Just a short post today, but an important subject: Arsenal’s Transfer Proceeds Account.

What the hell is that then?

Glad you asked. When the new stadium financing was signed in July 2006 the club signed up to the following agreement to protect lenders against asset stripping or a ‘fire sale’ of players:

Arsenal must ensure that, if it transfers the registration of a member of the playing staff of AFC to any other person, not less than 70 per cent (adjusted for tax) of any transfer receipt is deposited in a Transfer Proceeds Account (TPA), with amounts standing to the credit of any TPA available to be drawn by AFC only for certain specified purposes, including the purchase of certain fixed assets or registration rights of a new member of playing staff for AFC.

Before we go on, why am I talking to myself?

It’s the only way to be assured of intelligent conversation.

True. So is the money actually in a separate account? You know, like you keep that tenner in your ‘savings’ account, or ’Arry Redknapp gets his dog to look after some spare cash?

I neither know nor care. The fact is they have to account for it in the, er, accounts, and that’s what’s important.

So this is ring-fenced money. Where does the definition come from?

It was announced in the 2006 bond prospectus.

Is it a common arrangement, or unique to Arsenal?

It’s common to have agreements in place to protect assets of the lender when you have structured borrowing. It just happens that Arsenal’s key assets are players. When you buy a house, that’s your key asset, so lenders take a charge over that. It’s really no different.

Uh-huh. And is this the same money as the proverbial ‘war chest’ that Arsène usually refuses to spend?

Yes. It’s just money set aside for players. But they can buy new ones, or do something completely outlandish like, I don’t know, give Djourou a much better and longer contract for no seemingly good reason.

How long does this TPA arrangement last?

Until the lenders say it doesn’t, or until all the debt is repaid. Which looks like being a while, as the club’s owner is happy to service it on current arrangements rather than making early repayment.

Can the money be used for anything else other than buying players and spoiling Djourou?

Pay attention. I already said other football assets, and also prepayment of debt, so there’s no guarantee that all the TPA funds will be used on players. That also makes it difficult to work out how much is in the TPA at any time. And of course it’s doubly hard because Arsenal always refuse to divulge how much they’ve paid for a player or how much each player earns.

‘Earns’? You mean ‘gets paid’. No one ‘earns’ that much for kicking an inflated piece of plastic around a field for an hour and a half a week.

Can we stick to the point, rather than indulge your socio-economic theorising? The point is that there is a pot of money that the directors can decide to give to the manager for players or use on other assets. In Arsenal’s case, if they give it to the manager he then decides whether he wants to buy someone new or just reward those he has with more. There’s been criticism of Arsenal for tying certain players to long contracts, and equal criticism for NOT tying players to long contracts. Whether the manager has taken a blind bit of notice of either criticism is open to debate. What we can say for certain is that player wages keep on rising year after year.

As do ticket prices.

Only in Club Level this year, not for you plebs.

Power to the people!

Shut up.

There’s no picture in this post. It needs something visual.

You’re right. Here’s the lovely Sylvie van der Vaart again:

Twitter: @AngryOfN5