Author Archives: highburydays
What is the truth about Arsenal’s finances? Does Wenger have money to spend or has the move to the Emirates crippled Arsenal? These are questions that we are left asking every week as we speculate what money we have to spend.
Arsene and the board go on about UEFA’s Financial Fair Play (FPP) as justification for not splashing out on players, fearful that we will not be admitted into UEFA competitions, at this rate we will be luck to qualify!
UEFAs FPP regulations stipulate that over a three year period a club can only show football related losses of €45M. These losses do not include interest on loans associated with stadium or training ground development.
Furthermore, when a club sings a new player, i.e. Gervinho for £10.6M on a 4 year contract, this £10.6M is charged to the clubs accounts over four years, so Arsenal will record £2.65M to the accounts for the next 4 years. If a player is sold his original signing fee has been written off, i.e. Clichy £7M, then the club claims credit for the whole amount in the year the player is sold. This means that as far as player trading is concerned for the accounts 2011/12, Arsenal are showing a profit of £4.35M.
So spending money today is spread over the life of a player’s contract. Purchasing Cahill for £17 M and giving him a 5 year contract means we only account for £3.4M a year. So Wenger’s argument that any lavish spending (or in our case any spending) will harm our position is respect in UEFAS FPP is rubbish.
The next point is do we have money at the bank? The answer is yes, we have it by the bucket load. The last set of accounts for the 6 months ending November showed we had £110M in the bank. This remember is for a period when we still have not received all the television money nor all the prize money. Whilst we need to keep £22M in the bank to meet interest repayments, this still leaves us with £88M to spend. Since November we have sold more flats at Highbury Square and also sold to Barratts the Queensland Road flat development for around £26M. Cash is not a problem.
Arsenal have plenty of cash, cash that other clubs are envious of, the UEFA FPP regulations are workable, so there is no excuse from Wenger or the board as to why we do not spend money this summer.
It’s now or never for Arsenal Football Club. Stan Kroenke has been mopping up small shareholdings over the last couple of weeks to raise his share in the club to 29.8%. He is a fraction below the mandatory bid figure of 29.9%.
It was rumoured that he bought 100 shares from Arsenal chairman Peter Hill-Wood; this is the same man who famously said, “We do not need his sort at this club.” Hill-Wood has since been turned by Silent Stan and went as far as saying he would welcome a bid fro the club by Stan Kroenke, for which he got his knuckles rapped by the city Takeover Panel.
At the club’s AGM when asked about a possible takeover, Stan Kroenke remained silent on the matter, any comment would have meant he would be precluded fro many takeover for six months.
Any takeover of the club, and it is now becoming inevitable will hinge upon the three major shareholders, Danny Fiszman who has sold shares to Kroenke in the past and allegedly not been paid for tem), Alisher Usmanov who bought his shares from David Dein and finally Lady Nina Bracewell-Smith who was sacked from the board last year but has recently been seen in the directors box.
Arsenal fans want something to happen, but not at any cost. What we do not wish to see is Kroenke’s company land Arsenal plc with the debt of him buying the club. If we can have assurances that this will not happen, then Kroenke will be a good owner for Arsenal, and we know that he gets on well with Gazidis who is slowly changing things behind the scene.
Arsenal has had a giant axe hanging them in the form of a loan in the region of £130million. This loan needs to be repaid by April 2010. The loan relates to the development of Highbury Square.
Unless anyone has been living in a cave for the last 18 months, the property market has collapsed, leaving the club with over 600 flats to sell. The idea was that the flats will be sold by summer 2009, the loan would be repaid this summer and either Wenger would be given the surplus, £100million, to spend on the team or it would be used to reduce the debt generated by the building of the Emirates.
That was the plan, and all was going well with over 90% of the flats “pre-sold” with people leaving a deposit of £1,000 to secure their dream home.
Reality set in and last October the club had completed the sale of 90 flats, generating £39million (this money was used to pay of part of the loan and monies owed to the contractors). Since October the cub have been silent on the number of flats sold, though The Guardian claims that we have managed to sell a further two flats since then.
The club insists that the development is ring-fenced from the footballing side of the business, so in theory if the building part of the company went into liquidation it would not affect Arsenal FC, in reality that parent company would have had to give assurances to the banks in obtaining the initial loan which would have an ultimate impact on the football club.
The club has been desperate to re-negotiate the loan repayment, probably pushing the repayment date from April 2010 to April 2012. The extra two years should see the housing market improve and the club would then realise the income it had anticipated.
It has been reported over the week-end that the banks are prepared to extend the loan repayment period. This would be great news for the club. It would show confidence in the club having the ability to sell the flats albeit over a longer period and it would ease the financial constraints that Wenger has been working within over the last couple of seasons.
The club was right in developing Highbury and keeping the project in-house, the development will show a big profit. Unfortunately the directors were caught out like everyone else when the “credit crunch” hit. Obtaining an extension on the loan is another indication that Ivan Gazidis is a man who gets things done; it shows he is the ideal CEO for Arsenal.
Wenger is out of tune with FIFA, UEFA and the Premier League and their recent proposals. I believe Wenger is wrong.
FIFA and UEFA wish to impose a ban on players moving between clubs before they are 18 years old. There is nothing with this proposal, so long as the new ruling allows for players to be transferred between clubs where there exists consent of all parties. The rules will not ban say the transfer of Gills Sunu from Chateauroux to Arsenal once both clubs have agreed for the transfer to proceed, but the rules should prevent the movement of Fran Merida from Barcelona to Arsenal as there was no agreement between the clubs.
Youngsters should not be allowed to go from the team that has trained and nurtured them to another team without compensation. If a club releases a player from a playing “contract”, then the player is free to leave that club, otherwise they stay with them until they are 18 years old.
In recent years Arsenal have agreed a fee with the club and then youngsters have joined us be they from English clubs or foreign clubs, this is the way to behave.
Any club that signs a player and uses a loophole not to compensate that player’s club deserves whatever punishment FIFA or UEFA throw at them.
Fearful of a clampdown on overseas players, the Premier League announced rules the other day that places restrictions on the number of non-home grown players a club may register for next season.
The regulations state that a club may register 25 players of whom a minimum 8 need to be home trained. The definition of a home trained player is a player who has been trained from the age of 15 to 21 for a minimum of three years at a club in either England or Wales, irrespective of their nationality.
Wenger has come out to say that this is creating an artificial environment, yet these are the exact rules that are used for the Champions League. Due to Wenger’s foresight, Arsenal are not disaffected by the proposed rule change. Many of our players are deemed “home grown”, i.e. Fabregas, Djourou, Bendtner are all deemed home-grown.
The new rules are fully justified, they will ensure that clubs spend more money on youth development and will punish clubs that merely buy-in all their players.
The next ruling that is required from UEFA and FIFA relates to indebtedness and spending of clubs.
Clubs should only be allowed to have a debt that is equal to their annual turnover, unless the debt has been incurred for the purposes of capital infrastructure.
In addition to the debt ruling, FIFA / UEFA should place a restriction on both transfer activity and a salary cap. Both of these need to be tied to turnover.
Clubs cannot keep on spending limitless amounts, football needs a reality and the antics of Real Madrid and Manchester City this summer have brought home to roost a few home truths and scared many clubs. Add this to the debt situation at Portsmouth and Liverpool and it is about time clubs started to act more responsibly.
The proposals suggested by UEFA and the Premier League are in the best interest of the football and Wenger is wrong to argue against the rules.