Our financial results are out. The reduction in property sales was expected and these number don't include any of the activity in the Summer transfer window. Are you happy with these or more interested in playing matters ?
http://www.arsenal.com/news/news-archive/results-for-the-year-ended-31-may-2011 Sorry Gents. They're OK, we're in profit which makes us unique from everyone else but I worry that this may give rise to some fans who think we should be spending more money (at least £14.8m more).
This includes debt reduction and ****. Our debt is now only £98m. This should be no problem at all in 3 years.
Just checked the figures and apart from making a small profit there is £160 million in cash and short term deposits, so the 'no money for new players' brigade is utter eyewash. These results dont incude the summer transfer dealings so you could add another £30M to that.
Thanks. I couldn't view it earlier because I had just updated flash and forgot to restart the browser.
So, if the board can be bothered to spend the money, we'll be able to spend what City are spending now, effectively, except the money will be earned fairly.
I believe that the club is trying to bank enough money to pay for the stadium debt, including the interest payments. We can't pay of the debt early as there will be penalty clauses for this, but the finance dept will be able to work out how much money it will cost us in the next 15 years, to include mortgage repayments and interest. The idea would be to bank roughly that amount in cash reserves, say it works out at 200m for example. If we pretty much have that money banked, then we can then start spending more on players. Therefore the money will not be used to go on a spending spree, it will just sit in the bank and be wittled away over the duration of the stadium loan, until it is paid off. This would make great financial sense, while we would not be debt free, the debt would essentially be paid off, I really do believe this is what the club is trying to do, and why we are not spending more money that we take in. It will probably mean that we don't spend a lot until we reach the magical number in the bank (what ever the finance dept have worked out). Maybe in just talking rubbish but it would be a good idea and make sense, and would explain our transfer business over the last 5 years.
Why do we want to repay early? If it's going to incur a penalty for early repayment why not keep paying the installments as most of us do with our mortgages and have money available to pay better wages and buy new players now? The cash at the bank will also partly be to cover creditors due in the short term.
If the penalty outweighs the interest then it's worth taking the big hit now. I'm sure that, if any of us came into a large sum of money, we'd be more inclined to pay off the mortgage of our house if it worked out cheaper than keeping the instalments going. Spending a portion of the money now on wages/transfers is a massive gamble - it might not work out (signings don't guarantee success) and all of a sudden you've got no savings, a squad of players on hefty wages (which any potential signing will want parity with), a transfer market inflated by your actions and a debt which becomes harder to repay when you've facilitated an increase in outgoings. If you had been given a large lump some on retirement from work, would you pay off all small debts and as much of the house you can (bearing in mind your pension is less than your previous salary) or blow it all on a fast, expensive-to-insure car?
The thing i feel people have to realise is that when signing the big ticket players i.e. Mata, Benzema, and other players in the 20-35mn category they automatically come with wages of 100-150k for 4-5 years which mean another 20-30mn plus signing on bonuses a 30mn player actually winds up costing 60-70mn pounds over his contract. Not only that but it sets a precedent for renegotiation of existing contracts so RVP, TV, Walcott, Wilshere instead of asking for 50-100k will ask for 100-150k for pay parity which means our wage bill which is 55% of T.O. will increase dramatically. So signing a 30mn pound player would actually wind up costing us 100mn+ then add in any future players who's clubs will demand higher transfer fees and the player higher wages means that one big signing could destroy our financial model. This might change when we renegotiate our commercial deals and FFP comes into place then we can see what really happens. But for now I understand why the board and Wenger act the way they do. We dont have sugar daddies and we don't Have UTD's or Bayern's commercial clout so we have to go the way we are. In terms of the debt realistically the penalty may be high but if it is less or even close to the interest it is worth paying off as the interest we would be earning at best would be 2-3% unless we have it tied away even then 4-5%. Where as interest payment will definitely be 10%+. Not to mention the potentially better results we could get with some squad investment which could be vital when renegotiations of commercial deals take place. So while the world class players are deffo out we should be looking for more active investment in the 10-20mn category i.e. Cahill, Jag, Baines Or high value youngsters whose contract demands SHOULD be within our wage structure - Hazard, M'Villa, Gotze (cost 20-35mn but wages between 50-100k)
There really is no basis for the early payment of the stadium loan. We probably do have close to £200M in the bank but we also have creditors accounts of £130M due in the next 12 months So the net surplus cash is more like £60-70M, which is nowhere near enough to cover the debt and penalties. However what i would cover is a couple of £20M players inc wages . That is the realistic position.
