Arsenal Finances

Discussion in 'Arsenal Talk' started by TheLoneFalcon, Sep 22, 2014.

  1. lamby22

    lamby22 Well-Known Member

    The club might survive but I doubt the fans would. The unfortunate thing is with the top 4 now becoming a top 6 I reckon we'd be one of the teams that missed out more often.
     
  2. Fallout

    Fallout Well-Known Member

    background

    i've always had an interest in estimating arsenal's yearly transfer budget. there is a crude way to do it (simple inspection of the cash flow statement), but recently i had time to sit down and do it the real way.

    as a disclaimer, i can't definitively say that what i've done is 100% correct (i'm not a certified accountant, and there is a degree of opacity when you're looking at these things from the outside). however, i do have a pretty solid understanding of how financial statements work, and i'm reasonably confident of these results.

    anyway, what you'll see in the image below is a yearly estimate of the spare cash that we can potentially use for transfers. this spare cash is generated by our annual operating activities, and it excludes cash flows from non-operating activities.

    underneath those estimates of spare cash, you'll see what arsenal actually spent on transfers in the following season (this info comes from the club's financial statements). the last number in red is our alleged budget for this summer according to the media. it's pretty much in line with the spare cash we generated this season (again, according to my estimate).

    one thing to note is that our financial results from this season haven't been released yet, so i had to estimate the changes myself between this season and last season.


    if image isn't loading, use this link: imgur.com/W7t4rAU

    takeaways
    1. the alleged 40 million budget for this summer seems accurate.
    2. we are truly a self-sustaining club. the spare cash that we generate during each season gets reinvested into transfers in the following season.
    3. the new adidas deal kicks in this upcoming season, so our budget next summer (not this summer) should be even bigger. likewise, since a few high-earners have just left the club, that should also help our budget next summer (not this summer).
    4. if arsenal is feeling frisky (highly unlikely), the club still has a significant cash balance sitting in its bank account that can be used to supplement the transfer budget. however, obviously once we use this cash, it's gone for good!
    thanks for reading!
     
    Last edited: Jun 7, 2019
    Rex Banter, SA Gunner, Beksl and 8 others like this.
  3. krackpot

    krackpot Well-Known Member

    that's impressive work:eek:
     
    OSBK and Fallout like this.
  4. DanDare

    DanDare Emoji Merchant

    The thing that Arsenal should do if it isn't is take a loan from its cash reserves for the value the Adidas deal will add next season. It's guaranteed income.

    The more summers we aren't competing the bigger the gap gets
     
  5. field442

    field442 Hates Journalists Named James

    @Gooner Zig thoughts? Why would they not budget with the increased commercial revenue for the coming season?
     
  6. Maybe

    Maybe Well-Known Member

    350m on wages and contracts/bonuses, and people still ask why Everton or other mid table teams can spend more money than us :D

    I'm not concerned about our budget, the less we have the better. It's time for everyone to understand what type of business model can we afford here.

    The budget could still change though, not every transfer is payed in full immediately. If they want to invest heavily they will spread the costs over 2-3 transfer windows, but that would results in smaller budget next summer.
    Since we completely stopped player development to please the fans who were too annoyed with youth, we are finally in a position where we have nothing to sell, except for potentially getting part of investments back from Chambers, Mustafi or Elneny, but that's questionable do to their wages.

    For me it's exciting time ahead, we are going back to a business model that worked so well for us from 1998 to 2008, buying cheap gems on small contracts, integrating academy players, and selling players that we used enough and got their best years here (Henry, Vieira, Fabregas). We just need different manager for that and get rid of Emery.

    If we are smart enough, there is a potential to reduce the squad costs for 50-100m in the next 2 years, and then we can talk about bringing in brightest talents from abroad like Dembele, Mbappe and de Jong. Mixing them with our best academy products would make us top team again
     
    OSBK likes this.
  7. Fallout

    Fallout Well-Known Member

    good point, and to be fair, i should have included the change in net payables for player transactions to make my estimate of spare cash even better.

    luckily (for me), it seems this inclusion would not have affected the results. in each of the last three seasons, we've owed almost exactly 60 million more to other clubs relative to what they've owed to us, so it seems like that's a level our management is comfortable with. and if that net deficit continues to stay the same, it won't impact the spare cash we have. obviously if we decide to pay off that debt, then it will reduce the spare cash for the following season (as you rightly said).
     
    Last edited: Jun 8, 2019
  8. Gooner Zig

    Gooner Zig AM's Resident Accountant Trusted

    Just got back from a bachelor weekend, also my parents are coming to visit from Australia so won't be able to get to this for a day or two.
     
  9. OneAW!

    OneAW! Active Member

    1) We tend to artificially inflate our wages by including image rights which other clubs don't, so this isn't a fair assessment on how much we are spending vis-a-vis other clubs. Having said that we do have two top players in Auba/Özil who are making more than any players in any mid table club, except Man Utd!;)

    Emery definitely isn't making the most of the squad he has, which is why its imperative we sack him.

    2) We didn't do it to please the fans, although the fans lack of willingness to tolerate the youth policy was regrettable it was brought on by the board misleading people into believing that we could spend big and the policy was only there because our manager was mad.

    The real reason we gave up the youth policy was because it became too "expensive" for Kroenke's blood. Firstly clubs like Chelsea were starting to move into that area so we stopped getting the best young talents, Thats when Liam Brady left. Secondly players like Nasri wanted to get payed and we weren't willing to pay. So we scrapped it, better to get cheap "under-valued" talent like Merte, and Arteta. The thing is most of the times you don't get those players, instead you get a Mustafi.

    3) This is the same crap Kroenke and the board have been peddling since he took over, that The light is just around the corner. Instead we are moving backwards. We are now looking to get back to where we were when the stadium move happened.:lol:

    Firstly 1998 to 2008 is not one monolithic period. When Wenger joined we spent big on Overmars, Bewrgkamp, etc. We got highly talented players who didn't breakthrough at other clubs like Vieira. Wenger had knowledge of players that other top clubs just didn't like Anelka, Petit, Weah, Thuram, etc. None of this could happen today.

    We also had a spine of excellent British footballers who were Arsenal through and through and many of whom had already won the league twice including almost going unbeaten in 91(?). Seaman, Adams, Bould, Winterburn, Keown, Dixon, Parlour, Wrighty. None of this is true today.

    We then added to these players by picking up Henry after he failed at Juve(These days most big clubs would rather see highly talented players stay and fail, then sell them). We also outgunned Madrid for Pires signature (we were always top two back then and considered a big club, this wouldn't work as well today). Then there was the coup de grace outbidding Barca, Inter(back when they had Moratti's oil money) and a slew of other top clubs for Sol's services.

    My point is the game has changed, a renewed "cheap" youth policy isn't feasible anymore. All the best players young or not are pretty much known and cost a bomb, what did Vinicius Jr cost Madrid? The best clubs aren't going to let us get these players without a fight. They'd rather bring these players in early, or let them go to Sevilla, Dortmund etc. And get them later then risk them coming here and losing them forever.

    The fact is now is the time to spend big and compete. We've got Özil and Auba in their primes for another 2-3 seasons. The squad is capable of more than Emery has achieved this season. If this is to work we need to sack him. Get a truly world class manager and with our new commercial money spend big. It would be a difficult task for any manager, but Wenger can make it work.

    What I have outlined is the only sensible course of action. We cant afford to give Emery a couple 100Ms only to see him piss it away. Then we would have to wait until our next deal, only if he ****s up and we spend the next few seasons yo-yoing in and out of top4 we might not see as much next time. Lack of regular CL football over the next few years could really hurt the club's recognition and brand value. Midtable mediocrity here we come! Throw in one or two finishes out of the top 6 and we would be ****ed.

    What you are selling is Kroenke's snake oil. The players you listed, Dembele, Mbappe, de Jong etc are the upcoming young talents that we used to sign, they are the Cesc, RvP, Messi of their time. They are just being discovered and developed a lot faster.

    Going cheap in 2019 means buying Mustafi, Xhaka, Guendozzi, Torreira etc.
    If we are lucky we will get a Laca.

    Bringing back Wenger and spending big(within our means) is the only way.

    EDIT: The only reason to keep Emery and not spend this summer is If Kroenke has decided he's just going to sell the club eventually and wants to hold on as long as possible for footballing inflation to take place (real inflation stopped happening after the 2008 crash). He would just be enriching himself at the expense of the club and we can't allow that.
     
    Last edited: Jun 9, 2019
    krackpot likes this.
  10. Aevi

    Aevi Hale End FC Moderator


    Not a fan of betting sponsorships. Hope it's a good deal for us at least.
     
  11. Makingtrax

    Makingtrax Arséne Wenger once said "I will miss you"

    Is that you Arsène?
     
  12. 14Henry

    14Henry Well-Known Member

    It's promoting what is going to be the biggest problem amongst young males over the next 10-20 years. Sad how money rules.
     
    Artisan likes this.
  13. OSBK

    OSBK Well-Known Member

    Betting companies have huge stacks of cash. Bet365 are the money backers behind tile mountain the company who are buying other large companies all over in that industry. Its another boat we should have jumped on some time ago.
     
  14. OneAW!

    OneAW! Active Member

    If I was Arsène I would have ****ed these guys up years ago, by telling the truth. This club would be in a very different place today.
     
  15. Makingtrax

    Makingtrax Arséne Wenger once said "I will miss you"

    Knowing Arsène’s character I can’t see him doing that bro. Even now. He’s too classy for kiss and tell.
     
  16. dashsnow17

    dashsnow17 Established Member



    Long story short, not great.
     
  17. GoonerJeeves

    GoonerJeeves Up The Terriers

    Painful reading.
     
  18. Tony's nose

    Tony's nose Well-Known Member

    If that is acurate we are fudged for a few years yet
     
  19. Maybe

    Maybe Well-Known Member

    I've been trying to explain these things for months, people just don't understand. We are EL club paying CL wages to players who shouldn't be at the club in the first place.
     
  20. Dj_sds -

    Dj_sds - Well-Known Member

    :rofl:

    He's still out of a job.. I wonder why. Has nothing to do with the managerial mess he left us in.
     
    Last edited: Jul 1, 2019

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