We've actually been spending all the excess revenue on either wages or transfer fees. In fact we've made a loss for each of the last few seasons so we've overspent compared to revenue. That's possible because the interest rate on the stadium loans is so low that the interest payments are only about 40% of the depreciation so the cashflow is greater than the profit.Interesting! Thanks PS.
I don’t quite know how to word what I’m trying to ask, but basically, when it comes to this extra expenditure you mention, are we doing enough based on the relative revenue? Does that make sense?
It’s been pointed out that the wage ceiling hasn’t been raised, which could be causing a problem in terms of attracting the “next level” of player, so I’ve essentially got the same question.
Also, we signed Sanchez tor 40-45m back in 17-18, and since the stadium opened in 19/20, we’ve made 4 or so signings that have cost us between 50-65m (Johnson, Solanke, Richarlison, Ndombele). Is that increase in transfer fee enough where we should see a difference? (Relatively speaking?)
I'm just trying to work out what it is that we’re not doing, because, as I said, it feels like the new stadium hasn’t made us any more competitive. Why is it that many fans including myself feel like this? It just feels like there’s been no change.
I think there are a few reasons why we are not seeing a difference.
The first is that the 2019 squad was vastly better than the price we paid for it so even with the extra revenue it was always going to be difficult to keep the standard that high.
Secondly our high value signings have generally vastly underperformed. When I mention luck in football, one of the things that covers is transfer success. We had a great run between 2015 and 2018 and a much poorer one since. Liverpool did something similar.
Thirdly, while we have caught Arsenal and Chelsea on revenue, we haven't caught them on squad value. Both can still outspend us in the short run, because they don't have loan covenants restricting their flexibility. Whether we can do Chelsea's trick and sell something to a related company for a profit, I don't know...there is a loophole in PSR that allows such things but I suspect the banks that loaned us the stadium money have better lawyers than the FA.
