Financial AccountingPresentationComparison of the financial statements of the football clubsArsenal & Ajax
The Football Industry Wether to invest or not in Arsenal F.C. and A.F.C. Ajax• Exponential growth of the industry in the last 50 years• The “King of Sports” for many people• Top 10 Euro Clubs revenues sum up to more than 3 billion euros• Clubs have been entering the stock market in the recent years• Revenues connected to the capital structure and sporting results
Capital Structure (Revenues)FORMED BY:• Season tickets• Sponsorship deals• TV rights share• Merchandising• Matchday tickets• Investments (Youth team, etc.)• Player sales• Bank or ownership loans
The Financial Fair Play (FFP)SITUATION:• Increasing debt in the football industry• Bigger teams have economical advantageLEAD UEFA TO INSTITUTE FFP:• Obligation for clubs to balance their books or break even• Obligation to respect payment commitments at all times• Clubs who fail to do that will be required to provide budgets detailing their strategic plans
Ajax and Arsenal• Fame• Success in football• Examples for other clubs• Discover youngsters• Top stadium, training facilities, flourishing youth teams
StrenghtsArsenal AjaxRevenues of 380 million euros Ownership of stadiumOwnership of stadium Most famoust team in the NetherlandsMore than 1k euros earned per share Great European club traditionQuality trademark Quality of youth team3° most supported football team in the Good debt ratioworld
WeaknessesArsenal AjaxProfit connected with sporting results Recent years dry spellHigh long term debt Well supported only in the NetherlandsMarketing almost fully developed in Best players are often sold to breakEurope evenMain players left or are about to leave Unstable first team leadershipthe team
OpportunitiesArsenal AjaxNew Kroenke ownership New De Boer’s coachingYoung football prospects Promising and young first team playersBrand expansion in Asia Brand expansion in Asia and southern EuropeStadium-connected revenues Not defined leadership in Dutch football in the most recent years
ThreatsArsenal AjaxStart of the FFP Has not been very successful latelyCorrelation between football Correlation between sportingperformance and the ability to pay performance and brand growthback the debtPossibility that Wenger leaves if Best youngsters will leave ifinvestments on new players are not investments are not mademadeInability to pay back the debt Overall decline of Dutch football
Final analysis:Should an investor put money in either company?• Both teams wouldn’t be profitable for a small money investor• Both teams, and especially Arsenal, are and could be very profitable for their owners or major shareholdersWOULD BE PROFITABLE TO OWN BECAUSE:• Both teams represent a good way of running a football club• Ajax has huge inexpressed merchandising and marketing potential• Arsenal’s brand has very few rivals in the world
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