Stan Kroenke has just confirmed big change behind the scenes as Arsenal chase £220m dream

Yesterday at 01:45 PM

Arsenal fans are pining for their club to spend, spend, spend this transfer window, with Stan Kroenke urged to absorb any financial impact the Gunners might incur as a result.

Their first shot at silverware this season was set back last night as Mikel Arteta’s side lost 2-0 to Newcastle United in the League Cup semi-final first leg at the Emirates.

One narrative ahead of kick-off was that the clash was effectively an audition for Alexander Isak, who is a target for Arsenal but valued at £150m by his club.

Most expensive Premier League signings

The Swede would be a Hollywood signing and, at that price, would comfortably surpass the current Premier League record, the £107m Chelsea paid for Enzo Fernandez two Januarys ago.

Reportedly, Arsenal had the chance to trigger Isak’s £75m release clause in 2022 but the powers that be in N7 believed that fee didn’t represent good value.

But after 19 goal contributions in 22 appearances this season, the latest of which came with a bullet finish from eight yards at the Emirates last night, his market value has appreciated expeditiously.

Significantly, Isak is potentially now worth more than Arsenal can afford.

But what dictates what they can afford? The answer is multifactorial, encompassing Profit and Sustainability Rules (PSR), the benevolence of Stan Kroenke, and the health of Arsenal as a business.

For most in the Premier League, TV and streaming money is the golden goose.

The next four-year media rights cycle will see clubs pocket £12.25bn between them. That is a 17 per cent rise on the previous tranche of deals and bucks the trend across Europe, where TV money is shrinking.

But Arsenal are one of a select few whose revenue is heavily diversified. In the last financial year, the Gunners’ turnover was £464.6m.

Of that figure, £191.2m, or 41.3 per cent, came from media streams. For context, Brentford generated £166.5m over the same period, with 81.2 per cent of that figure coming from media.

However, while Arsenal are streets ahead of the chasing pack in the bottom two-thirds of the Premier League, they are arguably the worst performing business in their peer group, i.e., the so-called ‘Big Six’.

The North London side had the lowest annual revenue out of the two Manchester clubs, Liverpool, Chelsea and Tottenham – and by quite a margin the last count.

Where is the discrepancy, which will shrink but not disappear when Arsenal release their accounts for 2023-24, coming from?

The moneymen at the Emirates know – and they are thinking outside the box to address the root cause.

• READ MORE: Arsenal boss Mikel Arteta makes Stan Kroenke takeover request amid £5.5bn Man City empire interest

Stan Kroenke sets up new sponsorship unit

Arsenal’s three biggest sponsorship deals – with Emirates, Adidas and Visit Rwanda – are believed to generate around £141m per year.

That is a huge chunk of their total commercial income.

Arsenal are far, far more reliant on the so-called ‘big three’ sponsors than, say, Tottenham or Liverpool.

They have made efforts to diversify their commercial income in recent times, with a drive to increase the breadth of their sponsorship portfolio, however.

Every Arsenal sponsor

Now, Kroenke Sports & Entertainment is setting up a new team to oversee sponsorship across their portfolio.

As reported by Sports Business Journal, Kroenke Signature Properties will manage sponsorship sales across Arsenal, the Los Angeles Rams, Denver Nuggets, Colorado Rapids, and Colorado Avalanche.

The team is being co-led by Arsenal commercial director Olly Dale and the hope is a centralised approach to sponsorship across the KSE network will yield greater financial returns at each of its outposts.

"We're here to try to make it easy for global brands to take advantage of the size and scale KSE offers," Dale told Sport Business Journal.

"We're in a unique position where we can utilize the resources and expertise we've got all across the group, to offer something to brands that's pretty unique in the marketplace."

Chris Sloan, Dale’s partner in the new initiative, added: "Where it makes sense across the globe, we will continue to look for ways to tie all of them together, and it will work for some brands and some won't.

"It doesn't make sense to have a partner in LA doing one thing, and a different partner in Denver, and a different partner in London.

“Wherever we can to standardize those things, and bring the conversation together to give it scale, that's what stands out to us.”

• READ MORE: Liverpool and Arsenal set for multi-million payout after FSG and Stan Kroenke win £99m battle

How much commercial income can Arsenal make?

Ultimately, Kroenke wants Arsenal to be a sustainable business.

The 77-year-old Missouri-born billionaire has swayed from this model a little in recent years, underwriting losses of £311m since 2019 in order to make the Gunners competitive on the pitch again.

However, he now appears to be attempting to demonstrate the potential for long-term profitability once more, polishing the club in advance of when the time comes to eventually sell it.

Commercial income – especially derived from markets like the United States and through new technologies that allow clubs to better monetise overseas fans – is the key here.

Speaking exclusively to TBR Football earlier this year, Liverpool University football finance lecturer and industry insider Kieran Maguire said Arsenal are targeting “£200-220m” in commercial income this year.

The hope at Kroenke HQ will be that the new sponsorship division can help deliver and surpass those figures in the coming years, carving out a pathway to profitability.

How much extra revenue Silent Stan and his son Josh Kroenke, who is now the public face of KSE in North London, would skim off the top for Mikel Arteta’s recruitment and retention budget remains to be seen.