Every effect and what Arsenal stands to lose from COVID-19

It's now been over one month since Arsenal last played a Premier League game, and indeed a football game, with their last performance coming on the 7th of March, in a 1-0 victory over West Ham United. It has been a painful pill to swallow but one that has to be swallowed, health is a priority, you have to be healthy to watch and play football so the suspension of the game just had to happen.

The COVID-19 pandemic started well before football in the UK was put to a temporary end, the hope was that it'd not come to a point where that had to be done but it did come so the decision was taken. With such major decisions and interruptions, as you'd expect, comes with great effect. And for Arsenal, there stands to be very great effects. We'll try to take an indepth look at what effects the forced stop of Premier League football could have on Arsenal.

When Arsenal released their financial report for the 2018/19 season, they were already at a loss, with failure to qualify for the UEFA Champions League making things potentially all the more difficult.

As quoted in Arsenal's official website:
"The Arsenal Group’s loss for the 2018/19 year after taxation was £27.1 million(2018 – profit of £56.5 million). Football Revenue for the year was £394.7 million (2018 - £388.2 million) with the increase being mainly attributable to the club reaching the final of the UEFA Europa League (2018 – reached semi-final) together with increased commercial revenues which included the Visit Rwanda sleeve partnership as a new category. Overall operating profits were impacted by continued investment in player wages which meant that total staff costs, excluding exceptional costs, grew by £8.4 million to £231.7 million (2018 - £223.3 million)."

The vast difference in the profit and loss from 2018 and 2019 is quite staggering, going from £56m profit to a £27m. With player wages only having increased, with the wages of the summer additions having outweighed the departures, the wage bill only got bigger and expenditures increasing for the 19/20 season.

An unanticipated stop in the the Premier League is the last thing Arsenal would have bargained for. Matchday Merchandises have been a very big source of income to the club, one month off football means a huge loss in that, with even a potential restart not going to yield as much as it should have, given the potentially limited attendance as a health precaution, with reports even suggesting the rest of the season could be played behind closed doors.

Whether or not, the season ticket holders would be refunded for matches missed is unclear and remains to be seen, but what is certain is that Away team and tourism revenues would also run into millions lost in this short period which could still very much span a few more weeks.

The revenue streams have been closed on the club, but not on the players, with the players still receiving wages(whether full or after taking huge cuts), irrespective of the club's financial dilemma. This only aggravates the finances as, in a nutshell, money keeps leaving but not coming in to create the Balance.

Now on the on field impact. With all the financial hit the club is taking and could still take, it's almost inevitable that the club would spend significantly less than they'd have planned to before the unforeseen circumstance. Arsenal would still have to honour the terms of their contract with Lille over the signing of Nicolas Pepe, with Arsenal required to pay about €14m of the money in the summer, potentially taking a cut off the limited available funds for transfer. Arsenal have a lot of positions that would need reinforcements, not that it'd have all been done this summer, but even the small chunk that would have been done only just got smaller.

The buying asides, the sales could also take a good hit, with clubs almost certainly being more reserved in putting in bids and in accepting asking prices.

Arsenal took a £57m hit in the 2018/19 season, and things just got worse, that figure could very much get closer to £100m. The need for UEFA Champions League revenue has become greater than before, and it looks as though Arsenal are missing out on it again.
The loss could be great, the attendant effects could be even greater.

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