Gunners the Richest Club in Britian

September 24, 2007

Taken from BBC News:

“Arsenal have become the first English football club to break the £200m income barrier.

Their results for last season, the first in their new Emirates Stadium, sees income rise to £200.8m, a jump of £63m compared to the last year at Highbury.

The improvement brings Arsenal into the big league of European earners.

Manchester United will have to show an increase of £32m for last season to match the Gunners, while Chelsea will have to improve their income by nearly £50m, Liverpool by nearly £80m and Tottenham by £127m.”

This is indeed very good news for the club and gooners all over the world. It is another reason why Arsenal does not need a sugar daddy to bail us out in order to compete in England and in Europe.

The club has always been (and will always be) self-sufficient. The way Arsenal is operated stems from being a prudent business first, then passionate football club second. We are not like Leeds who will spend money at all costs in hopes of reaching success, and we are patient enough to develop our players into stars, rather than buying establish ones in hopes of instant glory.

Some would argue that once Wenger leaves, the next manager may need to spend more money on the transfer market to buy instead of breed star players. Not a problem, the revenue at the Emirates is sufficient to provide the next manager a healthy sum for the transfer kitty if needed, it’s just that currently the fact that wenger isn’t spending much is an added bonus and should not be expected as the norm.

Our players salary is only 50% of the revenue. I think most NHL, NFL, MLB teams pay close to 75% on player salaries, and I think Chelsea probably pays 200% (lol!)

With regards to our £345m debt, there is an annual budget to repay portion of the principal on top of the annual interest, and would be repaid within 10 years. The only worry I would have is that if Arsenal gets taken over, the new owner might do a “Glazer” and just make minimum interest payments on the loans while pocketing all profits and leave the club (and supporters) to save themselves.

What are your thoughts?

Posted by neova | Filed Under Mailbag 

Comments

15 Responses to “Gunners the Richest Club in Britian”

  1. 4_Arsenal Says:
    September 24th, 2007 at 1:23 pm

    We’re rich bitch!

  2. 4_Arsenal Says:
    September 24th, 2007 at 1:28 pm

    Seriously, though. It does seem that they are managing their money wisely. Still being a fairly unrecognizable team in the US, they must be doing something right if they are beating the likes of ManUre and Chelski!

  3. Seattlegooner Says:
    September 24th, 2007 at 2:06 pm

    According to soccernet.com. Arsene’s transfer kitty will be about 71M pounds. Of course that means that he will probably bring in a couple of 15 year old kids and stash the rest away for a rainy day. Nice to have on hand though, particularly since Wenger seems to have a preference for buying in January.

  4. DannyT Says:
    September 24th, 2007 at 2:13 pm

    I still think a takeover is likely. Usmanov has a big holding, as does Kroenke, and Fiszman is another massive shareholder sitting in Switzerland counting his diamonds and not even bothering to attend Arsenal matches.

    They are ALL in it for the money, and the future is all in their hands. In fact, Fiszman sold £3.9 shares in March to Kroenke – so it’s not exactly a home banker that he won’t sell his entire holding sooner or later to the highest bidder – who will doubtless be Usmanov.

    A lot depends on Fiszman’s relationship with Dein, and to be honest it wouldn’t surprise me if Dein knew more than he’s letting on otherwise he wouldn’t have gone into this joint venture in the first place.

    The fact that Arsenal are turning over massive profits only makes them more appealing to investors – not less. I think our best hope is that the shareholders just move the money around for profit and then f**k off until a true supporter takes a big stake in the club.

    I would like to think that ultimately the supporters can have a big say in this. If they don’t want Usmanov they can make it quite clear to him – take over the club and we’ll stop buying merchandise – then we’ll see what happens to your profits. If the supporters have principles this could be achieved, but usually they don’t.

  5. Biggun Says:
    September 24th, 2007 at 2:53 pm

    As you say Danny, it could be achieved, but usually don’t…….If you remember ManU fans said/tried to do the same when the Glazers took over, but it hasn’t happened. Fans are in the stands and I see tons of Rooney/Ronaldo shirts. For f****sake, I have even seen Hargreaves shirts…………….yes Hargreaves!!!!!!!!

    Anyway, it’s good to see how wise money management has gotten us this far adn that we don’t outside investors……but we are now even more attractive to investors and a takeover will happen, whether we like it or not………

    I personally don’t.

  6. irishgunner Says:
    September 24th, 2007 at 4:19 pm

    (1) Our total debt is 345m but nearly 100m of this is for the Highnury Square development. In fact our debt is likely to get bigger before it gets smaller as the property stuff plays itself out. Revenue from property will be about 300m but we will probably need to borrow about another 100m or so to finish the development. This is safe enough as 90% of the apartments have been pre-sold. The long version of the report says that we will clear 90m after repaying the property debt.

    (2) As a result the stadium-related debt is 256m restructured on a long-term basis (25 years) on fixed-interest bonds giving us an annual repayment of 20m. Out of football-related turnover of 177m, that is not too bad, especially as that figure will rise with the new TV deal. It is also a year when we went out of the Champions League in the first knock-out round. Interestingly, the Glazers tried to refinance into long-term bonds a few months ago but the markets wouldn’t buy it. We got in before that.

    (3) I agree with DannyT that Arsenal is very appealing to investors. I don’t know how the share price translates into overall club value but Usmanov was buying at 10,000 with the share price at 8,300. Assuming that the share is undervalued, and I was a Man Utd supporter with the money, I would buy Arsenal and milk the profits for the next four or five years. The young team that Wenger has assembled needs relatively little investment compared to the age profile of equivalent teams (and he has an under-18 team beating their peers 7-1 and 5-0 every second week to replace them). The bigger stadium and the increased success should generate huge revenue. The lower wage costs and lower transfer expenditure mean it would be a great buy compared to any other football business.

    (4) The current board have done a tremendous job. Apparently, it was Fizman and Edelman who along with Wenger pushed through Ashburton Grove and all three deserve the credit for the financial position we find ourselves in. Those on the Board who pushed to buy expensive players that Wenger never wanted and who wanted us to move to Wembley were very wrong. Even if they (Dein) had Arsenal’s best interests at heart he called it wrong on the big picture. How do we know he has got it right in backing Usmanov? After all six months ago he was backing the American.

    (5) THERE IS NO NEED FOR OUTSIDE INVESTMENT. The stadium and the property development will generate enough money for Wenger’s successor. Bringing in outside investors (Usmanov or Kroenke) will only give them the opportunity to take money out of the club. They can always dump their powerless figurehead (Dein) after a few months. He has no shares and Red and White could fire him tomorrow. In fact, if Fizman signed an agreement to sell to Usmanov if Dein was dumped, Usmanov would dump Dein like a hot potato.

    (6) Unfortunately in reality there is little we supporters can do except express our opposition to a takeover.

  7. Kiwi Says:
    September 24th, 2007 at 6:32 pm

    Dein wants to be Chairman. Going by Hill-Woods comments some weeks ago the existing Board didn’t sanction this so he’s trying to achieve his aim via a new majority owner.

    Dein was a huge asset – undoubtedly. Yet perhaps Dein’s qualities were best utilised as an excellent Deputy within the structure of a mature Board and Chairman.

    Financially, what ever way you cut it we are top drawer. Our revenue streams are as sustainable as it gets. We are one of the best positioned clubs to finance ongoing success.

    The only reason I can see for needing a wealthy benefactor is to compensate for average/poor player transfer management. The infrastructure is now in place.

    Footballing Sugar Daddy’s simply don’t exist. Sooner or later you see what they are after. And it’s not a good business model.

  8. SCJonathan Says:
    September 24th, 2007 at 11:11 pm

    Irishgunner, thanks for the financial review. I have a little extra cash, where would you recommend I put it? Risk free, and about 10% return/year. Thanks

  9. Andez Says:
    September 24th, 2007 at 11:31 pm

    When we get to learn more and more of the info being reported on the net about Usmanov, I have to bite the bullet and agree with what Priate (whom I had a big arguement with previously) and co that it’s not welcomed to have someone like him to take over our beloved club.

    I do still wonder though whether a take over is avoidable. Indeed fans can out and have a say or threaten to not watching the game, buying the merchandise…. with Man Utd’s case, they even went on to found a new club – FC United. Still, it failed to stop Glazer family took the club over.

    Remember, United used to be the biggest turnover club in England as well. as DT pointed out, it would only make the club more appealing to the investors.

    Anyway, I guess it’s all up to the board to see if they are really as good as their words. ‘Cos the key to resist a takeover is all up to them. Fans alike can’t really do anything to alter the eventual outcome.

  10. Kiwi Says:
    September 25th, 2007 at 12:30 am

    Good for you Andez.

    I think it was Fred who said that he preferred Arsenal’s present structure of several major shareholders rather than 1 owner. I agree with him.

    I see 2 main advantages:
    1. Assuming you have a quality Board – it provides a check and balance and a variety of ideas. You tend to avoid dumb decisions and the club doesn’t become any persons plaything.
    2. It also provides greater continuity. If one key board member goes the organisation still continues. Other members know the culture and direction of the club. Just look at Dein’s leaving…..whilst it came as a big shock everything has ticked along. Not so with the 1 owner model – what will happen when Abramovich goes?

    Whilst I was originally adverse to Kroenke, my feelings have mellowed somewhat having read a little more about the guy. I now feel he would bring a lot to the table.
    He’s a sports man, a football man, a business man and seems to have a good reputation. So if he could integrate with the existing Board he could well be a valuable addition.

  11. Sheed Says:
    September 25th, 2007 at 5:19 am

    I hope after this you won’t slag Senderos anymore. After all he is the Arsenal Mastermind :) )))

    http://youtube.com/watch?v=ALLSjEYbL-8

  12. Andez Says:
    September 25th, 2007 at 6:07 am

    Sendy did study a bit of Arsenal history didn’t he?!

    btw, looking back @ that Pires tackle Vs Juventus, it was as good as a tackle u can ever see, Paddy never saw it coming.

    http://youtube.com/watch?v=t3rdf3CROsc&mode=related&search=

  13. live_dont_exist Says:
    September 25th, 2007 at 6:29 am

    Sendy has a few qualities that few footballers have. Well versed in many languages, cares about the club history and a few more which I’ve read but dont remember. Obviously he is not a dud.. its just his panicking at times that causes a problem. Hope he comes good in time.

  14. pirate Says:
    September 25th, 2007 at 7:22 am

    To takeover the club Usmanov would need 50.1% of the shares – the current board controls 45% directly and the way trusts,etc work I would not be surprised to learn that they had another 5% squirrelled away somewhere. At very least, Danny Fiszman who gave up counting his diamonds in Switzerland for a day has said that another lock up agreement is being drafted for the board to sign. To that end, a takeover looks extremely unlikely. Arseblog has some excellent links on the story today and is well worth a look. http://www.arseblog.com/WP/index.php and http://www.bigsoccer.com/forum/showthread.php?t=602658

    SCJonathan – you’re looking for 10% pa risk free: I have some nearly new sub prime cdo’s I could sell you and they’re AAA rated, what could go possibly wrong?

  15. USGunner Says:
    September 25th, 2007 at 12:06 pm

    The Club is financially stable, Wenger has just signed a new contract and our squad is full of young, up-and-coming players that should give us a good run for the next 3-5 years (about as long as can be hoped for in professional sport). Consequently, all that is really being talked about is a rearranging of the balance sheet and I’m not sure how that adds a whole lot of value. I know the members of the board are aging. Maybe it’s time they develop their own succession plan otherwise Dein do it for them.

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