Arsenal have announced they had made a loss after tax of £2.5m in the six months between last May and last November. The news emerged 24 hours after Arsenal lost their first cup final in five years, as Birmingham City defeated the Gunners 2-1 to collect the Carling Cup.

“We are all desperately disappointed because we were hoping to do better yesterday,” Arsenal’s chief executive, Ivan Gazidis, said on the club website. “The important thing is how we react to this and every setback. But we continue to be in a healthy financial position and the club is run on a self-sustaining basis.”

The £2.5m post-tax loss is in stark contrast to the £29.2m profit recorded over the same six-month period in 2009 as Arsenal’s revenues were hit in a number of areas. There was a significant fall in the income from the club’s Highbury Square property development as only 50 flats were sold compared to the 261 of the previous year. This reduced property profits to £3.3m from £11.3m. Arsenal’s transfer proceeds also fell considerably, with the £33.9m generated with the sales of Emmanuel Adebayor and Kolo Touré in the summer of 2009 becoming £4m in the six months to last November. Two fewer home matches in the first half of this season compared to the previous year also contributed to the reduction of football operating profits from £18m to £9.3m. The other contributory factor to this decline was the renewal of a number of player contracts last summer.

“The numbers last year were pushed by property sales and the sales of a couple of big players,” said Gazidis. “This year we don’t have those one-offs. This is a very young team; the average age [in the Champions League win this month] against Barcelona was 23 years old. We try to keep them with the team by signing them to long-term contracts. We had investment in that with renewing a number of contracts last summer.”

Despite the marginal accounting losses, Arsenal are still generating their own cash. The Gunners’ contingency fund now stands at £110.4m, up from £101m last year.

Source: guardian.co.uk

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