The Enigma Stadium

As we're unlikely to see terraces again at football, this is the virtual equivalent where you can chat to your hearts content about all football matters and, obviously, Arsenal in particular. This forum encourages all Gooners to visit and contribute so please keep it respectful, clean and topical.
User avatar
Cockerill's chin
Posts: 1268
Joined: Sun Jul 15, 2007 12:57 pm
Location: Found the transfer fund... in Bendtner/Diaby/Denilson's pockets

The Enigma Stadium

Post by Cockerill's chin »

I don't tink I am unintelligent but I don't understand the impact of the new stadium on our finances. More specifically, I don't understand how Arsenal Football Club has established its' transfer budget for summer 2010.

PHW, as well as stating our captain is not good enough for Barcelona has mentioned our budget is bigger this year than for a long time. It is in the region of 25-30 million. It is a sign of the times for an Arsenal fan that this news was met with mixed feelings. As a fan of a club starved of team investment, it is great to think we might not have to make a transfer profit this year. As a supporter of a club that has been consistently outspent by other teams in the league in spite of having certain advantages, I am baffled it is so low.

I am not just talking about being outspent by the oligarch clubs but other teams like Villa, Tottenham and even Sunderland have made greater nett investments in the team than Arsenal. We have had the advantage of continual Champion Leagues football so why has our investment in the last five years been negative? (significantly in the transfer profit bracket).

If the team was the finished article then I could understand an argument that proposes we do not need the extra players. It is clear to all, however, that this team is three, maybe four signings short of being genuine contenders for trophies rather than the best of the following pack. Being the best of the rest leaves us in a trophy no man's land; we are too good to field full strength teams for the FA or Carling Cups but not good enough to compete against the big boys for what Wenger considers to be the majors.

The public relations which sold us the stadium idea has echoes of a certain dodgy dossier. Just as we didnt find any WMD lurking in the dessert we havent found Silva or Villa in the home changing rooms. It was stressed the project would allow us to compete. In reality, it could never allow us to compete with the likes of Chelea, Manchester City or Real Madrid. Those clubs are owned by oligarchs and the state respectively. How can you compete against a team which is funded by Russian commodities or Saudi oil? For Real Madrid how can we compete when the local government will offwrite any massive debts accrued by buying the training ground toilets for 250 million? (UEFA conveniently turn a blind eye to such benefactors but target the immoral funding of English clubs).

The move should have allowed us to compete financially with the likes of Tottenham and Sunderland though. Once the debt was restructured in 2006, even when debt repayments are taken into account, the club's turnover increased by at least £20m a year. Couple this with increased tv revenue, champions league money and cumulative transfer profits then why is the budget this year so low? Effectively, it is 5 million less than the remaining transfer profit from last summer.

Gazidis says our transfer policy prioritises re-signing existing players. I would argue that misunderstands the meaning of the word transfer. Re-signing players you want to keep should be a given. If that is all we are about now what happened to Flamini and why has Merida been left so late?

Another anomaly for me is the ever increasing wage bill. Last year we saved around £120k per week with Ade and Kolo joining Mancini's Mercenaries. If the X-Factor singer is to be believed the another £80k per week will be saved with Gallas going and another £20k with the Manchester Trojan Horse. I know Chamakh and Vermaelen combined will reduce the saving of £220k per week to £140k but why is our wage bill continually climbing?? Why are underachieving youngsters who don't put in a shift against a tired Tottenham squad so well rewarded?

That is why I didn't listen too much to the argument of our injuries on Wednesday. The players out there are exceptionally well paid. Wenger obviously believes they are worth the money so they need to start earning it.

Anyway sorry for rambling on. I think we should go to the next game dressed as Oliver Twist and shout to PHW for more this summer.

User avatar
marcengels
Posts: 7211
Joined: Sat May 02, 2009 11:12 pm
Location: North Bank

Post by marcengels »

I'm sorry I can't give you the reply your post deserves CC, because it does deserve more. Just a couple of points that immediately spring to mind.

Villa, Sunderland and sp**s are all being artificially subsidised, like Bolton and Wigan. They are getting investment directly from board members/owners - something that we don't/have not had. It is us, the fans, who generate the funds available.

The point regarding rewarding young players. I agree that I think we have made millionaires out of players who have done nothing, won nothing, and might be "good" players. But I guess the reason is that AW has seen a formula throught which he can save on transfer fees, and produce a team is good enough to be in the top four - which is, after all, the top priority for the Arsenal board.

User avatar
VforVictory
Posts: 563
Joined: Mon Feb 01, 2010 6:35 pm
Location: NORTH LONDON

Post by VforVictory »

New stadium earns us increased revenues per game, but it is a long term investment.

Highbury property sales will yield a profit this summer (though reduced on initial projections since recession, but a profit nonetheless.

Loan on stadium is long term, club are being very careful in paying it off within schedule.

As such, appears to me that they are not borrowing more funds, until that loan is paid off.

Club is keeping £35M or so as a security balance in accounts, so in case we fail to qualify for Champions League, we have enough in the kitty to pay for the stadium loan and player wages for one season, without having to cost cut because we did not qualify.

So money for transfers is well within budget, and when loan is paid off, that budget will vastly increase.

As I said on another post, I am pleased that the finances are so carefully managed, and accept the long term nature of the stadium investment, but I would be happy to see a share issue to raise extra funds for players, as a fundraising venture that would not put extra debt on the club.

AA23Northbank

Post by AA23Northbank »

This team may not have had the investment some fans want in, but it is of most importance for us to live within our means and look to the Emirates Stadium as reducing the debt before we can make top-class, expensive signings. Wenger has done wonders in the transfer market, flogging Adebarndoor for £25 million and getting TV in for £10 mil while selling Toure for £16 mil were masterstrokes in my opinion, and finding players such as Diaby and Song who have immense potential. We do need a new goalkeeper, a back-up centre half and we're quite likely to get Chamakh on the free (who, in my opinion, looks quick and sharp and is good in the air) but we should give the midfield more time. Diaby has improved immensely and hopefully Eastmond will get more opportunities. To the fans who want us to spend more now and revamp our squad completely, I say this: look at Man U, look at Liverpool and look at Pompey. Man U and Liverpool are in serious debt due to living beyond their means in the search for trophies (United's debt from the Glazer takeover excaberated by signing the likes of Berbatov, Anderson, Carrick, Nani and flops like Tosic) and Pompey may have won more trophies than us since '06, but they're financially ruined. Give this team and AW time, it only needs tweaking, we've done remarkably well this season to have lasted this long in the title race with so many injuries, keep the faith and sing up for The Arsenal!
:barscarf: :barscarf: :barscarf: :barscarf:

User avatar
Cockerill's chin
Posts: 1268
Joined: Sun Jul 15, 2007 12:57 pm
Location: Found the transfer fund... in Bendtner/Diaby/Denilson's pockets

Post by Cockerill's chin »

VforVictoey, if revenue is up even after the debt is serviced, then why have we had to sell players over the last three years?

I understand this year it is argued we wont have to sell (I hope that is true). But why can't we have last years transfer profit in its entirety plus say 10 million??

Considering our seats pay for the stadium debt plus an extra £20 million per year on top then additional transfer budget seems to be workable.

Do you think the budget is so low because we are fevering away to reduce the stadium debt at an accelerated pace? Perhaps for other motives? :wink:

worthing_gooner
Posts: 1951
Joined: Tue Dec 29, 2009 2:47 pm
Location: Worthing, West Sussex

Post by worthing_gooner »

The trouble is we hear a lot that once the stadium debt is cleared we'll be a financial powerhouse, but that's a seriously long term view. Do they not think that if we continue to scrape by with meagre resources, fans will eventually lose patience and dare I say it both manager and board will be kicked out on their ears.

I hear a lot at arsenal about next year, next year, future, but this is a results driven business - it's all about the here and now. The game today, the season this year. Bearing the future in mind is excellent and sensible, but focusing solely on what's going to happen 5-10 even 20 years down the line is not a good idea.

User avatar
VforVictory
Posts: 563
Joined: Mon Feb 01, 2010 6:35 pm
Location: NORTH LONDON

Post by VforVictory »

Increased revenue is needed to meet the debt.

It leaves money over for transfers, but not the vast amounts that Chelsea and Man City have, that much is clear by transfer patterns since we moved stadium.

As for paying off debt ahead of schedule, it could be as you suggest, to work towards a share price increase, or at least to make a sale a more attractive proposition to potential buyers.
I guess that in a sale, a reduced debt is a more tangible factor than player value?

It can also just be good housekeeping, because the interest rates on the debt are now higher than interest rates on savings.

AA23Northbank

Post by AA23Northbank »

The debt seems to have fallen significantly in the half-year report:
http://www.guardian.co.uk/football/2010 ... al-figures

I see good signs on the way in the year-end figures, hopefully there won't be a takeover that could significantly add to the debt.

User avatar
Boomer
Posts: 8602
Joined: Fri Jul 11, 2008 11:00 am
Location: Putting the 'THE' back in the Arsenal.

Post by Boomer »

CC The stadium loan repayments is £20M a year maybe a bit less now as like a mortgage the lower the loan the payments.
You also have to bare in mind we have no extra income from shirt, kit manufacturer or stadium naming rights. All that was negotiated (very low) and paid upfront.

To give an example Liverpool and ManU get shirt sponsorship of £15M a season! we get '0' That's a player in itself!

Can't remember the full cost of the loan (£300M+) but it's been drastically reduced. Too fast I think!
Last report it was down to just over £100M which considering the loan is for 15-20 years to knock off over £100M in a season is marvellous. But at what cost?
There's several schools of thought one of which is that Wenger doesn't spend. I partly believe that to be true but think back to the early Wenger years and he did spend.
So why not now?
I think he's been advised not to in order to reduce the loan far quicker than anticipated. Maybe this is a long term thought by the board. Wenger with limited funds can 'get by' but after next season will Wenger be around? Maybe not!?
So will a new manager be as prudent as Arsene? Not sure but I think the board are looking forward to give any new manager the funds.

For one I'm starting to see this 'project' now as a conveyor belt of funds and not a policy. Like property development. Take a rough house and dress it up and sell on for a profit! That's our youth policy.

Is there money who knows? This could be AW last throw of the dice and if he does go.....I think Cesc will follow.
So maybe something needs to be addressed now with the team from the boards point of view. Also I think the Nike deal is up next summer so it could be a case of speculating spending X amount now for when the new deals signed next season

Interestingly, once the debt has gone and added with new sponsor deals we'll be one, if not thee, richest club in the world in terms of generating (self) revenue. Club level the prawn sandwich ring around the Grove brings in around £2-£3M per match game which alone is more then the whole of Highbury brought in! Shocking! :shock:

CraigPollard
Posts: 371
Joined: Sat May 12, 2007 3:44 pm
Location: Portsmouth

Re: The Enigma Stadium

Post by CraigPollard »

Cockerill's chin wrote:I don't tink I am unintelligent but
A cracking opening line there!

:barscarf:

Champagne Charlie
Posts: 381
Joined: Sat Apr 10, 2010 1:47 am

Post by Champagne Charlie »

I make you right, Boomer.

Whgilst we've practically cleared the debt for cost of building Highbury Square, we still have to repay the rest of the £300m or so we took on for the Ashburton development.
And i also remember it being said we'd have to generate approx £20m per year for the next 18 years to pay the loan.
As said the renegotiation of the interest on loan (falling interest rates) have encouraged us to look at paying it off in less time.

The board have made available some money for new signings (salaries inclusive, signing on fees) and that is about £45m.

Wenger being Wenger believes in the project (he had significant input to the whole project: new stadium, Highbury redevelopment) and to that end possibly wouldn't spend as much funds as some other less financially aware managers (certainly if Levy had left the cash register open to 'Arry, Spuds wouldn't be in such rude health.).

As for the wage bill Cockerill, we pay on of the best salaries on average in the league. That is: we pay good money to keep some extremely average players.

You may find that whilst ManUre pays the likes of Rooney, Rio, Barbie and Giggs top dollar, folks like Vidic, Valencia, Fletcher and co are nowhere near that mark.
Spose it comes with the prestige of playing for ManUre?

And remember y'all, the board aren't paid salaries and shareholders don't get dividends.

So it seems to be all above board.
Unless Steven Madoff and Alan Stanford are secret board members...

hatemanu99
Posts: 181
Joined: Fri May 08, 2009 7:05 am
Location: London

Post by hatemanu99 »

A number of clubs have spent increasingly ridiculous amounts but where has it actually got them? Madrid being the main example - they could end the season with nothing. On a £200m outlay. City have had a great season but can you see them competing consistently? I doubt it given they will happily sack managers if they don't deliver within stupidly short timeframes. Even Chelsea haven't been able to achieve their ultimate ambition of the Champions League after 5 years of huge spending. And haven't won the league in 4 years.

The last 5 years has been very painful, particularly because it immediately followed such a successful period for us. But I'm confident we are running the club prudently and it will pay off. Wenger knows this lot aren't quite the required standard but what he's done has been amazing. This year and 2 years ago we have been genuine contenders, somehow. Managers who could have delivered the same with this budget and these players are few and far between. Perhaps Mourinho, maybe Hiddink.

Has any team who has built a new stadium in the last 20 years been able to stay in the Premier League since? Let alone challenge for the title and consistently reach the latter stages of the Champs League.

We'll be back. Of that I have no doubt.

hatemanu99
Posts: 181
Joined: Fri May 08, 2009 7:05 am
Location: London

Post by hatemanu99 »

VforVictory wrote:Increased revenue is needed to meet the debt.

It leaves money over for transfers, but not the vast amounts that Chelsea and Man City have, that much is clear by transfer patterns since we moved stadium.

As for paying off debt ahead of schedule, it could be as you suggest, to work towards a share price increase, or at least to make a sale a more attractive proposition to potential buyers.
I guess that in a sale, a reduced debt is a more tangible factor than player value?

It can also just be good housekeeping, because the interest rates on the debt are now higher than interest rates on savings.
Can you name a time when rates on debt were lower than rates on savings? That is how banks make money!

User avatar
Boomer
Posts: 8602
Joined: Fri Jul 11, 2008 11:00 am
Location: Putting the 'THE' back in the Arsenal.

Post by Boomer »

Fray Bentos wrote:Hello FHM readers!

I put a few quid on 2-1, thanks lads! Have a great summer! :barscarf:

Image

Love,

Mono x
Think we'll be laughing Mono when you're 3rd. Come on Citeh!
Teves or Berba :lol: :lol: :lol:

User avatar
augie
Posts: 26422
Joined: Mon Jun 18, 2007 3:03 pm
Location: Ireland

Post by augie »

AA23Northbank wrote:This team may not have had the investment some fans want in, but it is of most importance for us to live within our means and look to the Emirates Stadium as reducing the debt before we can make top-class, expensive signings. Wenger has done wonders in the transfer market, flogging Adebarndoor for £25 million and getting TV in for £10 mil while selling Toure for £16 mil were masterstrokes in my opinion, and finding players such as Diaby and Song who have immense potential. We do need a new goalkeeper, a back-up centre half and we're quite likely to get Chamakh on the free (who, in my opinion, looks quick and sharp and is good in the air) but we should give the midfield more time. Diaby has improved immensely and hopefully Eastmond will get more opportunities. To the fans who want us to spend more now and revamp our squad completely, I say this: look at Man U, look at Liverpool and look at Pompey. Man U and Liverpool are in serious debt due to living beyond their means in the search for trophies (United's debt from the Glazer takeover excaberated by signing the likes of Berbatov, Anderson, Carrick, Nani and flops like Tosic) and Pompey may have won more trophies than us since '06, but they're financially ruined. Give this team and AW time, it only needs tweaking, we've done remarkably well this season to have lasted this long in the title race with so many injuries, keep the faith and sing up for The Arsenal!
:barscarf: :barscarf: :barscarf: :barscarf:

So many flaws in your post -

1. Diaby has not improved immensely and I will stake my life that he will never make it as an Arsenal player - the guy has no football brain whatsoever, is as inconsistent as the weather and is a lazy fcuker :evil: If your and wenger's masterplan is built around diaby then we are seriously fcuked :banghead:

2. Wenger has done wonders in the market ? Some yes but it is wenger that continues to leave this squad threadbare every fcuking season - track back to any of wenger's soundbites at this stage or the end of the last 3 seasons and you will without doubt hear him referring to our injury lists but yet at no stage has he ever made strides to increase the size of the squad. The kudo's you have given him for selling greedybayor and kolo are misplaced cos he himself admitted that the fans drove greedybollox out while it was gallas that forced his hand over kolo.

3. You cite manure and point to buy's like barbietov, nani etc but choose to ignore buys like shrek, ronaldo and van der sar and also choose to admit that in these dark times where they are financially fcuked they were/are going for their 4th league title in a row and were champions of europe only 2 years ago.

4. How much more time do you want to give wenger and this team ? We stayed in the title race for as long as we did this season cos the other contenders were as bad as we were. This team does not require "tweaking" - it requires a major injection of talent not potential. It also requires a first choice centre back cos gallas is as good as gone - fcuk it if you can't see where the players are not good enough at this stage then it is pointless me trying to tell you

Post Reply