An Alternative Arena Approach: Arsenal and Emirates Stadium

ArsenalRecently, Wisconsin governor Scott Walker approved an Assembly bill earmarking $250 million for the Milwaukee Bucks to use in financing their new downtown arena.

Since I was at the tail end of my London study abroad program at the time of the approval, it was interesting hearing a different perspective on the approach to arena building.

Over in the United Kingdom, it’s quite rare for the government to intervene (outside of the 2012 Olympics bid) in stadium deals.

I think back to the team I support as the ultimate in alternative model—Arsenal Football Club.

The Gunners were based in the Highbury, a 38,000-seat stadium that had existed since the 1920s. By the turn of the 21st Century, it was apparent to manager Arsene Wenger and the Arsenal board that to compete in England and Europe consistently, a new revenue stream was needed. This was before the staggering media rights deals for the Premier League started increasing at an astronomical rate.

To increase revenue, it was determined that a new stadium was needed. But Arsenal could not look to London or Westminster to help finance it. Instead, the club put up £130 million and then took out a £260 million private bond with several financial institutions to finance the nearly £400 million stadium (roughly $630 million).

The project included the building of two new bridges over public transportation lines to ease flow of people in and out of the stadium, moving a recycling facility to a new site south to make room for the stadium, and then the stadium itself.

After Arsenal moved into its new home, the old Highbury structure was maintained, renovated and is now luxury housing in London. (A criticism here from me on this point…it would have been nice to see it be used for more low-income families in London, but considering the shortage of housing in London period, perhaps it is too much to ask).

Additionally, Arsenal does pay corporation taxes that fall in line with major corporations in London. While some of that is deferred or waived due to charitable efforts, it does release its financial statements every six months publicly.

Has it caused financial stress on Arsenal? Sure. The Gunners were forced to sell some of its higher-wage players to clubs, specifically cash-infused clubs like Manchester City, Chelsea and Barcelona early on. But Arsenal has remained competitive, reaching the Champions League group stages every year (and getting that additional £25 million in television revenue). The last two years, with new media deals signed in England plus a new kit deal from Puma that makes it the third most lucrative in all of football. It should also be noted that it’s only third in its own league as the Premier League owns the top five richest kit deals.

But the Gunners still maintain a competitive and world-wide brand while financing their own arena during the midst of an economic recession. With London rivals Chelsea and Tottenham making efforts to build or renovate their stadiums in the next two years, those clubs are trying to emulate the success that Arsenal has had with its deal.

Do I want the Bucks in Milwaukee? Certainly. It’s a source of great community pride. Did I want a new Bucks arena? I’m not so sure. Perhaps it rubbed me the wrong way where some of the Bucks brass held up the fact that if taxpayers do not chip in, they would sell the team back to the NBA and it would move. Holding a gun to someone’s head isn’t my idea of a great negotiation tactic. Plus, with Walker’s recent decision to cut $250 million in funding from the University of Wisconsin education department, it smacked of bad optics, especially for someone who painted himself as a man of austerity.

Arenas will always have their critics, and I understand that. I also know public funding of arenas is something that’s almost modis operandi when it comes to the approach in the United States.

I just think Arsenal offers a different roadmap to get to the same result and a potential alternative owners need to think about.


This Post Has One Comment

  1. Tony Geinzer

    I feel why not a Milwaukee answer to the Astrodome? I feel it would be a fixture to Marquette football, basketball, and hockey, and the Milwaukee Bucks and Admirals, and do the Valley Ranch of SE Wisconsin because I want the Rust Belt to rise and shine again for the better.

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