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Arsenal take out Bank of England Loan

Rasmi

Negative Nancy

Country: England
Of course I understand what you’re saying it’s a very simplistic view that ignores the fact that debt is cheaper than it’s ever been, billionaires are significant richer than they were a year ago and there is a 1.8b offer on the table. Given the circumstances the risk to the club is next to nothing. There are billionaires literally waiting to take over if anything goes wrong.

We can’t afford to not spend we are sinking away from relevance and just dropped out of the rich list and we are losing revenues from not playing in the CL. What’s a couple hundred mil in debt when you leak 50m a year not being in the CL? Granted spending doesn’t guarantee top 4 but not spending guarantees we don’t get it.
The offer won’t be there forever and if the thought is we can just take loans to spend and if it doesn’t work take more loans and just sell to pay off the loans. It will just mean the value of the club will decrease and the kroenkes will be in a position they may think it’s not even worth selling and we will be stuck with them. More loans tighten their grip on the club. Either way it’s all about making money for them and they would never spend a penny of their money on the club. Just more loans on the clubs name
 

Kav

Established Member
Of course I understand what you’re saying it’s a very simplistic view that ignores the fact that debt is cheaper than it’s ever been, billionaires are significant richer than they were a year ago and there is a 1.8b offer on the table. Given the circumstances the risk to the club is next to nothing. There are billionaires literally waiting to take over if anything goes wrong.

We can’t afford to not spend we are sinking away from relevance and just dropped out of the rich list and we are losing revenues from not playing in the CL. What’s a couple hundred mil in debt when you leak 50m a year not being in the CL? Granted spending doesn’t guarantee top 4 but not spending guarantees we don’t get it.
I agree completely with you about the debt being cheaper to acquire and service in this climate. My major concern is the lack of certainty with sporting competitions. Remember there was a 3 month hiatus for football. At any given time countries may GK into lockdown again.

That being said business is about taking risks to get rewards and I see and understand your position about the risk factors with regards to debt and servicing of obligations. If the pros outweigh the cons then it’s a choice to be made.

While I will admit my views are fiscally conservative I recognize the value in your perspective. My concern is that the club may eventually be saddled with significant debt without the ability to honour those obligations. It’s a slippery slope when you start borrowing. However with astute and competent professionals we should be able to avoid some of those issues though I don’t think we have those kind of professionals guiding the executive board of the club.
 

MartiSaka

Join my "Occupy A-M" movement here 🗳
Except you are wrong again it’s not their own money it invariably is Arsenal taking out a loan to cover a loan they took out less than a year ago because the scrums who own the club refuse to put their own money into it to invest in the sporting side of the business.

The majority of income comes from TV and commercial deals. Match day income accounts for about 20-24% of normal earnings. Prize income depending on performances can amount to 20-40% of earnings.

it’s not rocket science. Invest in the sporting side. More on field success will increase at heat revenue and increase earnings from the commercial division and Potential TV deals in select markets. Just start by putting some money into the club. Even as a loan to the club. If KSE decided to loan Arsenal FC 300 million it could go a far way into creating a successful team in the near future.
But the Kroenke have seen how poorly we have spent money previously (obviously it's the clubs not directly from their own pockets); so it would create a high degree of uncertainty with the owners whether putting their own money will see a return on their investment.
 
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MartiSaka

Join my "Occupy A-M" movement here 🗳
Going into this summer a number of analysts discussed this and overall "low downside risk". If the Kroenke's inject money in and succeed they will win with fans and returns on investment in terms of an appreciated asset. If they inject money in and fail, they gave it a shot, and Arsenal is stil a big enough club with a big worldwide fan base that there would be willing buyers to take Arsenal off the Kroenke's hands. If the Kroenke's put more skin in the game they likely would pay more attention to day to day running of the club than they have so far though, with better more competent executive hires.
Not sure the kroenkes are the type of owners who are so accepting of such risk. Which I agree in the grand scheme of things isn't really that major for them. The past suggests they are very conservative with their investments and willing to allow things to continue as usual, which seems unusual for billionaires. Maybe their LA stadium contradicts this point, but the NFL has more certainty around revenue than the PL.
 

Atlas

Lost a sausage bet on Xhaka 😭
The offer won’t be there forever and if the thought is we can just take loans to spend and if it doesn’t work take more loans and just sell to pay off the loans. It will just mean the value of the club will decrease and the kroenkes will be in a position they may think it’s not even worth selling and we will be stuck with them. More loans tighten their grip on the club. Either way it’s all about making money for them and they would never spend a penny of their money on the club. Just more loans on the clubs name
Not spending money is guaranteed to decrease the value of the club even more. Off field success is tied to on field success you can’t escape from it. We are missing out on CL revenues now which is a big hole in our finances. How long can we afford to carry on like this?
 

Atlas

Lost a sausage bet on Xhaka 😭
I agree completely with you about the debt being cheaper to acquire and service in this climate. My major concern is the lack of certainty with sporting competitions. Remember there was a 3 month hiatus for football. At any given time countries may GK into lockdown again.

That being said business is about taking risks to get rewards and I see and understand your position about the risk factors with regards to debt and servicing of obligations. If the pros outweigh the cons then it’s a choice to be made.

While I will admit my views are fiscally conservative I recognize the value in your perspective. My concern is that the club may eventually be saddled with significant debt without the ability to honour those obligations. It’s a slippery slope when you start borrowing. However with astute and competent professionals we should be able to avoid some of those issues though I don’t think we have those kind of professionals guiding the executive board of the club.
I can certainly see the need to be financially conservative but at the same time we need to acknowledge that the club is simply losing relevance. Dropping out of the rich list is the latest blow in our downward spiral. The money lost from CL revenues and other commercial revenue that is tied to on field success is simply too much to absorb and remain competitive with a self funding model. Indeed a self funding model seems self defeating for a club in decline : the more you decline the more you need to spend to get out of the decline but with a self funding model you now have less to spend.

Arsenal is in a very different place to where Leeds were when Peter “living the dream” Ridsdale borrowed to the hilt and bankrupted the club. The fact that there is a 1.8b offer on the table provides a ready exit plan. I’m not advocating that we fully mortgage the club to fund a City like expansion. I think the 200-250m figure being bandied about is easily covered by a 10 year loan that would likely repay itself if we could even secure CL football every other season. Of course then the question of whether giving Edu and Arteta 200m in borrowed funds to spend on players is a wise move would need to be addressed. If the answer is no then I think a new manager and DOF capable of spending money wisely would be in order before any large spending is authorized.
 

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