Happy Saturday everyone, how was your Valentines day night? I can’t even remember mine! That’s how good it was…
Anyway, let’s talk football, because we all love football.
Arsenal announced their financials yesterday. Guess what? We have even more money than many predicted! £120m cash available to the manager to spend. Quite incredible. By the summer, realistically, we could have another £40m! So the manager could literally go on a Chelsea style spending spree all within the confines of ‘sustainable’… here are the highlights, which in the main, from a sporting perspective are actually low lights…
These were pulled together by Rhys who is a long time Grover that understands a bit more about the money than me.
1. Arsenal have continued to hoard cash in the first half of this financial year, the position improving £20m over a year before. They now have £143m in cash, of which just over £120m is free to use. This will rise by another £40m this summer.
2. The turnover is pretty much identical to last year, with the one-off property sales of last year being replaced with new commercial deals, extra Emirates Cup revenues and more TV money. Based on there being 17 matches in the second half vs 11 in the 1st half at home, annual turnover should get close to £300m. Revenue in the football segment is up just shy of 30% this year.
3. Arsenal’s net transfer spend in cash terms in the summer was only £12m. This is obviously due to spreading out transfer fee spending and receipts over several seasons, but it hardly shows the club pushing the boat out, does it?
4. Wages have gone up again, with an extra £9.2m for 6 months suggesting an increase in the wage bill close to £20m for the full year. That is what might be called ‘inflation-busting pay rises’, it being somewhere between 13 and 18% depending on what the actual total bill for football staff wages actually is.
5. The stadium repayment will see outstanding debt drop below £200m in 2015, which is rather at odds with all the fans and media pronouncements that ‘Arsenal have paid off their stadium debt’, doesn’t it?? The first 10 years will have seen £60m out of £260m capital repayments with quite a bit of associated interest added on. But as a percentage of annual turnover, the mortgage payment will have dropped from around 9% to 6% over a 10 year period.
6. The only reason the period saw a P+L profit is due to a £5m tax credit associated with changing government corporate tax rates. Otherwise they made a small P+L loss.
7. In cash terms, the first half is always less good than the second half due to the imbalance of home fixtures, so a loss of £10m is well within the bounds of a cash-neutral full-year wet of accounts.
8. The only real item of interest on the balance sheet is a £35m worsening of the ‘short-term debtors – short-term creditors’ position: not sure of the reason, but it’s nothing radical to worry about. Most of it will be due to increased wages, a £10m+ instalment for Ozil and less transfer payment income from old sales I suspect.
So there we are. Arsenal are well run, we turn in great financials, but we’re not exactly pushing the boat out. We have an owner who is so anti risk it’s embarrassing he opts to run sports clubs, we have a manager who is so absorbed in his one man mission to win things on a budget he won’t push for trophies and we have a CEO who kind of sits on the fence in case he’s told off.
A beautiful concoction that means we suffer top four mediocrity. I was speaking to a Leeds fan yesterday and he laughed at my Premier League ‘first world’ concerns, and he’s right, we shouldn’t moan… but it could be so much better. So I will moan.
In other news, Jose Mourinho has been drawing attention to himself which is dull as dishwater, but mildly amusing because however much you hate him, he kind of has a point on Wenger…
“He’s a specialist in failure,”
“If I do that in Chelsea, eight years, I leave and don’t come back.”
When you’re kicking on for ten years without a trophy, it’s difficult to really carve yourself out as being successful. There are, of course, many metrics of success, but let’s not make excuses here. If you’re paid £7.5m a year, your main metric for success is a trophy. You need to deliver something. You need to push the boat out to win things. You need to deserve that next deal.
I like the stability Arsene brings to the club, especially when you consider the mess that’s occurring over at United. However, we’re hardly capitalising on 6 clubs around us changing up there manager over the last year. Wenger has geared himself up for another failure this year… yet he has £120m in the bank. What would be the excuse this year?
‘Money isn’t the answer, even thought it’s the reason Chelsea or City have won something…’
What would be the justification for another deal if we’re being honest… we’re building something? Wenger has been building something for a decade. When do Arsenal put a stake down in the ground and say… Arsene, you need to win something now.
Who bloody knows. But take all emotion out of what Jose is saying, take away the fact it’s a classless comment… he’s right, and that’s why it hurts.
… it also takes the focus off Chelsea being the clear favourites for the league now.
Have a great day… I’m off to nurse a hangover and build some phone book bridges after sending message to all the single ladies.