related bonuses are currently around £60m. If they win the Champions League, that will reach in the region of £94m.
The value pillar – which is based on coefficients and media market deals by country – has also been worth £31m to Arsenal, meaning they will trouser £125m all-told if they end the season as European champions.
That is before matchday income. Arsenal will have played seven home matches at the Emirates in their European campaign, which will generate £35m at a very conservative estimate. Now, we’re at £160m.
Club World Cup could be worth an extra £100m to Arsenal, says Kieran Maguire
The Champions League isn’t the only major competition to have undergone a revamp this year.
Chelsea and Manchester City will be the Premier League’s representatives at the US-hosted Club World Cup this summer, with a new 32-team format introduced by FIFA yielding huge prize money.
As University of Liverpool football finance lecturer Kieran Maguire highlights, qualification for the 2029 Club World Cup via the Champions League could supercharge the £160m Arsenal have already banked.
“The pathway to increased revenues is very much open for them and I think £700m in total annual revenue is within their grasp,” says Maguire, speaking exclusively to TBR Football.
“They have the benefit there of the Swiss model, which you have to give UEFA an awful lot of credit for.
“UEFA have marketed it well and leveraged far more money from the broadcasting deals than anyone expected given the flatlining we have seen in the Premier League and other major European leagues. The French TV deal has pretty much collapsed, for instance.
“There is more money in the pot and Arsenal are making more progress in the competition. When you put all those factors together and the benefits are significant.
“I think £700m is a stretch target. All of their revenue items would have to come into alignment. There would also need to be some fairly decent commercial bonuses from sponsors for reaching the final.
“But if that does happen, there are not only short-term benefits but also long-term. In 2025-26, the will play in the UEFA Super Cup. They would also be participating in the next Club World Cup in 2029.
“As we’ve seen with Manchester City and Chelsea, the Club World Cup is worth a minimum of £50m and potentially up to £100m.”
So, that would be a minimum of £210m attributable directly to winning the Champions League, with the potential for another £50m from performance in the Club World Cup taking the total £260m.
There are other less easily quantifiable benefits too – bonuses from sponsors, additional leverage in negotiations with commercial partners, a retail boom and so on.
Suffice to say, the Champions League is big, big business.
Arsenal have Stan Kroenke to thank for huge UEFA windfall
The new Champions League format with its extra millions is a direct consequence of the European Super League proposal co-authored by Stan Kroenke and his peers in the boardrooms of the so-called ‘Big Six’.
To placate the Super League clubs, who have effectively unionised by consolidating their interests in the European Club Association (ECA), UEFA introduced the expanded competition.
Kroenke’s deputy Vinai Venkatesham, who has now joined Tottenham, actively lobbied for the new format at ECA meetings as Arsenal’s representative within the group.
Kroenke has also thrown his weight behind the Club World Cup despite the Gunners not taking part this time around.
So, while the Super League scars will take time to heal in North London, there has been a fairly significant silver lining for Arsenal fans.