30th March 2021


30th March 2021

Previously, we have written and discussed the similarities and differences between Arsenal and Manchester United from a balance sheet and financial performance perspective as part of a wider analysis of the North London club’s overall business position.

The latest set of financial results from the 2019-20 season prompts a revisit given the unusual circumstances that unfolded towards the season’s end which in itself was extended into the summer months.

So, to start off, we will indulge in some time travel all the way back to the angst of 2009 when the world was still reeling from the banking crisis of the previous year, the death of Michael Jackson and Manchester United winning yet another Premier League title with a total of 90 pts, ahead of Liverpool in second place on 86 pts and Arsenal in fourth place with 72 pts.

From a revenue perspective, both Arsenal and Manchester United where broadly similar…

Largely due to revenues from property development offset by lower receipts from gate receipts, broadcasting and commercial activities, Arsenal’s turnover came in at £34.9m ahead of Manchester United.

It is interesting that for both clubs the largest driver of revenue back in 2009 was gate receipts which accounted for 31.9% and 41.1% of Arsenal’s and Manchester United respective revenue totals.  When viewed through this lens, a larger and more modern stadium was understandably seen as a positive and potential route to financial outperformance despite the requirement of significantly more capital on the balance sheet.

Moving swiftly into 2019-20, we find both clubs in quite different positions from a revenue perspective…

Covid-19 has obviously affected both clubs with a number of fixtures taking place in empty stadiums. Gate receipts have indeed been hit but that said, in the eleven years since 2009, Arsenal’s revenue has grown from £313.3m to £344.5m per annum – an upward movement of just £31.2m or 9.96% uplift.

Indeed, the North London club’s gate receipts in 2009 totalled £100.1m. However, gate receipts had dropped to £78.7m in 2019-20, some £21.4m lower than the 2009 level. The beginnings of football under Covid-19 had already made its mark.

By contrast, Manchester United’s revenue has grown from £287.5m (2009) to £509.0m (2019-20). This is an increase of 80.1% (£230.5m) or in comparative terms, approximately 8x Arsenal’s own revenue uplift for the same period.  Like Arsenal, Manchester United’s gate receipts in 2019-20 were £24.7m lower than the 2009 total of £114.5m.

The largest component of revenue for both clubs in 2019-20 was not gate receipts but the commercial and retail element. Manchester United’s prowess in generating commercial revenues over the last decade or so has been covered many times across numerous media outlets. Nevertheless, the comparative performance with Arsenal demonstrates how one club got it right and one club got it wrong.

In 2019-20, Arsenal generated £142.3m in commercial revenues. Manchester United achieved a commercial revenue of £279.0m which is the largest total for any football club in the United Kingdom.

It therefore follows that the growth or the change in commercial income for Manchester United is the largest driver of the revenue differential between the two clubs.

Set out below is a graphic showing the commercial income performance of both clubs since 2009;

So What?

We have consistently stressed that the error of conflating revenue with value creation lies at the heart of many of the misunderstandings regarding the financial and economic health of the beautiful game; a failure to recognise performance based on an actual value creation metric being the most notable.

Indeed, although Manchester United’s ability to generate revenue growth is undoubtedly impressive, it is not, based on the available evidence and in our opinion, a share to invest in for the retirement plan. There are plenty of opportunities elsewhere to obtain a significantly higher return for less ‘risk’.

However, with all of that acknowledged, there are some interesting insights coming from the above graphic. 

Over the period 2009-20, Manchester United generated £2.28bn in commercial revenues vs  Arsenal’s £1.02bn. The gap between Manchester United’s and Arsenal’s commercial revenue over the 2009-20 time period amounts to £1.26bn. This is £240k larger than Arsenal’s overall commercial revenue of £1.02bn for the same period. A staggering result.

Indeed, when the commercial performance of both clubs are directly compared as a percentage of overall revenue, the strategic element in Manchester United’s revenue evolution from 2009 is absolutely clear vs the haphazard and listless approach seemingly adopted by Arsenal over the same period, as illustrated below;

For comparison, over the period 2009-20, Manchester United’s commercial income grew at 14% per annum compound against Arsenal’s rate of 10.4% per annum.

In 2018-19, the last reported year when gate receipts remained unaffected by the pandemic, Arsenal reported a matchday income total of £96.24m.  In 2019-20, the gap between Manchester United’s and Arsenal’s commercial income totalled £136.8m. Take a moment for that to sink in. The gap in commercial performance between the two clubs is bigger than Arsenal’s matchday revenue.

Despite revenue growth that many companies can only dream of, Manchester United have struggled to translate that revenue into economic returns or surpluses. However, there is no denying that the club’s growth in commercial revenue performance is impressive and enables the club to compete for talent that is probably beyond the reach of Arsenal.

With this in mind, we have long believed and stated that the most important executive appointment within Arsenal FC after the first team manager is the marketing/commercial director and the latest data has not changed our view. 

It is evident that the commercial potential of the club has not been fully exploited and the continuing failure in this regard is already impeding activity in the transfer market and progress on the pitch. And with imminent change in the structural make-up of football at the highest levels, Arsenal will fall further behind unless it addresses this performance deficit.


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