https://www.arsenaltrust.org/feed/afc-finances/2019/-SimonHillfinancialanalysis I'm just going to paste the conclusion for those who can't be bothered/don't have time to go through the intricacies of the details. Summary: Arsenal are cash strapped, boxed in by FFP and saddled with existing debt obligations of £200m that would cost £250m to refinance early. Their rival clubs have much more free cash flow to invest in transfers and salaries and arguably start with stronger squads so it is going to be an uphill struggle to narrow the gap. Meanwhile it is hard to see much capacity for KSE to justify extracting cash short term (dividends or management fees) at least until the existing debts are refinanced and the losses stemmed. I hope the AST will be keeping a close eye on what happens here. When Usmanov owned 30% of Arsenal he proposed a rights issue (July 2009) to raise £150m to off some of the existing debts and improve cash flow for player investment but KSE said no and so unlike other clubs like Chelsea, City and Liverpool who invested in their grounds with owner finance or equity to support the cost, Arsenal will remain burdened by these debt related cash outflows (£20m per annum) for the next 12 years whilst trying to stem these losses and bridge the gap on their immediate competitors. The importance of Champions League qualification is evident.
Depressing reading. It's over a decade ago since we moved to the Emirates and all the promises that we'd be able to compete with the likes of Real Madrid and Barcelona have disappeared into thin air. We're now competing (in the market) with clubs like Everton and Wolves for a second tier of players. A combination of poor performance on the pitch (missing out on CL for 3 seasons in a row) and abject failure to cash in on our best assets (RVP, Ramsey, Fabregas, Alexis) and handing out mega wages to Ozil, Mkhitaryan etc, has meant we have been unable to reinvest into the squad in the areas that we need. At the moment, I'm prepared to see us rebuild with youth and it might take 5-6 years of playing Europa league football and finishing 6th / 7th, whilst we develop a squad that is capable of getting us back into the champions league and back up to competing with the likes of Liverpool, Chelsea, City and dare I say it Spurs
To compound matters in the short-term, Darren Burgess, director of high performance, is set to be leaving us. This is very frustrating that we seem to have a relatively high turnover of staff in such a short space of time. Mislintat was meant to be one of the best scouts in the world, and we got rid of him. Burgess is meant to be one of the most respected men in his field, and we're getting rid of him. Apparently Shad Forsythe, Head of Performance, was on the cusp of signing for AC Milan, but we've decided to expand his role, which means he is staying. I suppose we kinda should have expected this after the restructure, as it's unlikely everything was going to go right from the beginning, but there is no stability and it is frustrating to see what direction we are heading in right now...
I watched the interview with Raul Sanllehi and Vinai venkatesham and they are both obviously very switched on individuals. Sanllehi in particular has a wealth of experience at Barcelona and they both have a vision of how they want the club to be structured. Appointing Emery is just one part of it, they are looking for a technical director too, with reports that Edu is coming in during the summer. Not sure how good he is, but I would have liked to have seen Overmars coming in, given what he's doing with Ajax. Anyway, as you say this whole thing is going to take some time and I suppose there will be teething problems in the early days as we try to get the right balance in the set up. We have to remember that we've just come out of a model that had Wenger overseeing everything for the last 22 years, so it was always going to take some time to bed in. I'm not too worried about that to be honest, I like what I've seen from Emery so far and I think with the right structure and support in place, if he sticks with the project for 5-6 years then I think he can deliver trophies.
I agree it will take 5-6 years, and I've already said in other posts that after 22 years, we won't see the benefits of overhauling the club instantaneously. It will take time. But the two things I am concerned about are: 1) Mislintat, Burgess and Wrigglesworth have all left having been at the club for no longer than 2 years. All of these guys have come to us with good reputations and are highly respected in their fields. So why are they leaving? This is concerning because we were relying on these guys to help us through this transition and now they've buggered off. Which means they were either not good at their jobs or they do not feel like they were supported in their roles. I find it extremely hard to believe it was the former... 2) My fear is, though we may get this right in the next few years, how big of a gap will there be to the other clubs at that point? If they're already miles ahead of us, then catching them up in 5-6 years time to restore the gap becomes even harder. Liverpool, City and Spurs all look like they are going from strength to strength, Chelsea admittedly are a bit of an unknown quantity and United, though they are struggling right now, have the financial power to spend their way out of trouble. It will eventually come right for them because they still have the resources to attract top players. They are still benefiting from SAF's successful 26-year tenure.
I watched one of DT's videos (from Arsenal fan TV) Don't usually have much truck with what he says, but he made a really good point. In that in the last decade, we've only spent something like £12m net less than Liverpool. But that they have been able to invest £75m in a CB and £70m on a keeper because they made sure that when they sold Suarez, Coutinho etc, they got top dollar for them. And the reason they got top dollar for them was because they tied them down to contracts, unlike us who have let players go into the last year of their contracts time and time again .
This is correct. We have no assets to sell at the moment. Liverpool did, and they got excellent money for them, hence why they were able to reinvest that money wisely. That being said, I have been told by others that this upcoming generation of Hale End academy youth prospects are the most promising bunch we've had in years. Emile-Smith Rowe, Zech Medley, Xavier Amaechi, Tyreece John-Jules, Folarin Balogun, Bukayo Saka, Joe Willock, Jordi Osei-Tutu - all of these lads are tipped for big things for the future. Then we also have Matteo Guendouzi and Reiss Nelson, too. I don't expect all of them to make it with us, but there is potential to develop them and sell them on for hefty fees in the next few years. It's just a shame that, in our most exciting period of youth products being churned out of the academy, it has coincided with our stagnation on the pitch and financially. Meaning we may have to sell some of these talents once they come good to raise funds. Not ideal, but it doesn't look like we will have much choice unless Emery can work wonders next season.
Yep the academy players look good, and players like Willock, Saka, Nelson and Smith Rowe have already had an impact on the first team. As you say though, we might have to use them as bargaining chips in the future as our current squad (bar Laca and Auba) is virtually worthless in the market. Emery did pretty well this season, and but for the players collapsing in a few games at the end of the season, we would have had Champions League and a Trophy.
Never in a million years will I understand your dealings with United. You only got £25m for RVP and ignored city's offer for Sanchez but 6 months later you swapped him for Mikhatarihan (excuse spelling)...and allowing Ramsey to go on a free was insanity.
It was unforgivable to sell RVP to Utd. We should never have done that, not in a million years. The Sanchez situation was a joke, City were offering £60m for him and we said no and then swapped him for Mhkitaryan ffs. That was then compounded by us looking as losing Ozil on a free, so to keep him at the club we handed him a contract worth £350k per week. The whole thing has been a ****ing shambles. As for Ramsey, I would have liked him to stay. But if he was demanding £250-£300k then the club are right to tell him to Foxtrot Oscar. We needed to make a stand on wages and whilst we should have been selling him, that was the mistake of the previous powers at the club letting his contract run down. It stings losing him on a free, but I'm glad the club have drawn a line under the whole issue of players running their contracts down and then having us over a barrel.
All very true but tbf you boys are gambling at the moment with eriksen as he will be going on a free next year
A very good twitter thread by 'Swiss Ramble' about our finances and how we compare to those around us. Really demonstrated how far we've slipped behind. Depressing reading, really. Also highlights just how bad Gazidis was at his job. What exactly was this guy useful for? He should have been sacked a long time ago. The guy was all talk and never delivered what he was supposed to.
Our inability to sell players effectively and tie players down to contracts has cost rus soo much money. Even this year though Ospina leaving for £3-5m is an absolute joke. He's the No.1 for his country and has shown him self to be decent level keeper.
