World-record £200m deal is target for Arsenal amid off-pitch talks in USA

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Arsenal touched down in the United States tour last Wednesday for a three-game pre-season tour.

Mikel Arteta’s side beat Bournemouth on penalties after the scores finished 1-1 in 90 minutes yesterday (24 July) in front of 13,000 fans at Health Sports Park in Los Angeles.

Next, they will face Man United at the SoFi Stadium, home of owner Stan Kroenke‘s LA Rams franchise, in a match expected to draw a far more sizable crowd on Saturday (27 July).

Finally, they will make the trip to Philadelphia where another high-profile encounter against Liverpool awaits them next Wednesday (31 July).

The North London club are one of the most recognisable brands in world football, and they are trying to leverage that in an era of soaring commercial income for Europe’s elite clubs.

The Gunners arguably have more work to do than most in this department, however.

Arsenal earned £173m in commercial income in the last financial year, an impressive figure in isolation but one which is dwarfed by every other club in the so-called ‘Big Six’.

For context, nearest rival Chelsea earned £210m over the same period while biggest earner Man City made almost double Arsenal‘s total.

Many owners and directors believe the US is the golden ticket to unlocking far greater commercial income, hence why the Gunners have spent the last three summers on that side of the Atlantic.

To explore Arsenal’s ambitions in America and beyond, TBR spoke exclusively to the well-connected Liverpool University football finance lecturer and Price of Football author Kieran Maguire.

Arsenal need to innovate to catch Big Six rivals

A few miles across North London, there stands a physical illustration of the gap between themselves and their peer group in terms of commercial income.

As well as allowing Tottenham to surpass Arsenal’s still impressive matchday income, their new stadium has unlocked huge commercial benefits.

What’s more, a new study from Sports Business Institute Barcelona revealed that Arsenal are also more reliant on their front-of-shirt shirt, sleeve and kit sponsorship deals for commercial income.

Arsenal generated 81 per cent of commercial income from deals with Adidas, Emirates and Visit Rwanda, whereas Spurs made 36 per cent of their £228m commercial income from the same three sources.

Before concentrating on the US market, Maguire suggests that Arsenal should first be looking to emulate Spurs’ strategy at home in order to raise commercial income.

“Arsenal probably need to start thinking outside of the box in terms of commercial income,” he said.

“It is noticeable that they have fallen behind the other Big Six clubs. They have become over reliant on the three core areas.

“What they perhaps need to consider is alternatives possible uses for the stadium. Spurs are very much into this.

“They should be looking to use the stadium on non-matchdays to a greater extent.

“On the back of that, you build relationships with new markets and customers throughout those events, like concerts and other sports.

“In turn, you can increase sponsorship revenue through those new relationships and so on.

“Arsenal certainly have a lot of positives in their favour. They have now qualified for the Champions League two years in a row, and they now need to convert that into a monetary form.“

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Arsenal looking to unlock African market

While a great deal of their commercial firepower is concentrated on the United States, Arsenal are also making a concerted effort in other territories.

Historically, the Gunners have been the most popular Premier League club and North and East Africa, and there is a huge African diaspora in North London.

In an ode to this section of the fanbase, the club have cooperated with British-African designer Labrum for the launch of the new Arsenal away kit, which is inspired by pan-African colours.

Is Africa a territory they could further zero in on with a view to increasing commercial income?

“Converting eyeballs into dollar bills is always a big challenge for club,” said Maguire.

“Arsenal do have a lot in their favour in terms of their links to North and East Africa, which has come through previous success and links with individual players.

“The fact that they have Visit Rwanda as a shirt sleeve sponsor does indicate that there is a relationship between the club and a potential fanbase is there in theory.

“Putting that into practice and monetising it is difficult given that the cost of tickets and merchandise is very high.

“Arsenal are broadening the demographics of its product range to make it more attractive in certain territories, which is the way forward.

“They should also consider formalising more of the links they have in these countries where they have a very significant fanbase.“

How much will Arsenal make from USA tour?

Arsenal are no doubt looking to cultivate their following in the US for the long-term with their visit this summer.

But there is also an immediate financial benefit, through promoters fees, a cut of ticket sales, merchandise and sponsorships.

“Man United have set a benchmark of around £15m per season through pre-season tours,” explained Maguire.

“They are, in many ways, an aspirational brand as far as other clubs are concerned.

“But there is no reason Arsenal cannot be picking up around £2m per match and using the trip to the United States to tie up individual sponsorships and products in that market.

“It is also an opportunity to engage with the fanbase, sell merchandise and interact through player appearances. That can only help tie up and solidify fan relationships in the US.

“It’s noticeable that, if a club like Wrexham can now be the biggest that has greater support than any MLS club apart from Inter Miami, there are growth opportunities for clubs like Arsenal.

“However, they have to put the effort in to persuade discerning American fans that a club like Arsenal is worth of their support.“

Arsenal want Premier League to challenge supremacy of NFL, NBA TV deals

The Premier League is so much of a global phenomenon that you could be forgiven for thinking that it is the apex in terms of media rights value.

However, American sports remain the most lucrative and attractive for broadcasters.

The NBA, for example, recently struck a world-record £77bn TV deal, from which Stan Kroenke’s Denver Nuggets are expected to earn around £200m per season.

That will be the benchmark for the Gunners for some time as they aim to play a role in increasing the popularity of the Premier League in America, claims Maguire.

“The value of the US market can sometimes be overplayed, but it is very significant.

“However, the money generated from the Premier League TV deal is fairly small compared to the domestic deals.

“The challenge and target for Premier League clubs like Arsenal is that we have just seen a new record deal announced for the NBA TV rights.

“That and the NFL rights still are the main focus for the broadcasters and fans in America.

“When it comes to football, the Premier League wants to be the best of the rest.

“This us where clubs like Arsenal by visiting the US can embed themselves in the country.

“That can only benefit Stan Kroenke if he is looking to further increase the vale of the club. not that there is any evidence that he is looking to a sale at present.”