The Emirates Move

[StLGooner]

Dein wanted us to share a stadium with Spurs, for that alone he needed to go. Blasphemy!!

[Wenger's Coat]

At the time the biggest money in football was through revenue and corporate at stadiums

Once we completed the move it became TV money

Spurs managed to remain competitive because TV money has reached an all time high, plus they went two years without buying anyone

This.

Here is an extract from our 2005 accounts, the last year before the Emirates opened:

- gate receipts: £37m
- tv revenue: £49m

So, the gate receipts to tv revenue ratio was 76%.

Now compare with our 2017 figures (the last PLC accounts):

- gate receipts: £100m
- tv revenue: £199m

The gate/tv ratio is down to 50%. And this is despite us not winning the league for a while.

What this shows is that the relative importance of gate receipts declined and the relative importance of tv revenue increased over time.

I can’t find the figures for the mid/late 1990s (when the decision on the new stadium was being made) but I’m confident that back in the 1990s gate receipts were even more important relative to TV revenue than they were in 2005.

So when the Emirates decision was being made in mid/late 1990s, the club thought that boosting seating capacity would deliver a huge boost to overall revenues. So it was worth spending a lot of money on the new stadium.

However, what in fact happened over time is that tv revenues grew so quickly that gate receipts became a much smaller contributor to overall revenues. The game changed from local (bums on stadium seats) to global (bums on living room couches). As a result, all that money spent on the stadium had a proportionately smaller effect on the bottom line - effectively the return on our investment ended up being much lower than we anticipated.

In hindsight, a better investment might have been to spend all that money on players and wages, securing more silverware and, therefore, more tv revenue and merchandising income.

Flawed implementation of financial fair play also did not help.

However, all this is twenty-twenty vision. At the time I doubt anyone could have foreseen this.

In sum, the Emirates was a well-intentioned project which got overtaken and to some extent rendered irrelevant by life. Not sure blame can really be fairly laid at the board’s door for that one. For many other things, yes, but not for the Emirates I think.

[StLGooner]

At the time the biggest money in football was through revenue and corporate at stadiums

Once we completed the move it became TV money

Spurs managed to remain competitive because TV money has reached an all time high, plus they went two years without buying anyone

This.

Here is an extract from our 2005 accounts, the last year before the Emirates opened:

- gate receipts: £37m
- tv revenue: £49m

So, the gate receipts to tv revenue ratio was 76%.

Now compare with our 2017 figures (the last PLC accounts):

- gate receipts: £100m
- tv revenue: £199m

The gate/tv ratio is down to 50%. And this is despite us not winning the league for a while.

What this shows is that the relative importance of gate receipts declined and the relative importance of tv revenue increased over time.

I can’t find the figures for the mid/late 1990s (when the decision on the new stadium was being made) but I’m confident that back in the 1990s gate receipts were even more important relative to TV revenue than they were in 2005.

So when the Emirates decision was being made in mid/late 1990s, the club thought that boosting seating capacity would deliver a huge boost to overall revenues. So it was worth spending a lot of money on the new stadium.

However, what in fact happened over time is that tv revenues grew so quickly that gate receipts became a much smaller contributor to overall revenues. The game changed from local (bums on stadium seats) to global (bums on living room couches). As a result, all that money spent on the stadium had a proportionately smaller effect on the bottom line - effectively the return on our investment ended up being much lower than we anticipated.

In hindsight, a better investment might have been to spend all that money on players and wages, securing more silverware and, therefore, more tv revenue and merchandising income.

Flawed implementation of financial fair play also did not help.

However, all this is twenty-twenty vision. At the time I doubt anyone could have foreseen this.

In sum, the Emirates was a well-intentioned project which got overtaken and to some extent rendered irrelevant by life. Not sure blame can really be fairly laid at the board’s door for that one. For many other things, yes, but not for the Emirates I think.

Good post.

It definitely didn't work out how we wanted. Like you said, hard to foresee all the changes. I still think for the long term the move was needed in our situation at least. It may have hindered us at the time though.

Bottom line is, you don't see clubs with 30k stadiums that don't have sugar daddies or a global brand already established racking up the trophies.

[Marsbar100]

Where we went wrong is we didn't speculate to accumulate, We were far to passive in the transfer market from 06-13.

[Phil71]

In the first season at the Emirates the club earned more match day revenue from the corporate hospitality area than the average entire earnings at Highbury.

It was a sad day when we left. I have some great memories of the old place. Spent some of the best times of my life there. But we had to move.

It coincided with the oil money and the dirty Russian money coming into the PL. That contributed to our demise as much as anything. When we were doing it by the book they were playing with Monopoly money.

[Wenger's Coat]

At the time the biggest money in football was through revenue and corporate at stadiums

Once we completed the move it became TV money

Spurs managed to remain competitive because TV money has reached an all time high, plus they went two years without buying anyone

This.

Here is an extract from our 2005 accounts, the last year before the Emirates opened:

- gate receipts: £37m
- tv revenue: £49m

So, the gate receipts to tv revenue ratio was 76%.

Now compare with our 2017 figures (the last PLC accounts):

- gate receipts: £100m
- tv revenue: £199m

The gate/tv ratio is down to 50%. And this is despite us not winning the league for a while.

What this shows is that the relative importance of gate receipts declined and the relative importance of tv revenue increased over time.

I can’t find the figures for the mid/late 1990s (when the decision on the new stadium was being made) but I’m confident that back in the 1990s gate receipts were even more important relative to TV revenue than they were in 2005.

So when the Emirates decision was being made in mid/late 1990s, the club thought that boosting seating capacity would deliver a huge boost to overall revenues. So it was worth spending a lot of money on the new stadium.

However, what in fact happened over time is that tv revenues grew so quickly that gate receipts became a much smaller contributor to overall revenues. The game changed from local (bums on stadium seats) to global (bums on living room couches). As a result, all that money spent on the stadium had a proportionately smaller effect on the bottom line - effectively the return on our investment ended up being much lower than we anticipated.

In hindsight, a better investment might have been to spend all that money on players and wages, securing more silverware and, therefore, more tv revenue and merchandising income.

Flawed implementation of financial fair play also did not help.

However, all this is twenty-twenty vision. At the time I doubt anyone could have foreseen this.

In sum, the Emirates was a well-intentioned project which got overtaken and to some extent rendered irrelevant by life. Not sure blame can really be fairly laid at the board’s door for that one. For many other things, yes, but not for the Emirates I think.

Good post.

It definitely didn't work out how we wanted. Like you said, hard to foresee all the changes. I still think for the long term the move was needed in our situation at least. It may have hindered us at the time though.

Bottom line is, you don't see clubs with 30k stadiums that don't have sugar daddies or a global brand already established racking up the trophies.

Agree with you as well. I don’t regret that the Emirates was built. It was needed for our overall stature and some day (hopefully in all our lifetimes here) it will see major trophies again. It’s just that, as a financial investment, it ended up underperforming, which is unfortunate.

As for your wider observation, I think that part of the reason why you don’t see 30k stadium clubs at the elite table is the weight of history.

Though TV revenue is king now, this is only a relatively recent development - last 15-20 years or so. For decades upon decades before that gate receipts was king.

Your historic 60k and up clubs have had decades to build a financial base and a silverware cabinet (and therefore global merchandising revenues) on the back of gate receipts when they really mattered most. This in turn gave them a head start in the TV era (not to mention spared them the cost of stadium expansions).

We (and other lower capacity clubs) had to make do with a smaller stadium in the era of the gate receipt and only boosted our seating capacity when it no longer packed as much of a punch.

Essentially, we were late to the party. By the time we caught up with what we thought the game was, the rules of the game changed.

[StLGooner]

At the time the biggest money in football was through revenue and corporate at stadiums

Once we completed the move it became TV money

Spurs managed to remain competitive because TV money has reached an all time high, plus they went two years without buying anyone

This.

Here is an extract from our 2005 accounts, the last year before the Emirates opened:

- gate receipts: £37m
- tv revenue: £49m

So, the gate receipts to tv revenue ratio was 76%.

Now compare with our 2017 figures (the last PLC accounts):

- gate receipts: £100m
- tv revenue: £199m

The gate/tv ratio is down to 50%. And this is despite us not winning the league for a while.

What this shows is that the relative importance of gate receipts declined and the relative importance of tv revenue increased over time.

I can’t find the figures for the mid/late 1990s (when the decision on the new stadium was being made) but I’m confident that back in the 1990s gate receipts were even more important relative to TV revenue than they were in 2005.

So when the Emirates decision was being made in mid/late 1990s, the club thought that boosting seating capacity would deliver a huge boost to overall revenues. So it was worth spending a lot of money on the new stadium.

However, what in fact happened over time is that tv revenues grew so quickly that gate receipts became a much smaller contributor to overall revenues. The game changed from local (bums on stadium seats) to global (bums on living room couches). As a result, all that money spent on the stadium had a proportionately smaller effect on the bottom line - effectively the return on our investment ended up being much lower than we anticipated.

In hindsight, a better investment might have been to spend all that money on players and wages, securing more silverware and, therefore, more tv revenue and merchandising income.

Flawed implementation of financial fair play also did not help.

However, all this is twenty-twenty vision. At the time I doubt anyone could have foreseen this.

In sum, the Emirates was a well-intentioned project which got overtaken and to some extent rendered irrelevant by life. Not sure blame can really be fairly laid at the board’s door for that one. For many other things, yes, but not for the Emirates I think.

Good post.

It definitely didn't work out how we wanted. Like you said, hard to foresee all the changes. I still think for the long term the move was needed in our situation at least. It may have hindered us at the time though.

Bottom line is, you don't see clubs with 30k stadiums that don't have sugar daddies or a global brand already established racking up the trophies.

Agree with you as well. I don’t regret that the Emirates was built. It was needed for our overall stature and some day (hopefully in all our lifetimes here) it will see major trophies again. It’s just that, as a financial investment, it ended up underperforming, which is unfortunate.

As for your wider observation, I think that part of the reason why you don’t see 30k stadium clubs at the elite table is the weight of history.

Though TV revenue is king now, this is only a relatively recent development - last 15-20 years or so. For decades upon decades before that gate receipts was king.

Your historic 60k and up clubs have had decades to build a financial base and a silverware cabinet (and therefore global merchandising revenues) on the back of gate receipts when they really mattered most. This in turn gave them a head start in the TV era (not to mention spared them the cost of stadium expansions).

We (and other lower capacity clubs) had to make do with a smaller stadium in the era of the gate receipt and only boosted our seating capacity when it no longer packed as much of a punch.

Essentially, we were late to the party. By the time we caught up with what we thought the game was, the rules of the game changed.

Right! For the overall future of the club, I think it was the right move. Although, I didn't want to move and I never got to see Highbury, so that hurt me.

Ozim has a good case for it being a burden at the time, but for future success it was needed imo. In order to be successful, you're still going to have to have the right people in the right places making the right decisions and buying the right players at the right time. Whether you have a sugar daddy to throw money around, or whether you have to have more of a self sustaining model, either way it takes the whole village to be successful so to speak. Money just makes it easier. So even if we didn't move, we still would have had the same people making bad decisions. So no guarantee of any further success. Money was a worry, but it never really was a huge issue. We tried to spend and did, just on the wrong players. Staying at Highbury doesn't mean we all of the sudden make better decisions. It probably just means we make the same decisions, but with just less money to play with.

[Arsenal Tone]

It forced us to sell off the invincibles before we needed to. That was the problem. At Highbury we could have let them gradually phase out, even if that meant tgem retiring at the club and not making any money from selling them. Instead we seemed to sell off players who still had a year or two at the top and we never really replaced them with quality.

[LMAO]

It was the right decision at the wrong time.

Having hindsight, it would've been better to wait for the 2008 global financial crisis when the Islington Council may have changed its mind and we could purchase the apartments around Highbury to expand the stadium, or wait until 2013 when PL TV money was exploding to build a new stadium.

[Sims]

Yep hindsight is a great thing. We also had numerous people make terrible decisions

David Dein introducing Kroenke to the board
Lady Nina Bracewell-Smith and co selling their shares to Kroenke
Hiring Ivan Gazidis and having him as Wenger’s boss (when Arsene was someone who f***ing interviewed him)

[Marsbar100]

Yup we was pretty unlucky with owners, United have been to but their revenue is so silly it can counter act it.

[jayramfootball]

In hindsight we could have weighted but we never knew how big the the TV deals would get.

The fans were lied to.
We were told it was because we needed it to compete withe biggest clubs in the world.
In the end we did the opposite.
Whether the TV money came along or not would have made no difference.
The big mistake was believing that Financia Fair PLay would be properly enforced - we banked on it when it was pretty obvious that corruption was so rife in the game that it was nothing more than football governing bodies using the threat of punishment/ giving themselves more tool for control to solicit more back handers - much like VAR.

That wasn't a lie though. It's true. Without a big sugar daddy, that is the only way we were going to have a chance. That's all that was promised, a chance to keep competing with the money giants.

So how did Spurs overtake us then?
Liverpool seem to doing ok without a new stadium too.
The argument we needed the money doesn't stack up. We didn't keep pace, we went backwards. How anyone can suggest we'd be worse off (or it was the only option!), when the evidence is there to say that a new stadium was NOT an imperative at that time, is baffling.

You're missing the whole point. You agree that you need money in football to succeed right? Ok, so if we don't have a sugar daddy that is going to fork over loads of cash to get in the best players. Then what are your other options? Well, you'll need to generate revenue and as much as possible on your own to be able to compete right? So that is what we are trying to do. Since we don't have a sugar daddy, then we have to generate as much as our own money as possible. Hence getting more seats for more fans to buy, which equals more revenue. It's totally besides the point that we mismanaged so many things and are in the position we are in now. That isn't what the point is. The point is, money rules football and without it, you ain't going to win.

I feel like this is common knowledge and not sure why we're even discussing this.

No, I think you missed the point.
i am rejecting the notion that we HAD to build the Emirates to stay competitive. That was what was claimed. Reality proved that to be incorrect.
Whether we knew it was a bad decision at the time or not is irrelevant, it was still a bad decision and no one can legitimately say it was required in order for us to compete.
We simply did not need to build the Emirates at that time and it turned out to be a mistake to do so.

[StLGooner]

In hindsight we could have weighted but we never knew how big the the TV deals would get.

The fans were lied to.
We were told it was because we needed it to compete withe biggest clubs in the world.
In the end we did the opposite.
Whether the TV money came along or not would have made no difference.
The big mistake was believing that Financia Fair PLay would be properly enforced - we banked on it when it was pretty obvious that corruption was so rife in the game that it was nothing more than football governing bodies using the threat of punishment/ giving themselves more tool for control to solicit more back handers - much like VAR.

That wasn't a lie though. It's true. Without a big sugar daddy, that is the only way we were going to have a chance. That's all that was promised, a chance to keep competing with the money giants.

So how did Spurs overtake us then?
Liverpool seem to doing ok without a new stadium too.
The argument we needed the money doesn't stack up. We didn't keep pace, we went backwards. How anyone can suggest we'd be worse off (or it was the only option!), when the evidence is there to say that a new stadium was NOT an imperative at that time, is baffling.

You're missing the whole point. You agree that you need money in football to succeed right? Ok, so if we don't have a sugar daddy that is going to fork over loads of cash to get in the best players. Then what are your other options? Well, you'll need to generate revenue and as much as possible on your own to be able to compete right? So that is what we are trying to do. Since we don't have a sugar daddy, then we have to generate as much as our own money as possible. Hence getting more seats for more fans to buy, which equals more revenue. It's totally besides the point that we mismanaged so many things and are in the position we are in now. That isn't what the point is. The point is, money rules football and without it, you ain't going to win.

I feel like this is common knowledge and not sure why we're even discussing this.

No, I think you missed the point.
i am rejecting the notion that we HAD to build the Emirates to stay competitive. That was what was claimed. Reality proved that to be incorrect.
Whether we knew it was a bad decision at the time or not is irrelevant, it was still a bad decision and no one can legitimately say it was required in order for us to compete.
We simply did not need to build the Emirates at that time and it turned out to be a mistake to do so.

For our overall future yes we did have to move. Having less money is not going to help us right now, nor anytime soon. The move puts us in a better position for the future. We'll just have to agree to disagree.

[Santi]

If we didn’t move and the tv money didn’t spiral out of control we would’ve struggled to keep up.

Ended up being the worst timing of all clubs imo, chelsea and city got oil money while all other clubs caught up with tv money after we’d spent years being sustainable by selling our stars. All combined to make it a negative move and compounded by us falling down and down the table.

[Ach]

It's not worked out how we wanted it to. Newcastle have a massive stadium. They are shit. West Ham likewise

Chelsea and Liverpool have smallish stadiums and look at them.

Wenger and the board were intent on going one way and being self sufficient which meant we had to move to a bigger stadium to try and compete. Staying at Highbury, we'd only e able to compete if we were taken over by a billionaire willing to put money in for players like the Russian or the Arab and not the yank we got.

Football moves on and we always seem to be a step or 2 behind. When clubs were spending 30m on players, we stuck to 10m. When we decided to spend 30m on players, other clubs were already spending 60m. Now we are doing that, other clubs are spending 80m+

That shows on the pitch. We're stuck in a rut which started a decade ago.

I asked the question then and it's relevant now. When aguero moved to city, why weren't we in for him? It was 30m. We were top 4 for years. I was told by other fans that we couldn't afford him. If spending 30m on one player was such a hassle then what's the point of the stadium?

Spot on and totally agree about Aguero, I really wanted us to sign him and we were nowhere to be seen, what a bargain he turned out. That was our problem though, we wouldn't pay the going rate for quality and instead went cheap in the hope wed find a gem, in the end we probably spent more bringing in a few players who we never good enough when we could have bought someone top class and even got our money back and more.

Bad business decisions along with bad football decisions. Not a good combo.

We stood still for so long and others passed us by and instead of responding and reacting, we decline further.

I can understand moving to a bigger stadium but ineptness has cost us