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.
Follow me on twitter: @AngryOfN5
angryofislington 
Okay, so basically what you’re saying is that you have no idea what is going on.
And mate never even so much as read the first page of LeGrove than respond to that festering pit if idiocy.
They stick 3 million euros down shisha pipe Maroune.
I have read LeGrove before but this off season I am starting to think it may be Run by Spuds
Wenger hasn’t got funds to spend because he has spent substantial amounts of money buying sub-standard players like Squillaci, Chamakh, Santos, Gervinho et al. Who despite not costing fortunes in transfer fees are handsomely rewarded in terms of their contracts. This is evidenced by the comments made the Bastia and Fiorentina chairmen regarding their interest in Squillaci and CHamakh. He has also rewarded existing undeserving players with fat contracts while refusing to pay deserving players the market rate. The bottom is we can’t make any further purchases until we shift the dross and we can’t shift them because of the extravagant contracts Wenger has put them on. Now tell me who is to blame for the unavailability of funds?
“…who is to blame for the unavailability of funds?
Ramsey. It’s always Ramsey’s fault.
@Davethe Gooner
Seriously, I think you’re spot on, although we’re spotting the obvious.
Of course, it’s not only the players you refer to as ‘dross’ that need shifting (fast!), but Sir Robin of course. The sooner he goes, the sooner we can reinvest, and strengthen in departments other than strike force.
A Catch-22 if ever there was one.
I think the thing to bear in mind is that while we have an owner who had to borrow all the money to buy his shares in the first place it puts the financial department into a penney pinching state of mind. People think that we sell our best players because they really want to go and there is nothing we can do. Well that is a lie, the reason we sell players is because if we don’t then we won’t turn a profit and our share price & overall value will fall. Our commercial sector is performing really poorly against our competitors and if we didn’t turn a big enough profit, the failings of the buisness side would become bare for them all to see. So we must take money from the TPA and sell our best players to cover up the fact that this sustanable model is a load of rubbish as it is the least sustanable thing we could be doing. So you have a chairman who is in bed with Usmanov’s russian buisness competitiors and therefore will try anything to keep him out so he can continue to make money from his crownies in Russia. Then you have an owner who had to borrow the lot from Deutch Bank just to buy the shares and therefore has to put his own financial needs ahead of the clubs and he couldn’t care less about “soccer”. Then we have a CEO who has the PR skills of a 17th centuary tory MP and who just does as he is told and has little or no knowledge of a real league. Add to all this a complete inability to show any real ambition even when it is blantly needed (80 % of shirt sales had RVP on the back!) and you have a nightmare situation where the club is going backwards in its financial handling, backwards in terms of reputation and stature, and most criminal of all backwards on the pitch. AW is the only thing holding us together and yet the board pretty much place all the blame at his feet although he is hamdsomley rewarded for his silence. The only solution is to get rid of Kroneke and Gazidis and if we can PHW. If we don’t the next thing we will hear is “europa league is as good as a trophy”. To be honest with such a board I would be amazed that there is any money in the TPA ever. Oh and by the way Kroeke might not watch games but he does pay himself 25,000 a week for all his hard work and investment. Kroneke has to go. Pls sign the petition on petitionbuzz, savearsenalfc.
Can you explain how it benefits Stanley to keep money swilling around in the Arsenal account rather than spend a good part of it on signing the quality players required to make Arsenal genuine contenders again? His business is sports outfits, so one assumes his motive in buying the club must be profit. Is it capital profit he is after? Do you have any suspicion that some of the ‘missing millions’ have already found their way into his pocket. Also how do you suspect he would have proceeded had his effort to become sole owner succeeded. He has stated he admires the Glazers: would he have levered debt onto the Club?