Arsenal Finances

[Fallout]

Think CL football gets you about £30m for the group stages. Not really bothered personally as with sales and the money the club has they should still be able to spend more than Sp**s and Liverpool.

Wenger will spend his usual £100m, maybe more.

tbh i'm less optimistic. from what i can tell from our cash flow statement (from last season), we generate 50m for transfer activity each season. the tv deal is supposed to add another 50m to that amount, but taking away 30m for missing the CL as well as some sponsorship money could undo most or all of that income. we also have a lot of contracts to still extend, and we still owe 40mil in transfer clauses. overall, if the board doesnt dip into the cash balance again then im not sure what kind of summer we will have.

 

[Gooner Zig]

tbh i'm less optimistic. from what i can tell from our cash flow statement (from last season), we generate 50m for transfer activity each season. the tv deal is supposed to add another 50m to that amount, but taking away 30m for missing the CL as well as some sponsorship money could undo most or all of that income. we also have a lot of contracts to still extend, and we still owe 40mil in transfer clauses. overall, if the board doesnt dip into the cash balance again then im not sure what kind of summer we will have.

Which cash flow statement are you reading? Net cash inflows from operations are 94M and 102M respectively in 2016 and 2015.

We need to be better at selling under performing players with some currency, and most importantly of all, we need to fix our ridiculously poor wage structure.

 

[Fallout]

Which cash flow statement are you reading? Net cash inflows from operations are 94M and 102M respectively in 2016 and 2015.

We need to be better at selling under performing players with some currency, and most importantly of all, we need to fix our ridiculously poor wage structure.

well yes, but we consistently have all these other expenditures that arent grouped into operating activities (capex, interest, tax). we spent 50m on player investment in 2016 and basically broke even in terms of cash flow so thats what i percieve to be our long term sweet spot.

 

[Gooner Zig]

well yes, but we consistently have all these other expenditures that arent grouped into operating activities (capex, interest, tax). we spent 50m on player investment in 2016 and basically broke even in terms of cash flow so thats what i percieve to be our long term sweet spot.

I generally don't include CAPEX as I see it more as a discretionary cost or on an "as needs" basis, speaking of which, we've spent 28M on capex in the last 2 years, I would love to know on what exactly?

Our debt is pretty manageable at 20M p.a. but of course a fixed cost for the foreseeable future.

 

[Fallout]

I generally don't include CAPEX as I see it more as a discretionary cost or on an "as needs" basis, speaking of which, we've spent 28M on capex in the last 2 years, I would love to know on what exactly?

Our debt is pretty manageable at 20M p.a. but of course a fixed cost for the foreseeable future.

we keep investing in facilities and equipment. i forget what the specifics were last year but its written in the text somewhere. i would hope at some point we can decrease it and redirect toward the playing squad. but yeah just looking at those numbers we can assume around 10m of capex per year or more.

 

[Gooner Zig]

we keep investing in facilities and equipment. i forget what the specifics were last year but its written in the text somewhere. i would hope at some point we can decrease it and redirect toward the playing squad. but yeah just looking at those numbers we can assume around 10m of capex per year or more.

One thing to note is that it's easy to forget that the entire balance of the transfer fee is seldom paid in the year of acquisition. We spent 100M on on buying players this last summer but our total initial cash outlay would have been around anywhere between 40-60% of that 100M.

 

[mm76]

Great video. These guys can climb / get into anywhere! Football stadiums must be relaxing compared to the huge cranes & skyscrapers.

i was looking at the outside of the stadium last night and i think i worked out how they got in

 

[Preacher]

More info here:
https://twitter.com/SwissRamble

 

[Hunta]

Here cums @Makingtrax

 

[Deathstroke]

@Gooner Zig & @Fallout are speaking in a language... Greek to me. ops:

i was looking at the outside of the stadium last night and i think i worked out how they got in

Well?

 

[mm76]

@Gooner Zig & @Fallout are speaking in a language... Greek to me. ops:



Well?

shhh...

 

[Gooner Zig]

Here cums @Makingtrax

Those Liverpool wages

 

[Makingtrax]

we keep investing in facilities and equipment. i forget what the specifics were last year but its written in the text somewhere. i would hope at some point we can decrease it and redirect toward the playing squad. but yeah just looking at those numbers we can assume around 10m of capex per year or more.

We spent £13m on capital expenditure, developing our training facilities at Colney.

 

[FinnGooner]

Sp**s looking more and more like we did before the new stadium except not nearly the same sporting success or status in terms of commercial attractiveness. It's going to be interesting to see how they'll do when they start paying off the new stadium. What gives them an advantage, though, compared to us is that their academy seems to be way ahead of ours in terms of producing players for the PL level. Still, I think they will sell Kane, Alli and Eriksen to fund the stadium and it'll be difficult to replace those guys with bargain deals.

 

[Gooner Zig]

Sp**s looking more and more like we did before the new stadium except not nearly the same sporting success or status in terms of commercial attractiveness. It's going to be interesting to see how they'll do when they start paying off the new stadium. What gives them an advantage, though, compared to us is that their academy seems to be way ahead of ours in terms of producing players for the PL level. Still, I think they will sell Kane, Alli and Eriksen to fund the stadium and it'll be difficult to replace those guys with bargain deals.

They also have the benefit of the new TV deal cash bonanza which will help significantly. They already have a very young and talented team capable of competing (for the most part). They won't be able to spend big money but if they keep their top talent to long term contracts, which I believe they have then they'll be set for the short term.

 

[Fallout]

yup, unfortunately when we built our stadium, broadcasting and sponsorship income was much lower than it is today. so we had to struggle to pay off what was at that point a mammoth cost. Sp**s will probably struggle too, but much less than we did.

even as late as 2009, our matchday income was close to half of our total income. nowadays its closer to a fourth! you can imagine that when we made the decision to move in the early 2000s, matchday income was well over half of total income.

i actually feel bad for the board because they made a really brave decision to invest in this big stadium, thinking that it would differentiate arsenal financially from the rest of the pack. and then out of nowhere all this corporate and tv money comes flooding in, meaning the stadium is nice and everything but nowhere near as important as they thought it was going to be. unlucky.

 

[FinnGooner]

They also have the benefit of the new TV deal cash bonanza which will help significantly. They already have a very young and talented team capable of competing (for the most part). They won't be able to spend big money but if they keep their top talent to long term contracts, which I believe they have then they'll be set for the short term.

It'll be interesting to see how much the TV money actually helps. Now it just seems that English teams pay higher transfer fees for and bigger wages to players from all brackets because of the TV money. Right now it seems to mainly help European players get a bigger pay check. Also, due to the brexit the competition for talented foreign players might get tougher between English teams and in that competition the TV money doesn't really help.

As for the contracts for their talented players, that's the hard part. They won't be able to pay competitive wages with the stadium project so many of them may end up leaving. In the end, players will always go after the money.

Anyway, it'll be interesting to see. I think they will take a bit of a dive but how big, remains to be seen. Their main target should be to keep Poch because I think he's a pretty good coach. It'll be hard, though.

 

[bingobob]

Sp**s looking more and more like we did before the new stadium except not nearly the same sporting success or status in terms of commercial attractiveness. It's going to be interesting to see how they'll do when they start paying off the new stadium. What gives them an advantage, though, compared to us is that their academy seems to be way ahead of ours in terms of producing players for the PL level. Still, I think they will sell Kane, Alli and Eriksen to fund the stadium and it'll be difficult to replace those guys with bargain deals.

They'll already be paying for the stadium. You don't borrow 700m and then start repaying it years later. Actually they won't have used the whole sum but they will be drawing down money as they need it, well into a couple of hundred million given the amount of work done to date. Given the new TV deals they'll be set. 100m each season should cover the stadium and they can use their commercial revenue, stadium naming rights and match day income to buy players.

 

[Makingtrax]

yup, unfortunately when we built our stadium, broadcasting and sponsorship income was much lower than it is today. so we had to struggle to pay off what was at that point a mammoth cost. Sp**s will probably struggle too, but much less than we did.

even as late as 2009, our matchday income was close to half of our total income. nowadays its closer to a fourth! you can imagine that when we made the decision to move in the early 2000s, matchday income was well over half of total income.

i actually feel bad for the board because they made a really brave decision to invest in this big stadium, thinking that it would differentiate arsenal financially from the rest of the pack. and then out of nowhere all this corporate and tv money comes flooding in, meaning the stadium is nice and everything but nowhere near as important as they thought it was going to be. unlucky.

This.

People forget the context of the climate around 2004/5/6. Abramovic had just hit the scene and the board must have been thinking how they could compete long term against such financial clout.

 

[RoadrunnerReloaded]

@Preacher made a great post but this right here is the most important graphic to show how we have fallen behind due to mismanagement behind the scenes.

The year 2009 is especially revealing because that is when Kroenke took over with the previous two years our board was so busy with in-fighting and the stadium they could not have focused as much energy and time towards the commercial side as they should have.

Both our old board members - who loved Arsenal but were rushing to cash out to Kroenke as fast as they could and the risk averse Kroenke people completely dropped the ball here on the commercial side while United were hoovering up all sorts of partnerships.

Our old board were atrocious at negotiating deals as documented here
http://www.bbc.co.uk/blogs/thereporters/mihirbose/2007/09/quotas_quality_and_the_emirate_1.html

Especially when we consider that at the time of these deals we were only a few years out from the Invincibles and had been CL finalists. There was massive world wide marketing potential that was completely squandered there. Wenger does get some blame for he refused to go on pre-season tours overseas when United was doing it and building their fan base more than us.

And Kroenke gets blame here for being truly piss-poor at commercial deals. He should have re-negotiated our commercial deals like the Glazers did with United but we seemed to love getting completely ripped off by Emirates.

Which BTW I really don't know how any proper gooner can slag off Man City and Chelsea for being "oil clubs" when our stadium and shirts boldly declare our allegiance to Emirates. You can tell me its different and I would agree its different. At least City get good commercial deals from Etihad while we get reamed by Emirates from behind!

We made some major strategic blunders from a commercial perspective by not taking advantage of Invincibles marketing appeal when we had it, focusing too much on the stadium and then in-fighting instead of opening their eyes future growth and Kroenke's board of coin counters has just been woefully negligent in keeping us up to date.

Our entire organization smacks of complacency and stagnation.

As for the contracts for their talented players, that's the hard part. They won't be able to pay competitive wages with the stadium project so many of them may end up leaving. In the end, players will always go after the money.

That's why all their long stars are already tied down to long term deals (5 years is the average iirc). If they lose their English youth like Kane or Alli they are going to be getting more than fair compensation. That;s why on those lists of squad value Tottenham is near top in the entire world. Their long term contracts mean they are going to get maximum value from their players when they sell...unlike us.

As much as we hate him, Levy has been running circles around our board for a decade now.