During the summer, Arsenal co-chairman Josh Kroenke kicked open the door to a potential expansion of the Emirates.
The Gunners were the first team out of the blocks back in 2006 when they moved into their 60,704-seater home having waved goodbye to Highbury in the May of that year. It was a move that had an impact on Arsenal’s transfer spend for some time, but one seen as vital in terms of ensuring that the revenue opportunities at the club could be maximised.
It was built at a cost of £390m, something of a drop in the ocean compared to the eye-watering sums of £2bn-plus that have been attached to Manchester United’s search for a new home adjacent to Old Trafford. Higher rates of borrowing have made it an expensive task to undertake for any owners looking to do such things right now.
But the Emirates is now 18 years old, and while it remains one of English football’s biggest stadiums, and an appropriate home for a club of Arsenal’s size, the development of Tottenham Hotspur’s new state-of-the-art stadium, with a capacity of 62,850, has seen Spurs overtake the Gunners when it comes to matchday revenue, as well as be able to tap into revenue streams such as hosting annual NFL games and major concerts and other live events. That has made the £1.2bn seem worth the while for Spurs chairman Daniel Levy.
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Arsenal owners Kroenke Sports & Entertainment (KSE) know that they cannot idly sit by, and Kroenke, son of KSE founder and principal Gunners owner Stan Kroenke, alluded to that fact when speaking to ESPN during the club’s US tour.
“It would be premature to talk about any plans in depth, but the internal conversations are starting to occur about [the stadium],” said Kroenke.
“It is not an easy renovation, but we see the possibilities of what’s there.
“Our goal was always to compete for the Premier League title because if you look around the world, if you are competing for the title year-in, year-out, you are competing for everything else.”
Discussions around those proposals are understood to have been ongoing, and the potential of adding an additional 10,000 seats has been mooted in reports that emerged earlier this week.
When it comes to matchday revenue, for the most recently published and publicly available accounts that covered the 2022/23 period, Arsenal were third among the Premier League clubs with matchday revenues of £103m. They trailed Spurs’ £113m and Manchester United’s £136m.
Obviously, the amount of games played has an impact, and qualification for European competition that delivers additional home games, as well as home games in domestic cup competitions, can help lift revenues.
Last year, Liverpool completed the second major stadium upgrade of Anfield under the stewardship of owners Fenway Sports Group, adding a further 7,000 seats to take the capacity of the ground up to 61,000. By the time the 2024/25 accounts are published, covering this season, the club will likely join Arsenal in the £100m-plus club, and with rivals making ground on them the Gunners know that they need to do what they can to stay ahead.
It won’t be an easy task, however. While there is some room around the Emirates and the ability to expand, stringent planning regulations in the locality, not to mention the likely significant cost of the development given the current status when it comes to the cost of capital, mean that it will be a significant undertaking from KSE.
But more seats, and likely more hospitality spaces that can be sold for high sum, would directly aid the ability in the club to invest on the pitch, and would come at a time when Premier League clubs are trying to find ways to maximise revenues such as commercial and matchday to reduce their reliance on broadcast revenues, which could face an uncertain future in the face of rising pressures for broadcasters and an increase in piracy impacting TV subscriptions.
At present, using the possible increase of 10,000 seats, a rise of around 16.5%, to apply that to the matchday revenue as it stood in 2023, £103m, would bring in almost another £17m per year, which would see them leapfrog Spurs and close the gap on Manchester United, not to mention pull away from Liverpool.
While the tendency is often to look at a sum like that in isolation, such as how much £17m gets a club in the transfer market, that kind of near guaranteed sum significantly aids cash flow, and the club’s ability to absorb wage costs and amortisation costs on an annual basis.
Arsenal have made significant strides on the pitch under Mikel Arteta in recent seasons, having spent some time in the wilderness after focusing a little too much on what happened off it. If the two can be aligned, as is the plan, then Arsenal’s return to the title conversation after much time away, as well as their impact on European football’s top table, will be a far more permanent affair.
