Gunners’ figures defy the crunch, but how much longer will their financial health last?

On the day that Mike Ashley has been forced to plough £10m of his own cash into Newcastle to cover operating costs, Arsenal have announced that their profits have risen £4.5m to £24.5m before tax for the six months ending 30 November 2008.

Matchday revenue and broadcasting revenue both increased (by £.3m and £4.5m respectively), and problems shifting the properties on the old Highbury are not as drastic as previously reported; the 186 apartments are valued at £76.7m, and they had already sold £58.1m by November 2008.

Chairman Peter Hill-Wood told the BBC:

“Clearly there are some significant challenges ahead of us, both on and off the pitch, over the closing months of this financial year and beyond.

“The UK property market has been particularly affected by the economic downturn and, inevitably, this has had an impact on the group’s own property development activities.”

While these figures represent a picture of fiscal health, the Arsenal board must be mighty concerned by their reliance on Champions League money. According to Simon Chadwick, a professor in sport business strategy and marketing, English clubs have made an average of £34.39m from reaching the knockout stages of this year’s competition, and the eventual winner will make up to £98.69m.

Arsenal recorded a net debt of £318.1 million for the year ending 30 May 2008, including £250.2 million borrowed for building the Emirates Stadium (part of a 23-year loan at a fixed interest rate).

If the club fail to clinch fourth spot in the Premier League, thier delicate financial model could start to crumble.

‘Silent Stan’ given a voice at the Emirates

Arsenal this morning confirmed that American billionaire Stan Kroenke - the gent on the right in the picture above - has been invited onto the board to take a non-executive director role. The owner of the the MLS’ Colorado Rapids and the NBA’s Denver Nuggets has held a 12.4 per cent stake in the club since last year, and his invitation to the board appears to counter the takeover ambitions of Russian oligarch Alisher Usmanov.

On the club’s official website, Arsenal chairman Peter Hill-Wood says:

“We are delighted to welcome Stan to the Board of Arsenal. He brings with him a wealth of experience through his direct involvement in sports clubs in the US and we expect to benefit from his commercial insights and knowledge.”

It’s great that Hill-Wood is so welcoming, particularly as he once remarked of the American: “We don’t need his money and we don’t want his sort.”

Kroenke is not party to last year’s lock-down agreement (whereby directors can only sell their stakes to board-approved persons), but has agreed not to extend his shareholding beyond 29.9 per cent in the next year. If either Usmanov or Kroenke reach thirty per cent, they would have to launch a formal takeover.

Next week, Arsenal’s annual results will be formally announced, revealing a huge £225m turnover and record pre-tax profit of £36.7m.