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Emirates shirt-sponsorship deal buffs up Arsenal’s cash flow

Nov 24, 2012 1:45 am

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Sports marketing is big business for airlines, and its shirt and stadium-naming-rights deals are spreading the Emirates brands in an important market.

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Arsène Wenger will have £70 million to invest in his squad next year ahead of the final season of his contract as Arsenal manager.

The extra cash follows a new and extended £150 million shirt sponsorship deal with Emirates, announced on Friday, to run from 2014 until 2019, that has been partially front-loaded to ensure that there is additional money to invest next summer as Wenger prepares for 2013-14.

Arsenal have received around £6 million a year from their shirt sponsorship deal with Emirates since 2004 but that figure will rise to £30  million. The annual difference of around £24 million will be solely available for investment in the club and primarily the squad.

This will allow Arsenal to raise their wage structure so that it is more in line with their main rivals, principally Manchester United, Manchester City and Chelsea, but also to compete on transfer fees for leading players. Arsenal are entering crucial contract negotiations with several leading players. Theo Walcott’s situation is the most pressing, with Arsenal still unwilling to raise a five-year offer worth £75,000 a week. Bacary Sagna is also due to hold negotiations on a contract that expires in 2014.

In their most recent accounts, Arsenal also had a cash balance of £154 million. Although much of that money is committed to spending throughout the year, it is understood that the transfer budget, even before the new Emirates deal, stands at around £40 million going into the January transfer window.

“I think we will be able to be more financially competitive and that will enable us to push forward on the field,” said Ivan Gazidis, Arsenal’s chief executive. “We can pay bigger salaries and I think we can invest more in transfer fees. How we make those decisions will be based on a manager whose judgment, over the years, has been shown to be outstanding. There’s nobody I would like to be thinking about those types of decision more than Arsène Wenger.

“We have got a lot of money coming in. We also kept some powder dry, so we have got the ability to invest if our manager finds the right opportunities in January.”

The new sponsorship deal, which also includes training-ground kit and an extension of the Emirates’ Stadium naming rights for a further seven years until 2028, is thought to be the second-largest shirt sponsorship deal in British football after Manchester United’s tie-up with Chevrolet. United have also earned an additional £10 million a year from DHL for their training kit.

Gazidis said that Arsenal’s “outstanding” new deal was among the biggest in sports history and predicted that it would propel the club forward as significantly as the move to the Emirates Stadium in 2006. He also forecast that Arsenal’s self-sustaining strategy, underpinned by the move to the Emirates and new commercial deals, would put the club “at the top of the game five years from now, 10 years from now or 20 years from now”.

Arsenal are also in negotiations with Nike over their kit manufacturing deal which expires in 2014. A new deal should also be worth in the region of £100  million over five years.

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