Why the board is right
Why the board is right
This is important for Arsenal fans because it determines what kind of club we will have. At present Arsenal are mired in debt because of the stadium. However, the club wa swell able to pay back the debt even before removing Henry's GBP6m a year from the books and before the additional GBP15m plus a year from the new TV deal. So an additional GBP15m - GBP20m depending on who we sign. We then have another GBP100m plus from the sale of flats at Highbury. With the stadium debt at GBP300m odd, that halves it in 3 years. By that time, neither Man U nor Liverpool will have come anywhere near halving their debt. In fact it will have grown from the GBP50m player purchases for Man U (and whatever for Liverpool) and Liverpool will need to incur additional debt to build a stadium. So should the board sell? They can only do so if they need the money persaonally, which they don't. There is no benefit to the club in selling because the debt will only grow to finance the acquisition. Also, the board would be stupid to sell at GBP7000-8000 per share when the price will clearly be at around GBP12 000 or more in two years time. Koenke will also have no greater capacity to provide funds for transfers than the current board because he will have to borrow, he will not donaet the money like Abramovic. So what do Arsenal fans want? A sale now and mountains of debt or to hold out now and ensure a super rich club in 3-5 yrs?
Dont mean to come across argumentative or contradictory but think the hole arguments put forward by teh press, bloggers and forums is a bit missguided.
Its a bit sad but I am a chartered accountant (boo me but pays well - cant complain). As far as debt financing goes it is not a bad thing like people make out. It offers many benefits to organisations and within teh financial world is an accepted means of acquisution. There is an optimum level of gearing for any club (debt as a proportion of debt+equity). The assumption that debt is bad is wrong. In teh case of Man united, they paid dividends yearly to shareholders. Take shareholders out of this equations and pay intrest payments. Interest paymnets are deducted prior to tax (reducing tac charge), where dividends are paid after taxed profits.
For arsenal to generate so much cash (sale of highbury,increases mechadise and ticket sales) it is unlikely that they will use this to decrease teh value of debt. Firstly early repayment of debt incurs hefty charges. Banks make loans on teh basis of an annual intrest income. The basis to lend is made on teh present value of teh number of years intrest paymenst and the principal being greater than the value they lend up front. Early repaymenst destroys this present value, to make up their loss, banks charge a repayment fee. It woudl make more sense for arsenal to invest suplus cash in high interest deposits (or riskier investmets) as investment income is likely to be higher than intrest costs (due to rising rates)
In terms of teh clubs market valuation, this is entirly based on teh markets assesemnt of teh current value of all future cash inflows for a club. The present price is currently falling due to teh gap between arsenal and teh clubs above. If mercahdise sales decrease, prize money decreases and ticket sales decrease the value of teh club will decrease. So to assum a 50% increase in valuation is optomistic.
The point of all this is that trust needs to be put in teh board and Stan to determine the best outcome. As fans we have no say in this (as much as i hate to say so) we have invested or money to go watch games and buy shirts which pay all these wages, but its like saying buying my sony tv gives me a say in their running.
The decision made will be made for business reasons (i dont liek teh fact, but thats exactly what it is). None of teh current board need teh cash,m but they certianly wont destroy their own wealth to cut off their face. If Stan buys teh club you have to put confidence in his advisors that they will decide on teh optimum gearing levels, uf teh boards say no then they must also know they they have some other means of maintaining the current valuation of teh club (and therefore perfromance).
Spending millions doesnot buy success (ala west ham) its teh skill of management and teh boards to implement correct strategy, we just have to wait and see what happens. But saying we dont want stan, or kick teh board out now is just reacting to paper talk. Let the board and stan sort it, either way a decision and reduction in paper talk will help teh club move forward
Its a bit sad but I am a chartered accountant (boo me but pays well - cant complain). As far as debt financing goes it is not a bad thing like people make out. It offers many benefits to organisations and within teh financial world is an accepted means of acquisution. There is an optimum level of gearing for any club (debt as a proportion of debt+equity). The assumption that debt is bad is wrong. In teh case of Man united, they paid dividends yearly to shareholders. Take shareholders out of this equations and pay intrest payments. Interest paymnets are deducted prior to tax (reducing tac charge), where dividends are paid after taxed profits.
For arsenal to generate so much cash (sale of highbury,increases mechadise and ticket sales) it is unlikely that they will use this to decrease teh value of debt. Firstly early repayment of debt incurs hefty charges. Banks make loans on teh basis of an annual intrest income. The basis to lend is made on teh present value of teh number of years intrest paymenst and the principal being greater than the value they lend up front. Early repaymenst destroys this present value, to make up their loss, banks charge a repayment fee. It woudl make more sense for arsenal to invest suplus cash in high interest deposits (or riskier investmets) as investment income is likely to be higher than intrest costs (due to rising rates)
In terms of teh clubs market valuation, this is entirly based on teh markets assesemnt of teh current value of all future cash inflows for a club. The present price is currently falling due to teh gap between arsenal and teh clubs above. If mercahdise sales decrease, prize money decreases and ticket sales decrease the value of teh club will decrease. So to assum a 50% increase in valuation is optomistic.
The point of all this is that trust needs to be put in teh board and Stan to determine the best outcome. As fans we have no say in this (as much as i hate to say so) we have invested or money to go watch games and buy shirts which pay all these wages, but its like saying buying my sony tv gives me a say in their running.
The decision made will be made for business reasons (i dont liek teh fact, but thats exactly what it is). None of teh current board need teh cash,m but they certianly wont destroy their own wealth to cut off their face. If Stan buys teh club you have to put confidence in his advisors that they will decide on teh optimum gearing levels, uf teh boards say no then they must also know they they have some other means of maintaining the current valuation of teh club (and therefore perfromance).
Spending millions doesnot buy success (ala west ham) its teh skill of management and teh boards to implement correct strategy, we just have to wait and see what happens. But saying we dont want stan, or kick teh board out now is just reacting to paper talk. Let the board and stan sort it, either way a decision and reduction in paper talk will help teh club move forward
Lets just say in 3 years time the debt is halved, the cash is rolling through the doors and we have the power to buy who we want. What good is that if Arsene has long since walked frustrated that the club couldn't remain competitive and match his ambitions in the short term?
A less capable manager with unlimited funds is a recipe for disaster. We all know that no one man is bigger than the club, but Arsene is as close as it gets and it has to be a balancing act between making the correct Financial decisions for the long term benefit of the club whilst keeping Arsene happy and keeping him at the club.
A less capable manager with unlimited funds is a recipe for disaster. We all know that no one man is bigger than the club, but Arsene is as close as it gets and it has to be a balancing act between making the correct Financial decisions for the long term benefit of the club whilst keeping Arsene happy and keeping him at the club.
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nuttygoonerpaul
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- Location: enfield
- Arsene Wenger will hand fans a clear indication of his intentions to stay with Arsenal by appointing Gilles Grimandi as the club's new football director.
The Guardian says Grimandi is expected to become Arsenal's director of football this week. The former midfielder's appointment is believed to have been a key topic at the board meeting four days ago during which the £16m sale of Thierry Henry to Barcelona was approved.
Grimandi, who has been the Gunners' scout in France after retiring as a player, will take on the player-recruitment duties previously performed by David Dein. His appointment could follow quickly by an announcement that Wenger has signed a new three-year contract extension with the Gunners.
- Arsenal were offered Samuel Eto'o by Barcelona during negotiations on Friday over the sale of Thierry Henry, it has been revealed.
AS says Barca vice-president Ferran Soriano proposed a swap involving the Cameroon international, but Arsenal rejected the offer, insisting they were happy with the £16 million cash agreement and would go elsewhere to find Henry's replacement.
Barca's board are reportedly fed-up with Eto'o's attitude and outspoken ways and if they receive the right offer, they will sell the Cameroon striker this summer.
- Roma midfielder Alberto Aquilani is interesting Arsenal.
The Sunday Mirror says the Gunners, always on the look-out for the best emerging talent, are well aware that Aquilani has emerged as one of the world's top young stars.
The 22-year-old was watched by Gilles Grimandi, who is in line to be named the Gunners' new director of football, as Italy beat Portugal on penalties at the European Under-21 Championship on Thursday to qualify for the Olympic Games.
- Arsenal are rivaling Liverpool for Atletico Madrid striker Fernando Torres.
AS says Gunners boss Arsene Wenger has identified El Nino as the ideal replacement for Barcelona-bound Thierry Henry.
Wenger has been a long-time suitor of Torres and this summer there is a wind of change in the air at the Vicente Calderon.
Indeed, it's reported the Gunners will make an opening approach today to Atletico to register formal interest in opening negotiations for the striker.
Liverpool boss Rafa Benitez is also keen and has been informed a cash offer of £22 million will land Torres.
- Barcelona's £16 million signing Thierry Henry is keeping his executive box at Arsenal's Emirates stadium.
Henry has grown to love the English game - and the English game has grown to love him - since his £10.5m move to Arsenal from Juventus in 1999.
So much so that he will even keep his executive box at the Emirates.
He said: "I want to keep my box at Arsenal and watch some games, if they let me back in!"
Henry praised the loyalty English fans show their clubs, and learned that loyalty at Arsenal.
He said: "I had a pride in playing for the shirt and the team. In France we don't have that.
"When I was young I supported Bordeaux, but when they lost I went to support Marseille.
"Here, you really learn the importance and the value of the shirt and the club. Arsenal is like that - an English family.
"Everyone here has been great, the fans, playing away, getting booed, getting cheered.
"I will always, always remember that. And Arsenal gave me that.
"Getting standing ovations from away fans was out of this world. It's so difficult to understand because in France they are just not like that.
"If you play well at home in France you get a standing ovation.
"If you play well away from home, well, you play well away from home, that's it."
- Bolton Wanderers striker Nicolas Anelka will seek assurances from Arsene Wenger over his own future before committing to a return to Arsenal.
The Daily Mail says Anelka has been identified by Wenger as a possible replacement for Thierry Henry and the former Arsenal forward is said to be interested after what was described last night by sources close to the French striker as 'initial contact'.
But Anelka is said to be so alarmed by Henry's comments about Wenger's situation that he will seek assurances from the manager that he intends to remain at the Emirates Stadium beyond the remaining year of his contract before committing to a move from Bolton.
- Arsene Wenger must win another battle with the Arsenal board if he is to sign Bolton Wanderers striker Nicolas Anelka.
The Times says Wenger has never criticised Anelka for threatening to go on strike eight years ago unless he was sold.
Wenger believed that Anelka, then 20, was naive and the manager was more angry about the behaviour of Lazio and Real Madrid, whom Anelka joined for £23 million.
Some senior figures on the Arsenal board have voiced their concerns and remain upset at the way that Anelka's brothers, Didier and Claude, who were acting as his agents, encouraged him not to honour his Arsenal contract.
The Guardian says Grimandi is expected to become Arsenal's director of football this week. The former midfielder's appointment is believed to have been a key topic at the board meeting four days ago during which the £16m sale of Thierry Henry to Barcelona was approved.
Grimandi, who has been the Gunners' scout in France after retiring as a player, will take on the player-recruitment duties previously performed by David Dein. His appointment could follow quickly by an announcement that Wenger has signed a new three-year contract extension with the Gunners.
- Arsenal were offered Samuel Eto'o by Barcelona during negotiations on Friday over the sale of Thierry Henry, it has been revealed.
AS says Barca vice-president Ferran Soriano proposed a swap involving the Cameroon international, but Arsenal rejected the offer, insisting they were happy with the £16 million cash agreement and would go elsewhere to find Henry's replacement.
Barca's board are reportedly fed-up with Eto'o's attitude and outspoken ways and if they receive the right offer, they will sell the Cameroon striker this summer.
- Roma midfielder Alberto Aquilani is interesting Arsenal.
The Sunday Mirror says the Gunners, always on the look-out for the best emerging talent, are well aware that Aquilani has emerged as one of the world's top young stars.
The 22-year-old was watched by Gilles Grimandi, who is in line to be named the Gunners' new director of football, as Italy beat Portugal on penalties at the European Under-21 Championship on Thursday to qualify for the Olympic Games.
- Arsenal are rivaling Liverpool for Atletico Madrid striker Fernando Torres.
AS says Gunners boss Arsene Wenger has identified El Nino as the ideal replacement for Barcelona-bound Thierry Henry.
Wenger has been a long-time suitor of Torres and this summer there is a wind of change in the air at the Vicente Calderon.
Indeed, it's reported the Gunners will make an opening approach today to Atletico to register formal interest in opening negotiations for the striker.
Liverpool boss Rafa Benitez is also keen and has been informed a cash offer of £22 million will land Torres.
- Barcelona's £16 million signing Thierry Henry is keeping his executive box at Arsenal's Emirates stadium.
Henry has grown to love the English game - and the English game has grown to love him - since his £10.5m move to Arsenal from Juventus in 1999.
So much so that he will even keep his executive box at the Emirates.
He said: "I want to keep my box at Arsenal and watch some games, if they let me back in!"
Henry praised the loyalty English fans show their clubs, and learned that loyalty at Arsenal.
He said: "I had a pride in playing for the shirt and the team. In France we don't have that.
"When I was young I supported Bordeaux, but when they lost I went to support Marseille.
"Here, you really learn the importance and the value of the shirt and the club. Arsenal is like that - an English family.
"Everyone here has been great, the fans, playing away, getting booed, getting cheered.
"I will always, always remember that. And Arsenal gave me that.
"Getting standing ovations from away fans was out of this world. It's so difficult to understand because in France they are just not like that.
"If you play well at home in France you get a standing ovation.
"If you play well away from home, well, you play well away from home, that's it."
- Bolton Wanderers striker Nicolas Anelka will seek assurances from Arsene Wenger over his own future before committing to a return to Arsenal.
The Daily Mail says Anelka has been identified by Wenger as a possible replacement for Thierry Henry and the former Arsenal forward is said to be interested after what was described last night by sources close to the French striker as 'initial contact'.
But Anelka is said to be so alarmed by Henry's comments about Wenger's situation that he will seek assurances from the manager that he intends to remain at the Emirates Stadium beyond the remaining year of his contract before committing to a move from Bolton.
- Arsene Wenger must win another battle with the Arsenal board if he is to sign Bolton Wanderers striker Nicolas Anelka.
The Times says Wenger has never criticised Anelka for threatening to go on strike eight years ago unless he was sold.
Wenger believed that Anelka, then 20, was naive and the manager was more angry about the behaviour of Lazio and Real Madrid, whom Anelka joined for £23 million.
Some senior figures on the Arsenal board have voiced their concerns and remain upset at the way that Anelka's brothers, Didier and Claude, who were acting as his agents, encouraged him not to honour his Arsenal contract.
This board is so lucky Arsene is a man of honour.He has never broken a contract and says he has no intention of breaking this one. The board sacked his best friend at the club yet Arsene has carried on.But what happens in 12 months time. And why since the selling of Henry has there been a wall of silence from the board? Hill-Wood was all over the media when Dein was sacked.Do they honestly believe Silent Stan will go away.
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I Hate Hleb
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LOOK OVER THERE!!!
SHIT WEATHER TODAY, EH?
Last edited by I Hate Hleb on Mon Jun 25, 2007 2:07 pm, edited 1 time in total.
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I Hate Hleb
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COR! I HOPE YOU ARE BETTER WITH NUMBERS THAN YOU ARE WITH LETTERS, D.D. ME OLD SON!!DDignam wrote:Dont mean to come across argumentative or contradictory but think the hole arguments put forward by teh press, bloggers and forums is a bit missguided...
Its a bit sad but I am a chartered accountant (boo me but pays well - cant complain)...
How the hell are the board right exactly ? By sacking the one man that has driven this club forward for the last 20 odd years ? I am so in agreement with trevheff when he says that in 3 years time we could have money but a manager that will not come close to Arsene Wenger. On top of that we will also (probably) have lost some of future stars (cesc, van persie, merida etc) so any new manager will have a major rebuilding job to do. In football the time to strike a blow is now not sometime in the future because who knows if that chance will be there in 3 years time. Arsenal under Dein & Wenger have worked extremely hard over the last 11 years to earn the right for the club to sit at the top table of europes big clubs(G14) and for the board to risk throwing it all away is madness. History is full of stories of clubs that were successful and hit a lean patch expecting to rise again only to sink to mediocre levels (villa,forest,marseille,st ettiene to name but a few) and we cannot be niaive enough to think the same couldn't happen to us. There has been no other board member in an english club that has been as prominent in his clubs rise as Dein has in ours and likewise there has never been a manager in the history of the game that has had such a profound effect not just on his own club but on football in general as wenger has with us. To lose these people from our club tells me that the board isn't right and couldnt be more wrong if they tried
I have got some illusion that I can touch type then dont bother to read what I do type, grammer and typing are not my pros -
Eboue Can't Defend
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- Location: LONDON
DDignam,
I was really interested in your first post and was looking forward to reading what you make of the situation. Problem is, I can't understand more than a bloody word of it!!
Bruv, I have nothing but respect for the fact that you are a Chartered Accountant.
You have got to have plenty of intelligence to be able to achieve that. And it also means you have an insight into and understanding of the financial shenanigans surrounding our club that most of us don't.
However, can you do me (and I'm sure other Gooners) a favour and translate that stuff you wrote earlier into English? Cheers.
I was really interested in your first post and was looking forward to reading what you make of the situation. Problem is, I can't understand more than a bloody word of it!!
Bruv, I have nothing but respect for the fact that you are a Chartered Accountant.
You have got to have plenty of intelligence to be able to achieve that. And it also means you have an insight into and understanding of the financial shenanigans surrounding our club that most of us don't. However, can you do me (and I'm sure other Gooners) a favour and translate that stuff you wrote earlier into English? Cheers.
fair point ebue, as people can probably tell I have some down time from work, will try get a copy of arsenals latest accounts and give them the once over and post a topic on what the financial position is like, and what it could look like assuming Stan the man took over. Wont be untill early next week tho but I will give it a go
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I Hate Hleb
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- Joined: Wed May 16, 2007 3:36 pm
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COUNTING THE PENNIES
DDIGNAM,
THAT IS VERY KIND OF YOU. I'M SURE THAT MANY GOONERS WOULD BE APPRECIATIVE (ALTHOUGH THE WAY I UNDERSTOOD IT, ECD WAS BEING FUNNY AND WAS ONLY ASKING THAT YOU TRANSLATE YOUR ORIGINAL POST INTO SOMETHING MORE LEGIBLE!).
THAT BEING SAID, IF YOU CAN DECIPHER ANY INFORMATION FROM THE ACCOUNTS THAT YOU THINK WILL HELP US ARSENAL FANS TO UNDERSTAND A BIT BETTER WHAT IS GOING ON AT OUR CLUB RE: FINANCE/KROENKE , WE SHALL FOREVER BE IN YOUR DEBT.
THAT IS VERY KIND OF YOU. I'M SURE THAT MANY GOONERS WOULD BE APPRECIATIVE (ALTHOUGH THE WAY I UNDERSTOOD IT, ECD WAS BEING FUNNY AND WAS ONLY ASKING THAT YOU TRANSLATE YOUR ORIGINAL POST INTO SOMETHING MORE LEGIBLE!).
THAT BEING SAID, IF YOU CAN DECIPHER ANY INFORMATION FROM THE ACCOUNTS THAT YOU THINK WILL HELP US ARSENAL FANS TO UNDERSTAND A BIT BETTER WHAT IS GOING ON AT OUR CLUB RE: FINANCE/KROENKE , WE SHALL FOREVER BE IN YOUR DEBT.
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I Hate Hleb
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- Joined: Wed May 16, 2007 3:36 pm
- Location: London
1 PLUS 1 = 3?
BY THE WAY, WHILE YOU'RE AT IT, CAN YOU USE YOUR ACCOUNTANCY SKILLS TO WORK OUT WHY ALMOST ALL THE POLL RESULTS CONDUCTED ON THE ONLINE GOONER DON'T ADD UP TO A TOTAL OF 100%??
IT'S ALL A MYSTERY TO ME!!:?
IT'S ALL A MYSTERY TO ME!!:?
Arsenal English only???
How about the supporters from around the world?
About the board hope thats true, because thats too good to be true.
But if they dont give Wnger founds to buy, will he extand his contract next year, i dant want to see Wenger leaving, and Cesc, VP, etc after him.
As a replacement for Henry, Torrez aint bad but he is too slow compared to TH, so id prefer a move for Tevez, he is more like TH striker, playmaker and assister. About Anelka i dont know him enough, i dident watch football when he was 20 years old.
I hope Wneger stays, and sold Henry beacause he wasent fit for the team anymore.
Arsenal is the most supported foreign team here around, it was more than a win when they beat Juve, Manchickster, Liverpool, the best was beating last year R. M. this teams have also fans here. Specially Manchickster, when we beat tham this season it was the bigest day in football supporting history for me as a supporter.
AND DONT FOGET ARSENAL IS NOT ENGLISH ONLY.
There are a lot Kosovars who support this team.
About the board hope thats true, because thats too good to be true.
But if they dont give Wnger founds to buy, will he extand his contract next year, i dant want to see Wenger leaving, and Cesc, VP, etc after him.
As a replacement for Henry, Torrez aint bad but he is too slow compared to TH, so id prefer a move for Tevez, he is more like TH striker, playmaker and assister. About Anelka i dont know him enough, i dident watch football when he was 20 years old.
I hope Wneger stays, and sold Henry beacause he wasent fit for the team anymore.
Arsenal is the most supported foreign team here around, it was more than a win when they beat Juve, Manchickster, Liverpool, the best was beating last year R. M. this teams have also fans here. Specially Manchickster, when we beat tham this season it was the bigest day in football supporting history for me as a supporter.
AND DONT FOGET ARSENAL IS NOT ENGLISH ONLY.
There are a lot Kosovars who support this team.
