Last night’s blockbuster between two of Europe’s old-money clubs, Arsenal and Real Madrid, served up a perfect example of exactly why it’s so hard to think in dispassionate, financial terms about football.
But this is a gift that Arsenal owner Stan Kroenke, who did not build a £15bn sports and property empire by acting on emotion, posses in spades.
And while Declan Rice was inspiring riotous joy in the stands at the Emirates Stadium, deals were being done behind the scenes, where the currency is currency. Driven by money, not passion.
The world of football finance never sleeps and glamour ties like a Champions League clash for the ages in Arsenal vs Real Madrid make the perfect backdrop to wine and dine VIPs.
Ultimately, it’s the handshakes that happen in Arsenal’s corporate hospitality suites that – under Arsenal’s self-sufficient operating model – generate the cash for Mikel Arteta to spend on signings like Rice.
Stan and Josh Kroenke ideally don’t want to put any money into the club, though they have been forced to underwrite the significant financial losses that have come with increased spending in recent years.
Credit: Adam Williams/TBR Football/GRV Media
But Arsenal’s return to the extraordinarily lucrative Champions League and their sustained presence at the very top end of the Premier League in recent seasons will likely see them return to a break-even model.
Kroenke Sports & Entertainment have paid around £1bn to take 100 per cent control of Arsenal, with another £324m injected into the club via loans.
Credit: Adam Williams/TBR Football/GRV Media
To generate a return on that investment, the Kroenkes need to demonstrate the viability of the business model, hike Arsenal’s enterprise value, and – in due course – sell to another buyer.
That means outgoings to exceed outgoings can’t exceed incomings for too much longer, which in turn means fans can expect one of three outcomes:
- Major increase in revenue
- Spending cuts
- A combination of the two
In the coming summer, it seems very likely that Arsenal will spend big in the transfer market.
A goalscorer is the A1 priority and likely to cost up to £100m, while Martin Zubimendi’s Real Sociedad release clause will set the Gunners back £50.5m upfront, which would be a drain on cash in the bank.
That is unless they pay above the release clause but in a staggered arrangement. Instalments are the go-to structure for new signings at Arsenal and most Premier League sides.
Per their last set of accounts, the North Londoners owe £268m in transfer instalments, illustrating how the demands of running the world’s ninth-richest club by revenue are stretched well beyond a single window.
In Stan Kroenke’s other sports investments, he doesn’t have the same problem.
Why Arsenal aren’t a cash machine like Stan Kroenke’s US sports franchises
Through a combination of salary caps, discovery rights, and the risk-free franchise system, his teams in the MLS, NBA, MLS and NHL always make profits.
| Franchise | Sport | Major Honours in Kroenke era |
| Los Angeles Rams | NFL (American Football) | 1x Super Bowl Champion (2021) |
| Denver Nuggets | NBA (Basketball) | 1x NBA Champions (2023) |
| Colorado Avalanche | NHL (Ice Hockey) | 2x Stanley Cup Champions (2001, 2021–22) |
| Colorado Rapids | MLS (Football) | 1x MLS Cup Champion (2010) |
| Colorado Mammoth | NLL (Lacrosse) | 2x NLL Champions (2022, 2024) |
US sports teams, for all intents and purposes, are cash machines because of optimised revenue streams and – most significantly – strict systems of cost control. Huge media deals help too.
Credit: Adam Williams/TBR Football/GRV Media
Thanks mainly to inflation caused by the uber-ambitious state-owned clubs detested by Arsenal and emerging private equity investment, costs are wildly out of control.
The failed European Super League project in April 2021 was intended to force an American sports model on European football, changing it existentially and wiping out a century of history in the process.
It would have robbed Arsenal fans of the novelty and glory of nights like last night.
A historic 3-0 win over Real Madrid would be just another match in an endless, jeopardy-free carousel of goliath vs goliath match-ups.
The collective will of Arsenal fans and their peers in the so-called Big Six won out in the end and, for once, passion triumphed over greed.
But when the kind of money that was on offer in the Super League is in the picture, its flame will probably never be fully extinguished.
The evidence was there, suited and booted at the Emirates Stadium last night.
Super League CEO at the Emirates Stadium for Real Madrid clash
It is almost four years ago to the day that Arsenal attempted to join the European Super League.
Premier League clubs eventually dropped out, followed by the two Milan clubs and Atletico Madrid. However, Real Madrid, Barcelona and Juventus remained set on launching the breakaway.
Later, Juventus would drop out, but the Classico clubs are, to this day, still trying to get the project that they say will ‘save European football’ off the ground.
In December last year, A22 Sports Management – the lobby group created by Real and Barca to manage Super League 2.0 – announced the structure of its new competition, the ‘Unify League’.
The Unify League would sort 96 clubs from 55 domestic leagues into three divisions, with the top division split into two sub-groups that eventually feed into a knockout bracket.
A22 CEO Bernd Reichart says he has spoken to every major English club – which, of course, would include Arsenal – about joining up and they are, purportedly, keen.
Although, he would say that, wouldn’t he?
Regardless of the veracity of his claims and the difference between what clubs say in public and in private, the Super League sword is still swinging over Arsenal fans’ heads.
As relayed by the FootBiz newsletter, Reichart was a member of Real Madrid’s delegation at the Emirates Stadium for last night’s Champions League clash.
The ghost at the feast? Or a man on a mission to get English clubs back on board? We’ll let you decide.
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The Arsenal connection: How Stan Kroenke’s deal broker finance the Super League
UEFA are reportedly considering taking what would on face value be the unusual step of giving administrative approval to A22’s new Super League plans.
The consensus within football finance is that this might be UEFA calling A22’s bluff, exposing the fact that the Unify League is merely a bargaining chip in negotiations for more money, not a serious proposal.
For one, there is no real financial plan this time around. In April 2021, Arsenal and their co-conspirators secured £3bn worth of support from JP Morgan to get the Super League going.
As it happens, JPM organ have a sponsored suite at the Emirates Stadium. Memberships in the ‘Diamond Club’ cost £40,000 per year.
It isn’t unusual for a football club with a turnover of £600m-plus and an US banking giant to have a commercial relationship, but Arsenal’s links with JP Morgan run deeper than most.
As well as the sponsorship at the Emirates, JP Morgan helped broker Stan Kroenke’s takeover of Arsenal.
The 77-year-old has previously been characterised as one JP Morgan’s ‘biggest clients’ and borrowed around £1.5bn from the bank to help fund the SoFi Stadium, home of Kroenke’s LA Rams NFL franchise.
Could Arsenal join re-launched breakaway competition?
If the Super League is indeed a genuine attempt to dethrone the Champions League as football’s biggest and most salubrious competition, could Arsenal really join up?
Apart from the fan backlash, what mechanisms are in place to stop them if they did choose to get back on board?
In terms of real, structural powers, there aren’t many. The Gunners agreed to set up a fan advisory board the saga in 2021, but advisory is the key word there. It has no real, constitutional power.
Legally speaking, the Super League has also scored a number of victories in the European courts too, so it appears there would be no barrier there either.
However, a bill for an independent football regulator with the power to block breakaway leagues is currently making its way through Parliament.
Incidentally, Arsenal vice-chair Tim Lewis has railed against the football regulator, saying it threatens foreign investment in the Premier League.
There have also been some reports of late that prime minister Keir Starmer is considering paring back the powers of the regulator, which could be a problem as far as the Super League is concerned.
But in any case, the Premier League is likely to swept up in the internecine conflict around Manchester City’s 100-plus charges and Profit and Sustainability Rules to focus on a breakaway league right now.
