Arsenal take out £120m Bank of England loan to ease Covid-19 cashflow worries

Nick Ames on 7 January 2021

Arsenal have taken out a £120m loan from the Bank of England in an effort to ease cashflow issues that have mounted during the Covid-19 pandemic.

The loan, which must be paid back by the end of May along with an undisclosed sum of interest, is designed to cover losses and will not have any effect on Mikel Arteta’s winter transfer plans. It has been provided by the bank’s Covid corporate financing facility, which assists organisations that meet highly specific investment criteria and are deemed to make significant contributions to the economy. Tottenham Hotspur and the Football Association are the only other football institutions to have made use of the scheme.

Arsenal’s matchday income, in particular, has taken a huge hit during the pandemic. In 2018-19 it constituted a quarter of their revenue, a proportion unmatched across the top flight, and amounted to about £96m. The return of 2,000 supporters for recent games against Rapid Vienna and Burnley was scant compensation.

Research from the Arsenal Supporters’ Trust last April projected the club could lose £144m over the subsequent 12 months if fans remained absent, and commercial revenue streams are also expected to have taken a hit without a pre-season tour. Although the short-term nature of the bank’s loan may raise eyebrows, the club expect to have no problem paying it back.

The owner, Kroenke Sports & Entertainment, has played a part in shoring up the club’s finances by providing a loan in July that redeemed the fixed-rate bonds issued when building the Emirates Stadium.

It comes as a welcome boost at a time when Arsenal are looking to rid themselves of financial millstones. One of them, the exiled playmaker Mesut Özil, will see his future decided “in the next few days”, according to Arteta, although the Arsenal manager admits he does not know how or when the saga around him will end.

Mikel Arteta with Mesut Özil last February. The manager says he wants to ‘try to find the best solution for everyone’.
Mikel Arteta with Mesut Özil last February. The manager says he wants to ‘try to find the best solution for everyone’. Photograph: John Walton/PA

There is little doubt Özil, whose contract expires in the summer, has played his final game for the club and all parties are keen to move on from a soured relationship that has cast an expensive shadow. Özil has been linked with Fenerbahce and DC United in this transfer window although his agent, Erkut Sogut, said on Wednesday that the player’s “priority is to stay” until the end of the season.

“I’m saying we will decide what’s happening in the next few days,” Arteta said when asked whether Özil could remain at the club. “I don’t know what is going to happen. Obviously now he’s free to negotiate with other clubs. We will discuss internally what the best solution for him is for the near future, obviously with the player and agent too, and try to find the best solution for everyone.”

The logistics around Özil departing this month are likely to be complicated given none of his suitors would be able to match his £350,000 weekly wage. A simpler option might be for the former Germany international to commit to moving after his deal ends, but that would mean Arsenal have to retain a player omitted from Arteta’s Premier League and Europa League squads in October.

“If something was sorted this month, it’s because it is good for both parties, it is good for Mesut and his future, and it’s good for the club,” Arteta said. “If that’s the case, we will move forward. If it’s not the case, the player will stay here.”

Özil is available for the FA Cup third-round tie with Newcastle on Saturday, although his involvement seems unthinkable. Thomas Partey could return from the thigh injury that has kept him out for all bar 45 minutes of the past two months’ action, although Arteta suggested he could be kept fresh for the Premier League meeting with Crystal Palace on Thursday.

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Whereas Özil’s fate is a relatively short-term issue for Arteta, the manager is increasingly anxious about the prospects of Folarin Balogun staying at Arsenal. The highly rated striker’s deal is up in July and several clubs are understood to be interested in taking him on. Arteta suggested any stumbling block lay at the feet of the player’s representatives.

“You need three parties to make a deal,” he said. “For sure, the club wants to make a deal, the manager wants to make a deal, the player wants to stay and I’m not sure about the agent.”

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