Gary Neville: “Arsenal’s Debt Is Nearly Paid Off” Pardon?

This is a blog post inspired by Gary Neville’s comments on Sunday. But first, come with me on a journey through time and space . . .

Arsenal’s history has been rewritten this year. Firstly, and in a good way, by people like Andy Kelly and Mark Andrews, who have done the best research ever into Arsenal’s early years, digging out nuggets of important information that the club’s official historians have never found. Look them up if you’re at all interested. Secondly, and not in a good way, history has been rewritten by a number of people in the club who have put out misleading statements on the financial position that Arsenal is in.

In the Arsène era at least, the Board position has always been: “There is money there to spend if the manager wants to spend it.” This is true up to a point, though obviously it has always depended on how much he wants to spend. (Even at Man City it would depend how much the manager wanted to spend.) And largely the manager has chosen to spend on higher wages rather than higher transfer fees.

This went alongside statement two: “The stadium money/debt is ringfenced – it won’t affect the football operation.” This lie was blown out of the water by the collapse in property prices – not the Board’s or manager’s fault, of course, but in truth nothing was ringfenced. Money comes in, money goes out; the two need to be balanced. They just expected that the property profit would be so big that it was a risk-free statement. Sadly not.

Arsène has until recently not commented much on spending, preferring to back the Board by indicating he doesn’t really like spending and not contradicting their ‘money is available’ statements – some cynical people say this is because he gets £7m+ a year and has a cushy job where he doesn’t need to win trophies. I would not presume.

Arsène has said in the fairly recent past (last 2-3 years) that the stadium debt, currently being repaid at around £19m a year (£6m capital and £13m interest), has hampered him/Arsenal, because they start every year having to make that money before making the next pound that they can actually spend – unlike other clubs who can spend everything they make. This is a dodgy statement in itself, because one club – Man Utd – pays far more in interest and repayments, not to mention ‘management fees’, and yet has finished above Arsenal almost every year for the last decade. Nevertheless, it’s an admission that nothing was ever ringfenced, because of course Arsenal DO need to make that money and put it aside. It could also be construed as saying, “I’m doing a tough job here – look how well I’m doing compared to all those big spenders, what with me hampered by this stadium debt.”

Still on recent statements, the Board, usually in the shape of Ivan Gazidis, have in recent years been saying, “Wait till 2014 – everything will be great by 2014. We can compete then. FFP is coming.” And also the kit manufacturer and kit sponsor deals would be up for renewal at long last. Ivan has also had a fantastic bonus with the fact that the new TV deals – which he knew nothing about when he started banging on about 2014 – will also come in at the same time, improving the whole Premier League’s financial position. (I won’t bother with the joke about him getting a fantastic bonus of three quarters of a million on his already large salary.)

Then the updated Emirates shirt and stadium sponsor deal was announced with a big fanfare. This starts in 2014 and is worth up to £30m a year, but an unspecified amount of advance funds are apparently available in summer 2013 if needed.

And even more recently Arsène has made statements designed to suggest that he couldn’t really spend money before, but now he can. This is misdirection at best, if not an outright lie. There was plenty of money to spend last summer and he chose not to. The word on the underground grapevine was that many at the club were tearing their hair out that more wasn’t spent, knowing the flak they’d get after selling RvP. What Stan Kroenke was doing with his hair is not recorded.

Then the Puma kit deal was revealed by John Cross, and although still unconfirmed by the club, it has added fuel to the ‘we can spend now’ fire.

Now, if you add all these things together, make a few assumptions and not pay too much attention to the published accounts, you get the situation that seems to have occurred: suddenly all kinds of reputable media outlets, not to mention bloggers and tweeters of varying reputational status, have followed this logic:

  • Arsenal couldn’t spend before – it must be true because Arsène said so (or at least hinted – I wasn’t paying full attention to the actual words)
  • They couldn’t spend because of the stadium debt – Arsène definitely mentioned that
  • Now the Board and manager both say they can spend
  • They must have paid off their debts
  • This summer will be different to previous ones, because there’s no excuse now – because they’ve paid off their debts!
  • And there’s some extra money coming in from sponsors, but they’ve paid off their debts!

And suddenly everyone is going round saying that Arsenal have paid off their debts. This story could even have been started by someone like Robbie Savage, who is dimmer than a 3-watt bulb and would no doubt have misunderstood what he was told. But if he repeats it on air and other pundits pick up on it, it quickly becomes ‘the truth’.

Let me just also throw in that there are always statements about spending when it’s season ticket renewal time; that’s a given. What usually happens is that we then sell our captain. Ironically we could probably do that this year and there wouldn’t be much fuss.

Back to the finances:

In many ways, with FFP, TV deals, Emirates sponsorship, Puma rumours, Arsenal now have run out of reasons not to spend in the minds of every pundit out there. And so after 900-odd words, we get to Gary Neville, who said this:

“They [Arsenal] have built a football stadium, they’re paying off their debt and they’re nearly there.

If they move up now it will look like one of the most magnificent managerial performances if you look back in history.

Half the Arsenal fans are annoyed because they think they should be doing more and should be doing better, but of all the madness and debt that surrounds football, what they have done is absolutely the right thing.

What they need to do now, having nearly paid off their debt, is they need to go now. I think he knows, Arsène Wenger, that moment is now.”

To be fair to Neville, this is all off the cuff comment, not carefully crafted writing, so I’m not going to criticise exactly how he’s worded things, though some of it is ambiguous (eg “they need to go now” I assume means “they need to go and spend now”; presumably “absolutely the right thing” just means not doing a Leeds or Pompey, as opposed to signing Gervinho for £11m and Santos for £6m).

However, he’s categorically wrong about debt. I tweeted on Sunday that Neville should really check on the debt situation before commenting, and again last night when a copy of his whole statement was tweeted. This led to a long and involved Twitter discussion that went on through half the night (UK time), long after I was in bed (thanks John Pickford for continuing to make relevant points). Here’s a very small extract.debt tweets

The overall gist was this:

Unconditional Arsène lovers and eternal optimists: “Gary just meant the debt is manageable, don’t be pedantic. He’s just saying we’re in a great position to push on, and the only reason we’ve been stuck in third or fourth is financial constraints on the manager.”

People who may or may not support Arsène, but definitely don’t like bullshit: “A) Yes – and may I stress most importantly – Arsenal are now in a good position to push on, spend and compete. We agree. But – B) debt position has been steady for years; the current repayment schedule was set in place by Keith Edelman and it’s no more or less onerous than last year or the year before; C) debt is not nearly paid off; there is £246m of it and it won’t be paid off till 2031, and that’s just the stadium not the bonds; D) there was money to spend last year as well – we ended the summer transfer window with about £70m of spare cash, and most of it sat there all through January; E) the figure for spare cash is not idle speculation, it comes from analysing the accounts, which is done independently by qualified accountants in the AST and the equally qualified Swiss Ramble. They reach similar conclusions and in personal discussions between AST Board members and the club, the club confirm many of the figures.

Let me summarise: The unconditional Arsène lovers are taking Gary Neville’s words to mean ‘Arsène knows’, and thus those of us with an allergy to bullshit should stop being picky about actual facts of the debt, because the important thing is we’re heading in the right direction. The anti-bullshitters say, yes, we’re in a good position and heading in the right direction – but financially we were last year as well. And if we ignore the mistakes of the past then we are condemned to repeat them. So perhaps don’t believe whatever anyone at Arsenal or in the media tells you without thinking about it.

I’m not a mad swivel-eyed  ‘Arsene out’ extremist, nor a great lover of finishing third or fourth in the table with an empty trophy cabinet. But I am against re-writing facts of history to suit the agenda of people supporting a particular view. So if anyone repeats the crap about Arsenal’s debt being nearly or actually paid off, refer them here.

Glad to have cleared that up.

Follow me on twitter: @AngryOfN5


120 thoughts on “Gary Neville: “Arsenal’s Debt Is Nearly Paid Off” Pardon?

  1. Nothing has changed other than that Arsenal’s commercial income has moved up a bit, which makes the debt less of a potential millstone. It’s pretty much the same is the average person getting a decent raise at work – you worry less about the likelihood your mortgage bankrupting you next month, but it’s still a mortgage and you can’t go crazy, but you have more room to make some long term moves, at least sensible ones anyway.

    So in these terms, yes we can afford to get one or two “big” players, but not more. And part of that room includes a 3year slot of 150K per week which was budgeted for Van Persie but never materialized. So if we view buying one big player as simply replacing Van Persie now we can maybe afford one more like that. Nothing more. The rest of the moves eg
    – upgrading Sagna to an RB who can actually hold his own 1 vs 1,
    – getting a veteran goalkeeper and cutting loose either Szczesny or Fabianski
    – getting a genuine stud in midfield to offer what Diaby does, but full time (e.g. Etienne Capoue)

    well those will still have to be done a sensible low key prices. Unfortunately I can’t see Capoue going for cheap. He is worth splashing out for though. Absolutely.

    • You omit to mention two things directly impacting on the level of revenue available to spend on players-increased television revenue-not specific to Arsenal, and the definite reduction in the wage bill of 140k per week as a result of Arshavin and Squillacci’s contracts expiring and the likelihood of a further substantial reduction as a result of Bendtner, Chamakh, Santos, Denilson, Coquelin finding new clubs- are likely outcomes-this is before the sale of TV5, Gervinho and Sagna considered- 3 reasonable possibilities. This will open the door from moderate to significant squad strengthening without increasing debt levels one penny.

  2. While I can generally agree with most of your points I think the key difference this year is that we seem to be seeing a significant improvement in our cost to income ratio which allows money to be spent without fear of it tapping into the reserves. In other words, we are now able to spend more on a sustainable basis, something we seems to have been key to the arsenal philosophy over the last decade.

  3. Glad you picked up on this; just goes to show how stupid and hypocritical fans are – spend 20 years calling Gary Neville a cunt, but now he’s great because he’s backed Wenger’s spending restrictions and says he’s paid off all the debt. Fans should not listen to football players, they know jack shit about finance.

    Arsenal have not paid off the debt, the club will be spending £19m on interest+debt until 2031. The debt will not be paid off early because there would be financial penalties for doing so and to pay it early would incur penalties. Money is flooding in from all angles and has been for some time. Debt is really not a big issue at Arsenal, they just want you to believe that because Wenger can’t get it right on the pitch.

    Wenger prefers to exists in this middle ground where he makes it look like he can’t spend so he’s protected if he fails, but if he succeeds everyone will say how great he is.

    • How can there be penalties for early repayment?
      Actually there would be discounting (time value of money) in early payoff and we will save some quids in doing so.

      btw, Good Article. Has Gary Neville even looked into Arsenal Finances before making such audacious statement?

      • There are penalties. In order to get a low interest rate over such a long term there is a fixed payment schedule that can only be broken by basically paying the full amount that will be owed over the next 18 years.

  4. You sure about that £246 million debt? I could have sworn I read at least a year ago that the stadium debt had been reduced to somewhere over £100m now…

    • That is net debt I believe. Which is basically, the money that you owe minus the money you have in your account. (At least as far as I could gather. I’m no financial expert)

      • I too read it was around the £100 million mark, seem to remember being on the back of some of Arsenal’s financial records/annual performance being released

      • Net debt is as the poster above writes total debt less cash in the bank, the debt ie the actual loans havent been reduced in reality, if they had AFC wouldn’t have any cash in the bank.

    • In which case would mean the debt is actually closer to 150 million rather than the approx 250 stated in this original blog?

  5. Hi!

    I would like to know why you are so sure that Wenger was holding on to an EXTRA 70 million during last summer’s transfer window. You have simply made some passing remarks about “qualified accountants” who have made “independent analysis”. In this age of Wikipedia (where every claim requires a reference link!), I- as a reader of your blog- would be more convinced if you could back up your claims. (You know, just like how you wanted the “Arsene Knows” group to come out with evidence that the stadium debt is ‘almost paid off’.) Until and unless you do that, as a reader of your blog, I have no choice but to hold you as a bullshitter. (Sorry to use the word, really!)

    • Easy, many AFC fans are senior professionals in their trade, business analysts. Reading the accounts from last year, the cash in hand balance reads 120million pounds. Subtract AFC’s day to day costs of running club about 50 mill , you have a cash surplus of 70m pounds.

      It was available to spend Ivan Gazidis said so. If you doubt qualifications of AST accountants go and read their website and profiles, its all there, and look as @SwissRamble ‘s blog his analysis of all premier league (and not only) clubs is legendary,

      You stupid asinine I don’t want to hear the truth. with fingers in ears la la la I can’t hear you is typical of Arsene knows types. blind cult worship following of a person not our club. Fact is our club has been extremely badly run as a business, which has impacted on our team and pitch performances. On top of the a manager unmanaged, not under pressure and who has made massive errors was allowed to continue unchecked since the board put their feud with Dein, before the good of the club.

      Go and read Swiss Rambles blogs, read AST reports on AFC accounts, and you’ll find Phil is actually correct 100%

      • The problem with the ‘cash balances’ approach is that it tells us how much cash is in the bank, it doesn’t tell us how much the club can sustainably invest. The question is- how have these reserves been built. We get money from transfers, and don’t spend them, the cash accumulates, does that mean we can now afford more expensive players? The answer is, on a one-off we can, but it doesn’t reflect any overwhelming financial health.

        Think of it like any other company, the money that Tesco has to invest in capital projects next year, is related to the free cash it generates this year. It doesn’t matter if you have £123m in the bank if you’re only generating £20m of free cash per year. That £20m is how much you can sustainably spend. That’s the true measure of the club’s spending power.

        So while you can make a big splurge on the basis of having cash in the bank, it is no different from the banana republics that blow up their spending when resource prices are high. It’s not prudent.

        Invariably, what you’re criticising is the club’s prudence.

        You mention Swiss Ramble. But in his last review of Arsenal’s finances he had this to say about looking at bank balances as a sign of how much can be spent: ” it is actually almost impossible to calculate what could be spent in the transfer market for many reasons”.

      • @Lordhillwood

        “Fact is our club has been extremely badly run as a business, which has impacted on our team and pitch performances”

        Should have read:

        “Fact is our club has been extremely well run as a business, which has impacted on our team and pitch performances”

  6. Angry Of islington, whilst I agree with many of your points,according to the Arsenal Holding companies last financial statement. The total debt is 252.5 million pounds. However when you take into account, the cash reserves of 153.6 million pounds. The net debt is 98.9 million pounds, considering the new stadium cost over 400 million pounds, which is a large asset. Gary Neville is correct, that Arsenal debt is very manageable, particular in-comparison with Manchester United and Chelsea. Arsenal have the financial scope to make big signings this summer.

    • Are you on a wind up? I made it very clear that the debt is manageable; that is not the issue. Gary Neville was not saying ‘the debt is manageable’ he was saying ‘the debt is nearly repaid’. Entirely different.

      • How is that different, we have the cash reserves money there so the remainder 98mill IS manageable and IS nearly repaid?

      • Whats your problem,what do you mean by wind up, My comments are factual. My point is we could have paid off three quaters of the deft but chose not too. We are hold more cash than any of our major rivals. We are in a good place. If you look at Man United, there owners bought the club,and then put all the debt on the club! They paid no cash, there interest payments alone are over 50 million pounds a year. They do not have a new stadium and have debts of some 300 hundred million,and no cash pile. Whilst you may not agree with Garry neville his overall analysis is still correct,unless you are trying to spilt hairs and create a negative picture.

      • I think what Jordangooner is trying to say is that the NET debt is just under £100m, as we have the cash reserves to be able to pay it off up to that much, but as was stated before (either in your article or in another comment, I don’t remember which without reading it again) they have to stick to a payment plan so can not actually pay that much off in one lump. But the fact is, we have the ability to, so in a round-about way, we HAVE nearly paid off the debt.

  7. Thanks Phil, that was really helpful.

    I have some conjecture about this £70 million figure Arsenal has in the bank. My theory is there’s a major element of caution with that money because its renewal is not guaranteed. And what I mean by that is: the club buys a few good players but if things don’t work out or something within the club goes awry (like the property crash you just mentioned) then we won’t have another £70 million to splash out the next season. It’s essentially one-off money, or at least money that was accumulated over a long time (my own guess would be about seven or eight years of accumulation).

    On an unrelated note, one thing that’s always irked me is this suggestion we’re self-sustaining. I mean, yes to an extent we are. But most of that profit we post is from player-sales. In fact, only for the sales of the likes of Van Persie and Fabregas, the club would have recorded losses in those years. So I find it incredibly fortunate (or terribly depressing) that the club has come through this period of relying on selling its top quality players to make a profit (I assume the new deals mean we’ve seen an end to that?) just as the club has run out of top quality players to sell.

    • Para 1: You’re probably right about the caution, but in my opinion they went too far in avoiding any speculation to accumulate.
      Para 2: I agree, but in practice what would have happened if more money was still say three years away? We’d probably have made a small loss for a couple of years, while the Board prayed Arsene would sign an extension.

  8. This is one of the best articles I’ve read about our club in a long time. Well written, full of mature points and highly intellectual with little to no bias involved.

    I’m curious though and please don’t think of this as a ‘callin you out’ but I was of the understanding that the loan used to pay for this project had a sum balance of £260m.

    Obviously I realise there is a fixed rate of interest applied but you say the debt is still £264m? This means that the club has simply been paying off the interest and haven’t actually made a dent in the physical costs?

    Also, it’s stated here that the stadium debts won’t be paid off until 2031? Yet the loan is over 14 years. Mathematically, this makes no sense, unless we haven’t paid a penny of the loan and don’t plan to until 2017. Which is clearly not the case.

    I’d just like some clarification because not everything here seems to be accurate.

    All the same, an excellent article.

    • £246m, not £264m – you’ve misread. Actually that figure is from memory what was in last year’s accounts, so will be slightly out of date, though not enough to make any difference to the argument.

  9. Just wanted to say thanks for this nicely written blog that mad me laugh a few times.

    (Except some might say you let yourself down a tiny bit with the line about the underground grapevine).

  10. The biggest problem financially is the ideal of collective wages, that everyone in the team is on the same wage. Its all good in theory if everyone is playing well/performing but it has artificially increased wages within the club and has left us wth alot of below average players on £50-60k per week who we frankly cant sell because they are on too much (Chamakh, Squillaci etc).

    We need to strip the squad of this deadweight and strip the squad down to who we need. want to keep and those who contribute. We have far too many players out on loan with us still picking up a good portion of the wages.

    I know its being ruthless but I would sell; Chamakh, Bendtner, Chu-Young, Denilson, Santos, and Djourou. Out of the youth players I dont think Miyaichi has progressed and doubt Campbell or Wellington will get a work permit so they can be sold too. Arshavin, Squillaci, Mannone, Fabianski, Watt and Eastmond are out of contract and can be released. If we are offered £12mil for Gervinho we should break thier arm. The BFG Mertesacker has done better in the second half of the season but his lack of pace is a worry and we should cash in on him.

    If we clear the above players (*prays*) we could raise £30mil rising close to £50 if Gervinho and Mertesacker leave too. We would also save between £550k-700k per week in wages alone, add that to what we can reportedly spend and these are who I hope we can sign.

    20m Dzeko/Higuain/Jovetic
    10m Belhanda/Sterling
    10m Capoue
    10m Sakho
    10m Lovren
    5m Cesar/Adler
    If Sagna leaves try to get Micah Richards, Byrom from Leeds or Corchia.

    • Belhanda, Capoue and Sakho would not go for 10million each, and Richards is technically crap, wouldn’t survive at the club lol.

      If we do have 70 million to spend:
      GK – Rui Patricio from Sporting Lisbon, they want 12 mill for him
      CB – Djourou’s leaving, second choice for Williams from Swansea 8 mill
      RB – Sagna hasn’t signed an extension so sure is leaving, but who???
      DM – Capoue; strong, fast, vision and great tackler, 15 mill
      RW/LW/AM – Cabella from Montpellier 15 mill should do
      ST – Higuain, 20 mill

      Then if we can sell all these; Gervinho 10 mill, Djourou 10 mill, Chamakh 7 mill, Santos 3 mill, Denilson 7 mill and Squilashit 3 mill. I’m sure we can get up to 40 million for all of those, release Andrey and we’ll have an enormous amount for extra wages too.
      What do you guys think???

    • This is nonsense. There are not “collective wages” at Arsenal and have never been. That goes very far back, when the likes of Henry and Fabregas were on 150K per week, while many of their first team tmates would have been on 30-40 k per week.

      There is a lot of whinging, but the same people who say Arsenal pay socialist wages simply dont have the gumption to grasp that at Man Utd Wellbeck and Hernandez are on 75K per week, Ashley Young 120K per week (none of them really starters) and even Chris Smalling got 55K per week basic the day he left the Fulham bench to join Man U bench sitting behind Vidic and Ferdinand. What are the likes of Anderson and Evans getting paid to do not much? You really think it is a single penny less than 60k per week?

      What on earth do you think this does to the going rate for squad players at other top four clubs?

      Espcially Arsenal, with its policy to recruit and develop young players, the best of whom who carry a very high potential future transfer value. You get a crop of young players and the nature of the game is some of them will not work out. They will still get paid until they leave.

      Get a clue people – and stop parroting ever bit of garbage fed to you by the no-brain sports “journalists”.

  11. I wonder whether this is being considered by the board from risk vs opportunity perspective; that the opportunity that might be generated by spending an additional £70m was previously outweighed by the risk that we might lose Champions League money for a year or more (and have no money left in the bank to fall back on). But with the new commercial deals in place and ECL qualification looking likely, the balance of the model shifts considerably towards the opportunity side. Or, in layman’s terms: from now on 4th place is no longer a trophy! It’s a hope anyway….

  12. U want to spoil the minds of Arsenal fans,i guess u are not an Arsenal supporter.What i know is that our debts are nearly paid off simple! and if we fail to spend is best known to the manager and board so stop spilling rubbish u spuds fan.

  13. my recollection is that when the debt was originally financed, the club entered into an arrangement with the lenders that GBP 15m would be set aside each year for debt repayment – hence AW’s statement that we need to find cash of 15m from the club’s operations each year before we can spend. The new TV cash augmented by the new sponsorship deals means that the club has additional funds to spend net of 15m which has to be set aside – but it is still probably not as much as many commentators are suggesting – especially when one takes into the account the steeply rising wage bill.

  14. I’m just thinking out loud , maybe I should’nt (you lot won’t be long letting me know anyway! ) But what if this proposed “spending spree” that AW is about to embark on (we are told) has nothing to do with the finances of the club. Now before you all start jumping down my throat let me explain. Firstly I know we have a large debt (200 million plus is nothing to be sneered at) But could it be that Arsene Wenger has become cheesed off with criticism at the clubs lack of success and this has made him rethink his management strategy. Sure there are new revenue opportunities available from shirt manufacturers, TV and stadium rights etc. all of which will be very good for the clubs bank balance .But could it be that he decided his reputation was rapidly going down the drain and that the time was right to let Gazidas and silent Stan know that he wanted a change in the clubs policy regarding players wages and aquisition. Remember he used to be one of the best managers in the business and was recognized as so . But over recent years his reputation has been undermined by a lack of success. Maybe he decided that rummaging around the bargain basement is no way to run a club like Arsenal and enough is enough . Its just a thought . Nothing has happened yet but I think that a sea change is under way at the Arsenal and it may have nothing at all to do with what appears to be the obvious

    • Wenger’s reputation is still intact, except amongst Arsenal fans and crap sports journalists and ignorant Arsenal bloggers.

  15. so this year we might actually post a loss as there’s not going to be any major fees received for players……?

    saying that, there’ll at least be salary savings of those due to be out of contract, so might just break even after all (provided we don’t buy any expensive players that is) – Arsene will therefore have more excuses :-]

  16. The fact that we now have 2 major sponsorship deals has made the debt irrelevant…..because the debt repayments will come straight out of that money (with plenty of change left over…..about 40 million), so the tough times are over. With amortization we have some serious buying power, and Wenger being in the last year of his contract will want to focus more on the here and now rather than next season (because there could be no next season for him). Good times.

  17. Gary Neville was wrong to say the debt is nearly finished off what he should have said is its more manageable now than before in 2007 when we had a 14 year loan with a fixed hedge/commercial, lack of commercial/sponsorship deals etc but then again hes hes a football pundit giving a general opinion

    What confuses me looking at the balance sheet 2012/13 is there are creditors within a year being owed £145M. How do we pay our creditors off, how much is paid?

  18. I think what Gary Neville meant was as follows:

    Our cash reserves mean our debt is basically “safe” up to around 100 mil.

    But with our new kit and sponsorship deals being worth over 100 mil, that means with the total amount of money we have and we are owed, that if we “bank” all of that, the total debt is “gone”, and anything we make on top of that can be directly used for player sales?

  19. Great piece! I’ve always said ,be wary of an organization that puts out contradicting statements at the rate Arsenal do. Usually there’s only one reason for doing that , to avoid responsibility for failure. The fact people are still arguing whether Wenger had funds to spend and just refused to do so is ridiculous in itself. It makes the club look like a joke and a laughing stock. Further more, it gives top players a pause when they do get approached by Arsenal and makes their agents steer those players away to other clubs.

  20. I’m sorry but, …bullshit blog post spotted..this reeks of incomplete information, conclusion jumping, rotten “grapevines”, and, well…bullshit

    • Another moronic idiot who knows zero has no knowledge of the subject, it challenged his one brain cell tiny mind it went screaming over the top of his head, so it is bullshit, no mate you are bullshit if you don’t understand, can’t comprehend, you need to shut the f**k up when grown ups are talking and learn not to be so dumb

  21. I don’t think I should trust your writings for a single bit. First, the way you write is as if you are the chief accountant of the Arsenal Board! Why should I trust your words? I also don’t think you are more knowledgeable of financial business(at least in relation the the Premier League) that Ivan Gazidis, who you said didn’t know anything about the deals that were to unfold in 2014, I really don’t.

    Then again, I don’t think all news agencies would publish unresearched information and you’re the only one with correct data. I’ve read many news outlets, not just what Gary Neville said about the debt being nearly cleared. How all of them would be wrong and you are the only one right, beats my understanding. It is also wrong to compare the way Man United conduct their finances with Arsenal, because the two are completely different, therefore, finishing above Arsenal for the past decade is not surprising at all, and you know that. For example, how many times has Arsenal paid 20m upwards for a player? None! As for Man United, numerous times. This is because United are miles away from Arsenal in terms of almost everything football and finance, and Arsenal are only trying to catch up. Any comparison? not at all!

    Therefore, it remains the truth, despite what you wrote, that Arsenal have gone a long way in seeing off the debt and are in better position to compete in the market, and Neville was right.

    • Drrrrr. You don’t need to be able to paint like da Vinci to be an art critic. The financial reasoning is not in dispute: the levels of debt and repayment are matters of public record. More pertinently, a high proportion of resources has been spent on peripheral and ineffectual players rather than keeping our best players and buying top quality additions.

  22. Hell of a long article to say all. Why dont fans just leave the club to run the club. It all smacks of smugness.

  23. Plus the fact that along with the increase in revenue through sponsorship, there is a hell of a lot of dross that’s in the last year of their contracts. I think from what i hear, at least 12 players of the first team and youth will be released and sold thus freeing up over 450k a week in wages. Players like Arshavin 90k, Sagna 70k + 8mil transfer fee, Bendtner 60k, Denilson 60k, Squillaci 60k, Fabianski 60k, (if rumours are true) Gervinho 55k-65k +10-14mil transfer fee, Djourou 55k and Park 40k which if the sales happen equates to 560k per week. Then we may sell TV5 which I hope does not happen and I hope he has the fire in his belly to fight for his place.

    This for me is the biggest thing, not the apparent paying off of debt, of which Gary Neville we have not. There has indeed Been a war chest available to the manager but our pay structure was up to its limit you could say and for the past few seasons has hampered our spending. Look at last year we sold RVP and bought Giroud and Podolski this is evidence of this wage structure. Whats the point in buying a player for say 25 mil when a player that demands that fee would demand over 100k a week in his weekly salary. Now with technically we can afford to pay high fees and offer the wage to go with it technically we could sign 5 exceptional players pay them 100 k a week and still pay out less a week than last season

  24. Skillful propaganda. Basically inturpreting to fit your agenda.
    The premise; that AFC have hidden managerial incompetence behind the smokescreen of financial hardship. Also, the club is adding to the deception by implying that the debt incurred by the stadium project is almost repaid and, as a result, the financial shackles are off, leaving the club well positioned for the new season. The reality being that the debt is actually far from beeing paid.
    To start with Gary Neville ignorance of Arsenal’s financial situation

  25. Nice, clear and fair analysis. First I have to declare myself as an ‘anti-bullshitter’ but what irks me the most isn’t that we should have spent more but that we have wasted so much. If we remove our pointless buys (& their wages) from the equation (Santos, Arshavin, Bendtner, Chamakh, Gervinho, Denilson, Squillaci, Djourou, Diaby, JY Park) we could have invested in keeping our best players and buying one or two top additions. I have it on good authority that RvP would have signed an extension, at an early stage, for £130kpw but as with Ashley Cole and others we have lost them due to a failure to pay relatively small additional sums. Imagine what our team would be like today if we had concentrated our resources into keeping our best players and adding someone like Mata. What’s really annoying is that we could have done that within the same net spend – without even considering the additional resources available. Penny-pinching, by doing our shopping exclusively in the bargain basement, has cost us big time. This isn’t responsible financial management it’s very poor strategic planning.

      • exactly JJ Dude, revisionism of the highest order from may7.

        Santos was quite good in his first season. It seems he lost his way, especially with the RVP shirt thing.

        Arshavin was one of the best players in the world when he came in.

        NB and Denilson were very good players who came though and it did not work out for various reasons. However, they put in some very important performances for us. Anyone who thinks otherwise must have started supporting Arsenal this year.

        Gervs was on of the best players in the French league and is still plays great for his country and better away from the emirates, I wonder why?

        Diaby is one of the best talents around but has been injured. However, the same people are saying to be rid of him are the same ones complaining that we sold RVP, who was also injury prove…hypocrisy.

        Chamakh was great when he first came on board, RVP came back and he was never the same. No one expected that would happen when you look at how he started his Arsenal career.

        Djourou was a 4th choice defender, what more do you want. Not to mention prior to him dislocating his shoulder, the guy was something else.

        RVP sign a contract extension?! contracts are not worth the ink they are signed with. Cesc signed an 8 year deal and acted like a cry baby the next season.

        As far as paying players x amount of money and keeping them, I think that is nonesense. Teams can just pay more and also you cannot win without squad depth, if you understand my point. If you get rid of all of these players, what happens when your one magic man gets injured?

  26. so what are your thoughts on this summer’s transfer window. Do believe we will buy a top class player or are we going to be pulling our hair out again.

  27. Nice post! Indeed, aside from annual debt repayment provisions (about 19m), there was money to spend last summer on new signings and wages (about 70m), but with other teams strengthening while Arsenal was weakened with RVP’s exit, financially conservative Wenger preferred to first make additional provisions (about 30m) for a non-Top 4 finish scenario (as a financial analyst, I can appreciate that). Then, after Giroud’s purchase (12m + 12m wages), the balance could barely cover any replacement star’s wages (about 30m over 4yrs) talk less of signing fee. This summer is definitely a wholly different ball game!

  28. Thanks for the informative blog. I always come hear to read what you have to say. Plus I like your articles in the gooner.

    Can you answer these 2 question?

    How can we be sure arsene has had the money but not spent it?

    If arsene is refusing to spend the money and the club is indeed ready to compete how has he kept his job?

    Come on the gunners

  29. Even though i agree with a lot of this does it really make a lot of difference, while ffp is not effective and at the moment does not look like it will ever have any bearing on how others spend if are debt is at a good level and there is £70 million available it is still peanuts in todays market, unless ffp really takes a firm grip then all this talk is just idle, Wengers identification of some players recently has been very poor, lets not hide away from that fact, as arsenal fans we need to stay realistic, 70 mill as good as it sounds is not a lot really, I still believe Usmanov as a big part to play at AFC, i just cannot understand totally while a bloke that makes 14 billion plus is not being used to capacity, call me silly but he also sounds like a very astute business man to make them figures!!

    • I hope I don’t sound condescending, but I have gone through the accounts in detail and I am stunned by the lack of facts and general mis-information, around this area.
      Let’s make it clear.
      – We have 126m in cash reserves
      – We have to pay back 19m/year minimum on the loans
      – This summer we have a revenue increase of between 80m and 100m per year, every year. This is not a “one off” amount.
      – The 80m – 100m will increase in future years.
      – We knew that money was coming, last year, which meant we could have spent all 126m without any issue whatsoever, we didn’t.
      – We have not paid back the stadium debt in full, at all, our remaining debt is 98m (net) or 224 (gross).
      – Our wages bill as of summer 2012 is 143m/year, which is an embarrassment for what we get as ROI (Spurs is 91m and Man U’s is 161m).

  30. Not really sure what the point of the blog is but it is worth noting that while the debt level is mainly unchanged the cash balance has increased again so net debt is sub £100m. Also by 2014 we will have been able to remove over £700k in wages for unused players such as Arshavin, Bendtner, Chamack etc. Therefore when you consider our revenues will increase to around £300m means that there is a lot of money to invest. Say are able to move on the majority of dead wood this might raise £50m in this I assume Sanga leaves then player amortisation reduces and the wage bill drops by over £700k. That means if we bought Haugain, jotevic, sanogo, a dm, a cb, a rb and a gk for 80m then the wages would still be lower and the annual cost spread over 5 years would be almost covered by this. As wages would sit at around 200k lower £10m pa and a 3m reduction in player amortisation coupled with around a 30m player sales profit booked that year.

  31. Spot on, Phil. A very necessary article and its appreciated.

    Unfortunately some people just believe what they’re told by any old pundit on Sky, Talkshite etc. They’re too lazy to find the facts out for themselves and rely on the fundamentally flawed statements they get from TV personalities (most who have an agenda of their own). I’m sure if anyone asked Neville whether he professed to be an expert on the financial background of Arsenal he’d not say that he was – he knows football, not business, it’s unlikely he can read and understand accounts and even more unlikely that he’s read Arsenal’s recently. To be fair, Sky have 60 minutes to fill post-game and the big unanswered question about Arsenal is whether they are now in the position to compete with the big 3 on spending – I’m not surprised that Sky were asking Neville this, it’s what most people wanted to know. It would’ve been better had Neville answered “I don’t have a scooby”, but since when did any football pundit ever admit to this? Ideally Sky would speak to people who know what they’re talking about, but they also know that most viewers have neither the brain cells nor interest to listen – hence they stick with the vacuous soundbites.

    It should be made law that no one is allowed to comment on how much money Arsenal have without first having read the latest Arsenal accounts.

  32. If the buffoons had built the stadium to a size that truly reflected arsenals massive following it would have been paid for by now.The incompetence is mind blowing .

    • Buffoon. The maximum size of our new stadium was restricted by the area of the plot of land upon which it sits and the height was restricted by planning regulations. They could have crammed more arse pinching seats as Manure have done but I’m glad they didn’t. I take it you are neither an architect or design engineer drew?

  33. only difference is that wenger lost it half way through the season. it seems that could be a reason for him to change.

  34. Gary Neville was definitely wrong about the debt being almost paid off (Although I thought the bank loan would be paid off by 2029, and the bonds by 2031).

    I would also tend to agree with there being some money in the coffers last season. Possibly even as much as 70m. Now, the question becomes, why would Arsenal, or Arsene Wenger (since you seem to put the two in conflict) not spend that money? Any ideas?

    There’s no doubt we’ve been through a period of austerity. Some of it unexpected because of the property crash, as well as through the rise of the oiler clubs, making our money worth less. In this constantly deteriorating situation, we had to make sure we had a team that could compete (for titles, but top 4 as a minimum) We paid players based on potential ability rather than current ability. That was a conscious decision. And has been much maligned. We also paid in a more ‘socialistic’ manner (though that term is a little misleading) But it makes sense. If we pay the maximum that we can to our top players, it still wouldn’t be enough to hold off the likes of Chelsea and City from topping that. Which means we’d still lose them. While our squad players, being on lower wages here, would also be tempted to move. Meaning we would lose not just the best players, but also the decent ones. Of course the con is that when a player doesn’t work out, you get stuck paying their wages. But that happens to all clubs. It represents a risk worth taking, especially when other options were lacking.

    But we did lose our star players, and we didn’t win a trophy (though on and off we’ve challenged, usually in the years we didn’t sell important players) so it is easy to put the blame on the wage distribution.

    Anyway, onto your main point regarding money in the bank. What does money get you. Good players if you have the eye, and if they are available. Bad players if you don’t, and good players aren’t available, but you spend regardless. What the team needs, who is available, how much they cost, how much money you have. These need to be balanced. You perhaps also need to consider who is likely to be available the next year and whether buying someone now would restrict your chance of buying them next year. On top of that, that 70m was there only by careful saving. We didn’t know how much more money was coming in by 2014, and spending all of our cash reserves opens us up to being in a position where we might need to accept lower sponsorship money again, since we’d be desperate. That’s what’s changed now. We know exactly how much we have coming to us, and so we can spend our hard earned money again. It is virtually nothing to do with debt, which is what you pointed out as well. Although your mention of ManU is just bizzare.

    Sorry for the long post. Brevity is not one of my strengths. I don’t disagree with your conclusions on debt, or even on there being money available. I disagree with the implication that you seem to make. I ask for your views on why Arsenal, or Arsene, would not spend that money. (I offered one)

    • Fair points. In all honestly, nobody outside of the club really knows why Wenger didn’t spend the extra £70m last summer. It could be that he simply didn’t think the players who’d augment the squad were available at the right price. £70m can go very quickly – the transfer fees for Downing and Torres alone would soon wipe it out.

      The thing that people often forget is that, whilst there was this £70m surplus, this does go towards wages and other fees as well as transfer fees. It’s not simply the case that we have £70m so we can buy 3 players with transfer fees of, say, £35m + £20m + £15m. If you bring in 3 new players on £100k a week contracts then you need to take money out of the £70m and add it to the wage budget (or sell more players so that they are removed from that budget). People forget that the whole package Man Utd are outlaying on Van Persie will be in the region of £70-80m over the course of his contract. Equally, if, purely by way of example, we bring in someone like Jovetic for a £25m transfer fee, then the cost of his wages, agents fees, signing on fees etc would need to be factored in too – it would cost the club far far more than £25m in total over his contract. Whilst they would spread some of the money out over the contract, a big chunk of the total (more than £25m) would be paid up front this summer.

      • You don’t buy players in one lump sum. A 35m pound player purchased is divided by the length of the contract, the resale value is also considered and the wages for the contract duration. We have around 500m extra coming in in the next 5 years, so we could afford lots of big players and wages.

        RvP will cost United around 15m/year for 4 years.

      • It depends on the deal. Sometimes it’s spread over the contract, sometimes it’s one lump sum up front, most commonly it’s a considerable chunk up front and then further smaller payments and bonus clauses. Its often the case that selling club will want the money up front and it boils down to how much the buying club wants the player and how much the selling club needs to sell. Whatever deal Arsenal do, they need to factor in the total spend on a player. Of course they might only need to pay £20m at first for a £30m player, but then they would need to budget for the rest for later years.

        People seem to think that Arsenal only budget for one season at a time. It’s highly likely that they’ll be making payments for previous signings this summer out of the £70m surplus. For example, they might have to pay some of the Cazorla fee this summer. Or there might have been a clause in the Podolski deal that we pay Cologne more money in the event that we get 4th. Of course it works both ways – we’ve recently got a further pay-out from Hull for Jay Simpson and from Man Utd for Van Persie.

        My only point is that, yes, £70m was there at the end of last season. But, no, it’s not as easy as thinking that is purely for new transfer fees this summer.

      • The reason Arsenal got Cazorla for that “low” price was Malaga’s immediate need for cash, not receivables – and Arsenal’s ability to do a straight cash sale.

      • Absolutely. It’s actually a good example of when payments aren’t actually spread over a number of years.

  35. Pingback: £30million bid accepted… or is it a red herring? | Diaby and Gervinho wanted… no really – Le Grove – The Arsenal blog for news, opinion and transfers

  36. So your one of those people who show their hand when playing poker. Only a stupid person[s] would not put a spin, when in a bit of a corner. If we as a club were forever honest, we surely would be the only club in the world acting as such.

    Football is a cut throat sport/business, not a shoot yourself in the foot type game.

  37. Ex-footballer pundit in ‘lack of knowledge’ shock?

    When he was playing for ManU we all hated him.

    When he grew a moustache, we laughed at him

    When he got a job at SKY, we found out he actually knew his stuff when it came to football, and turned out to have a soft spot for Arsenal so then we respected him (apart from those torn apart by a conflict of loyalties, who hated him even more)

    Now his financial knowledge turns out to be vague, incorrect and misleading, though I guess the overall thought behind it had the right intentions.

    Not sure what to think about him now.

  38. First, i dont think you have the knowledge to analyse the debt situation! Second, you dont know anything about the club! 3. You talked about the ast and other members to prove your misleading analysis or article which is far from the truth. 4. If you want to be a critic of someone then have a better understanding and analytic mind. 5. You can have the debt figure from any site which includes the other team. 6. And believe it or not there was no money to spend for arsenal in the previous years. Arsene told has, in 2008, he cant buy unless he sold a player till it is 2014. The article is a very dummy and needs a lot thinking and research and it is the same as the brain of savage.

    • Great post, as I don’t know much about the financial aspect, it was definitely a good read. I just wanna ask a question, with all this 25-30 mil jovetic talk, 22 mil higuain talk and 70 mil to spend, I still have the impression that our transfer policy won’t change, meaning we will be going for players around the 10-15 mil bracket. even though we won’t lose any big players, I can’t see us biddin 25 mil for anyone, not that I think we need that but nothing in the last 8 years has shown me our transfer policy will change. What do you lot think? Do you think we will break our transfer record this summer?

    • So the author knows nothing about Arsenal! But you know exactly what Wenger’s been told…..?


  39. The stadium has paid for itself is what he’s meant. Cost 400m to build, with the sales in highbury square and sales to capacity in the emirates we’ve taken over 800m pounds. So he is right. Money from that revenue has surely been put aside and into other investment products to increase its value and slowly, over time, the banks will get their repayments. Your article is a load of rubbish. You need to do something, it’s called maths.

    • Your comment is a load of rubbish. Instead of saying ‘surely’ things have happened as you believe, you need to do something: it’s called research.

  40. Basic economics for the incompetent writer. Yes, there may have been money for the right player at the right price, but any money not needlessly wasted will ultimately greatly help the club in the medium to long term. That £70m from last season could be worth over £120m right now, what with arsenal having a shrewd business model. This all helps us to paying off the stadium. You seem to be too long termist going on about 2026…etc. Have you cared to think what might happen if we dropped out of the UCL places and did a liverpool for a few years? Sponsorship would go down and thus revenues and we would struggle to pay off the stadium debt; resulting in us trimming the squad. You don’t appreciate the massive risk the club took in spending over £450m (once you include interest) on a brand new stadium.

  41. “…..This is a dodgy statement in itself, because one club – Man Utd – pays far more in interest and repayments, not to mention ‘management fees’, and yet has finished above Arsenal almost every year for the last decade”

    I haven’t read the above comments but surely the fact that Manchester United’s income has massively dwarfed Arsenal’s would have been worth adding into the above statement. Or maybe I read it wrong.

    I tend to do that a lot but it seemed above that you were basically saying Arsenal and Man U are in debt but Man U have finished above us every season as if the situations were comparable.

    Manchester United are possibly the richest club in the world, have the biggest commercial deals going along with other super clubs like Real and Bayern meanwhile Arsenal have had to sell themselves short and grab onto small Emirates deals along with Nike to help fund the stadium. Very important at the time but clearly holding us back.

    Phil, do you think this has had any impact on where the two sides have finished? We can talk about Man U only having a £20m larger wage bill but in at the same time we have made a transfer profit whilst the same club have spent over £100m net on players (including selling Ronaldo for £80m)

    I’ve never been quite sure why so many people think it is normal to compare our commercial deals with that of Man U,like it or not we are so way behind them but the club have made huge strides in improving our spending power.

    I have no idea why we haven’t spent more than we have in the last three seasons, I wouldn’t be surprised if the low commercial deals caused more caution but there is no reason why we cannot do so now. Still shop sensibly but at a higher bracket.

  42. It is a fact the club have had £50m-£70m in the bank for 2-3 seasons (that’s free cash, we actually have £125m in the bank but various amounts need to be ring-fenced as security on the stadium debt). However, what I have heard nobody say is that Arsenal Football Club does not make a profit. The property side and player trading has made enough profit in recent years to cover and exceed the losses made by the football club.


    From analysing the accounts of Arsenal Holdings it can be seen that without player trading and the property business, the club would be making a loss (£31m in 2012 and £4m in 2011). Therefore it is prudent to say that Arsene Wenger has not been able to purchase players without making a profit on those player trades. He most certainly could have spent £40million (I mean net here, so  he could have bought a £50m player such as Falcao last year) but that money is then gone from the club, we are now down to £0m-£20m in the bank. By buying that £50m player the club also has to commit to a £50m player wage demands which I think could reasonably be set at between £175,000 and £225,000 per week. At the lower end this is £9m per season. Given the football club is already making a loss (so there will not be an increase of cash each year as property project is pretty much finished and we are not making a profit on player trades as we are spending big) , we now only have £20m in the bank at most, the extra £9m wages of that £50m player would put our bank balance at close to £0 in 2 years. Not good business sense.


    The club has suffered hugely due to the commercial deals, not the stadium debt! We had commercial revenue of approx £50m to the need to have secured stadium finance. In addition we have a very high wage bill because the club (and Arsene I believe) wish to pay squad/young talented players higher wages than any other team would pay. This has caused 2 problems. 1) the wage bill has increased hugely & 2) if those players flop (Gervinho, Chamakh, Bendtner, Santos etc etc) they are very difficult to sell because teams don’t want to pay the wages and players don’t want to take a pay cut!


    So what is different about this summer?


    1) Squillaci and Arshavin’s contracts are finished, that’s an estimated £150k per week off the wage bill.

    2) It is hoped Djourou and Bendtner will find different clubs (Djourou has done well at Hannover and I think Bendtner was liked in Italy). Denilson could also be on his way. That’s another estimated £120k per week off the wage bill.

    3) Our commercial revenue will increase by at least £50m per season starting in 2014 (£25m this year and £25m in 2014 assuming the Puma deal is correct)

    4) Our Broadcasting revenue will increase by approximately £30m per season.


    This means that Arsene can spend £50m this summer, on top of whatever funds he makes on player sales, and have at least 300k per week to spend on wages (£270k from players above plus £30k extra as a guide). The spending of £50m will not hamper the club now because it knows the football business will now be making approximately £60m profit each year from 2014 (It was not doing that before, the property business – which was unstable due to the property prices – and player trading made Arsenal the profit the Media reported in previous years) and so has no worry about the bank balance being reduced. The club could not have done that in previous years because revenues were not high enough due to the commercial deals, which were signed due to funding the stadium build, and the wage bill was high due to the flat wage structure employed.


    In order to compete for top honours you need a wage bill between 175m – 200m (about right for top clubs with world class players). In order not to go bust you must have a wagebill:revenue ratio of 60%-65% and thus revenues of £290m-£335m. Our revenues have been in the £230m range. From 2014 it will be in the £300m range.


    I hope this is clear and not too long winded but it was not right to say, there was £70m to spend, why didn’t we spend it, it would have had a knock on effect in latter years and put us in the red!

    • Some sense at last. It abouts time people in England were taught how to do sums. Then we wouldn’t be in the debt we are in.

    • Some good points but I must point out some glariing fallacies being beddled here:

      “…In addition we have a very high wage bill because the club (and Arsene I believe) wish to pay squad/young talented players higher wages than any other team would pay..Gervinho, Chamakh, Bendtner, Santos .”

      This is just plain wrong. If you look at the top four you’ll find that we dont pay more. 23 year old Danny Welbeck is on 75K per week for crissakes – and he has only ONCE scored 12 goals in a season.

      Chris Smalling and Anderson are on 50 or 60K per week. Ashley Young worse yet, is on 120K per week! We could go a discussing how much Rodwell and Sinclair get paid to play once every few weeks. Or wether anyone else would ever pay Wayne Bridge or Kolo Toure the money that Man City pays them to hang about. Nor do many of you realize the obscene amounts of money unknowns like John Guidetti are ALREADY making before ever having even show up in Man City’s first team

      And you people think Gervinho or Denlison are stealing money? For real?

      Some of you need to wise up and ask more questions. For example why it is always foreign players singled out for this nonsense. I’ve seen Theo Walcott basically delivery near-zero growth in most of his first 6 seasons at Arsenal – even now he still cant trap a ball better than some amaterus in a London sunday league – and the only fan complaint last year was for Arsenal to give Theo 100K per week! Because he is English.

      Stop this nonsense please.

      • @Ziontrain

        Obviously some kind of misunderstanding here. What I should have said was the wage structure was flatter than at most clubs, by this I mean that our top earners are earning £100k pw, whilst squad players are earning £40-£80k per week. At United/City/Chelsea, their top earners are earning between £175k-£295k whilst their squad players are earning £40-£80k and maybe more. That’s the difference.

        I don’t think Gervinho or Denilson are stealing money. I believe they are overrated by the scouts/Arsene/club and were poor purchases for which Arsene has to take responsibility for.

        As for Theo, he has become a much better player but this is my opinion. He has 14 goals and 10 assists and for a winger that is pretty damn good considering he is on £100k pw. Mata 12gls/12 assist, 100k pw Wayne Rooney 12gls/12 assists 250k pw, Bale 21gls/4 assist, 130kpw Hazard 9gls/ 11 assists, 170k pw Cazorla (who most believe to be Arsenal’s player of the season) 12 goals/11 assists 80k pw. Hopefully my point is clear that Theo is not as bad as you are making out and is up there with the best midfielders in the league, although I am not suggesting he is the best! 

        I am very much an Arsene Wenger “fan”. I do not want him to leave and hope he extends his contract. However he has certainly made errors with signings and the wage structure (although I suspect it has not just been him who has dictated the wage structure). I also believe that Ivan Gazidis and Tom Fox (Commercial director for those that don’t know) are doing a good job. They are being judged harshly by FOOTBALL fans not BUSINESS fans. They have done an excellent job in transitioning the club through a tough economic period and a move into a world class stadium with world class facilities without any injection of funds from the clubs owners (THIS IS GOOD FOR US!). I do however feel there have been some poor decisions made by the club mainly:

        1) The wage structure is wrong. Should be more dynamic with top players being paid a lot and squad players less but sticking to the 60%-65%wage:revenue ratio.

        2) The club did not communicate to the fans that there would be a 10 year lull in success due to an inability to match the extortionate wages now commanded by the football world elite and ridiculous transfer fees being paid. This meant fans expected success on the scale it had in the previous 8 years and that was not sustainable due to the huge transition to a new stadium that we OWN (yes I know it’s mortgaged)!

        I accept that for a period of 10 years we do not win a trophy means that the club can be sustainable, compete at the top level for the next 25 years without worrying who owns the club.  The club will now be able to spend approx £40m a season + player sales and pay wages of £150k+ to 2 word class players whilst increasing the wages of current players.

        I am glad my two sons are going to be able to grow up goners and continue to see them in the top flight and not end up like Portsmouth, Rangers, Leeds and countless other clubs who fail due to their irresponsible and trophy loving owners!

        Maybe I should get my own blog as these have been very long, for which I apologise.

      • To go a stage further as to why Arsenal are now in a better position:

        Outgoing Players:
        Arshavin £90k
        Squillaci £60k
        Total £150k

        Bendtner £2.5m plus £55k
        Denilson £2.5m plus £50k
        Santos £2.5m plus £60k
        Chamack £2.5m plus £60k
        Park £1m plus £50k
        Djourou £5m plus £60k
        Mannone £1m plus £30k
        Frimpong £2.5m plus £30k
        Coquelin £2.5m plus £30k
        £23m plus £425k

        Sanga £12m plus £65k
        Diaby £2.5m plus £60k
        Gervinho £12m plus £60k
        £26.5m plus £185k

        Now based on all these players leaving on what are low fees except the maybes the club would net a player sales profit of around £40m after the book value is discounted.

        More importantly the wage bill would be reduced by £760k.

        On top of this player amortisation will reduce by around £7m a year.

        While this seems like a lot of players only Sagna has played a significant part in our season.


        Higauin £19m plus £100k
        Jotevic £17m plus £75k
        Sanogo £25k
        Caoupe £12m plus £60k
        Cesar £2.5m plus £65k
        Piszczek £12m plus £60k
        CB £12m plus £60k
        £74.5m plus £445k

        Now lets say all players are on 4 year contracts the transfer fees would be spilit over he length of the contract meaning the cost would be around £18m a year via player amortisation.

        However this would offset by £7m reduction from out going players and a wage bill reduction of around £15m a year if we don’t increase other players wages.

        So the £40m covers the operating loss coupled with the new TV deal means the club are on a sound footing.

        The the following years will deliver revenues of £300m with a wage bill of circa £150m and returning the club to an underlying net operating profit.

        This means the club can add one or two decent additions each year without having to sell which has not been the case due to the underlying losses.

        Like buying a house the initial few years are super tough as you have to pull together be deposit plus the mortgage is usually a high % of you wage but move forward 10 years your wages increase significantly but he mortgage remains the same hence you have more money too spend. Well the club is almost there now.

  43. Excellent article as always Phil and it is easy for the less committed to fall in to the “it’s nearly paid off” trap. I’d like your next investigative article to reflect where has all the money gone from the sales of Toure, Nasri, Fabregas, Van Persie, Clichy, et al?

    • Not true at all. We scored as many or more goals than those teams, despite the frightening amounts of money they have spent on strikers. and across all their squads. We are easily able to compete, on the face of that. And defense doesn’t cost much money really – proper organization can get you a lot further there at no cost.

      Furthermore, If you look closely at the league table and some of our results, early in the season we basically threw away about 10 points for absolutely no good reason at all. Just threw them away. Total that up and we are AHEAD of those two, despite all their expense.

      If we simply use our heads.

      Hell yes we can compete, without necessarily spending the same amount. This is what Wenger has been saying all along – and it is true.

  44. The newer deals allow have bought more money to the club. It appears this will help increase the salary budget. I doubt if we can afford big salaries (£200K+ per week) and big transfer budgets (£30M+) though. We will be more competitive though may being able to pay £20M+ on a transfer and £150K per week. Arsene isn’t god and he isn’t rubbish either. Big signings are a gamble – Scheva, Torres, Veron, Carroll…if you can afford to write it off if it goes belly up fair enough.

    I am sure at some point our owner will tell the CEO it’s time for a dividend etc…

  45. Blah blah blah who cares about who knows more about arsenal finances! Lets play who can write the most boring post & comment. 2-3 major signings and we are back in the mix! New deals for Kozza & Santi a must. You are all gay

  46. Phil,
    After reading Arsenal financial reports since our move to Emirates and Swissramble and Andresred analyses of these results regularly,I agree with most of the points raised in your blog . However there are few thoughts from my point of view
    1. Due to downturn in property market, it is at least comforting to know that we did not make any losses. Essentially property development broke even with some marginal profits so far however the club are making righ decisions by getting rid of other landfil sites which may generate some profits but we have to wait and see
    2. Revenues are essentially flat for last 3-4 years (excluding player sales) however costs have gradually creeped up e.g. not so long ago was wage bill was around 80 million and now this year it will almost double (155 million according to most recent esitmate)
    3. Due to these rising costs, profit margins disappeared and looking at the most recent annual report ending May 2012, club acutally made a loss before player sales
    4. This brings me to the next point that over last couple of years at least, the only profit made was a direct result of player sales
    5. The profit would have completely disappeared if there was no additional CL money (around 30 million a year) during previous couple of years
    6. There is no doubt had there are significant inefficencies within our our playing squad and at least 25 million/year could have been saved by getting rid of non-playing playing members (sounds funny, but I hope you get what I mean without repeating the names!!)
    7. I agree with one of the earlier post that as a club we were and still are millions (miles) behind the marketing strategy of other leading clubs such as MU, Real Madrid, Munich. We could not utilize our on pitch success as Man U did and there were too many individual holding back the club without proper professional approach. Like it or not, that included Dein who used to regard himself as subject expert on everything while ManU had marketing teams and strategies in place and now they are reaping rewards
    8. To put it all together, Club stated clearly that the gross debt is around 240 million plus and there is unlikely to be significant reduction in that as Phil explained in blog above.
    So for me the question is that with our current income (excluding new deals) we are breaking even or making small loss so what new improved TV deal (at least 30 million), Emirates deal (25-30 millions depending on which analysis you read) and reported PUMA deal (again 30-33 million) means in term of our ability to compete.
    I guess we will see the indication of that this summer and if it does not happen then it will prove all the conspiracy theories that there is something more rotten than what we see

  47. As a matter of fact, residential property values have continued to rise, Phil. So if anything, property sales should have exceeded target. And if they haven’t, surely it must be taken as
    yet another example of how badly the Club is being run.
    What puzzles me most, however, is that you seem to depict Arsene as architect and chief proponent of the Club’s financial strategy. Such power certainly doesn’t seem to be ascribed to the manager of any other PL club, so why Wenger? Is it because he has a degree in Economics? Or is it because he stood in as CEO (so to speak) during the long hiatus between the departure of Edelman and the arrival of Gazidis? Or is because he was useful camouflage, handy to take any flak while the former owners got on with their REAL business. They certainly walked off carrying sacks of gold. And wouldn’t any one of us do the same, in their position?
    Not all of us. Some might have considered a Rights Issue that would have provided extra cash to keep up the quality of the squad. Yes, it might have diluted the value of shares held. It seems that Dein wanted to do something of that nature – and that Lady N too might have been so inclined.
    Instead we have Kroenke as (in effect) sole owner. And, but for Usmanov, as sole owner in absolute terms. And in the past two years with him at the helm, the decline has noticeably accelerated. Now we wait on his whim: to speculate to accumulate or to carry on more safely in profitable mediocrity. Or, most likely, somewhere in between. Does anybody doubt that, given the money, Arsene would make the signings that would transform the squad into genuine contenders for major trophies? Or seriously believe that he would decline on the grounds that players were over-priced? Why search for explanations other than the simplest, the most straightforward: Wenger works within a wages/transfers budget dictated by the people who pay HIM. Which in large measures accounts for why we have a squad light years behind the best here and in Europe. The money is there, it’s always been there – but the owners preferred not to spend it. The Emirates debt? Many Big Clubs have greater annual debt repayments.
    Should we love Kroenke if his profit-motive starts to coincide with our glory-motive, and Arsenal win things? Do the Man United fans love the Glazers!

    • that’s valid point that the club could have waited few years for house the prices to creep up again however it’s worth keeping in mind that there was interest payable on the loan for example before property side became debt free we paid 33 million in interest and interest payment on mortgage now stands at 13 million a year. so I am not sure if this 20 million interest for 4-5 years would have worth the risk and could have wiped all profits away. secondly no one knew how long this recession is going to last and sitting on built houses would have been a huge risk so I am not sure u can blame club to be badly run on that evidence alone

    • Property values are up again now, and the club tried not to reduce the price for flats, but there was a huge drop off in demand for a couple of years. The profits have been nothing like what was anticipated.
      There are lots of reasons why Arsene has ended up with the power he now has at Arsenal, chiefly that he was so successful for the first 6 or 7 years and then David Dein and Danny Fiszman left, leaving a power vacuum in the boardroom.
      You’re right that AW works within a budget dictated by the Board, but his spending has not been as restricted by them as you think, and he has absolute discretion to decide the split between wages and transfer fees.

      • On the contrary, Phil, EXACTLY as I think: ‘absolute discretion to decide the split betwixt wages and transfer fees, within a budget dictated by the Board’. From what we have seen, a starvation diet in which Arsene gets to decide how much is spent on bread and how much is spent on water.

  48. Hi, Great article and some very interesting analysis in the ‘comments’ section. Unfortunately my knowledge of accounts and finance leaves a lot to be desired and so I was wondering if someone could explain the term ‘player amortisation’ which was mentioned in earlier comments. Thanks

    • Simply – very simply – amortisation is an accounting practice to value assets in a company’s books on a reducing basis over time, like depreciation. So if Gervinho is bought for £10m and has a four year contract, then at the start of year 1 he has a book value of £10m, in year 2 this is amortised to £7.5m, until at the end of four years his value in the books is nothing. (Complete your own joke here.) Amortisation doesn’t affect cashflow, just book figures.

      • I thought that for taxation purposes, HMRC will not allow you to write-off the full £10m during the first year.
        For amortization, HMRC will only allow you to write-off that 4-year transfer fee at £2.4m per annum.

        Am I correct Phil?

    • Its like your car losing value once you have bought it. The assumption is a player’s value is going to decrease over the life of his contract as at the end of it he can leave on a free transfer. This is described as amortisation.

      Obviously sometimes that doesn’t happen as a players value will actually increase (Anelka going from £500k to £23.5m) or decrease faster (like Chu-Young Park whose value is suspected to have been written off in the last set of full accounts after only being on the books for less than a season).

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  51. I couldn’t agree more. Money has been there to spend for several seasons but Wenger chose not to spend it.
    simple as.
    We will have more money this year but Wenger has wasted £50-75m + on wages these past 4-5 years on inflated wages for average talent which could have been spent more wisely on a few top players instead of 6 players that hardly play.

  52. Hi there,

    Found your blog and interesting. My very first post over your “Anger”.
    You blog got moi interested to post and fantasize on “what if” and “alternative history” on My DREAM – or obsession – that Arsene Wenger may have finally got it right and his acts together rebuilding this 3rd TEAM, into a title-winning team by 2015/16.

    You knew that old saw – one billion monkeys typing for one billion year resulting in one of them typing out the complete works of Shakespeare!

    Give them French snake-oil salesman another 3 years or the final length of rope to hang himself.

    And yes, in a way Gary Neville is correct to say “our Emirates Debt is nearby paid off” as our annual mortgage payment had been reduced to such an extent that is just a paltry sum of £13m or less from next FY till 2013.

    With the new Emirates Deal and new TV Rights Deal, our projected FY2013/14 turnovers should be averaging £260m with that £13m annual mortgage payment just a mere 5% of annual turnover, easily manageable and all under the column of “operating expenditures”.

    And this 5% is a smallish sum in contrast to our average of spending at least 60% on “Player Salaries”

    BTW< you break-down of that £143m should also include Tom Fox and his growing marketing Department, which are all classified as under 'Player Salaries" or all adding up to that "Operating Expenditures" averaging about 60% of our annual turnovers.

    Cheers folks, nice "talking" to you all!

  53. our main problem is AW who overpay dead wood players, he should emulate what other teams are doing pay the 20 – 30 pounds a week and only increase when the show that they are really talented and pay higher wages to those who deserve it.

    • Tapuwa, reality check: average premeirship player makes 40K per week. Narrowing down to the top four clubs, 40K per week is a meager salary.

      Danny Wellbeck makes 75K per week and he has scored 4 goals. I think he has never scored 10, or maybe once in his life. And he is Theo’s age. Ashley Young is on 120K per week. Chris Smalling 55 per week. John Mikel Obi is on 80K per week…deep on the Chelsea bench. Victor Moses is on 80K per.

      Get it?

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  55. Phil simple question I just want you to confirm what i think so theres no doubt in my mind.

    So the debt now is at a manageable level so the debt issue is no longer a issue, so no longer a excuse in any way for the club to his behind?

    I especially believe this to be true considering we make almost a 100 million a season in matchday revenue and now our Commercial deals are getting renewed meaning we should reach over 300 million in revenue.

  56. To get us Top 4 every season has been an amazing achievement baring in mind we haven’t been able to spend. Wenger has done an amazing job. Yeah we kept some crap players on high wages, but still we kept a squad. We have low wages anyway compared to the other top clubs. We’ve almost paid off the Emirates Stadium and can almost compete with the likes of Man City and Chelsea with no need for billionaire takeovers who invest. A revenue of over 300 mil after next season, plus with the new Puma deal we’ll be loaded. Yeah it’s been frustrating and nerve wracking, but I can’t say it hasn’t been exciting. I’m proud to be a Gooner and think we have an awesome and exciting few seasons ahead!

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