Dissertation Report - Handling A Football Club-Finance and Administration

MANAGING ARSENAL FOOTBALL CLUB

PROJECT REPORT ON-
THE SUCCESSFUL MANAGEMENT OF ARSENAL F.C. IN TERMS OF ITS FINANCE AND MATCHDAY EXPERIENCE
PREPARED BY-
HUZEFA M. SITABKHAN
UNDER THE GUIDANCE OF-
NISHANT MEHTA
SUBMITTED TO THE UNIVERSITY OF MUMBAI IN PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE AWARD OF BACHELOR OF MANAGEMENT STUDIES
ACADEMIC YEAR 2009-2010
Team Sponsors-
Commercial Partners-
DECLARATION
I MR HUZEFA M. SITABKHAN OF H.R. COLLEGE OF COMMERCE
AND ECONOMICS OF T.Y.B.M.S (SEMESTER V) HEREBY DECLARE THAT

I HAVE COMPLETED THIS PROJECT ON MANAGING ARSENAL F.C IN THE ACADEMIC YEAR 2009-2010. THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST OF MY KNOWLEDGE.
DATE: PLACE:
___________________________ (SIGNATURE OF THE STUDENT)
Team Sponsors-
CERTIFICATE
I MR NISHANT MEHTA CERTIFY THAT MR HUZEFA M. SITABKHAN OF H.R. COLLEGE OF COMMERCE AND ECONOMICS OF T.Y.B.M.S (SEMESTER V) HAS COMPLETED THIS PROJECT ON MANAGING
ARSENAL F.C IN THE ACADEMIC YEAR 2009-2010. THE INFORMATION

SUBMITTED IS TRUE AND ORIGINAL TO THE BEST OF MY KNOWLEDGE
_______________________ SIGNATURE OF PRINCIPLE GUIDE (MR NISHANT MEHTA)
Team Sponsors-
ACKNOWLEDGEMENT
IT IS A MATTER OF GREAT PLEASURE AND PRIVELAGE TO PRESENT THIS PROJECT REPORT ON MANAGING ARSENAL FOOTBALL CLUB. THE COMPILATION OF THIS PROJECT IS A MILESTONE IN THE LIFE OF A MANAGEMENT STUDENT AND ITS EXECUTION IS IMPOSSIBLE WITHOUT THE COOPERATION OFTHE PROJECT GUIDE. I WISH TO RECORD A DEEP SENSE OF RESPECT AND GRATITUDE TO MY PROJECT GUIDE MR. NISHANT MEHTA FOR HIS ENCOURAGEMENT THROUGH THE COURSE OF MY WORK. IT IS DUE TO THE ENDURING EFFORTS AND GUIDANCE OF MY GUIDE THAT ULTIMATELY MADE IT A SUCCESS. I WOULD ALSO TAKE THIS OPPURTUNITY TO EXPRESS MY DEEP REGARDS AND GRATITUDE TO THE PRINCIPLE- DR. MRS. INDU SHAHANI AND WOULD LIKE TO THANK THE HEAD OF THE B.M.S DEPARTMENT PROF. GEHNA HINGORANI WHO GAVE US GUIDANCE TO TAKE UP AND PURSUE THIS PROJECT. I CANNOT JUST CONDONE THE VALUABLE OPPURTUNITY GIVEN TO ME BY THE UNIVERSITY OF MUMBAI FOR COMPILING AND SUBMITTING THIS PROJECT, WHICH I FEEL IS AN OPPURTUNITY TO EXPRESS MY VIEWS ABOUT MANAGING ARSENAL FOOTBALL CLUB. I WOULD ALSO LIKE TO ACKNOWLEDGE VARIOUS AUTHORS FOR MAKING AVAILABLE VALUABLE INFORMATION LIBERALLY. IT IS MY PROUD PRIVILEGE TO EXPRESS MY DEEP SENSE OF APPRECIATION AND GRATITUDE TO MY PARENTS AND FRIENDS FOR THEIR SUPPORT AND COOPERATION IN THE COURSE OF THE PROJECT EITHER DIRECTLY OR INDIRECTLY INVOLVED IN TIME WITH THEIR VALUABLE CONTRIBUTION.
Team Sponsors-
ABSTRACT
In recent times fans relate a successful football club to that which is successful on the pitch, win trophies and goes for glory. Although in some rare cases this circumstance may hold true, it is a known fact these days that a club can be successful onl by carefully y managing its finances and administration. Success off the pitch is more vital than success on it because only then can a football club run its proceedings in a smooth manner For instance Real Madrid one of the most successful clubs in Spain is nearly 500 million in debt due to excess spending on transfers and salaries of its star studded team. Manchester United the single most successful club in England is facing de worth an bts estimated 1.086 billion. So are current Barcelona, Chelsea (who reportedly make losses of about 40-50 million every financial year and the only way they are able to withstand it is due to a rich owner Roman Abrahimovic who has a high net worth) and other top clubs from various European countries. Having such high amounts of debts especially during such recessionary times can prove lethal in the clubs downfall unless the club is owned by a billionaire (like Manchester City, Chelsea etc.). Even banks refuse to fund such clubs that are financially unstable. An evident example of such a club is Portsmouth, who due their large amounts of debts last season almost faced rustication from the Barclays Premier League and in the end were given a 20 points deduction which eventually lead to their relegation from the premier league But now i shall speak about what i have covered as a topic. A top club Arsenal, which has been managed so beautifully that even after purchasing a new stadium in recentyears, (taken on loan) The EMIRATES Stadium the club still manages to churn out profits. Although the club has not managed to win a trophy in 4 seasons of the premier league its fan base keeps on increasing due to the clubs style of playing on the pitchand due to the clubs management of the pitch. In this project I have covered 2 aspects of the clubs management that ha led to its success of the pitch:1) Administration on Match day (includes how well it manages/treats its fans on the day of the match such that more and more supporters of the club living in and around the London are buying entire season tickets.) 2) Management of the clubs Finances (includes how the club follows a strict wage structure, spends less on buying established players and diverts th funds into ose
Team Sponsors-
MANAGING ARSENAL FOOTBALL CLUB developing home-grown young talents, gives value for money to its fans for their season tickets.)
My aim is to convince my readers by the end of my project with the help of statistical data that success on the pitch does not always guarantee success of the pitch.
Team Sponsors-
TABLE OF CONTENT
SERIAL MAIN HEADING NO. 1) INTRODUCTION
SUB HEADING
PAGE NO.
The hypothesis and a brief introduction to the sport
10-11
a)
What is Football as a profitable business
11-15
b)
The huge amounts of money that goes into making this sport a success, players who are paid exorbitant amounts as salaries per week
16-17
2)
MAIN BODY
Concentrating on Arsenal Football Club(A.F.C.)
17
a) b)
History of Arsenal Football Club Current Successes of the Club(last decade) and information about the board of directors and other personnel Research methodology
17-19 19-24
3)
Arsenal football club improves the Match day experience for 60,000 fans with integrated it management. (Administration)
25-38
4)
Managing of Finances and administration at Arsenal Football
38
Team Sponsors-
MANAGING ARSENAL FOOTBALL CLUB Club a) b) Structure of finance at the Club Main sources of finance(INCOMES) -Transfer income -Participation income from various competitions like the Barclays Premier league, UEFA Champions League, F.A. Cup -Subscription fees from Arsenal T.V. Online -Merchandise Income -T.V. rights -Shirt sponsor/Stadium Sponsorship(EMIRATES) income c) Main sources of EXPENSES -Players and Manager/coaches salaries -Repayment of loan for the Emirates Stadium A final sum up of Arsenals finances for the last year as compared to other top clubs d) 5) 6) 7) CONCLUSION BIBLIOGRAPHY ANNEXURES Testing the Hypothesis 52 52 53 54-62 46-51 38-41 41-46
Team Sponsors-
10
INTRODUCTION
The hypothesis for this project is
Success on the pitch (by way of winning trophies and competition for a s) club doesnt always guarantee the Success off-the pitch (in terms of financial solvency, excellent management and financial success in terms of profits every year)
A BRIEF INTRODUCTION TO FOOTBALL AS A SPORT

Association football, more commonly known as football or soccer, is a team sport played between two teams of eleven players using a spherical ball. It is the most popular sport in the world. The game is played on a rectangular grass or artificial turf field, with a goal in the centre of each of the short ends. The object of the game is to score by driving the ball into the opposing goal. In general play, the goalkeepers are the only players allowed to use their hands or arms to propel the ball; the rest of the team usually use their feet to kick the ball into position, occasionally using their torso or head to intercept a ball in midair. The team that scores the most goals by the end of the match wins. If the score is tied at the end of the game, either a draw is declared or the game goes into extra time and/or a penalty shootout, depending on the format of the competition.
Map showing the popularity of football around the world. The various shades of green and red indicate the number of players per 1,000 inhabitants.
Team Sponsors-
11
GOVERNING BODIES
The recognised international governing body of football (and associated games, such asfutsal and beach soccer) is the Fdration Internationale de Football Association (FIFA). The FIFA headquarters are located in Zrich. Six regional confederations are associated with FIFA; these are:
y y y
Asia: Asian Football Confederation (AFC) Africa: Confederation of African Football (CAF) Central/North America & Caribbean: Confederation of North, Central American and Caribbean Association Football (CONCACAF) Europe: Union of European Football Associations (UEFA) Oceania: Oceania Football Confederation (OFC) South America: Confederacin Sudamericana de Ftbol/Confederao Sul americana de Futebol (South American Football Confederation; CONMEBOL)
y y y
INTRODUCTION
A BRIEF INTRODUCTION TO FOOTBALL AS A BUSINESS AND SUCCESS OF THE SPORT WORLD-WIDE
Article-The Richest Soccer Teams Source- Forbes.com staff, 04.01.05, 3:00 PM ET Soccer is not the most popular sport in the U.S. but it is almost everywhere else -- which means it is worth big bucks. We reckon Manchester United, which tops our latest annual rankings of the most valuable soccer teams, to be worth $1.3 billion, more than the most valuable franchise in the National
Team Sponsors-
12
MANAGING ARSENAL FOOTBALL CLUB Football League, the Washington Redskins ($1.1 billion), and substantially more than baseball's most globally recognized team, the New York Yankees ($832 million). Soccer's global audience, unmatched by any other professional team sport means Europe's top teams--and stars--attract millions of dollars in sponsorship from U.S. multinationals like General Motors (nyse: GM - news - people ), Coca-Cola (nyse: KO - news - people ) and Anheuser-Busch (nyse: BUD - news - people ) (See "Soccer Pitchmen"). Manchester United has a $38 million sponsorship deal with Nike (NYSE: NKE - news people). Man U's former star, David Beckham, now at rival Real Madrid, earns millions of dollars in sponsorship from Gillette (nyse: G - news - people ) and Pepsi (nyse: PEP - news people ) among others. Beckham is the nearest soccer has to a one man brand (See " Brand Beckham"). As he passes the apex of a famous career, he is trying to extend his celebrity beyond his playingdays la Michael Jordan. Manchester United and Real Madrid are at the forefront of turning football teams into global brands earning more money from broadcasting and merchandising than from ticket sales. Both are eying the lucrative emerging Asian market where home -grown teams and stars are not yet sufficient to satisfy the hunger for the sport.
The $40 million transfer fee Real Madrid paid Manchester United to buy Beckham in 2003 could be recouped with just four years sales of replica uniforms, according to some calculations. Beckham has a huge following among Asians, particularly free -spending Japanese teenagers. The "galctico" (megastar) that Real Madrid bought before Beckham, the Portuguese midfielder Luis Figo, is thought to have doubled his new employer's merchandising sales. Expatriate Russian billionaire Roman Abramovich, who bought heavily indebted Chelsea two years ago and who has spent lavishly on building a world -class team, is spending off the pitch too (See "Russian Roulette"). He has lured top coach Jos Mourinho from FC Porto and hired Peter Kenyon, as chief executive--the very man who made Manchester United a merchandising powerhouse. Abramovich will find that betting the house on star players spe disaster if they don't lls deliver. Leeds United fell into bankruptcy after a spending spree on high -wage players failed to deliver European success. The ensuing financial crisis forced Leeds to sell off its best players and the team fell out of the top division of English soccer, which cost it dearly in lost
Team Sponsors-
13
MANAGING ARSENAL FOOTBALL CLUB broadcasting revenue. As an ironic twist of fate, Leeds is now majority owned by Ken Bates, the man who sold Chelsea to Abramovich.
Article-Professional Sports can be a Profitable Business Source- Article Source: http://EzineArticles.com/?expert=Stanley_O Professional Sports Franchise can be a profitable business, if you get involved with the right sport, the right franchise or team, in the the right place at the right timeWinning soccer franchise in Cabo San Lucas Mexico is on the block. Delfines de Los Cabos is one of the youngest teams in Mexicos very competitive professional 2nd Division Premier Promotional league, playing out of beautiful Cabo San Lucas, one of the countries leading tourism destinations and calling the Don Koll Seaside stadium home qualified for the quarter finals losing to the perennial leagua champion Universidad del Futbol that is a full fledged farm team for the Pachuca powerhouse 1st Division club. Sports betting is increasingly becoming an emerging online business. Billions of $$$ are wagered on every match day. Live telecast of matches further intensify the excitement. Bookmakers' statistics revealed that soccer betting is the most popular among sports betting. Soccer is the most watched, most played and the highest grossing sport on the planet.
Why Soccer Is The King Of All Sports

Soccer is the King of all sports because it is a simple game so easily understood. It is No. 1 because it is a sport that can stir up so much passion. Each game is loaded with suspense... fantastic or reckless finishes, players pushing their human bodies to the limit or playing like zombies. This cocktail of emotions can be experienced in every match - the sickening feeling in the stomach, the anger, the joy, the elation. Its pure entertainment, and it makes the adrenaline flows faster and more intense.
Team Sponsors-
14
MANAGING ARSENAL FOOTBALL CLUB At its best soccer is considered magic, that is why names like Maradona and Pele resonate across the world. Soccer carries the largest fan base in the world of sports. More and more games are being televised live which means more games are offered for live betting than in any other sports niche. The Internet and live telecasting of soccer matches have made soccer live betting immensely popular. (*Live betting is also known as in-running betting, in-play betting, in-game betting and running ball). There is a wide variety of live bets available for punting such as Asian Handicap betting, full time score, half time score, full time over/under, half time over/under, number of corners full time, number of corners half time, etc.
The Odds Tell A Story

Many savvy punters now recognize the main difference between live bets and normal bets. Before the introduction of live betting, punters used past data and analysis to determine their bets. But with live bets, punters can now know how the match unfolds as the odds tell a story. The movement of the odds is an indication of the performance of the teams play at that ing time. Bookmakers adjust the odds by minutes or even seconds according to the level of play of the teams. So the odds movements tell the "scenario" from the bookmakers' point of view which cannot be far off. From the odds changes, the punter must be able to identify the odds indicators on the exact time to bet, and also the time to exit the bet, that is, to cut loss when necessary to limit the financial damage. The ability to 'decode the odds and read the game' is the recipe for live bettingsuccess.
Profitable Live Bets On Every Match Day
Team Sponsors-
15
MANAGING ARSENAL FOOTBALL CLUB In every match, there are numerous punting opportunities. There are profitable live bets to be made in the first 20 minutes of play, during the course of the game, and the last 10 minutes of the match. You do not need complex technical analysis to find them and profit from them. The key lies in the ability to identify them and profit from these opportunities. In card games, if you want to win, you have to win the game. But the beauty of soccer live betting is you can still WIN if you have betted on the losing team. In live betting, the odds indicators are profit opportunities. But the punter must know how to spot them to take profitable actions. It's all about timing.
Have A Slice Of The Lucrative Soccer Live Betting Pie

Soccer live betting is absolutely insane right now! There's never been a better time for punters to get in on the live betting bandwagon and have a slice of the lucrative soccer live betting pie. Think about how many games are being played onevery match day during the soccer season. That's plenty of games begging for your action. If you have never engaged in soccer live betting experience, you really don't know what you have been missing. Stanley O is a Chartered Accountant and soccer has been his passion since young. He has extensive experience in soccer betting. You can "crack" the soccer live betting market and make the "big bucks" once you know how to identify the money making indicators in the odds movement. The #1 complete soccer live betting system available containing 10 winning strategies with STEP-BY-STEP screenshots showing you how to spot and make profitable live bets. Be sure to claim a free copy of the winning "Midweek Strategy" by visiting
Team Sponsors-
16
EXHORBITANT AMOUNTS OF MONEY PAID TO THE PLAYERS

Article- Crazy amounts paid to players? Source- http:/. jeffrimsblogspot.com It pays to be a great footballer Football or soccer has been around for many years. It started as a game for leisure, but somehow it has evolved into an industry, where professional football clubs make money from competing against each other on several levels, by sponsorship and also TV rights. As a team sport, a football team needs eleven players playing during a game. There are too many football players on Earth, for which can be classified from amateurs, semi pros, pros, and the highest level of all, world class players. What set these world class players apart from the rest of the players? If you can run and kick a ball, then you can join a game of football. But do you know that a world class player can get paid up to 100,000 on a weekly basis? That is more than my mother's annual salary working a government nurse here in Malaysia! How can a person lands that amount of money just by running around kicking a football, week in and week out?
TOP TEN HIGHEST PAID FOOTBALLERS
1) Leo Messi (Barcelona, Argentina) 33m/29.5m 2) David Beckham (LA Galaxy, Eng) 30.4m/27.2m 3) Cristiano Ronaldo (Real Madrid, Por) 30m/26.8m 4) Kaka (Real Madrid, Brazil) 18.8m/16.8m 5) Thierry Henry (Barcelona, France) 18m/16m
Team Sponsors-
17
MANAGING ARSENAL FOOTBALL CLUB 6) Ronaldinho (AC Milan, Brazil) 17.2m/15.3m. 7) Carlos Tevez (Manchester City, Argentina) 15.4m/13.7m. 8) Zlatan Ibrahimovic (Barcelona, Sweden) 14.5m/12.9. 9) Frank Lampard (Chelsea, England) 14.2/12.6m. 10)Samuel Etoo (Internazionale, Cameroon) 13.8m/12.3m.
MAIN BODY
CONCENTRATING ON ARSENAL F.C. HISTORY OF THE CLUB (1886)
Arsenal's origins can be traced back to a group of workers in the armament works in South London in 1886. In October that year they clubbed together and each paid a subscription to form the club that was at first called Dial Square after the name of the workshop in which most of them worked. David Danskin was the man who collected the subs, other notable names were Fred Beardsley, the goalkeeper who had previously played for Nottingham Forest, and Jack Humble, later to become secretary and chairman. H umble became the unofficial historian by virtue of being associated with the club in it's early days longer than anyone else. At Christmas that year they decided they needed a new name, and called their club Royal Arsenal. Beardsley's connections also persuaded Nottingham Forest to donate a set of shirts to the new club, and Arsenal have worn red ever since. Their first home games were played on Plumstead Common until a site at Manor Field in Plumstead was found in 1888 and a stadium of sorts built there. Among the early matches was the first recorded against Spurs, on Tottenham Marshes which the old enemy won 2-1, the historic date being 19 November 1887.
Team Sponsors-
18
MANAGING ARSENAL FOOTBALL CLUB The club first entered the FA Cup in 1889, but with limited success. In 1890 they moved to a new ground, the Invicta, just down the road. By 1891 Royal Arsenal had won all the regional trophies available in London, including the foremost trophy, the London Senior Cup in the 90-91 season, beating St Bartholomew's 6-0 at the Oval. Royal Arsenal grew quickly in the 1890s mostly due to the large influx of migrant workers to the armament works because of rearmament at the time in response to the perceived French threat. In 1935-36 Arsenal finished only 6th in the league, but Drake created a record by scoring seven goals in a league match against Aston Villa, and Arsenal again won the FA Cup by beating Sheffield United 1-0 in the final at Wembley. The following year was Alex James' last at the club, and saw the four year run of unbroken success come to an end withonly a 3rd place finish in the league.
The year after that though, 1937-38, brought Arsenal's 5th league title in seven years, though the team was now generally held to be in decline, and only 5th place was achieved the following season, the last before the war. The club was also once again in a precarious financial position because of the cost of building the new East and West stands, which still stand today. After the war a great team rose once again. Booming post-war attendances eased the financial situation and the first season, 1946-47, saw only a 13th place finish in the league, but also the arrival of two more great names, Ronnie Rook and Joe Mercer. The following year, trainer Tom Whittaker took over as manager, and the league title duly arrived at it's rightful home. Only 32 goals were conceded that year, a defensive record unmatched until the double season of 1971. In 1948-49 Arsenal finished 5th in the league and Doug Lishman, one of the great strikers, arrived. The following year the FA Cup was won once again, with the Gunners again coming from 2-0 down in the semi-final to force a 2-2 draw against Chelsea. Freddie Cox scored direct from a corner, to get back to 2-1, and the replay was won 1-0 in extra time. Liverpool were defeated 2-0 in the final.
Team Sponsors-
19
MANAGING ARSENAL FOOTBALL CLUB The year after that, 1950-51, Arsenal could only finish 5th in the league, though things might have been different had Lishman not broken his leg early in the season. In 1951 Arsenal -52 once more were runners-up in both league and FA Cup, being just 3 wins away from the elusive double, before the league championship was once more won in 1953, on goal average from Preston. Alex James died in 1954 and the death of Tom Whittaker in 1956 presaged a decline in the fortunes of the great club until the resurgence of the late sixties
CURRENT SUCCESSES AT THE CLUB (LAST DECADE)

The history of Arsenal Football Club from 1966 to the present day covers the third, fourth, and fifth periods of success in Arsenal's history, including three Doubles, a Cup Double, and success in European football. Following Bertie Mee's appointment in 1966, Arsenal won the Inter-Cities Fairs Cup, their first European trophy, in 1969-70, and their first League and FA Cup double in 1970-71. The Double-winning side, however, was soon broken up and the following decade was characterised by a series of near misses: Arsenal lost three FA Cup finals (1971-72, 1977-78, and 1979-80 and the 1979-80 Cup Winners' Cup final on penalties. The club's only success during this time was an FA Cup win in 1978-79 against Manchester United. After stagnation in the 1980s, the return of former player George Graham as manager in 1986 brought a third period of glory. Arsenal won the League Cup in 1986-87, two League title wins in 1988-89 and 1990-91, the FA Cup and League Cup double in 1992-93 and a second European trophy, the Cup Winners' Cup, in 1993-94. However, Graham's reputation was tarnished when it was revealed that he had taken kickbacks for signing certain players and he was sacked in 1995.
APPOINTMENT OF ARSENE WENGER

Arsenal fifth period of success came with the appointment of Arsne Wenger in 1996. Under him, Arsenal won a second league and cup double in 1997-98 and then a third in 2001-02. In addition, the club were victorious in the 2002-03 and 2004-05 FA Cups, and won the Premier League in 2003-04 without losing a single match. In 2005-06 became the first London club to reach the UEFA Champions League Final, and lost 2-1 against FC Barcelona. During the
Team Sponsors-
20
MANAGING ARSENAL FOOTBALL CLUB following close season, they left their longstanding home of Highbury to the new Emirates Stadium nearby.
NEW STADIUM- THE EMIRATES THE PRIDE OF NORTH LONDON

Arsenal have been highly successful in the 1990s and 2000s, but Highbury's capacity was limited to only 38,500 in the post-Taylor report era; virtually every match was sold out and the club were unable to maximise matchday revenue. With expansion of Highbury ruled impossible, in 1999, Arsenal announced plans to move down the road toAshburton Grove; construction started in December 2002 with the demolition of buildings on the site, and in July 2006, the new Emirates Stadium opened, ready for the start of the 2006-07 season.
Team Sponsors-
21
THE INVINCIBLES SEASON OF 2003-04

Little did they know it at the time, but the defeat to Leeds would be Arsenal's last in the League for over a year. 2003-04 was a record-breaking season for Arsenal, as they won the Premiership unbeaten (26 wins, 12 draws, 0 defeats), finishing a clear 11 points ahead of second-place Chelsea. They became only the second team to do so, the first having been Preston North End in 1888-89, though Preston had only played 22 games in their own unbeaten league season. Their rivals for the title gained revenge in other competitions - Arsenal were defeated in the Champions League quarter-finals and FA Cup semi-finals by Chelsea and Manchester United, respectively, in successive matches. Faced with the potential collapse of their season, Arsenal recovered from being 1-0 and 2-1 behind to Liverpool in their next league match to win 4-2, thanks to a Thierry Henry hat-trick, and went on to win the league with a 2-2 draw away to Tottenham Hotspur, mimicking their success in 1971.
Team Sponsors-
22
MANAGING ARSENAL FOOTBALL CLUB Arsenal were unable to retain the title in 2004-05, finishing second, 12 points behind a record-breaking Chelsea side. However, the Gunners did stretch their unbeaten run to 49 consecutive matches, an English league football record; the rec was equalled with a ord dramatic 5-3 win over Middlesbrough (Arsenal having trailed 3-1 shortly after half-time) and then surpassed with a 3-0 win over Blackburn Rovers in August 2004, before it was ended with a 2-0 away defeat by Manchester United. This defeat arguably upset the team's form and they fell away from title contention before recovering with a late flourish to finish second, sealed with a 7-0 drubbing of Everton. Champions League glory eluded them again, with the club getting knocked out 3 on -2 aggregate by Bayern Munich in the second round. Arsenal did not end the season empty handed; they came away with their third FA Cup in four years, winning 5 on penalties after -4 a 0-0 draw against Manchester United. Weakened by the sale of skipper Patrick Vieira to Juventus in the summer of 2005, Arsenal's 2005-06 season was comparatively disappointing domestically and theclub failed to challenge for any trophies at home. In the league, their poor away form dogged them and despite recording some impressive wins at home (5-0 over Aston Villa, and 7-0 over Middlesbrough), Arsenal spent much of the latter stages of the season in fifth place or lower, and looked set to miss out on the Champions League for the first time since 1997.
However, they won their last three matches of the season, culminating in a 4-2 victory over Wigan Athletic in the last ever match at Highbury; coupled with Tottenham Hotspur's loss at West Ham United the same day, this meant Arsenal pipped Spurs to fourth place and a Champions League spot.
In contrast to their domestic form, Arsenal's form in Europe in 2005 was much stronger; -06 they reached the UEFA Champions League final for the first time in their history, becoming the first London club ever to do so. Arsenal finished top of their group unbeaten, aboveAjax Amsterdam, FC Thun and Sparta Prague against whom Thierry Henry scored two goals on away to become the all time record goalscorer for Arsenal; in the knockout stages they beat
Team Sponsors-
23
MANAGING ARSENAL FOOTBALL CLUB Real Madrid (becoming the first British team to beat Real at the Bernabu), Juventus and then Villarreal to reach the final, setting a competition record of ten matches without conceding a goal in the process.
Team Sponsors-
24
THE BOARD OF DIRECTORS AND OTHER KEY PERSONNEL AT THE CLUB
Team Sponsors-
25
ARSENAL FOOTBALL CLUB IMPROVES THE MATCH DAY EXPERIENCE FOR 60,000 FANS WITH INTEGRATED IT MANAGEMENT.
Challenge
With only 30 match days a year, Arsenal Football Club (FC) has a limited number of opportunities to boost revenue and customer loyalty. It must therefore ensure that every match is a positive experience for the thousand of fans s who attend its Emirates Stadium. This means ensuring that the stadiums 450 television screens, 500 hospitality and retail tills and 100-plus turnstiles are all operating at optimum performance on match day. With these systems all reliant on the clubs back-end infrastructure and network, IT availability and business continuity are of paramount importance to Arsenal.
Solution-Aligning IT to business strategy

The new stadium is a radical departure from Highbury, offering a wide variety ofservices that rely on a range of new IT solutions designed to improve and streamline every aspect of the clubs business. To achieve commercial success we need to put the infrastructure in place to support our ambitions, which includes IT, comments Ford. Clubs need to maximise revenues so that they can invest in the best players, and continue to perform at the highest levels. For IT to facilitate the modernisation and transformation of a football club, it must be aligned to business objectives and integrated with core operational processes. At the heart of the Emirates Stadium is a suite of new hospitality and entertainment systems that control everything from the entrance turnstiles to the video replays in the executive box.
The performance and reliability of these systems is absolutely vital. As Paul Farmer, head of IT at Arsenal FC, explains, The new systems are more complex and more sophisticated than anything we had at Highbury, and we need to manage them proactively and address any performance issues before they become apparent to the customer. We cant afford for a
Team Sponsors-
26
MANAGING ARSENAL FOOTBALL CLUB turnstile to stop working on a Saturday afternoon a couple of hours before kick -off. Optimised service management
To ensure that the clubs core operations were not impacted by techn ology performance problems, Arsenal needed an integrated IT management solution that would provide constant visibility and control of its enterprise systems.
This solution is founded on a range of technologies from CA, including Unicenter Network and Systems Management, Unicenter Service Level Management and Unicenter Management Portal. By combining these with its existing CA software, Arsenal has been able to reduce the complexity of managing its IT infrastructure and in particular the applications that u nderpin core customer services at the stadium.
If theres a problem with an electronic point of sale (EPOS) till on a catering outlet, for example, we know about it before the user does and we can fix it before business continuity is affected, says Farmer. Without CAs solution, I cant think of any other way we could be confident of 500 tills all working perfectly on match day.
As a result, Arsenal is able to manage a much larger IT infrastructure without needing to invest in new IT support personnel. The Emirates stadium boasts more than 500 highly specialised hospitality EPOS devices and 450 entertainment screens double the number used at Highbury all of which can be managed through a single centralised CA management console.
The new management solution also allows Arsenal to measure its IT performance according to key business priorities, which aids investment and resource allocation.
Opportunity
To ensure that its systems meet customer expectations, the club has adopted an integrated approach to Enterprise IT Management (EITM). Founded on CA solutions for Incident & Problem Management, IT & Financial Asset Management, Information Governance, Recovery Management, Change & Configuration Management and Dynamic & Virtual
Team Sponsors-
27
MANAGING ARSENAL FOOTBALL CLUB Systems Management, the club now has a centralised and standardised platform for managing IT. By introducing real-time data replication, automated alerts, regular device polling and remote monitoring, IT efficiency and business continuity have also increased, which means less systems downtime.
Benefits
By ensuring that its stadium systems are fully operational on match day, Arsenal Football Club has: Improved the customer experience Protected competitive advantage Increased profitability These factors are all key to the success of the club both as a business and as a football team, and will help to support the ongoing transformation and growth of Arsenal FC.
Meeting customer expectations

The customer experience is everything in todays global market. Thanks to Web -enabled sales and delivery channels, consumers now have a much wider choice available to them and wont hesitate to switch suppliers if they are unhappy with service or product quality. As a result, companies need to be able to constantly evolve their off erings to provide customers with faster and better services. This innovation process invariably involves implementing new IT systems, which can make a significant difference in competitive advantage and customer satisfaction. Although football clubs enjoy higher customer loyalty rates than other sectors, they still need to compete for fans spending power as well as corporate hospitality business. As a result, the customer experience on match day is vital. Yet with an average of just 30 match days a year, the chance for football clubs to make an impression and boost revenue is much more limited than most businesses.
Team Sponsors-
28
Maximising revenue generation to support sporting achievement

Failure to maximise revenue opportunities on match day can have massive conseq uences for a club. Football is now a multi-million pound business, and clubs need a healthy balance sheet to attract the best players in the game and retain their league status. Londons Arsenal Football Club (FC) has enjoyed success both on and off the pich. In 2007, t the club made a total operatig profit of more than 24 million and in 2006/07 once again finished in the top three of the UKs FA Premier League. To meet the expectations of an ever-growing fan base, the club moved to a new 60,000 capacity stadium at the start of the 2006/07 season. This ultra-modern facility has been specifically designed to enhance the match experience for fans particularly for the clubs 9,000 premium customers who generate almost as much revenue as the other 51,000 geneal r admission fans. Adrian Ford, Commercial Director for Arsenal FC, comments, Football is still very much about what happens on the pitch, but the modern football ecosystem also requires commercial success to enable sustained sporting achievement. Arsena is now a global brand, and we l want to offer services that match up to our reputation.
Keeping match day systems operational

To offer such services, Arsenal FC invested heavily in new technology for its Emirates Stadium. To achieve commercial success we needed to put the infrastructure in place to support our ambitions, which included IT, comments Ford. As a result, IT not only plays an important role in the general management of the club and the stadium, but also underpins critical customer-facing services on match day. Everything from accessing the stadium and purchasing refreshments to watching televised replays is controlled by IT. This is a massive departure from the clubs previous stadium and has led to a heightened need for IT availability.
Team Sponsors-
29
MANAGING ARSENAL FOOTBALL CLUB The clubs IT infrastructure now boasts: 60 servers 450 screens 350 desktop computers 500 hospitality tills 50 retail points of sale 100-plus turnstiles All these components, along with the clubs network, must operate at optimum performance on match day or fans will soon be impacted. As Paul Farmer, Head of IT at Arsenal FC, explains, At our previous stadium. IT was important to the business but not to match day operations, so we could afford to be more reactive. At the Emirates Stadium, the entire customer experience relies on our technology so its vital that our IT systems are highly available.
Controlling access to the stadium

Access control is particularly important at the Emirates Stadium getting 60,000 people safely into the grounds within just a couple of hours on match day is no easy feat. The old approach of paper-based tickets is long gone and has been replaced with automated turnstiles, which are operated using proximity smartcards. This sophisticated access control system ensures that only those fans with a valid ticket are admitted to the stadium, and provides a real-time count of the number of supporters in attendance. Police officers use this data, which includes a breakdown for different stands and areas, to manage health and safety and crowd control at the match. The access system, which is dependent on the clubs servers and network, can also be programmed to send an alert if a particular card is used to enter the stadium for example if a supporters card has been reported stolen. Stewards also carry personal digital assistants (PDAs) that can be used to pull up card details from the clubs access system to help resolve entry problems. The PDAs, which run off 80 wireless access points, are also used by stewards to help fans find their seats.
Providing consistent services to staff, the media and fans
Team Sponsors-
30
MANAGING ARSENAL FOOTBALL CLUB In addition to supporting the stadiums access system, the clubs IT infrastructure is also critical to the operation of 450 high-definition Sony screens. The screens broadcast Arsenal television, which includes live match coverage, pre- and post-match interviews and advertising. Based on Internet Protocol (IP), any network failure would instantly impact these screens and 60,000 fans visual enjoyment of the game. Arsenal FC provides both wireless and fixed port Internet access for journalists and photographers to upload reports and images on match day. Although the system has inbuilt resilience and no single point of failure, it is important that the club can guarantee t e h availability of its network to support the system. The club also offers Internet access as part of its hospitality package to help further enhance the customer experience.
Away from the stadium, IT also supports the clubs e-ticketing system, which must be available 24x7 for supporters to purchase their match day tickets, as well as for core business systems, such as finance and email. To ensure that the clubs 350 users have reliable access to these systems, the clubs IT department must adhere to stringent internal service level agreements (SLAs).
In order to meet these SLAs and the expectations of its customers, the club must be able to ensure the ongoing availability of its back-end and front-end IT infrastructure. As Farmer explains, We need to be monitoring our key servers and network, so that any issues can be identified and dealt with before they affect the performance of our systems or indeed our match day operation.
Guaranteeing business continuity through proactive IT management

To safeguard its business-critical systems, Arsenal FC has adopted CAs Enterprise IT Management strategy (EITM). This enables a centralised approach to core IT processes, such as: Incident & Problem Management IT & Financial Asset Management Information Governance
Team Sponsors-
31
MANAGING ARSENAL FOOTBALL CLUB Recovery Management Change & Configuration Management Dynamic & Virtual Systems Management
At the hub of the clubs IT operation and EITM approach is its helpdesk, which deals with around 500 calls per month. These issues are tracked v a CA Incident & Problem ia Management solution, CA Unicenter Service Desk. CAs solution is ITIL (IT Infrastructure Library) compliant, which means we are able to adopt a best-practice approach to helpdesk management, comments Farmer. Using CA Unicenter Service Desk, the IT department is able to track all incidents from initiation to resolution, as well as create automated reports to measure performance and verify that internal SLAs are being met.
The Incident & Problem Management solution is integrated with CA Unicenter Asset Management to provide a comprehensive inventory of the software loaded on each of the clubs desktops and servers. In addition to helping the club ensure that it is fully compliant with its software licensing agreements, CA Unicenter Asset Management enables the IT department to identify and remove unauthorised software. This has helped to not only reduce the number of IT problems but also the number of calls to the clubs helpdesk.
The workload of the helpdesk has also been reduced through the introduction of remote monitoring and management capabilities. Arsenals IT equipment is located throughout the stadium, in a nearby office building and at various remote sites. To prevent the need for travel between sites, the club uses a CA Change & Configuration Management solution, CA Unicenter Remote Control. This enables the IT team to remotely access, view and control the clubs 350 desktops and 60 servers, which helps to improve efficiency and problem resolution times.
Team Sponsors-
32
Improved fault detection

To help reduce the number of problems escalated to the helpdesk as well as the availability of its core systems, Arsenal uses a CA Dynamic & Virtual Systems Management solution, specifically CA Unicenter Network and Systems Management (Unicenter NSM). This solution is vital to ensuring the availability and performance of match day systems, for example, the television screens and turnstiles. At the new stadium, there is a much higher cost associated with downtime both in terms of revenue and reputation, comments Farmer. For example, a network issue impacting our television screens would be very quickly noticed. Thanks to CA Unicenter NSM, the club is able to verify that networked devices are still responding. Previously, for example, if a turnstile reader failed between games, this would only be detected during pre-match checks a couple of days before the turnstiles were opened to the public. However, by using CA Unicenter NSM to carry out automated and regular polling of devices, the problem can be identified immediately and fixed well in advance of a match.
Faults with individual devices can also be identified using SNMP trap information, which is centrally captured by CA Unicenter NSM from a variety of stadium systems. Where no SNMP traps are available, the IT department can fall back on application log information captured by the solutions agents. CA Unicenter NSM agents have been installed on all the clubs 60 servers and not only help to identify application problems but also monitor server disk space, CPU and memory utilisation. If, for example, the free disk space falls below 10 percent, or the CPU usage is continuously above 90 percent, CA Unicenter NSM creates an alert classified by severity, so that the IT department can prioritize issues more quickly and effectively.
CA Unicenter NSM acts as a central hub for IT availability and performance monitoring and
Team Sponsors-
33
MANAGING ARSENAL FOOTBALL CLUB reporting throughout the stadium and clubs offices, comments Farmer. By establishing this central hub, CA Unicenter NSM has become our manager of managers platform. In addition to collating all system alerts from a variety of separate management consoles, CA Unicenter NSM also aids in:
TREND REPORTING Historical information captured by the solutions server agents

can be used to identify recurring patterns across the infrastructure.
IT BUDGETING Trend reports can be used to predict when more disk space might be
needed, which in turn can be used to forecast future capital expenditure.
SERVICE LEVEL MANAGEMENT Network status views provide valuable and

timely service information to staff, such as displaying if there are performance issues with a key application, for example email.
In the future, the club plans to fully integrate the CA Unicenter NSM solution wit CA h Unicenter Service Desk to further automate core IT management processes, such as raising incident tickets.
Safeguarding business continuity with replication

Although CAs solutions help significantly reduce IT downtime, it is impossible to foreseeall potential problems. The club must therefore have a robust continuity plan in place for its most critical systems and data for example its ticketing servers, access control system and hospitality servers.
The football club uses a CA Recovery Management solution to replicate these systems to offsite servers. In the event of a hardware failure or other unplanned incident, the club is able to use CA XOsoft WANSync to failover to the replicated environment with downtime of less than a minute.
Team Sponsors-
34
MANAGING ARSENAL FOOTBALL CLUB The mirrored system is also used during planned outages. For example, during an email application upgrade the clubs IT department was able to failover to the replica servers and data with no noticeable downtime for users.
To ensure that the replication process functions correctly, CA XOsoft WANSyncs Assured Recovery module enables the club to perform regular tests without impacting the production environment or even affecting ongoing data replication processes.
Additionally, the Enterprise Rewinder module enables the club to rewind to before a corruption event to ensure the integrity of its data. The solution is managed through a single browser console, and has been put into practice with Arsenal FC twice since its implementation due to hardware failures with great success.
Meanwhile, non-critical systems are backed up to tape using CA ARCServe Backup. As well as backing up core data, the solution is used for system state backups, which means the IT department could rebuild a server from scratch in just a couple of hours.
Team Sponsors-
35
Coping with email growth

As in any business, email is a key communication tool for the club. The importance and popularity of email, however, means that user mailboxes often become unwieldy. As Farmer confirms, Users were treating their mailboxes as an electronic filing system to such an extent that some staff had more than two gigabytes of messages. As a result, our email
Team Sponsors-
36
MANAGING ARSENAL FOOTBALL CLUB storage requirements just kept on growing. This not only impacted ongoing management, but backups and restores were also taking much longer to perform.
With the backup of the email database and messages taking an average of six hours, the club was keen to reduce the number of emails on the mail server to a manageable level. To keep track of archived emails for its data retention policy and simplify email management, the football club uses CA Message Manager.
With CA Message Manager, we now have total control of our email archive and have been able to reduce users mailbox sizes, comments Farmer. We store just the previous six months messages on the mail server while long-term copies are held on a separate archive server, which protects against deletion and enables us to enforce our data retention policy.
Enhancing the match day experience

By implementing CAs integrated EITM approach, Arsenal Football Club has been able to simplify and streamline its IT management processes. This has resulted in: More proactive and flexible IT services Increased efficiency Reduced system downtime
With IT playing such an important role in the clubs operations, these improvements have a far-reaching impact on the business as a whole. As Ford confirms, Thanks to CAs technology, weve got what we consider to be a Rolls Royce system underpinning allour ITbased customer services. And were planning to go out and maximise every opportunity we can to continue to drive the business forward.
The club is already looking at a number of IT-based opportunities that will help to transform its business. This includes a centralised contact centre for all customer queries from buying tickets to merchandising queries and an innovative plan to provide wireless connectivity and content to portable gaming devices.
Team Sponsors-
37
MANAGING ARSENAL FOOTBALL CLUB The ability to launch new offerings and guarantee the availability of existing IT-based services helps Arsenal FC:
IMPROVE THE MATCH EXPERIENCE FOR FANS By providing sophisticated

and reliable facilities, such as large screens and automated turnstiles, the club is able to increase spectators enjoyment of the game.
SAFEGUARD COMPETITIVE ADVANTAGE Arsenal FC needs to perform on and

off the pitch. By using IT to provide superior hospitality services, the club can continue to attract premium customers and the revenue it needs to invest in new players.
INCREASE PROFITABILITY By minimizing IT support costs and safeguarding

against threats to business continuity, the club can ensure that it runs a profitable and highly successful business.
A club like Arsenal only gets 30 opportunities a year to reach our customers, and we cant afford to miss a single one, comments Farmer. CAs solutions and integrated IT management approach enables us to safeguard our critical systems and ensure that the match goes on. When it comes to customer service, one negative experience can quickly eclipse a previously faultless track record. With consumers facing an ever growing of choice of suppliers, companies even football clubs must ensure the customer experience remains as positive as possible.
With many customer-facing services now underpinned by IT, this means ensuring the availability and performance of a wide range of systems and components. Trying to achieve this with disparate IT management processes and solutions will result in unplanned downtime, spiraling costs and duplication of effort.
Team Sponsors-
38
MANAGING ARSENAL FOOTBALL CLUB By taking an integrated approach, an organisation like Arsenal FC will not only be able to meet their IT availability objectives but also improve business agility, competitive advantage, customer satisfaction and profitability.
MANAGING OF FINANCES AT ARSENAL FOOTBALL CLUB
STRUCTURE OF FINANCE AT ARSENAL F.C

Arsenal claim their new position as Britain's richest football club shows they do not need foreign investment. Latest figures reveal the club's turnover has broken the 200m barrier after the move to the Emirates Stadium. "These results demonstrate we really don't need any outside investment," managing director Keith Edelman told BBC Radio 5live. "We secured all the players we wanted in the summer and manager Arsene Wenger did not spend his budget." The Gunners have been subject to takeover rumours after Alisher Usmanov increased his share in the club to 21% with reports suggesting that he wants to increase his s take to 25%. American billionaire investor Stan Kroenke has a 12% stake and, while he has met with Arsenal, the club have yet to hold talks with Usmanov. "I am unsure what he (Usmanov) can do with 25%, and I do not believe he can stop us operating the business on a day-to-day basis," said Edelman.
Team Sponsors-
39
MANAGING ARSENAL FOOTBALL CLUB "Usmanov has a stake, (Stan) Kroenke has a stake and we get on and run the business every day. "It is a distraction for us to keep talking about it, but we are trying to focus on the team getting the job done and we do not think it affects them." He added: "As far as Usmanov is concerned, we have always stated our belief as a responsible corporate body, we meet anybody who requests a meeting, and that is still our policy." Uzbek businessman Usmanov's company, Red and White, is chaired by former Arsenal vicechairman David Dein, who claims foreign investment is needed to compete with the likes of Chelsea. But Edelman told the BBC: "We are looking at a position where we don't believe we need additional monies. "We had 73.9m cash at the year's end and we are telling people today we've got increased cash balances at this juncture." The move to the new stadium from Highbury means the Premiership leaders are generating more than 3m a game.
A statement from the Arsenal Supporters' Trust said the group was delighted with the club's current financial position. "These results are a testament to the success of the Emirates project. These results are the fruits of opening the new stadium on time and on budget," the statement read. "The club have sown the seeds for a bright new future.
Team Sponsors-
40
MANAGING ARSENAL FOOTBALL CLUB "The AST studies carefully the different models of how football clubs are run. Arsenal's model, based on sensible borrowing to invest in facilities that generate an increased income stream, is a model we commend. "AST reiterates its opposition to any hostile takeover at Arsenal." BBC sports editor Mihir Bose says Arsenal can now argue that this brings them into the big league of European earners, just behind Real Madrid.
"Manchester United will have to put on another 32m from last year to match the GunnersChelsea will have to show an increase of nearly 50m; Liverpool 80m and Tottenham 127m to match Arsenal," stated Bose. He added that Arsenal project that the "Emirates effect will continue to produce vast sums of money for years". And on Dein's ambitions? "One well-placed Emirates source told me: 'David always sees himself as number one. He wants to be chairman. The Arsenal board puts Arsenal first. They see themselves as the custodians of the club. That is the difference'," said Bose. The stake held by Red and White Holdings Limited could see them seek a seat on the Arsenal board - and a return for Dein. But Edelman said: "The board can review anybody being a director at any time, and either accept or decline it. "If he had 49.999%, but the board did not think he wouldadd value as a director, it would say no. "It would have to go over 50% for the board not to have a choice."
Team Sponsors-
41
SOURCES OF INCOME
This Club is ambitious for success and I believe that the strong financial position which the Group has established, as confirmed by the results for the year, provides the best possible platform from which to deliver that success for the long-term.
We are committed to operating the Club as a business which is financially self -sustaining. This is clearly demonstrated having achieved our second highest ever pre-tax profit of 36.7m. Over the last two seasons Emirates Stadium has taken our football revenues to a new level, but we cannot be complacent. Accordingly, we recognise the need to further develop the business commercially on a worldwide basis. We have reported significant growth in turnover to 223m reflecting a growth in our core football business. There are two main reasons for this. Firstly, new Premier League domestic and overseas TV deals have led to a rise in broadcasting income of 24.1m to 68.4m, and secondly, matchday income was 94.6m and remained the most important component of the Groups income. Arsenal moved to Emirates Stadium in order to compete with top European sides, not only on a financial footing but from a footballing perspective. The healthy financial returns from
Team Sponsors-
42
MANAGING ARSENAL FOOTBALL CLUB moving to the Emirates are the fruits of our labour so far, but just as important is the teams performances at our new home. Given that we have only lost one match in 58 competitive matches since moving here in 2006, Emirates is certainly becoming the fortress that Highbury once was .
The most significant factor is the new TV deal which has increased income by just over 24m. In addition, the inaugural Emirates Cup which we hosted in 2007 brought in 4m
Team Sponsors-
43
MANAGING ARSENAL FOOTBALL CLUB Transfer funds-funds will always be made available to Arsne to improve the quality of the squad and we have consistently stated that adequate funds are available to him if needed. We maintain a constant dialogue with Arsne and whilst there is not a set figure in place we are always able to buy additional players should he choose to buy. We have every confidence in Arsne and trust in his judgment, so he decides whether he needs to strengthen his squad. The accounts which we have released today show that the Group had cash balances of some 93 million at 31st May 2008. This is clearly a very healthy position from which to support the managers spending plans. However, it must be recognised that 31.5 million of this cash is held as security for the debt service of our Bonds and its use is therefore restricted, also there is a strong degree of seasonality to our cash flow with season ticket renewals during May having a positive impact on the year- end cash figure Both matchday revenue and broadcast revenue are important revenue streams. The difference is that matchday revenue is a direct result of our active fanbase coming to watch the team play. By moving to Emirates Stadium it has enabled us to reduce our season ticket waitinglist, thus bringing our exciting brand of football to a wider audience as well as increase our matchday revenue significantly. It is part of our overall self-sustainment strategy
Team Sponsors-
44
OTHER SOURCES Arsenal get 6m a year from the Emirates for shirt sponsorship The construction work of Highbury square is right on schedule and a large number of apartments are scheduled to be completed and released for sale in phases over the 2008/09 financial year. The first wave of completed apartments, which are 65 units in the South Stand, were released at the end of July and our old home already has its first new owner in residence. Legal completions from this first phase are ongoing and so far have generated sales proceeds of 18.7 million. As I mentioned earlier, the Highbury Square bank loan is ring -fenced from and has no recourse to the football side of the Groups business, so it will be repaid entirely from sales proceeds from the development. As proceeds come in on legal completion of sales, th will be used firstly in funding the ey remaining balance of the construction costs at the site and then in repayment of the bank loan
INCOMES RECEIVED FROM TAKING PART IN VARIOUS COMPETITIONS
Matchday Revenue 90.6m: (tickets, merchandise, concessions an corporate d hospitality sales): Hill-Wood has said: Our repayments on the stadium are under 20m a year and it`s producing an extra 50m a year. Our annual costs are fixed for 25 years. They will not rise. Our income will rise and our gate income will rise. Those payments are fixed. So in not too long it will look like a few pennies.
Team Sponsors-
45
MANAGING ARSENAL FOOTBALL CLUB Broadcasting Revenue 44.3m:

o
Champions League- 1.5m each club got as a participation premium, 750,000 surplus revenue saw each club receive this extra fee in 2006 -07. 300,000 for every group match played, 450,000 for every group -stage victory, 226,000 for every groupstage draw. 1.6m for reaching the knock-out stages and 1.8m for reaching the quarter finals. Potential 2.2m-7.4m if go further. (The other half of the prize money depends on the value of each clubs national market, the number of clubs in that association, the teams position in their previous domestic league season and the number of games they played in the Champions League.)
Premiership:- Each team was paid an almost 9m share automatically, as well as 4m for overseas TV deals. The rest was paid out in facility fees and based on the teams fi nal standing in the league. As merit payments, champions Manchester United earned 9.7m more, with last-placed Watford receiving 486,563. In 06/07 Arsenal recieved 28.9m from broadcasting.
FA Cup and Carling Cup: Arsenal recieved around 40,000 for losing the 4th round and less than 40m for losing the Carling Cup semi-final.
Team Sponsors-
46
MAJOR EXPENSES PLAYERS AND MANGERS SALARIES
Team Sponsors-
47
HOW ARE SALARY PACKAGES OFFERED
The package you are offered will be tailored to you, and will almost inevitably include a fixed basic salary and a bonus element. That bonus element will depend on a performance rating in your annual appraisal, the financial position of the business and the performance of the rest of your team. At the year end there will be some variation in rewards, but most people will get roughly the same bonus if they perform in line with expectations.
This is more or less what is going on between footballers and clubs they work for. There is a market out there, and more than most markets the skills of the players are observable to employers, so pay can be fine-tuned to mirror performance. My own research has shown that the market for football players works so well that in the long term the variation in what teams are prepared to pay for talent accounts for around 90% of the variation in team success.
Expensive teams win you games. Players do have performance bonuses written into their contract, but these account for a small fraction of the remuneration package.
A football player (or his agent) is no more likely to accept his income should depend entirely on the vagaries of the team's performance than you or I would accept that our entire income should be at the mercy of the success of our companies and the efforts of those ar und us. o
Team Sponsors-
48
MANAGING ARSENAL FOOTBALL CLUB In a very few businesses, incentive-related pay dominates but usually these are jobs like sales, where your own efforts almost entirely determine entirely how you perform and there is no team element.
Fair enough for Roger Federer or Tiger Woods, but not for Wayne Rooney or Jonny Wilkinson, who are highly dependent on what the team-mates around them are doing. Performance-related pay for teams is more likely to lead to internal squabbles than squad unity. When it comes to the World Cup, the question of incentives becomes more complicated. Players mostly want to play for their country out of patriotism and out of self interest. Players do have a financial incentive to perform because the marketing opportunities created by having a good World Cup can make you very rich. But the direct incentives are small. FIFA keeps most of the money, and the amounts distributed by national associations to players are tiny relative to the club salary of a Premier League star. England players are paid by the FA, but there is a long -standing agreement that this remuneration is donated to charity. Does anyone seriously think England would have performed better if they had kept the money for themselves? Anyone who saw John Terry's maniacal (but comic) attempt to clear a late Slovenian shot with his head cannot doubt the commitment of the players. Which brings us back to the question of why players are paid so much when pay does not directly influence performance. Players are paid a wage that is high enough to stop them leaving to play for someone else. Clubs try to buy the best team they can afford (and sometimes cannot quite afford) so that the wage of a player is determined in relation to all the other players in the market. Sometimes clubs make mistakes, but there are so many players and so many clubs that these errors are quickly ironed out. In US sports such as baseball and American football where clubs agree to share income and restrict competition for players through salary caps and the like, the relationship between pay
Team Sponsors-
49
MANAGING ARSENAL FOOTBALL CLUB and performance is much weaker. But in Europe, where the free market rules, you get pretty much what you pay for. As long as the clubs have the money to spend, player salaries will remain astronomical.
REPAYMENT OF LOAN TAKEN FOR THE CONSTRUCTION OF THE EMIRATES The 470 million cost of the project, augmented by the extra costs the club had to meet besides building the stadium itself, was a formidable obstacle, especially as Arsenal were not granted any public subsidy. Arsenal had difficulty obtaining finance for the project, and work ceased just after it had begun, before restarting when a 260m loan package was obtained from a consortium of banks, led by the Royal Bank of Scotland
In August 2005 Arsenal announced plans to replace most of the bank debt withbonds. The proposed bond issue went ahead on 13 July 2006. The club issued 210 million worth of 13.5 year bonds with a spread of 52 basis points over UK government bonds and 50 million of 7.1 year bonds with a spread of 22 basis points over LIBOR.
It was the first publicly marketed, asset-backed bond issue by a European football club. The effective interest rate on these bonds is 5.14% and 5.97% respectively, and they are due tobe paid back over a 25 year period; the move to bonds has reduced the club's annual debt service cost to approximately 20 million a year. On 31 May 2007 the club's net debt stood at 262.1 million. However at the same time there are multiple sources of income for the club; the remainder of the Lough Road site is being used for new housing, as are the surplus areas around the stadium at Ashburton Grove.
Team Sponsors-
50
MANAGING ARSENAL FOOTBALL CLUB Highbury is currently being converted into apartments, most of which have been sold. In total, more than 2,000 homes will be built at the three sites, and the club is counting on the profit from these developments to make a major contribution towards the costs of the new stadium.
Other sources of revenue include the 100m from Emirates for the naming rig to be paid hts, over the course of the deal and a 15m contribution towards the capital costs of the stadium's catering facilities from catering firm Delaware North, which has a 20-year exclusive contract to run the stadium's catering operation. Finally, there is the increased revenue from the stadium itself. In 2005, Arsenal's then chief executive Keith Edelman commented that the new stadium is expected to increase Arsenal's turnover from typically 115 million to around 170 million .
Final accounts for the year ending May 2007, Arsenal's first season at the Emirates, show that Arsenal's turnover has increased to 200.8m, compared to 137.2m the previous year and that group operating profits increased to 51.2m. Even once debt repayments are taken into account, the club's turnover has increased by at least 20m a year, (in 200607 the club recorded a surplus of 37 million).
Team Sponsors-
51
A FINAL SUM UP OF ARSENALS FINANCES FOR THE LAST YEAR AS COMPARED TO OTHER TOP CLUBS
From the above statistics it is crystal clear that Arsenal as compared to other clubs recorded the highest Net Profit Before Tax thereby highlighting how successfully it manages its finances
Team Sponsors-
52
TESTING OF HYPOTHESIS The hypothesis for this project was

Success on the pitch (by way of winning trophies and competitions) for a club doesnt always guarantee the Success off-the pitch (in terms of financial solvency, excellent management and financial success in terms of profits every year) ANS-Thus after compiling the results and findings in respect of this hypothesis I have reached a conclusion that this hypothesis is correct as from the above data (informative and statistical) although Arsenal may not have been successfully by way of winning competitions but its financial position is much more solid and concrete compared to clubs other top clubs competing at its level.
CONCLUSION
Thus i would like to conclude this project report by saying that although Arsenal have been unsuccessful in terms of winning a major trophy since the past 4 years, but this was because they paid more attention towards paying off their rather than buying elaborate stars for the team and paying high wages to them. Clubs which have been successful have signed such stars on extraordinary pay packages, bu are now suffering to recover these amounts in these t recessionary conditions. Arsenals success also goes down to its manager Arsene Wenger who unlike others believ es in spending wisely. Arsenal has thrived under his reign and the team has gained immense success even on the global stage. Although Arsenal F.C isnt that popular in these parts of the world yet slowly but surely it is getting recognised as one of the be examples of Club st management and people around the globe are recognisingits style of play on the pitch and style of management off the pitch.
Team Sponsors-
53
BIBLIOGRAPHY
http://www.deloitte.com/view/en_US/us/index.htm http://jeffrims.blogspot.com/2008/05/latest-transfer-arsenal-newss.html http://www.goonernews.com/ ht t p:/ / t hesu n. c o. uk/ f oot ba ll http://mirror.co.uk http://guardian.co.uk http://Arsenal.com http://Scotsman.com http://CNN.com h t t p : / / UEFA.com http://GiveMeFootball.com
Team Sponsors-
54
ANNEXURES
ARSENAL HOLDINGS PLC: FINANCIAL RESULTS

Results for the year ended May 31, 2009: Group turnover increased to 313.3 million (2008 - 223.0 million) reflecting income generated from cup competitions and property sales. Match day revenue was increased to 100.1 million (2008- 94.6 million), mainly as a result of progress to the UEFA Champions League and FA Cup semi-finals.
Operating profits (before depreciation and player trading) in the football business were 62.7 million (2008 - 59.6 million).
The completion of sale of 208 (2007 Nil) private apartments at Highbury Square contributed 88.0 million of revenue (2008 - 15.2 million) and boosted the operating profit from property activities to 7.8 million (2008 Nil).
Profit after tax of 35.2 million (2008 - 25.7 million) was a record for the Group.
Since the end of the financial year there have been a number of further positive developments in relation to the Groups Highbury Square project:
Of the 655 private apartments in the development, sales have now complet d on 445 units e with a cumulative sales revenue value of 172.4 million.
Team Sponsors-
55
MANAGING ARSENAL FOOTBALL CLUB The balance on the bank loan used to fund the project has been substantially reduced to 47 million and agreement has been reached to refinance the loan and extend its term to December 2010.
Commenting on the results for the year, Peter Hill-Wood, non-executive Chairman, said: The Groups profits have now risen in each of the three years in which Emirates Stadium has been our home. This is excellent news although I should perhaps stress that making and reporting profits is not in itself the primary objective for the directors. First and foremost we are supporters of this great football club and, as such, our main goal will always be the achievement of success for Arsenal on the field. The Groups profitability is important because it is a by-product of running the Club as a solvent and successful business, which in turn allows us to maximise the level of investment in the playing staff and in the future development of the Club. Ivan Gazidis, Chief Executive, said: Clearly, the Club already has a first class stadium, an excellent world -wide reputation and outstanding core support. Football is a hugely competitive and fast moving business and we must ensure that Arsenal is not just keeping pace but setting the pace, both on and off the field. The Club is superbly positioned for the future and I am tremendously excited about the opportunities we have ahead of us. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions.
Source: Arsenal.com/newsarchives
Team Sponsors-
56
HIGHBURY SQAURE REDEVELOPMENT:

Highbury Square development Latest
Just a few hundred yards from Emirates Stadium, Arsenal's previous home Highbury continues to undergo its transformation from football stadium to luxury apartments. Due for completion next year, the stunning Highbury Square r e-development is certainly taking shape, and as you can see from the pictures, many of the traditional elements of the building have been preserved. The matchday programme caught up with Acting Managing Director Ken Friar OBE for the latest on the development.
Q. How is the redevelopment at Highbury Square progressing? A. Very well. The development is being executed in phases and our contractors, Sir Robert McAlpine, are on time or ahead of schedule with each of the phases. What I find amazing is even though the old stadium is transforming into apartments at a rapid pace n it still feels ow, like the old Highbury. You can envisage the pitch and the stands and it brings back such fond memories. A real sense of history remains there.
Q. When is the development due for completion? A. The summer of 2009 is when Highbury Square will be fully complete but as with any major development of this scale, we have phased handovers of finished units from now through to the end of the construction works. The first and second phases of finished units, 136 apartments in total, have now been handed over to us by Sir Robert McAlpine and we
Team Sponsors-
57
MANAGING ARSENAL FOOTBALL CLUB already have over 90 purchasers completed. In fact, some residents have already moved in to their apartments in the South Stand, the site of the old Clock End.
Q. How many apartments have been sold? A. There are a total of 680 apartments in the development of which 655 apartments have been marketed so far. Of these, 598 have already been presold, which represents over 90 per cent of the development, a figure that we are obviously extremely pleased with.As mentioned, over 90 purchasers have completed so far, generating some 39 million of sales income.
A completed apartment
Q. That sounds promising. How does the Board envisage using the profit made from the sale of Highbury Square? A. The financials for the Highbury Square development have been ring -fenced so they are separate from our usual football business. As such we have not budgeted for the profit and this allows the Board to be flexible over its use as the money has not been earmarked for anything in particular. In that sense it will be a bonus. We have options available to us, for example, profits could be used to reduce the stadium debt or to strengthen the team if the manager wishes.
Team Sponsors-
58
MANAGING ARSENAL FOOTBALL CLUB Q. There has been some suggestion that a significant number of purchasers have pulled out of the development. Is this true and if so, why do you think that is the case? A. Absolutely not, this is completely untrue. To date, we have had just two purchasers who, due to personal circumstances, had to pull out and bo of these were over six months ago. As th it stands, we believe that we continue to outperform the market and indeed a recent independent valuation by Colleys concluded that all of the Highbury Square apartments have exceeded the prices contracted to be paid for them. However, we are not complacent or shortsighted about the current economic climate and with this in mind, we have enlisted the support of Savills Private Finance to assist purchasers in achieving finance where they require it.
Q.What are the long-term prospects for the Highbury Square development? A. Property that has unique qualities, by virtue of location and character, always maintains its value relative to the market and is always the first to realise an increase in value. This is definitely the case with Highbury Square, which is in an excellent location, in terms of connections in and out of central London. The development also captures the history and character of Highbury Stadium with the East and West Stand facades retained and the pit h c constructed into a private two-acre garden for residents which, we believe, is the largest private London Square to have been built this century. In addition, Highbury and Islington as a whole is a highly desirable location for purchasers and tenants al ke, so we believe the i future prospects for Highbury Square are very positive.
Q.What type of properties are still for sale? A. There are only 57 units which are unsold and these are a mix of one and two bedroom apartments.
Q. How will you feel once the development is complete?
Team Sponsors-
59
MANAGING ARSENAL FOOTBALL CLUB A. It will offer a tremendously unique place to live for all those who have bought an apartment there and in that sense it will be truly exciting. To live in a home in the home of football gives it added sparkle but for me personally, it will close an eventful chapter of my life.
Source www.thestadium-highbury.com.
ARSENAL BUILDS FINANCIAL FOUNDATIONS By Bill Wilson Business reporter, BBC News
Arsenal goes into the new English Premier League season looking forward to a timely financial boost from the sale of apartments at its former stadium. When the club - which describes its business as both "football and property" - moved from Highbury to its impressive new Emirates Stadium in 2006, it turned its old home over to housing development. The Highbury Square development comprises 711 one, two, and three bedroom apartments priced between 250,000 and 1,500,000. And at the end of the month those who have paid a deposit - of between 10% and 20% - on apartments in the South Stand of the scheme will have to pay the rest of what they owe. It is hoped the sale of apartments can boost team building 'Far from rosy' The 300m-plus development should be providing some funds for manager Arsene Wenger, who has had to operate frugally as the club also services the debt it took on board to build its modernistic new venue at Ashburton Grove. But there are fears that the credit crunch and falling property prices could now hit Arsenal's financial plans, both on and off the playing field. Football business guru Alex Fynn is the latest commentator who feels the club may be regretting the decision to rely strongly for future income streams through the property market. "The fear a good number of the prospective purchasers who had put 10% down on
Team Sponsors-
60
MANAGING ARSENAL FOOTBALL CLUB Highbury Square apartments might cut and run in the light of plummeting property prices means Arsenal's garden is suddenly far from rosy," he says. The point is made in a book Mr Fynn has co-written, Arsenal: The Making Of A Modern Superclub , which analyses the club's journey from financial underachievers to third richest club in the world. Mr Fynn, who has written and spoken extensively on the business of sport, adds: "The board know they are treading financial water until the Highbury Square revenue starts coming in." As it was... fans arriving for a He also expresses concern in the book that "for the game at Highbury in 1972 club to develop Highbury Square themselves might not have made sound economic sense in the light of the credit crunch that came along". However it is believed the Arsenal board is sanguine about the curr economic situation, ent and envisages no problems with the development, despite current housing market uncertainty. It is also understood the club believes that even in a falling property market, the uniqueness of the Highbury Square development will help the flats hold their value. It is known that three buyers so far have given up their deposits and walked away from completing their purchase at Highbury Square. Commercial developments But the club, which had made the decision it would make more money by redeveloping the stadium itself rather than selling out to a developer, highlights the fact it has sold more than 93% of its apartments. As Mr Fynn points out: "The club has massive commercial developments, and in fact they now define the nature of their business as being 'football and property'. "The only danger is they might have predicated a few decisions on the premise that Highbury Square was going to bring in more revenue than it might realise." As well as Highbury Square, Arsenal has also recently As it is... the former Highbury submitted a planning application for the playing area is being transformed redevelopment and regeneration of Queensland Road as part of the Emirates Stadium regeneration programme. There, it plans to sell affordable housing to a housing association and to market other accommodation to a residential property company. Wage control The club had turnover of 23.7m on its property development in the sixmonths to
Team Sponsors-
61
MANAGING ARSENAL FOOTBALL CLUB November 2006 and in November 2007 this was 7.6m. And operating profit from property fell from 9.3m in 2006 to 2.5m in 2007. However it is understood this is merely down to the fact that more payments -due dates fell in the earlier financial period. "I would say Arsenal's finances are very good," says Mr Fynn, "not withstanding the fact they have got a huge debt - which is manageable as long as they fulfil three criteria. "These are that they play to sell-out grounds in the English Premier League, that they enjoy a successful run in the Champions League, and that they keep their wage to turnover ration at a healthy level under 60%. As it will be... Highbury "If they continue to do that, there is a very great transformed into apartments difference in going in to debt and trying to buy success through the purchase of players, and going into debt to build a new stadium- as Arsenal has done - which triples your matchday income at one fell swoop." Match-day revenues However he also warns that there are a "few variables" that could influence their financia l position. These include the future shape of the property market and credit crunch, ensuring that Arsene Wenger is retained as manager and the lack of commercial experience which the club has at the highest level. In moving from Highbury to the Emirates Stadium They could have been protected the brand, by calling Arsenal hugely increased their match-day revenues. the stadium something like A total of 1,838,152 attended matches at Arsenal's new home during the 2006/07 season, a 76% increase the Highbury Emirates on the total attendance during the final season at Alex Fynn Highbury, when 1,044,266 took their seats. 'Protecting the brand' The move also saw the groundbreaking naming rights sale at the new stadium. In a 90m, 15-year, deal Arsenal gave the airline Emirates exclusive naming rights to the stadium. "All I would say is that maybe from a marketing point of view they could have ma de better use of the assets they have," says Mr Fynn, who has worked as a director at Saatchi & Saatchi advertising for nearly 20 years, handling a number of big -name clients including several football clubs.
Team Sponsors-
62
MANAGING ARSENAL FOOTBALL CLUB "There is nobody on the board with a marketing or advertising background, nobody with experience of working at somewhere like Procter & Gamble for example. "I have suggested in the book that there were different ways of handling the stadium naming rights. They could have been protected the brand, by calling the stadium something like the Highbury Emirates. Mr Fynn believes Arsenal could "But let us not forget it is the third richest football have handled its naming rights club in the world." Meanwhile the club hopes the conversion of all four former stands into apartments will be completed by the end of summer 2009. In the meantime Arsenal are betting that the lure of owning an apartment overlooking where greats such as Alex James, Charlie George, Ian Wright and Thierry Henry once played will overcome any housing market wobbles.
Page last updated at 14:40 GMT, Sunday, 10 August 2008 15:40 UK http://news.bbc.co.uk/2/hi/business/7545274.stm
Team Sponsors-

Dissertation Report - Handling A Football Club-Finance and Administration

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Dissertation Report - Handling A Football Club-Finance and Administration

Загружено:

Авторское право:

Доступные форматы

MANAGING ARSENAL FOOTBALL CLUB

MANAGING ARSENAL FOOTBALL CLUB

MANAGING ARSENAL FOOTBALL CLUB

UNDER THE GUIDANCE OF-

SUBMITTED TO THE UNIVERSITY OF MUMBAI IN PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF BACHELOR OF MANAGEMENT STUDIES

ACADEMIC YEAR 2009-2010

MANAGING ARSENAL FOOTBALL CLUB

MANAGING ARSENAL FOOTBALL CLUB

AND ECONOMICS OF T.Y.B.M.S (SEMESTER V) HEREBY DECLARE THAT

___________________________ (SIGNATURE OF THE STUDENT)

MANAGING ARSENAL FOOTBALL CLUB

MANAGING ARSENAL FOOTBALL CLUB

ARSENAL F.C IN THE ACADEMIC YEAR 2009-2010. THE INFORMATION

_______________________ SIGNATURE OF PRINCIPLE GUIDE (MR NISHANT MEHTA)

MANAGING ARSENAL FOOTBALL CLUB

MANAGING ARSENAL FOOTBALL CLUB

MANAGING ARSENAL FOOTBALL CLUB

SERIAL MAIN HEADING NO. 1) INTRODUCTION

The hypothesis and a brief introduction to the sport

What is Football as a profitable business

Concentrating on Arsenal Football Club(A.F.C.)

Managing of Finances and administration at Arsenal Football

MANAGING ARSENAL FOOTBALL CLUB

A BRIEF INTRODUCTION TO FOOTBALL AS A SPORT

MANAGING ARSENAL FOOTBALL CLUB

Why Soccer Is The King Of All Sports

The Odds Tell A Story

Profitable Live Bets On Every Match Day

Have A Slice Of The Lucrative Soccer Live Betting Pie

MANAGING ARSENAL FOOTBALL CLUB

EXHORBITANT AMOUNTS OF MONEY PAID TO THE PLAYERS

TOP TEN HIGHEST PAID FOOTBALLERS

CURRENT SUCCESSES AT THE CLUB (LAST DECADE)

APPOINTMENT OF ARSENE WENGER

NEW STADIUM- THE EMIRATES THE PRIDE OF NORTH LONDON

MANAGING ARSENAL FOOTBALL CLUB

THE INVINCIBLES SEASON OF 2003-04

MANAGING ARSENAL FOOTBALL CLUB

THE BOARD OF DIRECTORS AND OTHER KEY PERSONNEL AT THE CLUB

MANAGING ARSENAL FOOTBALL CLUB

Solution-Aligning IT to business strategy

Meeting customer expectations

MANAGING ARSENAL FOOTBALL CLUB

Maximising revenue generation to support sporting achievement

Keeping match day systems operational

Controlling access to the stadium

Providing consistent services to staff, the media and fans

Guaranteeing business continuity through proactive IT management

MANAGING ARSENAL FOOTBALL CLUB

Improved fault detection

TREND REPORTING Historical information captured by the solutions server agents

SERVICE LEVEL MANAGEMENT Network status views provide valuable and

Safeguarding business continuity with replication

MANAGING ARSENAL FOOTBALL CLUB

Coping with email growth

Enhancing the match day experience

IMPROVE THE MATCH EXPERIENCE FOR FANS By providing sophisticated

SAFEGUARD COMPETITIVE ADVANTAGE Arsenal FC needs to perform on and

INCREASE PROFITABILITY By minimizing IT support costs and safeguarding

MANAGING OF FINANCES AT ARSENAL FOOTBALL CLUB

STRUCTURE OF FINANCE AT ARSENAL F.C