Sometimes it's better the devil you know.
http://news.bbc.co.uk/1/hi/business/8084182.stm
Liverpool in the shite
the problem is the 2 muppets aren't cash rich enough and keep refinancing so eventually there was going to be a problem.-
Charlie! Charlie!
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So if I understand this correctly, Hicks and Gillett bought the club in 2007 for 174.1 million + 44.8 million of debts (total of 218.9 million) and loaded the entire amount as debt on the club/the holding.
At the end of the 2007/08 season (barely a year after they had bought the club) the debt was at 300 million, so H&G made a massive loss in their first full season as owners of the club (as you'd expect in the beginning, having invested some cash in new players as well). Despite little to no investment being made in the 2008/09 season they have now sustained additional losses of over 42 million pounds (while the club itself generated an operating profit of 10 million).
We can quite confidently predict that the debt will have reached around 350 million by the end of this season.
So basically, the club has seen very little investment, the promised stadium has not even reached final planning stages and the debt has increased by over 200 million pounds in little over 2 years.
The next person buying the club will have to pay around double of what they paid 2 years ago in order for those 2 two to actually make a profit for their trouble. Unless that person is a crazy Arab actively trying to burn money the extra money required will again be loaded on the club in debts, very likely putting the debt figure to around 500 million in the end (again without having even started building the new stadium). And that person would have to do that without any reasonable hope of actually making money off the club in the long term unless he in turn sold it on for a profit a few seasons down the line.
Seems like a sustainable business model to me, I am still sad Arsenal haven't sold out yet.
At the end of the 2007/08 season (barely a year after they had bought the club) the debt was at 300 million, so H&G made a massive loss in their first full season as owners of the club (as you'd expect in the beginning, having invested some cash in new players as well). Despite little to no investment being made in the 2008/09 season they have now sustained additional losses of over 42 million pounds (while the club itself generated an operating profit of 10 million).
We can quite confidently predict that the debt will have reached around 350 million by the end of this season.
So basically, the club has seen very little investment, the promised stadium has not even reached final planning stages and the debt has increased by over 200 million pounds in little over 2 years.
The next person buying the club will have to pay around double of what they paid 2 years ago in order for those 2 two to actually make a profit for their trouble. Unless that person is a crazy Arab actively trying to burn money the extra money required will again be loaded on the club in debts, very likely putting the debt figure to around 500 million in the end (again without having even started building the new stadium). And that person would have to do that without any reasonable hope of actually making money off the club in the long term unless he in turn sold it on for a profit a few seasons down the line.
Seems like a sustainable business model to me, I am still sad Arsenal haven't sold out yet.
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SPUDMASHER
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In a nutshell, that's a pretty fair assessment of their situation. It doesn't mean it would be the case if our board sold on though. Their problem has occured as a result of the investers borrowing to buy. Citeh and the chavs are not in those problems because their new owners used their own cash, not finance. If someone does buy Arsenal eventually, I don't have a huge issue with it so long as it is done on a sound footing. Remember that the current board would have a say in that. If they didn't think it was a sound offer and represent the best interests of the club they could simply refuse to sell.
I do know I'd rather have a good new owner that would invest rather than dodgy owners like Manure and the Mousers have or like the current board that are too safe and are allowing us to slip away as a result.
I do know I'd rather have a good new owner that would invest rather than dodgy owners like Manure and the Mousers have or like the current board that are too safe and are allowing us to slip away as a result.
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Boomer
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So would you rather us be sold then to keep with the current structure?SPUDMASHER wrote:In a nutshell, that's a pretty fair assessment of their situation. It doesn't mean it would be the case if our board sold on though. Their problem has occured as a result of the investers borrowing to buy. Citeh and the chavs are not in those problems because their new owners used their own cash, not finance. If someone does buy Arsenal eventually, I don't have a huge issue with it so long as it is done on a sound footing. Remember that the current board would have a say in that. If they didn't think it was a sound offer and represent the best interests of the club they could simply refuse to sell.
I do know I'd rather have a good new owner that would invest rather than dodgy owners like Manure and the Mousers have or like the current board that are too safe and are allowing us to slip away as a result.
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SPUDMASHER
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Not necessarily, but I'm not totally opposed to the idea either. Provided it is done responsibly and is not detrimental to the club then I see no big issue. The problem really is that most people percieve a take-over as being a negative thing because of the way it has happened with some other clubs. If it's done like Manure/Mousers then it is financially fraught with danger. If done like Chelsea then it is a "rich mans plaything".
There is nothing to say that a take over is essentially bad, and if the club continues to have a sound financial footing but benefits from a cash injection that restores our fortunes on the pitch then I see no issue.
Having said that, if this board find a way to invest in the squad at a more realistic level then I would have no objection to them staying.
There is nothing to say that a take over is essentially bad, and if the club continues to have a sound financial footing but benefits from a cash injection that restores our fortunes on the pitch then I see no issue.
Having said that, if this board find a way to invest in the squad at a more realistic level then I would have no objection to them staying.
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Boomer
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I don't like the idea of a play toy either though.SPUDMASHER wrote:Not necessarily, but I'm not totally opposed to the idea either. Provided it is done responsibly and is not setrimental to the club then I see no big issue. The problem really is that most people percieve a take-over as being a negative thing because of the way it has happened with some other clubs. If it's done like Manure/Mousers then it is financially fraught with danger. If done like Chelsea then it is a "rich mans plaything".
There is nothing to say that a take over is essentially bad, and if the club continues to have a sound financial footing but benefits from a cash injection that restores our fortunes on the pitch then I see no issue.
Rumour has it, and it's a strong rumour, that the money that Abramovic spends on Chelsea will eventual be paid back.
So this Makes Citeh the only 'play thing' club.
I think its dangerous game to play to be the mercy of a single owner. Just my personal take.
It's not necessarily bad, but what worries me are the motives of anyone buying a football club.
I would think that there's essentially two types of buyers:
- cash rich big children that want a toy to play with
- business types that want to make money off the club and raise their profile
Personally I don't want the club to become the toy of anyone, no matter how much money he invests and how many titles it would win us. It wouldn't be the club anymore that support, it would take its soul away. I sincerely hope that nobody like that ever comes remotely close to buying Arsenal. Luckily not too many of those people are around.
The second type of buyer could potentially be ok, if the club is continued to be run in a reasonable way. But we are doing that already, so I don't see how a new owner would benefit us.
I really question whether you can actually make money off running a football club, I really don't think that that's been done in the Premiership in recent times (I don't think anyone has even come close). If there is no money to be made of running a club the money has to be made off selling the club on. Every time somebody buys the club the debt will increase - and that's without any investment in the team or in a new stadium.
If that this spiral can go on indefinitely then that's fine, but I don't think it can (where does it stop? at a billion, 2 billion, 20 billion?). Sooner rather than later clubs will require a license to participate in certain competitions, if not the Premiership then in European competitions. When the debt repayments reach a point of 20, 30, 40% of the turnover, will a license like that be issued? Other leagues in Europe already have a licensing model and clubs are refused licenses on a regular basis causing them to go into administration.
That business model is not sustainable long term, it's barely sustainable short term.
When I look back the last 10 years I can only remember one takeover that had a positive effect on a club - Aston Villa. All the other ones have either generated massive debts for the respective clubs that are very likely to cripple them long term, or they have made the clubs disgusting toys of sugar-daddies.
I'm not saying that it is impossible that a club can profit from a takeover, but evidence shows that it's highly unlikely.
I would think that there's essentially two types of buyers:
- cash rich big children that want a toy to play with
- business types that want to make money off the club and raise their profile
Personally I don't want the club to become the toy of anyone, no matter how much money he invests and how many titles it would win us. It wouldn't be the club anymore that support, it would take its soul away. I sincerely hope that nobody like that ever comes remotely close to buying Arsenal. Luckily not too many of those people are around.
The second type of buyer could potentially be ok, if the club is continued to be run in a reasonable way. But we are doing that already, so I don't see how a new owner would benefit us.
I really question whether you can actually make money off running a football club, I really don't think that that's been done in the Premiership in recent times (I don't think anyone has even come close). If there is no money to be made of running a club the money has to be made off selling the club on. Every time somebody buys the club the debt will increase - and that's without any investment in the team or in a new stadium.
If that this spiral can go on indefinitely then that's fine, but I don't think it can (where does it stop? at a billion, 2 billion, 20 billion?). Sooner rather than later clubs will require a license to participate in certain competitions, if not the Premiership then in European competitions. When the debt repayments reach a point of 20, 30, 40% of the turnover, will a license like that be issued? Other leagues in Europe already have a licensing model and clubs are refused licenses on a regular basis causing them to go into administration.
That business model is not sustainable long term, it's barely sustainable short term.
When I look back the last 10 years I can only remember one takeover that had a positive effect on a club - Aston Villa. All the other ones have either generated massive debts for the respective clubs that are very likely to cripple them long term, or they have made the clubs disgusting toys of sugar-daddies.
I'm not saying that it is impossible that a club can profit from a takeover, but evidence shows that it's highly unlikely.
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SPUDMASHER
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I know it's only picking a minor point from your whole post but,
My view on that is that whilst we may have a "responsible" board I think they're are too conservative. No business succeeds without taking some risks. Sometimes you have to invest more readily than they are prepared to do. The problem I see with the way they are doing things is that we run a very real risk of falling away from our current status. We've done well up to now to preserve our position but how long can we sustain that when those around us invest and we don't? There has to come a time where you take a risk, whatever size, to keep up with things.the club is continued to be run in a reasonable way. But we are doing that already
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Boomer
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I know things look bad at the moment financally but I've just been looking at some of the sponsor deals made and around.
Emirates paid Arsenal over £90M for the Stadim naming rights which is more nearer £100M for 15 years.
Sadly this also includes the shirt sponsorship which was a 8 year deal.
(I believe the £100M was splilt £54M Stadium / £46M Shirt. Ed would know!)
The deal was alot at the time but we could have got alot more as we where asking for money upfront.
Compare this to the Manaure's new shirt sponsor AON this is an £80M deal for 4 years. The £20M a season!!
Infact it's almost double our deal considering ours is twice the lengh!
The AIG was around £52m at the same time us ours for 4 years!!!
We both have Nike deal also.
Ours £130 for 10 years
ManUre's £302.9+profits for 5 Years
Deals due for renewal
Nike: 2011
Emirates Shirt 2014
Emirates Stadium 2020/21
Emirates paid Arsenal over £90M for the Stadim naming rights which is more nearer £100M for 15 years.
Sadly this also includes the shirt sponsorship which was a 8 year deal.
(I believe the £100M was splilt £54M Stadium / £46M Shirt. Ed would know!)
The deal was alot at the time but we could have got alot more as we where asking for money upfront.
Compare this to the Manaure's new shirt sponsor AON this is an £80M deal for 4 years. The £20M a season!!
Infact it's almost double our deal considering ours is twice the lengh!
The AIG was around £52m at the same time us ours for 4 years!!!
We both have Nike deal also.
Ours £130 for 10 years
ManUre's £302.9+profits for 5 Years
Deals due for renewal
Nike: 2011
Emirates Shirt 2014
Emirates Stadium 2020/21
The problem is that we don't really know how conservative they have been. We just don't know how much money has been available in the last few years, we can only see that our debt has increased despite operating profits and despite little money being invested on the playing side.
I think the way they built the stadium and the Highbury Square project to generate funds long term has been anything but too conservative. They took a risk.
Unfortunately the credit crunch is delaying that risk to pay off, but I have no doubt that it will. Whether that has made us fall behind too far in the short term is the question. Personally I don't think it has, we challenged for the league last year and I am absolutely positive that we will challenge for it again next year. And that's before having seen a real return on the investment.
I know that by looking at this season people will disagree with my assessment, but such is life.
I think the way they built the stadium and the Highbury Square project to generate funds long term has been anything but too conservative. They took a risk.
Unfortunately the credit crunch is delaying that risk to pay off, but I have no doubt that it will. Whether that has made us fall behind too far in the short term is the question. Personally I don't think it has, we challenged for the league last year and I am absolutely positive that we will challenge for it again next year. And that's before having seen a real return on the investment.
I know that by looking at this season people will disagree with my assessment, but such is life.
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SPUDMASHER
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Do you really think we challenged for the league this season though, really?hadareud wrote:The problem is that we don't really know how conservative they have been. We just don't know how much money has been available in the last few years, we can only see that our debt has increased despite operating profits and despite little money being invested on the playing side.
I think the way they built the stadium and the Highbury Square project to generate funds long term has been anything but too conservative. They took a risk.
Unfortunately the credit crunch is delaying that risk to pay off, but I have no doubt that it will. Whether that has made us fall behind too far in the short term is the question. Personally I don't think it has, we challenged for the league last year and I am absolutely positive that we will challenge for it again next year. And that's before having seen a real return on the investment.
I know that by looking at this season people will disagree with my assessment, but such is life.
We were nowhere near challenging for the league, we challenged for a top 3 or 4 spot. We were never in the race for the league itself.
You're right when you say none of us know how conservative they have been because we don't actually know the whole finances of the club. This current board do absolutely nothing to help themselves on that front when they constantly send out mixed messages. The fact that we're going this way on this thread shows how intertwined all the different concerns are.
Anyway, I have to be a bit careful for now with posting anymore this morning. My boss is nearby!!!!
Last season, not this. We were top of the league for over half the season, so we challenged for it last season. We were only 4 points off the top at the end despite a horrible run of draws and despite an unlucky defeat at OT and a defeat thanks to an offside goal against Chelsea.SPUDMASHER wrote: Do you really think we challenged for the league this season though, really?
We were nowhere near challenging for the league, we challenged for a top 3 or 4 spot. We were never in the race for the league itself.
You're right when you say none of us know how conservative they have been because we don't actually know the whole finances of the club. This current board do absolutely nothing to help themselves on that front when they constantly send out mixed messages. The fact that we're going this way on this thread shows how intertwined all the different concerns are.
Anyway, I have to be a bit careful for now with posting anymore this morning. My boss is nearby!!!!
This season we weren't anywhere near challenging though, unfortunately.
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Bendtners Drinking Buddy
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Im not great with the financial side of football, and my understanding isnt great so bear with me, but the Liverpool news further confirms to me that the way our club is run and the way Wenger goes about things is the correct way in the current climate as well as our own situation with the Stadium etc. Running up masses of debt is a dangerous game, be it to a company, a bank or an individual and you have to behave correctly when you do it.
I think the board do a great job and they have allowed Stan the Man to the table, so they are obviously looking at different avenues going forward.
I dont think the board are holding us back at all, Wenger has always said whenever he has asked for something he usually gets it : ie, big money for Theo when he was unproven, Arshavin more recently.
Im personally more than happy with the way Arsenal are off the pitch, its the defending ability that id like changing, and im sure it will be!
As for the Mousers, my heart bleeds....
I think the board do a great job and they have allowed Stan the Man to the table, so they are obviously looking at different avenues going forward.
I dont think the board are holding us back at all, Wenger has always said whenever he has asked for something he usually gets it : ie, big money for Theo when he was unproven, Arshavin more recently.
Im personally more than happy with the way Arsenal are off the pitch, its the defending ability that id like changing, and im sure it will be!
As for the Mousers, my heart bleeds....
