Arsenal post pre-tax profits of £49.5million


Anzac (Forum Member) on February 28th, 2012, 12:06 pm

Rain Dance wrote:
Anzac wrote:BINGO!!!!!

But essentially what Gazidis is indicating is that we use our annual profit to cover our projected expenditure re our self funding model.
As such it's got frakk all to do with operations costs and everything to do with funding additional projects like the medical facility upgrade & the statues etc.


and what keeping the separation between our projected expenditure and our operation costs? As AFAIK those can overlapped with ease.
Please enlighten me... I'm not good w/ numbers ( Im good with Asian handicap, though :wink: )


You ARE right in that they overlap,
but I was talking in terms of new / upcoming projects other than 'normal' operating costs.

IMO it's all more of the same gobldy-gook & double talk we heard from AW re the 15-20m profit required to pay for the stadium = we already know that the stadium pays for it's self & that the payments are part of our normal projected operating costs & have nothing to do with 'profit',
but everything to do with 'revenue'.

Likewise we know that 30% of the Cash Reserves are held in reserve to provide emergency funding to meet our debt payments in case of a rainy day when we fail to generate those 'extra' revenues,
or moreso when we have a potential conflict of interest regarding the use of reduced revenues.

Essentially the club work off the principle of securing the building blocks BEFORE they do anything,
be it player contracts or finances or whatever.
Fundamentally they are conservative by nature = cover the requirements & anything else is a bonus.
The bottom line is MORE than we do not spend more than we earn,
it's more a case of we do NOT spend more than what we currently have available or accounted for.

Anzac (Forum Member) on February 28th, 2012, 12:11 pm

We have to remember that essentially our football & commercial revenues have stagnated / remained constant these past 2-3 seasons,
whilst at the same time our wages & operating costs have continued to increase.

Our 'extra' revenues of any regularity and volume have come directly from profit generated from player trading.
Under our self funding modfel those profits have raised the revenues to pay for any & all additional costs incurred, including the new medical facilities, contract upgrades, wages budget increases, statues & whatever.
The Board still do NOT put their hands in their own pocket - the club pays for EVERYTHING out of the money we have available that we have raised.

eye4goal (Forum Member) on February 28th, 2012, 12:55 pm

Anzac (Forum Member) on February 28th, 2012, 1:18 pm

eye4goal wrote:Swiss Ramble analysis of recent results

http://swissramble.blogspot.com/2012/02/arsenals-mystery-dance.html


Brilliant as usual.

Armor for Sleep (Elite Member) on February 28th, 2012, 1:45 pm

Ye great blog. We're really getting shafted by the Emirates and Nike shirt deals. Potentially costing us around 20-30 million a season. When did we extend the Nike deal? Why didn't we just let it run out in 2012?

SwissR seems to think Djourou is on 50k. I like him and think we were right to keep him but thats too much money.

eye4goal (Forum Member) on February 28th, 2012, 2:01 pm

Nike had the option of extending it and took it up. So as it stands we're making losses if not for player sales.

Armor for Sleep (Elite Member) on February 28th, 2012, 2:40 pm

That makes sense i suppose. You'd think we'd be fairly desperate to finish these contracts and re-negotiate new ones.

DJ_Markstar (Forum Member) on February 28th, 2012, 2:52 pm

eye4goal wrote:Nike had the option of extending it and took it up. So as it stands we're making losses if not for player sales.


We should learn our lesson in future and have one year rolling contracts imo. That way, we won't get shafted in this manner should the market change.

spartandre217 (Forum Member) on February 28th, 2012, 3:21 pm

Too much can go wrong with deals like those DJ and no business like Nike is going to commit to that sprta expenditure for just one year of "possible" returns... I think 3-5 year deals with wiggle room to help us get out of them is our best bet for renewable, dependable and valuable commercial deals.


The wiggle room I refer to is as follows:

If current deal is less than 75% of deals negotiated by other notable clubs renegotiation is mandatory.

If while during the term of a commercial deal, an offer is made by another entity that's 25% greater than current rate, existing deal must be increased to match at least 90% of new offer's value or risk termination of existing deals.

Deal can be bought out by either party 1 year after the half-way point of the term of the deal for half the price of the outstanding balance.



Those are terms that I see as viable for both the club and businesses looking to advertise with us with a few modifications while allowing some long term benefits for either side.

Long term deals are already seen to be rubbish and no business would want to rely on year-by-year income streams that would have such massive effects on their yearly prospects.

DJ_Markstar (Forum Member) on February 28th, 2012, 3:31 pm

Perhaps, Sparta, but giving only one side the option to extend is just asking to be shafted should the market change.

Maybe make a 5 year contract which is reviewed every year based on current market rates?

spartandre217 (Forum Member) on February 28th, 2012, 3:50 pm

If one side decided to re-up at less than 75% of market value, we can walk, if we get a better offer and they don't match 90% of the offer, we walk and even then us(arsenal) being able to buy out the deal and walk halfway through is a decent compromise I feel. I wouldn't give anyone the unilateral right to extend the length of the term though

TheEconomist (Forum Member) on February 28th, 2012, 4:24 pm

DJ_Markstar wrote:
eye4goal wrote:Nike had the option of extending it and took it up. So as it stands we're making losses if not for player sales.


We should learn our lesson in future and have one year rolling contracts imo. That way, we won't get shafted in this manner should the market change.


Why would they agree to fund so much of our stadium if they were given such little security? The reason we got so much money upfront was because we agreed to give them good terms in future time periods. And the reason we wanted so much money upfront was because it meant we could make that transition to a new stadium, which requires significant capital. We wouldnt have been able to do it without their money

We arent doing them a favour, they arent doing us a favour, its an agreement that is benefical for both parties now. Its like taking out a contract for a new Iphone, and then after a month saying I dont want to pay your £40 a month anymore, but il keep the free phone you've given me. Its just not how it works

TheEconomist (Forum Member) on February 28th, 2012, 4:28 pm

Why is a lesson? We did the right thing, and I wouldnt change a thing to be honest. Everyone knew that this is how it would be even before the contracts were signed, its not exactly a surprise

DJ_Markstar (Forum Member) on February 28th, 2012, 4:28 pm

I'm fully aware of the terms of the current contract with Nike.

It is still a lesson for the future, however, that long contracts will bite us on the Arsenal should the market change.

Floating (Trusted Member) on February 28th, 2012, 4:42 pm

What it really boils down to is that we are miles behind other clubs in terms of commercial revenue.

Once we secure better sponsorship deals and partnerships, we will likely see our profits increase two or three-fold. Seriously.

Mastadon (Forum Member) on February 28th, 2012, 4:51 pm

Floating wrote:
mo50 wrote:What I'd like to know is, if we've made a 49.5m profit, why did our cash reserves only increase by 5m? How is the rest of the profit classified?


That's a good question, but I believe Gazidis said that we can't invest 100% of profit into the team every year. There are running costs for the stadium, training and medical facilities and other operations that eat up a chunk of our revenue every year.


Its because our profit does not fully reflect the cost of transfers and contract renewals. The money spent on transfers is amortised over the length of the players contract meaning if we spent 60m on players signed for 5 years, every year we recognise an expense of 12m or 60/5 while the reduction in cash will be 60m straight up if its all paid up front. Thats why its possible to show profits while having minimal cash flows.

The fact is most of the transfer proceeds from selling players this summer has been spent on new signings and contract renewals.

kenkbc2 (Forum Member) on February 28th, 2012, 5:01 pm

eye4goal wrote:Swiss Ramble analysis of recent results

http://swissramble.blogspot.com/2012/02/arsenals-mystery-dance.html


Great blog, very insightful..although it got me dizzy for a while looking at all the $ (or pound) signs.

So, now we wait until 2014. Question is, will we splash the cash then once we double or even possibly triple our sponsorship income?

error_prone (Forum Member) on February 28th, 2012, 5:18 pm

kenkbc2 wrote:
eye4goal wrote:Swiss Ramble analysis of recent results

http://swissramble.blogspot.com/2012/02/arsenals-mystery-dance.html


Great blog, very insightful..although it got me dizzy for a while looking at all the $ (or pound) signs.

So, now we wait until 2014. Question is, will we splash the cash then once we double or even possibly triple our sponsorship income?

If we want to triple our income then we need to splash the cash before 2014, I dont see sponsors going crazy looking at gervinho. I'm not expert about this but it seems logical to me

kenkbc2 (Forum Member) on February 28th, 2012, 5:45 pm

error_prone wrote:
kenkbc2 wrote:
eye4goal wrote:Swiss Ramble analysis of recent results

http://swissramble.blogspot.com/2012/02/arsenals-mystery-dance.html


Great blog, very insightful..although it got me dizzy for a while looking at all the $ (or pound) signs.

So, now we wait until 2014. Question is, will we splash the cash then once we double or even possibly triple our sponsorship income?

If we want to triple our income then we need to splash the cash before 2014, I dont see sponsors going crazy looking at gervinho. I'm not expert about this but it seems logical to me



Maybe not Gervinho, but by then we'd have(if they are still here) a fully developed quintet of Wilshere, Chamberlain, Ryo, Campbell and Wellington Silva around. Not forgetting full England internationals such as Gibbs and Walcott as well.

eye4goal (Forum Member) on February 28th, 2012, 6:10 pm

We have less than half the number of sponsors of Man Utd. Improving on the main deals of Emirates and Nike will not be a problem, but ultimately we'll need to start challenging for trophies to get the type of deals Utd get from minor sponsors like DHL

Floating (Trusted Member) on February 28th, 2012, 6:24 pm

It's not always trophies that bring commercial revenue, it's a global brand, it's marketability.

Hell, Liverpool and Spurs more commercial revenue than we do. We got short-changed years ago, and it's hopefully going to be rectified when our sponsorships are renegotiated.

VancouverCanuck (Forum Member) on February 28th, 2012, 7:34 pm

Floating wrote:It's not always trophies that bring commercial revenue, it's a global brand, it's marketability.

Hell, Liverpool and Spurs more commercial revenue than we do. We got short-changed years ago, and it's hopefully going to be rectified when our sponsorships are renegotiated.

We didn't get short-changed. We were simply too passive: last year was the first time we went overseas to promote our brand, while I know ManU and Liverpool have been doing that for years. Sponsors are willing to pay more when a team has more global presence.

error_prone (Forum Member) on February 28th, 2012, 8:48 pm

If we want to triple our income then we need to splash the cash before 2014, I dont see sponsors going crazy looking at gervinho. I'm not expert about this but it seems logical to me[/quote]


Maybe not Gervinho, but by then we'd have(if they are still here) a fully developed quintet of Wilshere, Chamberlain, Ryo, Campbell and Wellington Silva around. Not forgetting full England internationals such as Gibbs and Walcott as well.[/quote]
I dont see any potential superstars on your list, maybe wilshere if he can get over that injury but he could also end up like ramsey. It is very sad that we have destroyed our best brend, and that is great football. With only one shirt selling player, with lame footblall we play, I dont see us geting good contracts in 2014.

Floating (Trusted Member) on February 28th, 2012, 8:51 pm

error_prone wrote:I dont see any potential superstars on your list, maybe wilshere if he can get over that injury but he could also end up like ramsey.


:lol: Oh dear.

progman07 (Lobby Member) on February 28th, 2012, 8:58 pm

Whatever people say, the best marketing is to win trophies, with popular marketable players. Foreigners like me usually pick teams that either have star players (like Bergkamp, Henry, Pires, those who got me following and supporting Arsenal, and got me travelling to Austria every summer, watching them train, etc), or who win trophies. I don't think you can get people support teams by pushing them into their face, so I don't think we could build huge fan bases without stars and trophies, even if we toured in their country every season.
Also, not every foreigner fan will stick to the team forever. I'm stuck forever obviously, but others who have never taken it so seriously might just switch teams, if we decline.


What I want to say is, Arsenal must produce results, and put players on the pitch who make you say "wow", if we want to keep and win supporters and build that 'global brand'. Just by having profit, and constantly living in the past where we had great players and played beautiful football consistently, we won't win over young kids who only see the matches. Though it is a bad time for me to post this, as our win against Spurs is something that could win fans over, really, we need these kind of games.
User avatar

Beksl (Forum Member) on February 28th, 2012, 9:55 pm

You don't need to win trophies IMO. You can also buy a player from a certain country with a big unexploited market and a lack of footballing culture like China/India or even Japan.

The problem is apart from Japan those countries are miles away from producing quality players.
User avatar

error_prone (Forum Member) on February 28th, 2012, 11:14 pm

Floating wrote:
error_prone wrote:I dont see any potential superstars on your list, maybe wilshere if he can get over that injury but he could also end up like ramsey.


:lol: Oh dear.

oh dear, another one who thinks arsenal has the best young players in universe, well where should i start , vela, bendtner, merida, denilson, reyes,diaby, ramsey,aliardiere, gibbs, walcott, bentley, quincy, randall,tomas, eastmond... all hyped to be the next arsenal legend and all have failed. so, if i have doubts over our curent crop of youngsters there could be some history reason for that?!
and plz tell my why are you so sure wilshere will come back as a top player? let's be honest here, apart from barcelona games he was nothing special all season, good, but nothing special.

VancouverCanuck (Forum Member) on February 28th, 2012, 11:16 pm

progman07 wrote:Whatever people say, the best marketing is to win trophies, with popular marketable players.

Not that I disagree with you, progman, two facts that I just want to point out:
1. *** Spuds are making more money from their sponsors.
2. Our commercial revenue pale in comparison to ManU's during the Invincibles' era.

Yes, we do need success on the pitch. Yes, we do need big name players. But we also need to be better at marketing. And I believe management is at least trying to address that. But it's just not going to happen overnight.

Floating (Trusted Member) on February 28th, 2012, 11:50 pm

error_prone wrote:
Floating wrote:
error_prone wrote:I dont see any potential superstars on your list, maybe wilshere if he can get over that injury but he could also end up like ramsey.


:lol: Oh dear.

oh dear, another one who thinks arsenal has the best young players in universe, well where should i start , vela, bendtner, merida, denilson, reyes,diaby, ramsey,aliardiere, gibbs, walcott, bentley, quincy, randall,tomas, eastmond... all hyped to be the next arsenal legend and all have failed. so, if i have doubts over our curent crop of youngsters there could be some history reason for that?!
and plz tell my why are you so sure wilshere will come back as a top player? let's be honest here, apart from barcelona games he was nothing special all season, good, but nothing special.


Wow, mate. First of all, I never said anything about Bendtner, Denilson, Vela, etc. I've never rated any of them the way I do Oxlade and Wilshere.

Wilshere was voted our Player of the Season, and the English Young Player of the Year. He was massive. Not every single game, but he was brilliant for huge stretches of the season and carried the midfield in Cesc's absence at 18 years old. He is, deservedly, looked upon as one of the brightest talents in Europe, on par with the likes of Hazard, Gotze, etc. He's also regarded as a potential future captain of both club and country.

I understand not wanting to overhype our youngsters, but Wilshere, Oxlade-Chamberlain and possibly Ramsey are elite talents.

The fact that you used Ramsey as an example of a "failed" youngster is daft as well. He's only just turned 21, it's his first season as a starter and he's just returned from a career-threatening injury. I'm not saying he's been incredible this season, but seriously. Get a grip.

eye4goal (Forum Member) on February 29th, 2012, 12:52 am

VancouverCanuck wrote:
progman07 wrote:Whatever people say, the best marketing is to win trophies, with popular marketable players.

Not that I disagree with you, progman, two facts that I just want to point out:
1. *** Spuds are making more money from their sponsors.
2. Our commercial revenue pale in comparison to ManU's during the Invincibles' era.

Yes, we do need success on the pitch. Yes, we do need big name players. But we also need to be better at marketing. And I believe management is at least trying to address that. But it's just not going to happen overnight.


We're even far more behind them now. They've gone from 27% revenue from commercial money to 40%. How long is it going to take us to catch up on marketing, brand, etc? Another tour or two probably but ultimately we've got to be there when it comes to winning trophies. United have dominated the last 20 years(including the Invincibles era too)and they're reaping the rewards for it

Spurs only make more money as a result of our deals being so out of date. We can command a £20m shirt deal. I don't think Spurs can yet but they will if they start finishing above us regularly
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