English Premier League club, Arsenal has just announced that the club is in a perilous financial situation, due to the coronavirus pandemic. The club said they will be declaring 55 staff redundant in order to manage the situation.
The club confirmed that they will make 55 members of staff redundant in a statement released on Wednesday, August 5th 2020, by the Club Chiefs Raúl Sanllehi and Vinai Venkatesham. Both in the joint statement, admitted that they have been ‘hit severely’ by the coronavirus crisis, despite qualifying for European cash by winning the FA Cup.
The club in the statement these cuts are necessary in order to make sure the club ‘operates in a sustainable and responsible way’.
Sanllehi and Venkatesham confirmed that investment in the first-team squad is a priority for the club and that a 30-day consultation period will begin to determine how they will make 55 members staff redundant.
The Gunners are facing financial troubles while star man Mesut Ozil earns £350,000-a-week, which equates to £18million-a-year, despite being out of favour with head coach Mikel Arteta.
Furthermore, Arsenal owner Stan Kroenke’s wealth has grown by £300million during 2020, according to American thinktank Billionaire Bonanza 2020.
The club statement read: ‘We do not make these proposals lightly and have looked at every aspect of the club and our expenditure before reaching this point. We are now entering the required 30-day consultation period on these proposals.
‘We know this is upsetting and difficult for our dedicated staff and our focus is on managing this as sensitively as possible.
‘Our main sources of income have all reduced significantly. Revenue from broadcasters, matchday and commercial activities have all been hit severely and these impacts will continue into at least the forthcoming 2020/21 season.
‘The pandemic represents one of the most challenging periods in our 134-year history and we have responded promptly by implementing wide-ranging measures to reduce our costs.
‘These proposed changes are ultimately about ensuring we take this great football club forward, creating the right organisation for a post-Covid world, and ensuring we have the resources to return to competing effectively at the top of the game here and in Europe.’
Several clubs made announcements regarding their financial situation when the coronavirus pandemic first hit the world of football. Newcastle United, owned by British businessman Mike Ashley, became the first Premier League club to place staff members of the Government’s furlough scheme back in March
Liverpool also revealed plans to furlough some of their non-playing staff but reversed their decision after intense backlash from the football community.
Arsenal’s north London rivals Tottenham Hotspur also announced they would be reducing 550 non-playing staff wages by 20 per cent in March, but reversed their decision a fortnight later, with board members opting to take pay cuts instead.
In order to combat the negative economic impact of the global pandemic, Arsenal’s players volunteered to take a 12.5 per cent pay-cut to help out the club’s finances.
The Gunners players earned some of that money back when they won the FA Cup and qualified for the Europa League, a condition that was made at the time of the pay-cut.
However, highest-earner Ozil refused to take the pay-cut despite his lack of game time on the pitch. The ex-German international has not played a single minute of football since the coronavirus pandemic halted the Premier League season
Arsenal’s statement continued: ‘Our players, senior football staff and executive team have volunteered pay cuts, we have stopped pretty much all of our capital spending, and our discretionary operating expenditure has been strictly controlled.
‘We have also received significant financial support from our owners, Kroenke, Sports & Entertainment in terms of refinancing our stadium debt.
‘These steps have all reduced the impact of the pandemic on the club and have helped us continue to maintain investment in the team. This will continue to be a key priority.’
The Gunners pinpointed that the lack of matchday revenue and the negative global economic projections are some reasons why the club is making further cuts.