Arsenal's Financial Crisis

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Re: Arsenal's Financial Crisis

Postby StLGooner » Thu May 30, 2019 1:35 pm

Serious failure from the board if we really only have 40 mil or so to spend. I have to doubt this is what they had in mind when we decided on a new stadium.
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Re: Arsenal's Financial Crisis

Postby Tony_Adams » Thu May 30, 2019 1:55 pm

I still think its BS tbh. We reach a european final, get a new kit deal, spent nothing in january and we only have 40m available? Yeah right.
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Re: Arsenal's Financial Crisis

Postby alexafc12 » Thu May 30, 2019 7:07 pm

100% its bullshit.
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Re: Arsenal's Financial Crisis

Postby alexafc12 » Thu May 30, 2019 7:13 pm

2017 £ 45m net profit

2018 - £ 70m net profit

2019 - New kit deal, multiple high earners (Wenger, Mertesacker, Cech, Ramsey Welbeck) left / leaving.

We have more than £40M to spend.
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Re: Arsenal's Financial Crisis

Postby PairyGrows » Thu May 30, 2019 7:54 pm

alexafc12 wrote:2017 £ 45m net profit

2018 - £ 70m net profit

2019 - New kit deal, multiple high earners (Wenger, Mertesacker, Cech, Ramsey Welbeck) left / leaving.

We have more than £40M to spend.


Don't forget that we've likely lost £70m this season due to being in the Europa League. The kit deal and getting some high wages off the books get us closer to the black, but it will likely not add to our transfer budget. Every penny we can pinch will go towards mitigating this season's losses.

All this indicates that the £45m figure is a very realistic one. Unless Kroenke pulls out his cheque book, which he's never done before, we shouldn't expect a busy summer at the Emirates.
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Re: Arsenal's Financial Crisis

Postby EliteKiller » Fri May 31, 2019 1:21 am

Here are our net profits up until last year -

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Here's what we spent net on transfers over the same period -

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Here's our wages spend -

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As you can see we have spent more on transfers in the last seven years than we've made in profit ... whilst at the same time our wage bill has increased by 100m

Of course there's been a huge increase in income so we still balance the books, indeed for the first time in a very long time we have no net debt

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However this year has seen a substantial increases in costs with little or no increase in revenue ... the new sponsorship deals will show up in the next set of accounts, but it only adds a few million ... if we make even close to the 50m profit of last year we will have done well ... 40-45m is the expectation ...

and that 40-45m is all that The Don will get - Arsene spent the 2017 and the 2018 profit on Lacca and Auba ... there is no secret reserve ... sorry
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Re: Arsenal's Financial Crisis

Postby PairyGrows » Fri May 31, 2019 5:29 am

Indeed. The only way we'll have a big war chest in the summer is if Kroenke pulls his finger out and injects cash into the club. That, however, is unprecedented since Kroenke has never injected a penny into the club.

There's every reason to be worried. Right now, the gap between us and City is a lot larger than the gap between us and Wolves, Everton, Leicester and (soon) Newcastle. They're gaining ground while we're spinning our wheels. That trend won't be reversed without big spending, and there won't be big spending if we don't get Champions League football.

The future of the club looks very grim. Maybe we've seen nothing yet.
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Re: Arsenal's Financial Crisis

Postby BrunelGooner » Wed Jun 12, 2019 11:15 am

https://www.arsenaltrust.org/feed/afc-f ... alanalysis

I'm just going to paste the conclusion for those who can't be bothered/don't have time to go through the intricacies of the details.

Summary:

Arsenal are cash strapped, boxed in by FFP and saddled with existing debt obligations of £200m that would cost £250m to refinance early. Their rival clubs have much more free cash flow to invest in transfers and salaries and arguably start with stronger squads so it is going to be an uphill struggle to narrow the gap.

Meanwhile it is hard to see much capacity for KSE to justify extracting cash short term (dividends or management fees) at least until the existing debts are refinanced and the losses stemmed. I hope the AST will be keeping a close eye on what happens here.

When Usmanov owned 30% of Arsenal he proposed a rights issue (July 2009) to raise £150m to off some of the existing debts and improve cash flow for player investment but KSE said no and so unlike other clubs like Chelsea, City and Liverpool who invested in their grounds with owner finance or equity to support the cost, Arsenal will remain burdened by these debt related cash outflows (£20m per annum) for the next 12 years whilst trying to stem these losses and bridge the gap on their immediate competitors.

The importance of Champions League qualification is evident.
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Re: Arsenal's Financial Crisis

Postby EliteKiller » Wed Jun 12, 2019 12:17 pm

BrunelGooner wrote:https://www.arsenaltrust.org/feed/afc-finances/2019/-SimonHillfinancialanalysis

I'm just going to paste the conclusion for those who can't be bothered/don't have time to go through the intricacies of the details.

Summary:

Arsenal are cash strapped, boxed in by FFP and saddled with existing debt obligations of £200m that would cost £250m to refinance early. Their rival clubs have much more free cash flow to invest in transfers and salaries and arguably start with stronger squads so it is going to be an uphill struggle to narrow the gap.

Meanwhile it is hard to see much capacity for KSE to justify extracting cash short term (dividends or management fees) at least until the existing debts are refinanced and the losses stemmed. I hope the AST will be keeping a close eye on what happens here.

When Usmanov owned 30% of Arsenal he proposed a rights issue (July 2009) to raise £150m to off some of the existing debts and improve cash flow for player investment but KSE said no and so unlike other clubs like Chelsea, City and Liverpool who invested in their grounds with owner finance or equity to support the cost, Arsenal will remain burdened by these debt related cash outflows (£20m per annum) for the next 12 years whilst trying to stem these losses and bridge the gap on their immediate competitors.

The importance of Champions League qualification is evident.


But wait ... haven't we been repeatedly assured by the brains-trust on this site that we make as much from the EL as we would do from the CL ... but now the CL is at least 50m more ... well who would have thought that?
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Re: Arsenal's Financial Crisis

Postby theHotHead » Wed Jun 12, 2019 1:06 pm

Don't try it EK. History has showed that our limited runs in the CL yield approx £20m more than our runs in the EL.
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Re: Arsenal's Financial Crisis

Postby EliteKiller » Wed Jun 12, 2019 1:28 pm

theHotHead wrote:Don't try it EK. History has showed that our limited runs in the CL yield approx £20m more than our runs in the EL.


Wasn't me saying it that came from Vinai Venkatesham and last I heard he was Arsenal's chief financial officer, but what does he know compared to the brains-trust on here ... you stick with your 20m if you want, seeing as we didn't qualify it's all irrelevant anyway ...
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Re: Arsenal's Financial Crisis

Postby PairyGrows » Wed Jun 12, 2019 5:42 pm

The fact that the club who charge sky-high fees for season tickets is also the club that has £45m to spend in the summer is beyond depressing. I once again find myself desperately clutching at straws for anything positive.
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Re: Arsenal's Financial Crisis

Postby CynicalGooner » Wed Jun 12, 2019 6:17 pm

theHotHead wrote:Don't try it EK. History has showed that our limited runs in the CL yield approx £20m more than our runs in the EL.

Is that all? I thought CL football was worth a lot more than that. £20m is nothing these days

At the end of the day we are struggling financially because we've been stupid with our money and unlike other clubs, don't have a bottomless pit of it.
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Re: Arsenal's Financial Crisis

Postby theHotHead » Wed Jun 12, 2019 8:43 pm

A great run in the CL will yield £90m+, a run to round 16 like we get to yields about £50m. A run to the EL final yields about £30m, thats where the £20m difference comes from. No point comparing our EL run to a loss of £90m when we never get close to that figure anyway.
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Re: Arsenal's Financial Crisis

Postby gooney » Wed Jun 12, 2019 8:48 pm

Unless the club is in cl they are struggling financially...if they are they still have small budget. We have the highest tickets in england and one of the smallest budget in the pl
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