FINANCIAL REPORT DAY EVERYONE!
Yeah, that day of the year Arsenal fans collectively say…
‘God damn i t we’re a classy club… and my god, I’m proud we’re run the way we’re run’
Well people, on the one hand I’m pleased we’re run in a self sustaining manner. We’re not heavily indebted, we’re not getting red letters dropping through the door from Pay Day Loans and we’re functioning in a healthy way.
Here are the headlines if you missed the post yesterday:
• Group turnover was £243.0 million (2011 – £255.7 million). Reduction was due to the expected lower level of property sales activity.
• Revenues from football increased to £235.3 million (2011 – £225.4 million) with Commercial activities contributing £5.6 million of this growth.
• Operating profit (before exceptional costs, depreciation and player trading) in the football business was £32.3 million (2011 – £45.8 million) with revenue gains outweighed by increased wage costs.
• Profit from player trading of £26.0 million (2010 – loss of £14.6 million) with gains from a number of significant player sales, including Cesc Fabregas and Samir Nasri, partially offset by higher amortisation charges.
• Low key year for property business with an operating profit of £2.2 million (2011 – £12.6 million) as Highbury Square project draws to a satisfactory close.
• Group profit before tax was £36.6 million (2011 – £14.8 million).
• Cash and bank balances amounted to £153.6 million (2011 – £160.2 million) at the balance sheet date and as a result the overall level of Group net debt was stable at £98.9 million (2011 – £97.8 million).
So the good news is we’ve managed to add £5.6million to the commercial revenues. So we’re growing there. The fruits of our infrastructure overhaul are on track. Operating profit is down because of player wages going up. A staggering feat despite losing Nasri and Cesc off the wage bill! The big one though… cash in the bank.
So when I think about self-sustaining, I think about a man out in the woods, living off the land… surviving. So when Arsenal talk about self sustaining with a £153million sitting in the bank, I kind of don’t think of us being self sustaining. I think of us as being cash horders. The term ‘self-sustaining has the psychological connotations of us struggling like Everton. A bit rich when you consider our wage bill and turnover being amongst the biggest in football.
You never really hear United talk about being self sustaining or any of the other major clubs in Europe. We’re obsessed with it… I mean, we’re so obsessed with money, the opening paragraph from our Chairman says…
‘We have invested in the team and in the Club’s infrastructure as a whole and this will continue. UEFA’s new financial regulations have added a further emphasis to the need for a sound financial model.’
I mean seriously, when are we going to stop going on and on about our sound business model and how future proof it is? It’s like we think if we talk about FFP enough, it’ll come true and all of a sudden, every club in Europe will cede power to our almighty business model and we’ll be the only club in the world allowed to buy players.
That £153million has about £80million that is committed. So we’re looking at cash reserves of £70million. That’s money we’ve once again not invested in the squad. That’s money that’s once again sitting there doing nothing, Now , I know it’s going against the grain to talk like this because we’re winning. However, you have to cut past that and not let your views on this money be tarnished by the now. A season spans more than two months. We’ve come out of the summer having sold two of our best players and not replaced them. Now, that might be a masterstroke… however, I’m doubtful it’s going to win us the league… and that’s what we’re all here for right?
Is the objective of Arsene Wenger to turn Arsenal into the greatest club in the world? It is. So why did we scrimp on the summer? Why are we in a situation where we’re arguing the merits of whether Theo or Gervinho should play up top for us… neither player a natural or gifted striker. We’ve got £70million going spare… shouldn’t that be used for buying in a proper front man with pedigree? There’s literally no one we can’t afford with that sort of money.
Some might like the fact we do things on the cheap, however, I find this idea of celebrating lavish cash reserves a bit empty when we don’t have a squad capable of winning the league or Champions League. I find the concept of celebrating a business model that has directly resulted in our best players leaving every year for 7 years absurd. I look at £70million and think… jeez, you’re kind of telling the world and his wife where your priorities 100% sit.
So on the eve of what is going to be the biggest grossing gate in Premiership history, with no ticket going for less than £60, how do we feel about that £150million? Shouldn’t the club be giving something back to the fans if Stan Kroenke has no interest in investing in the squad? I mean, really, when you think about it, the most expensive season ticket in the world should have some correlation with 1) Investment and 2) Success. I’m not seeing much of either. Our club keeps foghorning about how much money it’s making off the back of our yearly investment. It keeps telling us FFP is great despite it not doing anything to prevent owners taking cash out of clubs or hiking up season ticket prices. In fact, all FFP seems to be good for is increasing the value of clubs assets… and we all lap it up?
So all in all, it’s great news we’re making money. It’s great news we’re not going broke. However, £70million cash in the bank with a squad that likely won’t be competitive isn’t a cause for celebration, it’s a cause for introspection we know won’t come.
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Drop by tomorrow for the Chelsea preview.