Anyway, if we take a snapshot of our club at the moment, we're in a decent position both on and off the pitch. You have to see the bigger picture to understand that short going down the sugar daddy route, we're doing all we can to compete.
Just to reiterate a point no-one has yet countered... If there is no problem at the club, how do Arsenal post a post-tax profit every year - after operating costs (including debt repayments) - and have in recent times had serious income from property development, yet still do not invest in transfers and usually make a profit? This, to me, seems like a lack of investment.
We invested £93m in the squad over the last two seasons, so the argument that we don't invest doesn't really hold any water. We sell players also and usually recoup a greater margin of any outgoings, but to me that is just savvy business accumen. Would people rather we were just pissing our cash up the wall ?
If we didn't post a profit (small or otherwise) each year, then we would be heading for serious trouble. If you have been a director, then I am sure that you would appreciate how a company runs. I'd rather have our situation than that of Liverpool for example, who were very close to serious trouble.
Or Man Utd, who have humongous debts loaded against their club, or Chelsea and City, who survive on rich benefactors who pump in their personal millions.
I'm finding your rather sloppy use of business terminology really hard to reconcile with you experience in business. However this aside... If you want to understand the Arsenal accounts you have to understand the difference between operating costs and (capital) investment. Generally speaking, we shouldn't be using the property, or even operating profits to fund operational costs (like the wage bill). They should be used for capital investment, or one-time costs (like transfer fees). This is because profits cannot be guaranteed to go on for ever. If we saddle ourselves with high operating costs now, when the property business dries up or we miss out on CL football, then we will have a problem. What we can do is increase the budget for the future and the club has done that year on year. We have made a small operating profit most years. I actually think that this may be because we have out-performed even our own expectations. So, we change our budgeting to increase our operating costs based on the increased profits, or we reduce ticket prices, etc, etc. However, we will not use the actual profit money, as an operating fund. That is the slippery slope that has led to other club's financial failures. It may work for a few years, but it slowly drags you down. When you run out of profit money, you have to start borrowing, then you start selling players (assets), and then you go bust. So you may ask, what good is all that money? Well, first you pay off all the debt you can, because that directly translates into operating revenue. After that, it can be invested, to generate interest income, which does represent operating revenue, although these days interest rates are not that good. Or it can remain for future capital investment opportunities. It allows us to estmate budgets closer and to take a few more risks. We should also be doing things like putting aside money to build a new stadium in 40 years, when the Emirates gives out. ------------------------------------------------ I also have a few other things to clear up reflecting how difficult it is to explain this financial stuff. Particularly for me. Re-reading my earlier post, I can see that I may have given the impression that we sold RVP because we needed the 25M to cover the wage bill. That wasn't what I was trying to do there. We may have sold him because we couldn't afford to change the salary structure, but we didn't need the 25M to pay wages for eveyone else. I was just trying to show what a massive impact the wage bill has, and that it can't be covered easily by selling players. That just the increase in wages over two years represents the entire worth of RvP. I also mis-spoke in an earlier post when I said we hadn't paid off any debt. We can't pay off the Stadium debt, but we have in recent years paid off debt related to the property business. In 2010 this was about 130M.
Excellent, thanks for that!! I never claimed to have any experience in Business - that was another poster, I merely asked not to be insulted or treated like an idiot.
Wouldn't it be fair to say that the reason we have posted profits every year is because of property & player sales ? Our profits aren't that great from gate receipts,merchandising & sponsorship compared to our outgoings
It's easy to look at the club through the lens of being a fan, but that only gives you the apeture of pitch side matters. Ultimatley that is the most important focus, but the the whole panorama is framed by how the club operate as a business as a whole picture. What do you think Balham ?
We will have a much better idea about our club by the end of this month, I ain't counting my chickens yet, we face big tests, including Southampton at home, City away, Chelsea home, an away Champions league game, these games put together with our 3 games so far will give us a better picture of how our club is really doing.
And if we do well or badly the manic depressives will send us to the xenith of nirvana, or the flaming nadir of hell. Live for the moment my friends, enjoy even temporary success, and don't temper it with worry, or guilt. Success is always fleeting and is never permenant. I apologize to older readers, but I am old, and if I can pass on one thing to younger people it is to fully celebrate and enjoy your success, whether it is good relationship, a promotion at work, or a win in sport. Those are the moments you remember in life, and you don't want them damaged because you were too busy worrying.
I guess the real answer is we won't know until the season really gets underway. A lot depends on injuries. I would have liked M'Vila and another striker. I feel that we are 1 or 2 players short of a real challenge for the title. It would be great to be proved wrong.
