Yesterday I did a quick blog in response to Le Grove concerning the amount of money being provided to Arsène Wenger for new signings this summer. I was accused – can you believe it? – of missing the point! I’d said I thought we all knew there wasn’t a huge pot of money available, so not really big news. LG tweeted me to say that his point was that the pot of money in the Transfer Proceeds Account wasn’t being made available to Wenger, and he’s basically spent what he’s allowed on Pod and Giroud already.
Perhaps I’m just quibbling over terms, but just to be clear:
- there isn’t really any money in the transfer proceeds account
- there is cash in the business, but opinions differ on how much is available to spend on players
- the bigger question is what the hell do they do with all the money at Arsenal?
So let me just clarify on the TPA first, which I wrote about recently here. In simple terms, under the terms of stadium financing, a large percentage of income from transfers has to be held back for reinvestment into the team by transfer fees or wages. Guess what? It is.
As I put in yesterday’s blog there is a surplus of around £20m since 2008 on transfer deals. I accept my figures may not be exact, and different figures are quoted in different places for exact fees paid and received, and I may have missed out a couple of minor signings as well, but overall I’m happy that £20m is close enough to the surplus since 2008.
But wages during the same period have gone up by more than £20m. In 2007-08, the Arsenal wage bill was £101m. It went up year by year to £104m, £111m, £124m, and finally an estimated £140m this year. We need to note that this is ALL wages not just players, and this year’s figure is an estimate, but I’m getting these from AST finance guru Nigel Phillips so I have no doubt they’re accurate.
So transfer proceeds of £20m and a wages increase of £40m in the same period means that there’s no contractual reason for Arsenal to spend any more on players because the TPA is empty – or £20m overdrawn if you like.
But there is of course money in the business, and cash balances are large and getting larger. Arsenal’s turnover has increased during the same period, with more gate money, more TV money and that extra fiver from a secondary commercial deal. Again as I said yesterday, the AST and Swiss Ramble weren’t in exact agreement but both estimated a few months back that there was in the ballpark of £50m to spend on new players. Others, such as John Pickford (@theN5er) who has guest posted for me on the subject, think there should be more cash available to spend. And as was also pointed out to me, there is the approx £25m from the sale of Queensland Road that has come in.
So maybe Le Grove is right. Maybe Wenger is not being given access to more of the cash that’s swilling around, in which case we need to know why. Because although running a football club is expensive, it’s of no benefit to the fans if it builds up cash reserves, particularly if it’s partly done by increasing already exorbitant ticket prices. It does benefit the major shareholder, though. Perhaps Usmanov should write a letter about it.
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