Jack_the_boy
Definitely Not Manberg
Do you have proof? Need to see a current financial report. The balance must have gone too far down.
-
! ! ! IMPORTANT MESSAGE ! ! !
Discussions about police investigations
In light of recent developments about a player from Premier League being arrested and until there is an official announcement, ALL users should refrain from discussing or speculating about situations around personal off-pitch matters related to any Arsenal player. This is to protect you and the forum.
Users who disregard this reminder will be issued warnings and their posts will get deleted from public.
Arsenal take out Bank of England Loan
- Thread starter Trilly
- Start date
- Replies 165
- Views 13,621
Do you have proof? Need to see a current financial report. The balance must have gone too far down.
Country: Norway
Not sure fans will be back next summer. We are near that the entire season will be derailed. The vaccine is coming, but it will take time to vaccinate enough people.
Country: Canada
@Slartibartfast would be creaming himself at this post right now.
https://football-observatory.com/-values-66241
He doesn't even make it into this list:
https://football-observatory.com/IMG/sites/b5wp/2020/wp319/en/
Iceman10
Established Member
If they let people in who have been vaccinated that would be a good start, but maybe not equitable and representative based on who the vaccines are made available for first. Hope it doesn't get to the point of doubts over "immunity" due to mutant strains.
Iceman10
Established Member
Credit to the Kroenkes for getting what they can, and it is only fair I guess, but have to laugh every time I consider Stan had no problems with his L.A. stadium cost ballooning from $1bn to $5bn, no expenses spared.
HairSprayGooners
My brother posted it ⏩
At what point do you say enough people have been vaccinated though? Because if you had to vaccinate everyone before letting fans in then you won't be seeing fans in stadiums until 2022..
Player:Saliba
So part of this is going straight to paying off Özil
Country: Norway
I'm not an expert, but from what I understand you need 70%+ of the population vaccinated to achieve immunity.
Obviously there are standards for this, but I'm not an epidemiologist.
HairSprayGooners
My brother posted it ⏩
I think that's fairly achievable this year in fairness.
lol we are going to pay it back in May. go take a loan and pay it after few months stop crying.
Last edited:
Riou
In The Winchester, Waiting For This To Blow Over
Country: Northern Ireland
Player:Gabriel
Country: England
Player:Saliba
Arsenal have just taken out another loan after last summer's refinancing of the debt, this time £120m from the Bank of England. They had losses last season and likely to have a lot more this season. The 55 redundancies clearly weren't enough to cover those losses. Wonder if giving Willian and his agent millions in fees had anything to do with it.
ATHLETIC
Arsenal’s biggest deal of the January transfer window was not struck with Mesut Özil or Fenerbahce, but with the Bank of England.
The Athletic explores the loan the club have taken to help sustain them through the pandemic, including tackling the question of whether it will impact their spending power this month.
How much money have Arsenal borrowed?
Arsenal have taken a £120 million loan through the Bank of England’s COVID Corporate Financing Facility (CCFF). The loan is repayable in May this year.
What’s the CCFF?
The CCFF was one of several measures introduced by the Treasury in March last year to support businesses during the pandemic. It is intended for larger companies who “make a material contribution to economic activity in the UK” — this is measured by factors including a company’s number of UK employees, the extent of their UK revenue, the size of their British customer base and the number of operating sites. To be eligible, companies must also demonstrate they were in sound financial health before the pandemic, with strong investment ratings.
The broader objective of the scheme is to support corporate finance markets. In theory, the scheme frees up more capital for commercial lenders to make loans available to other companies that don’t have the same credit rating.
Why did Arsenal take out the loan?
They need this money to help ease cash flow issues caused by the pandemic. The Arsenal Supporters’ Trust estimate that in the likely event that fans are not allowed to return before this season ends, Arsenal could face reporting losses of £158 million for 2020-21 — that’s on top of a considerable loss for last season. Arsenal made 55 redundancies during the summer as a consequence of the economic problems caused by the pandemic.
The CCFF closed for applications on December 31. With the uncertainty that lay ahead in 2021, especially regarding when fans will be in stadiums again, Arsenal decided to enter the scheme.
As loans go, the terms are extremely favourable. Neighbours Tottenham, who used the scheme to borrow £175 million from the Bank of England in June, will pay just 0.5 per cent interest on it. If the interest rate on Arsenal’s loan is the same, it will amount to £250,000.
“It’s a great deal,” says football finance expert Kieran Maguire. “You’re borrowing from a reputable lender at a ridiculously low interest rate. Burnley and Southampton have loans where they’re paying around nine per cent, whereas Arsenal and Sp**s will be paying much lower rates.”
What alternatives were available to Arsenal?
Arsenal could have taken out a commercial loan, or their owners could have made up the shortfall.
The owners, Kroenke Sports & Entertainment, have already played a part in shoring up the club’s finances. In July, they provided a loan that enabled Arsenal to refinance the debt accumulated in the construction of their Emirates Stadium home.
What restrictions does the Bank of England loan bring?
On May 19 last year, the Treasury (HMT) announced that those participating in the CCFF “may be required to commit to restraint on their capital distributions and on senior pay”.
In practice, this means proposals for the CCFF must typically include no pay rises or cash bonuses to “senior management” for the duration of the loan. Given that the taxpayer is indemnifying the loan, these terms appear reasonable.
If the firm breaches the undertaking, HMT reserves the right to publicise non-compliance — that would not only damage Arsenal’s reputation, but also potentially their credit rating.
A football club presents a relatively unusual case study, as employees who are technically further down the organisational pyramid — the players — tend to earn substantially more than its senior management figures.
Nevertheless, Arsenal’s policies are likely to fall within these parameters. In April, the club’s 14-person senior executive team agreed to a wage cut of 30 per cent, for up to 12 months. A few days later, the players and core coaching staff agreed a cut of their own — this was initially for 12.5 per cent, but fell to 7.5 per cent in August when Arsenal qualified for this season’s Europa League by winning the FA Cup.
Can Arsenal use the money to buy players?
Not directly, no. The purpose of the loan is to replace revenue lost because of the pandemic. Arsenal have been clear about that in all their communication on the subject.
The money could potentially be used to help meet existing commitments to previous transfers, such as the staggered instalments on the Nicolas Pepe fee. It could even be used to help pay off the contract of a departing player, such as Mesut Özil.
Arsenal may also need it to sustain them if clubs who similarly owe them money default on payments.
So, can Arsenal buy anyone in January?
There is nothing in the wording of the CCFF that specifically prevents Arsenal from recruiting a player. Tottenham’s loan was approved last summer, yet they still ended that transfer window in deficit.
From a PR perspective, however, it would be tricky for Arsenal to make an expensive transfer in this window. The Premier League is under significant political scrutiny currently — and diverting this loan to fund a major signing would amplify some of that disquiet.
“The loans are designed to cover revenue losses due to COVID-19,” says Maguire. “In theory, that money is ring-fenced for that purpose — but this is difficult to enforce.”
HM Treasure agree: “The purpose of the Covid Corporate Financing Facility is to help big companies to sustain the jobs and suppliers that rely on them. We expect any businesses who have been granted loans to use them in a way which is consistent with that aim.”
Why are other clubs annoyed then?
Not all Premier League clubs qualify for this scheme — those with substantially lower revenues do not have the requisite credit rating. And while other government-backed schemes are available, the CCFF comes with a particularly low interest rate, as we detailed above. Some believe this is handing the bigger clubs a competitive advantage. Southampton, for example, have taken a £78.8 million loan from MSD Holdings at 9.14 per cent interest — a considerably higher rate than that which Arsenal will likely have to pay.
There is also some frustration that clubs have been heavily criticised for using the furlough scheme when they may not be eligible for other government modes of support.
The Coronavirus Business Interruption Loan Scheme (CBILS) is only open to companies with an annual turnover of up to £45 million, which rules out Premier League clubs.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) offers loans of up to £200 million to companies with annual revenues over £45 million, but the loan rates involved are not as competitive as with the Bank of England scheme.
Arsenal’s biggest deal of the January transfer window was not struck with Mesut Özil or Fenerbahce, but with the Bank of England.
The Athletic explores the loan the club have taken to help sustain them through the pandemic, including tackling the question of whether it will impact their spending power this month.
How much money have Arsenal borrowed?
Arsenal have taken a £120 million loan through the Bank of England’s COVID Corporate Financing Facility (CCFF). The loan is repayable in May this year.
What’s the CCFF?
The CCFF was one of several measures introduced by the Treasury in March last year to support businesses during the pandemic. It is intended for larger companies who “make a material contribution to economic activity in the UK” — this is measured by factors including a company’s number of UK employees, the extent of their UK revenue, the size of their British customer base and the number of operating sites. To be eligible, companies must also demonstrate they were in sound financial health before the pandemic, with strong investment ratings.
The broader objective of the scheme is to support corporate finance markets. In theory, the scheme frees up more capital for commercial lenders to make loans available to other companies that don’t have the same credit rating.
Why did Arsenal take out the loan?
They need this money to help ease cash flow issues caused by the pandemic. The Arsenal Supporters’ Trust estimate that in the likely event that fans are not allowed to return before this season ends, Arsenal could face reporting losses of £158 million for 2020-21 — that’s on top of a considerable loss for last season. Arsenal made 55 redundancies during the summer as a consequence of the economic problems caused by the pandemic.
The CCFF closed for applications on December 31. With the uncertainty that lay ahead in 2021, especially regarding when fans will be in stadiums again, Arsenal decided to enter the scheme.
As loans go, the terms are extremely favourable. Neighbours Tottenham, who used the scheme to borrow £175 million from the Bank of England in June, will pay just 0.5 per cent interest on it. If the interest rate on Arsenal’s loan is the same, it will amount to £250,000.
“It’s a great deal,” says football finance expert Kieran Maguire. “You’re borrowing from a reputable lender at a ridiculously low interest rate. Burnley and Southampton have loans where they’re paying around nine per cent, whereas Arsenal and Sp**s will be paying much lower rates.”
What alternatives were available to Arsenal?
Arsenal could have taken out a commercial loan, or their owners could have made up the shortfall.
The owners, Kroenke Sports & Entertainment, have already played a part in shoring up the club’s finances. In July, they provided a loan that enabled Arsenal to refinance the debt accumulated in the construction of their Emirates Stadium home.
What restrictions does the Bank of England loan bring?
On May 19 last year, the Treasury (HMT) announced that those participating in the CCFF “may be required to commit to restraint on their capital distributions and on senior pay”.
In practice, this means proposals for the CCFF must typically include no pay rises or cash bonuses to “senior management” for the duration of the loan. Given that the taxpayer is indemnifying the loan, these terms appear reasonable.
If the firm breaches the undertaking, HMT reserves the right to publicise non-compliance — that would not only damage Arsenal’s reputation, but also potentially their credit rating.
A football club presents a relatively unusual case study, as employees who are technically further down the organisational pyramid — the players — tend to earn substantially more than its senior management figures.
Nevertheless, Arsenal’s policies are likely to fall within these parameters. In April, the club’s 14-person senior executive team agreed to a wage cut of 30 per cent, for up to 12 months. A few days later, the players and core coaching staff agreed a cut of their own — this was initially for 12.5 per cent, but fell to 7.5 per cent in August when Arsenal qualified for this season’s Europa League by winning the FA Cup.
Can Arsenal use the money to buy players?
Not directly, no. The purpose of the loan is to replace revenue lost because of the pandemic. Arsenal have been clear about that in all their communication on the subject.
The money could potentially be used to help meet existing commitments to previous transfers, such as the staggered instalments on the Nicolas Pepe fee. It could even be used to help pay off the contract of a departing player, such as Mesut Özil.
Arsenal may also need it to sustain them if clubs who similarly owe them money default on payments.
So, can Arsenal buy anyone in January?
There is nothing in the wording of the CCFF that specifically prevents Arsenal from recruiting a player. Tottenham’s loan was approved last summer, yet they still ended that transfer window in deficit.
From a PR perspective, however, it would be tricky for Arsenal to make an expensive transfer in this window. The Premier League is under significant political scrutiny currently — and diverting this loan to fund a major signing would amplify some of that disquiet.
“The loans are designed to cover revenue losses due to COVID-19,” says Maguire. “In theory, that money is ring-fenced for that purpose — but this is difficult to enforce.”
HM Treasure agree: “The purpose of the Covid Corporate Financing Facility is to help big companies to sustain the jobs and suppliers that rely on them. We expect any businesses who have been granted loans to use them in a way which is consistent with that aim.”
Why are other clubs annoyed then?
Not all Premier League clubs qualify for this scheme — those with substantially lower revenues do not have the requisite credit rating. And while other government-backed schemes are available, the CCFF comes with a particularly low interest rate, as we detailed above. Some believe this is handing the bigger clubs a competitive advantage. Southampton, for example, have taken a £78.8 million loan from MSD Holdings at 9.14 per cent interest — a considerably higher rate than that which Arsenal will likely have to pay.
There is also some frustration that clubs have been heavily criticised for using the furlough scheme when they may not be eligible for other government modes of support.
The Coronavirus Business Interruption Loan Scheme (CBILS) is only open to companies with an annual turnover of up to £45 million, which rules out Premier League clubs.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) offers loans of up to £200 million to companies with annual revenues over £45 million, but the loan rates involved are not as competitive as with the Bank of England scheme.
novar
Well-Known Member
Wonder how it feels bleeding your employers dry like Willian
Country: Canada
Spoken like a true Tesla bear!
SingmeasongSong
Right Sometimes
So Özil did get almost all his money, Sokratis also still got money,.. ?
Iceman10
Established Member
Would think the players still left significant amounts on the table. The loan does have to be paid back by May, which would be when PL prize money is paid out?
SingmeasongSong
Right Sometimes
I'd thought it would've made most sense for regular salaries, which it probably still is.
Özil and Sokratis, at worst, are surely not more than 10m down the drain.
