Arsenal set to make make £140m announcement as Stan Kroenke delivers something not seen for a long time

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Arsenal are one of world football’s biggest clubs. They tick every box on an investor like Stan Kroenke’s wish list. If you were playing sports business Monopoly, you’d want to buy property in N5.

Kroenke has an eye for valuable real estate, both literally and figuratively.

Billions of dollars of Kroenke’s wealth is held in physical infrastructure on both sides of the Atlantic.

The Emirates Stadium, acres of commercial and residential property in his native Denver, a £500m ranch in Texas, LA’s iconic SoFi Stadium – the list goes on and on.

But when he first bought into Arsenal in 2007 and increased his stake over the next 11 years, it wasn’t because of what they owned in bricks, mortar or even the intangible value of physical assets like players.

Instead, it was the Gunners’ brand.

Arsenal have always been a stylish, community-rooted club and their move into the streetwear market in collaboration with Adidas and local designers Labrum and Aries shows KSE leveraging on that.

British Vogue even ran an article on ‘how Arsenal became fashion’s favourite football club’ in November last year.

Their history and heritage is another major selling point, allowing them to flog merchandise based on the badge and its association with success alone – and not just in North London, the UK, or even Europe.

Arsenal are huge in the most populous football-mad markets like Indonesia and Nigeria, while the data suggests they are easily the most popular Premier League club in North and East Africa.

They’ve capitalised on that through a £10m-a-year deal with Visit Rwanda, although it helps that the country’s autocratic president Paul Kagame is a genuine fan and regular in the Emirates’ posh seats.

Setting aside the pandemic era, Arsenal are on a six-year run of pre-season tours in America, which tells you all you need to know about their thoughts on the States as a ripe commercial market too.

This kind of marketing speak makes most bedrock supporters in North London queasy, true, but it is exactly how Kroenke Sports & Entertainment (KSE) think.

It is also why KSE, now publicly fronted by Josh Kroenke at Arsenal, think they can one day cash in for an enormous profit, having invested approximately £1bn to secure full ownership of the club.

And yet, as a business, they have not posted a profit for over five years.

In fact, they have lost £311m since 2017-18 which, significantly, was the first of a seven-season absence from the Champions League.

That goes to show that, despite all the commercial partnerships, merchandise sales and hospitality lounges that surround the Emirates Stadium, what happens on the green bit in the middle is still king.

All 27 Arsenal sponsors

Now, their renaissance on the pitch under Mikel Arteta is being reflected in the balance sheet. Could they finally sign that world-class striker as a result? More on that later.

• READ MORE: £55m striker Arsenal want to sign more than Alexander Isak may 'suddenly' become available before deadline day

Arsenal poised to reveal major financial boost

For years now, Arsenal have been the worst-performing side in the so-called Big Six in financial terms.

Their last set of published accounts details revenue of £464m, well behind the two Manchester clubs, Liverpool, Tottenham and Chelsea.

When it comes to Arteta and his behind-the-scenes team’s ability to compete in the transfer market, that is a big problem.

Stan Kroenke wants his teams to be self-sufficient, with every penny spent accounted for elsewhere in the business.

Yes, he has deviated from this model a little in recent years with the aim of getting Arsenal back into the lucrative Champions League, but their modest revenue has manifestly anchored their spending.

In terms of amortisation (how clubs account for transfer spending over a period of time) and wages, only tight-fisted Tottenham spent less out of the Big Six clubs in the last financial year.

However, thanks in large part to their increased fortunes on the pitch and the impact they have had an all three major income streams, Arsenal have arrested the slide.

As relayed in the Deloitte Football Money League, Arsenal are set to announce revenues of around £605m when they release their 2023-24 accounts in the next few weeks.

Everyone in football finance knew that the Gunners’ revenue would leap up in 2023-24, but the jump is bigger than anyone expected.

It also means that, based on projections from the likes of world-renowned finance analyst Swiss Ramble, the North Londoners will probably post a profit for the first time since 2018.

It is, as several financial sources have characterised it in conversation with TBR Football, a staggering set of results.

• READ MORE: Stan Kroenke's right-hand man at Arsenal accused of trying to 'derail' £106m masterplan

Will Stan Kroenke pay for a world-class new striker?

Even if Arsenal had posted a modest loss for 2023-24, Profit and Sustainability Rules (PSR) was never going to be an issue for them.

They have, by some estimations, around £184m’s worth of headroom thanks to PSR-deductible expenses such as spending on infrastructure, the academy, and the women’s team.

But if Arsenal are to sign a coveted world-class striker – Alexander Isak, Benjamin Sesko and Victor Osimhen are the names most often mentioned – there are more factors than just PSR to consider.

For one, Kroenke needs to have the necessary liquidity – AKA how easily he can access cash – but that shouldn’t be an issue given his cash reserves and access to the best lines of credit.

However, the potential redevelopment of the Emirates Stadium is on the horizon and macroeconomic conditions are unfavourable.

Three factors that mean KSE probably won’t alter the existing budgets for the time being are as follows:

1. The January transfer window often sees clubs held to ransom
2. Arsenal already have a strong chance of Champions League qualification, which delivers the best income-expenses ratio
3. They are naturally risk-averse

Unfortunately for Arsenal fans and football staff alike desperate to see a big name arrive this January, it isn’t in the Kroenkes genes to make this sort of high-tariff move.