Arsenal are set to break their £173 million club record, thanks in part to their latest high-profile commercial deal. The Gunners have lagged behind the so-called Big Six in terms of commercial income in recent years, with their revenue from sponsorship and merchandise approximately half of Manchester City’s total.
However, the Gunners’ brand is now valued at £840 million, the fourth-highest in the Premier League and seventh in world football.
Arsenal face the challenge of monetising their brand and overseas following in a crowded marketplace. One area where they have seen significant success is merchandise. Arsenal’s £60 million-a-year partnership with Adidas has yielded excellent results in terms of shirt and sportswear sales.
The North London club’s latest commercial initiative is set to propel them past their previous high. According to an official UEFA report, Arsenal earned £75 million from shirt sales and merchandise in the 2022-23 season, the most recent for which financial data is available. This campaign was their fourth with German sportswear giant Adidas, which will remain Arsenal’s kit manufacturer until at least 2030.
In addition to releasing three kits per year, Adidas has collaborated with Arsenal on special merchandise ranges, such as the Stella McCartney-branded range and the one-off all-white No More Red charity kit.
On Thursday, as part of the launch of their new away kit, Arsenal unveiled a new range designed by Labrum London, celebrating Arsenal’s relationship with its African supporters and featuring “traditional pan-African colours.”
Arsenal have a large African diaspora supporting them in North London and remain hugely popular on the continent. A 2015 BBC study found that the Gunners are the most popular Premier League club in North and East Africa. Capitalising on these links, in tandem with the club’s wider commercial strategy, means Arsenal are on course to smash their £173 million commercial income record.
Part of Arsenal’s commercial strategy is their shirt sleeve partnership with Visit Rwanda, engineered by Arsenal-supporting Rwanda president Paul Kagame. The business and sporting sides of football are inextricably linked, and Arsenal’s commercial income directly affects how much Mikel Arteta and Edu can spend in the transfer market.
The Premier League’s Profit and Sustainability Rules limit clubs to losing no more than £105 million over a rolling three-year period, with allowable deductions for things like youth and infrastructure spending.
Analysis from finance expert Swiss Ramble has found that Arsenal have roughly £94 million worth of PSR headroom for the three years up to 2023-24. This means the Gunners could have lost an extra £94 million over that period and still remain compliant with PSR.
Climbing commercial income and the return of lucrative Champions League football to the Emirates mean Arsenal are not in danger of a breach anytime soon. However, Stan Kroenke and his son, Josh, who has assumed more day-to-day responsibilities at the club in recent years, will be keen to ensure that their baseline metrics hold firm to ensure maximum flexibility.
