Special Contributor

An American Gooner In North London

By Foti Filacouris

The Decision

When considering what me and my lovely girlfriend should do for holiday this year, our initial thought was to vacation to Spain and to spend a nice 10 days in Barcelona. After a brief search on the most popular travel sites, we realized quite quickly that $2,000.00 in return tickets alone was not as appetizing as the allure of the warm Catalonian sunshine. We happen to live in Long Island, which is right outside of New York City, so we ultimately had an easy flight path to Europe. 

Our next thought was to visit the south of France, a beautiful vacation to the Côte d'Azur better known as the French Riviera. After another seemingly endless search trying to discover reasonable flights, we discovered this journey was also too expensive for only 10 days.

A look at the start and end dates of our holiday lead me to a very interesting discovery. We just so happen to be planning to head to Europe during the opening game of the season at the Emirates vs Burnley!

After what seemed to be endless searching which coincided with some careful budgeting on our side, I had a stroke of brilliance. What if I could somehow do a train tour around Europe that started in London? Could I sell that to my better half? 

The answer was yes… what follows is my experience.

I will attempt to depict my pilgrimage to the Emirates. I will attempt to encapsulate my thoughts and feelings in a coherent manner. I will attempt to make some suggestions for folks who might also be making their first trip in the near future.  

The challenge with all of that is, if you love the club the same way that I do, this task is seemingly impossible. For a foreign fan, watching the team week in and week out, living and dying by the pixels on a tv screen or laptop monitor – seeing the Emirates for the first time is a surreal experience. Come on the journey with me ya gunners.

The first question is..

How do I get tickets?

Once I convinced my girlfriend to gallivant to London with me to visit the Emirates, I had a big task at hand, how do I purchase tickets.

This is not such a straightforward experience to the layman. After some careful investigation, I learned that purchasing tickets from popular ticketing websites may be illegal in the UK. This was a complete shock to me as third-party ticket reselling in the US is the most common mechanism for purchasing match day tickets – for any sport. This had me a bit rattled, so I decided that the best approach was to go directly to https://www.arsenal.com/ to purchase tickets.

What I did not know was that in order to purchase tickets from The Arsenal you must go on their Ticket Exchange which is a marketplace for reselling directly through the club. In order to gain access to the ticket exchange, you must purchase a membership plan which will grant you access to the ticket exchange – the better the membership plan, the earlier in advance you can purchase tickets. Much to my chagrin, since this was fairly last minute (3 weeks before the match), I decided to purchase the red membership. This was essentially a £29 cost for purely the chance of purchasing a ticket. (You can find out more about red membership details here https://www.arsenal.com/membership/red)

Bad luck for me though… 

All of the tickets were sold out on the ticket exchange and my dream was almost shattered. I decided that this was not enough to get me down and that after all of this hard work and planning, we would take the risk and purchase tickets via StubHub. After two weeks of waiting, I received the email with our e-tickets!


The next question we had to ask ourselves was…

Where do we stay?

Luckily for me, working for global companies for the better part of my career left me with friends that lived in and around London. The recommendation that was given by a good friend and colleague was to stay in Shoreditch. Shoreditch is a hipster part of London that is located in the borough of Hackney. We stayed around a very reasonably priced area in Shoreditch which was roughly a 12-minute uber ride to the Emirates stadium. Our hotel was very accommodating with nice restaurants, clubs and bars nearby… not to mention some great street art:


The Emirates Experience

Once gameday arrived I donned my bruised banana Arsenal away kit and made my way towards the stadium. The game was set to start at noon, which left me at a decision point of what time to arrive. We arrived two and a half hours early so that we had plenty of time to take in the surrounding ambience that was North London. Traveling to the stadium in our minicab, we traversed Holloway Road that brought us past Highbury  and into Islington (names of the local towns in the area – probably familiar to most). As we made our way through the streets, we were brought into a neighborhood where our Uber driver instructed us to exit. After walking up a block or two we were able to see it… finally.


The first thing you see as you walk up to the stadium is the Armoury. 

The Arsenal Armoury

Once you enter the Arsenal team shop, you walk into a room that has all the kits anyone could ever dream of. In the main entrance area, there is all of the Men’s kits, these varied from warm ups to the standard Home, Away and Alternate jerseys. 


Even roughly two hours before kickoff the Armoury was packed! There was a substantial amount of families.  While wandering around and casually shopping I was able to meet Gooners from all around the globe. We met many Gooners that varied from countries such as Australia, Japan, Nigeria – we even met fellow Americans from Colorado and Boston. I must warn any first time Gooners that there is a metric ton of awesome Arsenal memorabilia and clothing – please be prepared to spend money if you walk in there. I personally got a custom printed Bergkamp #10 on the home kit, which was around a 20-25-minute wait (view from the line below).


This whole experience gets you really jazzed for the game. As I walked out of the Armoury I felt this feeling of anticipation welling up inside of me, I was a few short steps away from entering the stadium grounds where the new look Gunners would face Burnley.

As we walked up the stairs, we were greeted by music…

Entering the grounds

Once we climbed the staircase that led to the main promenade, we were greeted by a quartet of brass players playing on a stage. They were playing a lively tune that flittered through the warm summer day, saluting the fanbase on their way through security. While we walked and wandered towards our preferred entrance, a nice woman came up to us and handed us a card for a free pint of beer inside the stadium. This turned out to be Arsenal’s new brewery sponsorship, Camden Town Brewery. 

Before walking into the grounds, I stopped for a moment to take the whole beauty of the stadium in, there is a giant mural of some legends that look over the stadium from the upper perches of the walls (History Through Harmony):


 After the initial butterflies of being there had subsided to a degree, we walked to our “gate” and walked through security. The experience of passing through security for me was very light compared to what I am used to in the US sports venues. A quick look through our bags was all it took for us to be passed through to the turnstiles. We were quickly into the inner sanctum of the Emirates. 

Inside the Emirates, we saw a ton of concession stands and food halls. It is important to note that we had entered on field level and this account is from that purview. Needless to say, at this point, the anticipation of getting my free beer and walking onto the field level seating was growing. We quickly grabbed our free Camden Town Brewery lagers and headed for our seats.

One thing to note that was also a bit of a shock to me, was that, alcohol was not allowed on the field facing portion of the stadium. This may seem naïve to folks who grew up in Europe and attended many football matches abroad, but this is a completely different policy compared to American sports. This is an important memory to point out because it required me to drink my beers quickly inside the stadium prior to heading to my seats. This probably added to the liquid courageous feeling that I felt when I actually saw the field.

My view from our seats – NorthBank

My view from our seats – NorthBank

The Atmosphere

Walking out and seeing the Emirates field for the first time is very difficult to explain. Arsenal Football Club has become a sort of obsession for me over the course of the past 5 years or so – watching and admiring the ups but mostly the downs over the course of the past decade. This summer on the other hand left the club in a positive light for the first time in a while. The business that was done left a sense of optimism in the air and it resonated throughout the pitch. 

It may sound odd to the say that being there in person was euphoric but that is really the best way to explain it. Once the match began, being so close to Aubameyang, Ceballos, Guendouzi, Leno, Sokratis, etc… at times I had to pinch myself to make sure I wasn’t dreaming. 

The result of the match and the overall tone of the game also assisted in enjoying the experience thoroughly. This includes but is not limited to the stadium energy and the banter all around me. We had heard in the past that the Emirates is quiet and lacking in charisma but that was not the case on this day. The four-tiered bowl that comprised of roughly 55,000 screaming fans was both beautiful and electric. Our perspective was from the North Bank, closer to the field level by the corner flag. I mean just look at some of the photos:

Aubameyang and Mike Dean – bitter rivals)

Aubameyang and Mike Dean – bitter rivals)

Post Aubameyang second half goal

Post Aubameyang second half goal

An American Gooner in North London

Being a tourist in London for the first time let alone traveling to the Emirates can be intimidating. Especially since it is difficult to answer some of the questions mentioned earlier in this blog post. Hopefully some of this helped someone, somewhere looking to visit for the first time and to emulate this experience. Hell this might even be interesting for locals and season ticket holders – to understand what visiting the stadium means to someone living 1,000’s of miles away. 

Being somewhere you’d never thought you’d get to be is special. Being there with the person you love is life changing. Getting to share that experience with countless others in this beautiful community we call fandom – priceless.

North London is red my friends, I just had to see it with my own eyes.

Arsenal vs. FFP in 2019/20 - Are We Screwed?

That’ll do pig. That’ll do.

by Tom Jones


To comply with Financial Fair Play clubs must break even or better on a rolling three-year aggregate. For example, to qualify under FFP in the 2019/20 season the club submits total profit and loss (P&L) from 2016/17, 2017/18 and an estimate of 2018/19 (official accounts are not available when submission is due). For 2020/21, the accounts for 2016/17 will be replaced with estimates for 2019/20 and so on. Owners can offset losses as much as 35m per year with cash investment, and clubs can deduct expenses on youth development and infrastructure from the calculation.

Seems reasonable, right? But as we will see, there can be some unintended consequences of this three-year window that clubs may not have anticipated. In Arsenal’s case, a large cash reserve was built up long before FFP as Arsene Wenger and the board kept player trading expenses down. Arsene finally started to spend the cash, but as of May 2018, Arsenal still had about 195m in “free cash.” We have repeatedly heard from management that money generated by the club is free for investment into the squad, so why in January of 2019 when faced with a tight race for the lucrative Champions League and key injuries did the club state it could only loan players while sitting on 200m?


One prevailing theory is that Stan has tightened the purse strings to cover cost overruns at his LA stadium project. While a nice narrative, there is another possible explanation—that the fiscally responsible Arsenal are up against an FFP wall. As I’ll explain, the player trading and contract management at Arsenal the last few seasons have put the club in an accounting bubble which has ballooned and effectively made spending the cash pile very challenging even if KSE has given the green light to use it. To see this, we will need to first understand how the club accounts for player trading.


As fans we like the simplistic approach of following the cash balance numbers and annual “net spend” figures that are spouted in the articles we read. In truth though, there is no such item in the official accounts. Player purchases, renegotiations and sales are distinct types of transactions and are accounted for differently in both amount and timing.

Player Purchases

While a club may pay actual cash for a player’s registration from another club, this cash paid does not immediately go toward expenses (see highlighted portion of Official Arsenal Accounts below). This is because the new player’s registration is considered an (intangible) asset, and for accounting purposes the cost of assets is realized over their “useful life.” While the “usefulness” of some of Arsenal’s players is debatable (ahem, Mustafi), the club will spread out or amortize the cost of a player’s registration over the duration of the player’s contract.

This is useful for typical businesses so that when acquiring a large asset, they can spread that cost out and not take a huge hit on the bottom line in a single financial period. But typical businesses don’t have to deal with FFP, and Arsenal do.


As an example of how this is done, we can look at the purchase of Alexis Sanchez by Arsenal. He was bought for reported 35m in 2014 on a 5-year deal. That 35m did not go on Arsenal’s P&L for 2014 as an 35m expense, however. Instead, Arsenal booked his registration as an intangible asset with a cost of 35m. Each year for the term of the contract they amortized that value down by 7m (35m/5yr) and booked the 7m as an amortization expense (see the line item below). So, in terms of affecting the P&L, and therefore FFP calculations for that season, Sanchez only “cost” the club 7m in 2014 even though they might have paid the 35m up front in cash. Of course, this meant he was still hitting this line item for 7m in 2016 as well.


Contract Renegotiations (extensions)

In these situations, club accounting policy (see below) is to take the remaining amortization of the player’s registration (what’s left to expense from the initial purchase or prior renegotiations), add that to the cost of the new contract (certain bonuses, Agent’s fees, etc.) and then amortize that “total cost” over the life of the new contract.

Consider the Ozil deal. At the time, Ozil had about 6 months left on his original cost of 42.5m. So, the club maybe had about 4m remaining to amortize. Certain bonuses to the player, agent’s fees for the new deal, etc. are added to that remainder (maybe 10m for such a huge deal). Therefore, we have maybe 15m as the total cost of Ozil’s current registration. The club will spread that over next 3 years (duration of his new deal) by taking an amortization expense of 5m every year. So Ozil hits the bottom line to the tune of negative 5m or more per year on top of his 18m per year salary. Easy to see why the club possibly wanted him off the books in January.


Player Sales

When a player is sold, the remaining amortization is subtracted from the sale price and the result is what hits the bottom line as either profit or loss.

Consider the rumored sale of Xhaka this summer for 50m. While the club might receive a check for 50m, that money will not contribute to the P&L as a 50m income. At the time of sale, the club must charge off the remaining amortization left on the player’s registration. As we learned from the sections above on purchases and renegotiations, the club is yet to fully realize Xhaka’s initial purchase price and he also renegotiated his deal in 2018 further adding to his “cost”. When he is sold, this remaining amortization would need to be realized which would offset some of the 50m income from his sale.

In detail, Xhaka’s original deal was reported as 35m for 5 years so the club was charging 7m off each year. At the time of renegotiation in 2018, the club still had 21m (7m per remaining year) left to amortize. He renegotiated for reported 5 more years. So, add another few million in agent’s fees and bonuses and you probably have 25m left. Subtract the amortization taken in 18/19 (1/5th) and you are left with about 20m or so to amortize at the time of sale. Therefore, if Xhaka is sold for 50m this summer, the club may see an increase in cash by 50m but will actually only book an income on the P&L of 30m from the transaction.

Again, for a typical business this is good. It can essentially shield the bottom line from huge fluctuations when a large asset is sold (i.e. dodge the tax man). However, these costs are being spread out over 5 or more years while profits from sales are being realized in one season. With only a three-year window for FFP it’s easy to see that occasionally this may cause a problem if not considered by management.

A prime example of how this disparity can unexpectedly affect the P&L can be seen in Arsenal’s spending in 17/18. At first glance the net spend in cash terms was close to zero (3m net income according to tranfermarkt.com) with sales of Giroud, Ox, Walcot, etc. essentially balancing out purchases of Auba, Laca, etc. However, due to these accounting practices, Arsenal actually booked a 120m income on player “disposals” that year (see P&L from 2018 below) which was only offset by player trading expenses of 91.7m. Essentially Arsenal only generate 3m in cash from player trading that year but booked a net positive of about 30m toward the bottom line.

How is this possible? Due to the accounting differences between purchases and sales we explained above, most of the cash from the outgoing players was booked as profit for 2017/18 while most of the cost of incoming players is spread out to future years. This is the problem Arsenal are facing with respect to FFP.


Another good example is the Sanchez/Miki swap deal with United. To the fan, it seems like a net-zero even swap since no cash was exchanged between the two clubs. However, for accounting purposes this was a sale of an asset (Sanchez) and a purchase of another asset (Miki). For this one, the club uses the fair market value of the players (reported as 35m in this case). So the club booked an income of 35m from the Sanchez “sale” for that year (less any remaining amortization). But for Miki, the club will spread the 35m “cost” over the 3.5 years of his contract (10m per year). The effect of this is that the club booked a “profit” on the exchange of perhaps 20m or more for the year 2017/18 even though no cash was exchanged.

Of course, there is no such thing as a free lunch, and the club still amortizing Miki’s registration at the clip of 10m per year and over time this will net out to zero. But, by taking the profit in one year and the expense in future years can really hurt the bottom line when the year of the profit drops out of the FFP calculation, but the years of the expense remain—essentially a 50m swing in this example. More on this in the FFP section below.

What is the consequence of all of this? From a business point of view Arsenal is actually doing okay in terms of revenue, cash and debt trends. But the way Arsenal have “timed” and structured their player trading in the twilight of Wenger’s reign means those deferred costs have created a bubble which is hitting the club’s P&L hard starting in 18/19 and likely continuing through 21/22.


Now that we know how the accounts are handled, what does the FFP situation for Arsenal look like? Recall that according to FFP, Arsenal must profit or break even over a rolling three-year aggregate or face penalties. Let’s look at the next two seasons--2019/20 with the FFP window using accounts from 2016-19 and 2020/21 with the FFP window using 2017-20.

We have official accounts for 2016/17 and 17/18, but official numbers for 2018/19 haven’t been released and 19/20 hasn’t happened yet. In order to do some analysis, I have projected in the chart below based on what we do know about these seasons (no Champions League revenue, 18/19 signings, new Adidas and Emirates deals, etc.).


As we can see, the club was in profit both of 16/17 and 17/18 despite the lack of Champions League revenue in 17/18. In 18/19 the club will still be amortizing the deals for Auba, Laca, ozil, etc. from 17/18, while the revenue from Theo, Giroud, etc. all was booked in 17/18. Further, the club essentially sold no one in 18/19 but bought new players (Leno, Torreira, etc.) spending about 75m. That expense will also be amortized in 18/19, 19/20 and beyond at about 15-20m/yr. Therefore, the club likely will see a jump in amortization expense that I estimate to be as much as 35m more than in 17/18. I keep staff and other wage costs the same.

Turnover due to property sales doesn’t count toward FFP, the commercial/TV deals were basically the same, and there was no Champions League revenue in 18/19 so FFP revenues will likely be the similar to 17/18. Therefore, in 18/19, Arsenal will likely see a huge jump in expenses due to the signings of 17-19 along with the stall in revenue due to no Champions League. This will culminate in a huge P&L loss for 18/19 which I estimate could be about 92 million.

That is a huge loss, but for the season 2019/20 FFP calculation Arsenal had the profits from the previous two years to offset this loss for an aggregate profit over the three years of about 15m. Not bad, but I think I’ve been conservative here by not accounting for any extra expenses relating to the departure of Wenger, Gazidiz, Sven et al. and the appointment of their replacements. I suspect this 15m may actually be closer to zero. In any case, this number doesn’t offer a lot of wiggle room, and so it is a possible explanation why the club announced it could only loan players in January.

But what about 2019/20 when the club has additional revenue from Adidas (30m/yr more than Puma) and Emirates (10m/yr more than before)? The club is also trimming its wage bill significantly with the departures at least of Cech, Ramsey, Leichsteiner, Wellbeck, Jenko, etc. so at least 20-30m in reduced annual wages and even further reduction in amortization costs. With these considerations, I project that Arsenal will reduce wage and amortization expenses by about 50M next year not including any signings or contract extensions. With the 40m more in extra revenue, 50m less in expenses, and healthy cash balance Arsenal should be good to make signings in the summer of 2019, right? Not necessarily.

Since there is no Champions League football for 19/20, even with the new kit deals and trimming the fat a little, I project Arsenal will likely still see a small net loss on the season of 19/20 of around 2m (assuming no player trading). A big improvement compared to the huge loss of 18/19. However, the problem with respect to FFP is that the very profitable year of 16/17 (+43m) now drops out of the FFP calculation for the 20/21 season. Arsenal will then have a loss in two of the three years considered by FFP for the 20/21 season. Put another way, without doing “something” positive in 19/20 Arsenal will be about 30m behind the FFP target of break-even over the three-year window from 2017-20 and could face FFP sanctions for the season of 2020/21.


We’ve all seen the rumored net of 40m to spend this summer. As one can see from above, club accounting with respect to player trading is not so simple. For example, Xhaka and Iwobi might be sold for the same cash amount, but Iwobi is an academy player and most of his fee would count to profit while Xhaka still has 20m left to amortize which will reduce his fee income. Basically, “net spend” is an oversimplification and useless with respect to club accounting if FFP is in play.

Disregarding this rumor and assuming my projections to be somewhat accurate, we know the club needs to offset FFP losses of 30m with player trading in 19/20 to avoid FFP sanctions for 20/21. However, this doesn’t mean the club has to make a net income of 30m on player trading (i.e. net spend -30m). Remember, player sales and purchases are accounted for separately and the club can take advantage of this to show a 30m “profit” on player trading even though in cash terms they actually have a positive net spend.

How? For an example, let’s say the club sell some combination of players for 50m income after all the remaining amortization of their contracts is realized (see Xhaka example above). This will hit the line item as profit from player disposals. We reserve 30m of this to offset the 30m FFP loss and 20m income is left. Does that mean the club only have 20m to spend? No. Remember, the expenses from purchases are spread out over the contract years of the new players. For example, assuming the club sign new players on 5 year contracts, they could spend a total of 100m this season and still comply with FFP next season since only 20m of the 100m (100m/5years) will hit as an expense in 19/20.

Of course, this effectively kicks the can down the road a bit more and if not balanced by revenues at some point could serve only to further inflate the bubble.


In the latter seasons of Wenger’s reign, it seems he and Gazidis failed to adequately plan player trading and contract negotiations for future FFP compliance. Perhaps they were simply going all-in on a quick return of Champions League revenue, or maybe they just assumed the “well run” club of Arsenal didn’t need to be too concerned with FFP. For whatever reason, they made a huge FFP mistake in 17/18. While they didn’t “net-spend” that year, the effect of such high squad churn yielded a large profit in 17/18 and huge expenses realized in 18/19 and beyond. For a while, the profits and losses were balancing out, but the profitable years of 16-18 will be dropping out of the three-year FFP window leaving only the losses. These losses will have to compensated by profits in 2019/20. With no Champions League, the only meaningful way the club have to generate that kind of revenue is through more squad churn in 19/20.