Arsenal's £100M Sponsorship Deal With Emirates No Longer Looks Like a Good Deal

Arsenal F.C.'s sponsorship pact with airline Emirates once looked like a good deal for the club: The Gunners received £100 million for a 15-year lead sponsorship contract in 2004. But five years in, that deal looks less like a lottery win and more like a millstone. Arsenal receives far less for its sponsorship rights than comparable clubs Manchester United, Chelsea F.C. or Liverpool F.C. At the same time, a BBC report indicates the club is crippled with debt. It owes a total of £416 million, according to The Guardian; and has "£242m of separate debt" on the construction of its stadium, according to the BBC.

But the Emirates sponsorship breaks down to just £6.7 million a year over the course of the deal. Manchester United just signed a deal with Aon worth £20 million a year; Chelsea's with Samsung is worth £10 million a year; and Liverpool gets £7.2 million from Carlsberg in a deal that is up for renegotiation soon.

Meanwhile, Arsenal's margins are thin. Its EBITDA will fall to just £35-40m in 2010, the BBC reported. And the club has trouble raising cash to buy players -- the crucial expense on which all revenues depend.

The club recently rejected the idea of selling stock to its fans to raise £150 million; perhaps it is time examine the Emirates contract for loopholes that will allow the club to negotiate anew?

• A selected list of football sponsorship deals:
• £100 million Arsenal's 15-year deal with Emirates
• £80 million The four-year deal Manchester United signed with Aon takes effect next summer
• £75 million Juventus have a five-year contract with Tamoil, the international oil company
• £68 million Bayern Munich's four-year deal with T-Home
• £50 million Chelsea signed a five-year contract with Samsung in 2005
• £38 million Real Madrid's three-year deal with Bwin.com, the Austria-based online gaming company
• £7.2 million Liverpool's annual fee from Carlsberg expires in 2010

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