Arsenal to make 55 redundancies due to impact of coronavirus on club's finances

Sam Dean
·3-min read
People play football outside the stadium because they are not allowed in - REUTERS
People play football outside the stadium because they are not allowed in - REUTERS

Arsenal still plan to invest in their first-team squad this summer despite announcing that they are proposing 55 redundancies as a result of the coronavirus pandemic.

The club said their main sources of income have reduced “significantly” because of the coronavirus crisis, adding that the redundancies will ensure they can adapt to the post-Covid world.

Head of football Raul Sanllehi and managing director Vinai Venkatesham said they have tried to protect the jobs and salaries of their staff “for as long as we possibly can”.

The majority of the redundancies will be in the commercial and administrative departments, although some football staff will also be affected.

Arsenal have maintained their commitment to investing in the team in the current transfer window, despite their financial struggles, because returning to the Champions League is crucial for their long-term financial prospects. There is an acceptance within the club that the team must improve if they are to become financially secure.

Like all clubs, Arsenal have been severely impacted by the loss of matchday income without supporters in the grounds. The global economic environment has had an impact on their commercial partners, too, and there is uncertainty over the future value of broadcast deals.

Arsenal’s executive team, coaching staff and the majority of their first-team players had already agreed to take voluntary pay cuts earlier this year. Arsenal’s situation is made more difficult by their ongoing failure to return to the Champions League and their hefty first-team wage bill.

“It is now clear that we will be facing more significant and longer-lasting reductions in our revenue than we all hoped,” said Sanllehi and Venkatesham.

“Current indications are that we will not have fans back at Emirates Stadium for the start of next season and fans will only be able to return in limited numbers after that. The global economic projections are also very negative.

“This will impact the disposable income of our fans, the money corporate clients have to spend on hospitality and sponsorship, and the ability for broadcasters to invest in TV rights.

“We all hope there will be no ‘second wave’ but we also need to accept that is one of the many uncertainties ahead of us and plan accordingly.”

Arsenal said they have received “significant” financial support from owners Kroenke Sports & Entertainment, who have refinanced the club’s stadium debt in order to allow them to be more flexible with their money. The process means the club is no longer required to hold at least £36m in reserve. Stan Kroenke, the club’s owner, is estimated by Forbes to have a net worth of $8.3 billion.

The financial situation would have been even more challenging for Arsenal if they had failed to beat Chelsea in the FA Cup final last weekend. The victory guaranteed a place in next season’s Europa League, which is a valuable source of funds, although not as lucrative as the Champions League.

“Over recent years we have consistently invested in additional staff to take the club forward but with the expected reduction of income in mind, it is now clear that we must reduce our costs further to ensure we are operating in a sustainable and responsible way, and to enable us to continue to invest in the team,” said Sanllehi and Venkatesham.

“Our aim has been to protect the jobs and base salaries of our people for as long as we possibly can. Unfortunately, we have now come to the point where we are proposing 55 redundancies.”