Man City show flaws in Arsenal’s business plan

The Arsenal board, led by Stan Kroenke and Ivan Gazidis, tell us that they are doing the right thing when it comes to finance. The famous self sustaining model is lauded as the role model that all clubs should aspire to. Arsenal fans are reassured that the new Financial Fair Play rules will help to propel the Gunners to the pinnacle of world football while the Chelsea’s and Manchester City’s struggle to cope.

The figures released by Deloitte, which show the list of football’s biggest earners seems to indicate a less optimistic future for Arsenal, however. Chelsea have already overtaken us in the league of revenue, and City are on the verge of doing so. The reason for this is the success the club’s have achieved by spending money.

If the trend continues, City will soon be competing with Manchester United as the top English team on the list. There is about to be a big rise in TV money in the Premier league, which will give English teams an advantage over those from other countries, but it will also increase the gap between the top and the bottom in England, making successful teams richer.

There we have the basic flaw in Kroenke’s plan. By not spending money, we allow other teams to overtake us in football success. That then leads to them overtaking us in revenue. Teams winning things are more attractive to sponsors than those not doing. More of their games will be shown, while Arsenal will drop further behind, especially if Kroenke refuses to spend to try and stop the decline.

If Arsenal miss out on the Champions league places, the effect could be disastrous for years to come. The Arsenal board need to understand that a bit of money spent now could come back with interest in the next few years. Now is the time to invest, before the FFP rules kick in.

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100 thoughts on “Man City show flaws in Arsenal’s business plan

  1. true goon

    Your totally right,the saying “you have to spend money to make money” comes to mind.

    Top Gooner!. Agree or not?: Thumb up 152 Thumb down 15

  2. AFCEdwards

    You clearly have no idea of how the system works. The Deloitte list shows the income, not the expenditure which is what Financial Fair Play monitors, Man City are well behind in terms of FFP and Arsenal are not. More useless rubbish on this site that serves no purpose but to demean Arsenal. Fansite is not a word I would use here…

    ADMIN
    yes but the point is, if other teams are earning more then they can also spend more under FFP no?

    Top Gooner!. Agree or not?: Thumb up 166 Thumb down 23

  3. dal

    This is misleading as not all factors are taken into account. Where still doing very well.

    Top Gooner!. Agree or not?: Thumb up 77 Thumb down 15

  4. horlique

    this article is anti-gunner. stop saying wrong things about arsenal. if u spend 100m pounds a year and Makes 60m pounds is that a healthy business. why not just support manshitty and chelski.

    Top Gooner!. Agree or not?: Thumb up 46 Thumb down 25

  5. LFS HARRY OF AFC

    You’ve missed a few key details,
    Man city have lifted themselves due to their new sponsorship deal on the stadium, done by the owners brother… financial doping.
    Chelsea have gone above us because of them winning Champs league yes, but, I doubt they will do that year after year.
    We will be up there again next year due to our new Emirates sponsorship and new kit deal on the horizon.
    Also, neither chelsae nor city’s plan is sustainable.If FFP works our £150m kitty will be worth more like £500m.

    Top Gooner!. Agree or not?: Thumb up 78 Thumb down 14

  6. Dave

    @AFCEdwards

    Can you please post on here more. One of the few intelligent people here

    Top Gooner!. Agree or not?: Thumb up 21 Thumb down 12

  7. davey

    Loom if you read the full deloitte article it states chelsea will fall back behind us as winning the champions league was the only thing that upped their income and man city have only caught up as they have an outrageous sponsorship deal with etihad which is a cover for how they will get past financial fair play plus these figures dont take into account our new sponsorship deals raising our income by almost like £30 million a season especially with lower loan repayments we are far above both teams in terms of worth and income. I mean who can see chelsea winning the champs league again or man city who it seems cant play when in europe. Screw the oil barons play things arsenal will always be the greatest team in the world.

    Top Gooner!. Agree or not?: Thumb up 34 Thumb down 11

  8. Jim

    Why should Kroenke spend money when he’s got a manager who’s been making truckloads of money for him year in year out, by spending on bargains and still getting to CL. Silent Stan is a such a shrew investor. My hats off to him.

    Opinions divided. What do you think? Thumb up 17 Thumb down 24

  9. Nick

    While the Deloitte figures do only factor in certain aspects of the money situation it does point towards the fact that success does increase revenue. As true goon stated the old saying “you have to spend money to make money” does ring true.

    You win the EPL, CL, FA Cup, etc and it gives you are more firm position in negotiating new sponsorship deals and makes you much more attractive to new sponsors. It’s business and rather ironic given how much more “business” oriented our board seem to be than they are “fans” of AFC.

    Top Gooner!. Agree or not?: Thumb up 22 Thumb down 3

  10. joe gooner

    great win boys now do us a big favour and be consistent…off topic am glad chelsea were eliminated from coc……..coyg

    Rate this comment: Thumb up 8 Thumb down 0

  11. JackDeLeon

    From BBC: Unnamed club in for M’Vila was Everton – £6.2 rising to £6.6m with £48k wage. Rubin paying €4.5m a year post-tax

    Does this mean they’re buying replacement for Fellaini? Yesterday, GeoffArsenal said that we’re aiming to a lot higher than Diamé, could it be Fellaini?

    Top Gooner!. Agree or not?: Thumb up 23 Thumb down 1

  12. Sun

    It will be interesting to see if the rich owners of these clubs stick around once FFP comes into full effect.

    If they do stick around they will have to make sure their club is in profit or break even at the end of the season…. which means for teams like Man City and Chelsea the owner will have to pay money out of his own pocket to make sure the club does not violate the rules.

    With the wage bill that these clubs have, even if they were to win the Carling cup, fa cup, champ league and the prem they would still not earn enough to break even.
    So how long will the owners continue to bail the team they own out?

    Opinions divided. What do you think? Thumb up 6 Thumb down 6

  13. Smaryll

    I’m not sure this article is too far off the mark. Yes, Chelsea and Man City have high expenditure and City are guilty of manipulating the rules but what is to stop these clubs continuing to adopt similar schemes when FFP kicks in? I think FFP is a white elephant and will not stop these clubs from spending what they like and window dressing their numbers to fit with the FFP rules. The bottom line is success on the pitch, Arsenal have supporters worldwide because of the great teams in the first half of Wenger’s reign and merchandise and sponsorship deals are currently good because of this popularity. Lack of investment in the team now, and subsequent lack of success, will lead to a reduction in that fan base and an increase in those supporting the likes of Man City and Chelsea. Arsenal will need to grow these revenue streams at a better rate in order to compete with these clubs who are bankrolled by their owners.

    Top Gooner!. Agree or not?: Thumb up 20 Thumb down 2

  14. Graham

    The football rich list is a load of bull**ks. Revenue is all very well, but what about profit and cashflow. The report is very misleading. Many of the teams in the top 20 do not make any profit and are struggling with their cashflow. This is what the report should have focused on.

    As for Man city, their growth in revenue is coming from commercial deals that are anything but commercial. The owner’s brother and relatives are making commercial deals with city that is worth a lot more than a club of city’s reputation should get. How is this growth? City’s player wages is 150% its turnover. Again, how is that growth?

    Chelsea won the champions league. I am also guessing there is some revaluation of players value in there. Basically any team can revalue how much they think their players are worth. Let’s say they valued Torres at £70m. The extra increase of £20m is automatically revenue. Chelsea’s player wahes is almost 90% of turnover. The report also only looks at Chelsea the club, not the holding company. The holding company has over £800 million of debt, effectively what they owe Abramovich.

    Before anyone kicks off about us going backwards, these numbers need to be taken with a bucket full of salt.

    I am not saying we are much better, but the level of our debt is much lower than many of the clubs on the list and we are profitable. Only problem we have is making silent stan spend some money on the club instead of shopping centres and ranches.

    Top Gooner!. Agree or not?: Thumb up 18 Thumb down 2

  15. gonnerboy4life

    Reported Diame does not want to leave West Ham.
    Chance for us to buy even a bigger player.
    I would like THREE players. Villa, Hummels and Wanyama.

    Top Gooner!. Agree or not?: Thumb up 12 Thumb down 1

  16. micro

    People keep asking why Kroenke or Usmanov is not spending money on Arsenal, do these fans know that Arsenal is a non quoted PLC owned by Arsenal holdings, and one of the few clubs in the epl operating under that business model? Lack of understanding of various business models available and how they are regulated, make many Arsenal fans pour their ignorance into these sites, some times I just laugh. The fact that all are playing football does not mean they are regulated by the same rules as businesses.

    Opinions divided. What do you think? Thumb up 15 Thumb down 9

  17. kzm

    if they are top earners n make billions a year whats in it for us fan?? if a team doesnt produce results in my opinion its not a top team.

    Top Gooner!. Agree or not?: Thumb up 12 Thumb down 0

  18. CHARLIE GEORGE

    The other flaw in kronke’s plan is that sponsors pay for winners not for teams that come forth. Gazidis was cooing over the emirates stadium deal which is worth 150m but the MC eithad stadium deal is worth 600m…city have a loophole in the FFP and I’m sure chelsea could find a similar loophole….FFP actually means more profit for arsenal board that all

    Top Gooner!. Agree or not?: Thumb up 20 Thumb down 1

  19. That Gunner

    didnt have to read this to reply,Man Shitty stock rose because they were double cup winners last year,no other reason,they’ve spent millions bcause their owners are billionaires,dont envy them bcause Uzmanov makes Roman Abramovich look POOR!

    Top Gooner!. Agree or not?: Thumb up 15 Thumb down 4

  20. true goon

    These people talking about FFP do you really think its gonna work?look what PSG did they gave themselves a sponsorship deal of 150m a year,they got around FFP b4 its even started.Alot of you guys need to stop buying Gazidis’s rubbish,even when it comes in the rich teams will still have all the best assets(players).And they will find a way around it.

    Top Gooner!. Agree or not?: Thumb up 12 Thumb down 1

  21. AFCEdwards

    @Admin, yes a club can spend more if it earns more but they have to comply with FFP to get into that position. Man City and Chelsea are not and will have to lessen the influence of their owners, especially as the majority of Man City’s earning came through their backdoor sponsorship deal and not the success (only the premier league, they went out of the Champion’s League and won no other trophies) they achieved. It’s also worth noting that Arsenal made much more than last year and are in a better position in terms of points than last year and in a position to spend further with no risk.

    Rate this comment: Thumb up 4 Thumb down 6

  22. true goon

    @AFCEdwards

    your wrong anyway,FFP measures say that a clubs wages must be below a certain percentage of a clubs overall income.

    Rate this comment: Thumb up 6 Thumb down 0

  23. That Gunner

    Ive heard we are locked in negotiations for B.D Mat Hummels,we have lodged a 17.1 mil bid,I think their holding out for at least 20mil,if this is true,I PPRAY TO GOD Wenger forks out that extra cash,hes a REAL BRICK and hes committed to his defensive duties..

    Rate this comment: Thumb up 7 Thumb down 1

  24. KickuPtheArsene

    Been saying the exact same thing for years now. Without continued investment, we lose market share. Loss of market share is loss in revenue. Loss in revenue means we can’t invest the same amounts as before. And the downward spiral continues.
    As in any business – if you want it to grow, you have to plow cash into it. In football especially. The argument against is that money doesn’t buy success. That is true to some extent, because money spent badly doesn’t equal success, but money spent well does. And the more you have to spend (wisely), the better chance of success. But if you don’t spend? …. No chance.
    The issue is we NEED to spend money now. But we don’t. Furthermore, we sell off our best assets (or refuse to pay them what they are worth – RVP) and then call the revenue from those sales “profit”. In what universe does selling the thing that will make you money (assets – good players) mean you have made a profit??!?! All you have done is diminish your chances of success at what you are trying to accomplish – win trophies. It’s like being a formula 1 team, that sells its best car (which they have worked on, developed, & fine tuned), only to sell it and buy 3 regular sports cars to replace the one F1 car … Who cares that you have 3 cars for the price of one F1 car! It won’t help you win!
    But as is ubundantly clear – winning is NOT a priority for the owner and CEO of Arsenal. A good looking balance sheet is. And that is what will ruin us if the strategy doesn’t shift soon.
    I’m not saying be foolish and simply throw money around (look at QPR). But when we have a part owner (30%+ – Umasov), who is willing to invest, and a majority part owner (Kronke) who refuses to spend a cent on the club from his own pocket, isn’t the proof clear enough? All Kronke wants is to “self-sustain” the profits into his own pocket.
    Not willing to invest, but I am 100% sure he will be happy to put money from the club into his bank account. 100% sure.
    Nuff said.

    Gunner through and through.

    Top Gooner!. Agree or not?: Thumb up 12 Thumb down 0

  25. true goon

    @That Gunner

    i pray your correct.But would they let him go now?they’re still in the CL?

    Rate this comment: Thumb up 2 Thumb down 2

  26. KickuPtheArsene

    We paid £12-15mil for Cazorla. £10-12mill for Giroud. There is NO WAY Wenger will pay £20mil for Hummells. Wake up people.
    (It’s transfer silly season … Rumours are getting more ridiculous as we get closer to the end of the window).

    Opinions divided. What do you think? Thumb up 11 Thumb down 6

  27. John-Legend

    Everything is juƨτ wrong with our club!!!

    This is unfair from these board members.

    Top Gooner!. Agree or not?: Thumb up 15 Thumb down 2

  28. Tron

    This bloke ain’t got a clue ….. I’m one of arsenals biggest critics at the moment but if there is one thing u can’t have a pop at , it’s the way the club is run !

    We might b desperate for players but Jesus Christ do the books look good !!!!

    Opinions divided. What do you think? Thumb up 5 Thumb down 9

  29. Charlie

    The article tackles an important point. Revenue is linked to success and therefore success will be linked to expenditure under FFFP. If Arsenal fail to qualify for Europe they also lose out on 30m in television revenue don’t forget. Then you have the likely drop in ticket sales. Failure to achieve a top 4 finish this season would lead to Arsenal struggling to get back into the top 4 in the future because their rivals will have more to spend and will already be ahead. All this sensible accounting is worth nothing without success on the pitch, the club can still get trapped in mid-table for a number of seasons.

    Rate this comment: Thumb up 7 Thumb down 2

  30. Mehrzad

    good article,
    nowadays in sport you have to concentrate on the revenue more than cost. AW and company are totally wrong thinking that fair play will help Arsenal. There are 2 main reasons:
    1) There exit many ways to inject money into the club, show higher revenue and reduce the debt. So the real fair play will never come to effect
    2) there are so many crazy billionaires in the world that love to own a top football club and wont hesitate the opportunity no matter cost

    so if this trend continues and AW, board and SK dont change their strategy, the outlook is not promising at all.

    Rate this comment: Thumb up 4 Thumb down 1

  31. Losing Hope

    Under financial fair play laws teams like Chelsea are running a profit in the last year they can show that they are moving closer to abiding to fair play rules and will not have a problem. Neither will Manchester United, Barcelona and Real Madrid. The debt that you hold does not count against you. This article is correct because if we don’t spend money now we will not have the money from tv, champions league etc.. to compete with the top and run a sustainable business model. Imagine where we would be the last 3 years without champions league money. We have the sponsorship levels because we are always competing in Europe and finishing in the top 4 when this stops happening it will start a downward spiral that can’t be stopped even with significant investment. We need to buy now!!!!!! Also Demba Ba 8 million 75,000 a week, Mapou Yanga-Mbiwa for 7 million and around 50,000 a week and the fact we could have had Mata for 17 million last year and 70,000, before we waited a month makes us look like idiots. Even if we sign 2 good players we still don’t have real depth.

    Rate this comment: Thumb up 5 Thumb down 1

  32. @OnlyOneIceFM

    Everyone is talking a bunch of irrelavant facts! Look its as simple as this! If you have a hitman like Cavani & Villa a defence with hummels and mbiwa & our midfield! I’m sorry but every team in the world would fear the name Arsenal! Man City are stupidd because they just buy players that shine “now” without monitering there progress, the likes of Balotelli, Nasri etc…. But Cavani, Villa etc have been scoring for years! And with defenders like hummels etc! You only have success! So plain & simple spend on the right players the money you will gain will be major! And for years to come!

    Rate this comment: Thumb up 7 Thumb down 4

  33. craig2500

    The point of this article should be to show that our commercial deals have been terrible since our move to the new stadium compared with other clubs like Utd. Because Chelsea and City have just won titles they have generated new deals and sold more merchandise and along the way picked up a whole new generation of support. Arsenal have stagnated if you follow the Delotte tables year on year and even though we have a stable bank balance it wont be long before Utd have the same. Thus Utd will have won all those titles, spent all that money on players but better still will eclipse all the debts into massive profits outdoing Arsenal in every area. This is why Usmanovs business savvy is needed to ramp up the commercial deals so we can compete with Utd on funds generated within the club.

    Rate this comment: Thumb up 5 Thumb down 2

  34. AmericanGooner

    FFP will do nothing.

    The billionaire owners will sponsor their shirts and stadiums for crazy sums that will keep their spending at current levels.

    Rate this comment: Thumb up 5 Thumb down 2

  35. 2gunsUp

    I wonder what arsenals profit margin would be if they didn’t sell their best players year after year. In fact it seems selling players for a major profit is what keeps arsenal alive.

    Rate this comment: Thumb up 5 Thumb down 3

  36. mark simpson

    Hello!!! the report lists revenue not profit. Shitty are paying more in wges than the money they have coming in. They are in huge debts. Also they will not win premiership this year so that figure will go down next year. And in not too distant future the owners will get bored pull out and City will be f##ked.

    Rate this comment: Thumb up 2 Thumb down 4

  37. craig2500

    @ AFCEdwards – If you took a deep breath before ranting you might realise that our excuse for not competing was not having funds and getting into debt. Meanwhile United have spent,won and will now cover that debt easily while also expanding a 70,000 seater stadium. They have now arranged a £350 million shirt deal with Cheverlote which will no doubt be spent on players like Zaha, Wanyamer and if wanted even Ronaldo. Selling RVP need not have happened if we were bringing in MORE money so Bobs right to bring this to our attention

    Rate this comment: Thumb up 5 Thumb down 2

  38. KickuPtheArsene

    @tron

    Read my earlier post. Good looking books does not reflect how the profit is being made – by selling our best assets. Not a very sustainable endeavour. (or maybe you are suggest we SHOULD be a selling club?). Yes we should manage our club well. But to refuse ANY external investment is, and will hurt us down the line. When I think of the players we have missed because we are unwilling to go a little further instead of counting our pennies. Those players ARE succeeding at other clubs, and the one we had, we have also lost for the same reasons. I agree with the article – our model is flawed. The problem is it won’t be evident till its too late to correct. (I hope I am wrong, but I’ve been following the trend, and it ain’t in the right direction).

    Rate this comment: Thumb up 6 Thumb down 1

  39. craig2500

    selling the palyers is not for profits its for having money for the transfer windows and to cover the £15m a year interest payment on our loan. Any money left over goes into the bank so that for FFP purposes we have the money to cover the loan which stands at around £100m. Paying the loan off early will incur penalties which is why we wont pay it off now

    Rate this comment: Thumb up 1 Thumb down 2

  40. HW123

    Guys

    Its not about the income. Its about balancing the books between the income and the expenditure. These clubs that are mentioned higher than Arsenal have bigger costs than Arsenal, hence that we will do more than them. just keep in mind their Salary bills , they are huge compared to ours. They will not be sustainable, if they keep going like this, Arsenal will be

    Arsenal 4 ever

    Rate this comment: Thumb up 1 Thumb down 2

  41. Nick

    City got 400 million pounds in sponsorship from Etihad, way over the value of the sponsorship. Etihad is owned by owners of City. Therefore the sponsorship inflates City’s earnings. It was really money-laundering vis a vis FFP. that said, I agree that if Arsenal spent more and built a winning team their revenue would explode.

    Rate this comment: Thumb up 6 Thumb down 0

  42. vp

    @ KickuptheAresene

    Absolutely spot on mate. No risk= no return. Any organization who looks to totally eradicate risk is anti growth. That’s exactly what we’ve become.

    Rate this comment: Thumb up 2 Thumb down 2

  43. Pete

    @craig2500

    Please explain to me how paying a debt off earlier will incur a penalty.

    If I repaid my mortgage now, I’m fairly certain that I would save money, less interest, and possibly even negotiate a discount.

    I severely doubt my bank would ask me to pay extra, to do something that they want me to do.

    Rate this comment: Thumb up 0 Thumb down 2

  44. Gigi

    Arsenals business plan is:
    1. safe
    2. healthy
    3. with steady but not huge revenues
    Kind of a low rosk investment, you sleep better but you earn less.

    Chelsea and City are:
    1. Risky
    2. Sweaty
    3. Huge investments that could end up being a failure, but when the right bet is in: HUGE REVENUES.
    Kind of like the high risk investment, you sweat and have nightmares, but when you win, you WIN BIG.

    Rate this comment: Thumb up 6 Thumb down 4

  45. Gigi

    it is as simple as if you invest a lot you can lose a lot, but you can earn a lot.
    Example: you hit the jackpot at the lotto. If you bought one ticket you might get ONE million, but if you bought 10 tickets then you d get 10 million?

    Rate this comment: Thumb up 0 Thumb down 5

  46. MDOwn

    Your right, they have shown us the light! We should use our billionaire owner’s oil money and buy any in form player even if we have options in that position. and offer them all 250k+ a week to play for us and then when they drop form sell them for a massive loss… Cause you know we have all that oil money just lying around… They have spent 400+million in pasr 5 years. We don’t have anywhere near that much! Be REALISTIC!

    Rate this comment: Thumb up 1 Thumb down 2

  47. Smaryll

    @ Gigi: Er, no. If the lottery had a jackpot of £1m and you bought one winning lottery ticket you’d get £1m, if you bought 10 winning tickets each of those would be worth £100k (1/10th of the jackpot) so you’d still only get £1m. At 10 times the cost.

    Rate this comment: Thumb up 5 Thumb down 0

  48. craig2500

    @ Pete you house payments and £300 million pound loan dont compare at all. The bank lends the money and wants to be paid for doing so, first they do this by interest payments which we do every year at £15m. With the loan comes arranged payments or payment plan agreed and signed by both parties, if the money is payed early the bank wont get interest payments so will then have put in a caveat stating a charge to Arsenal. This is why Arsenal are £100m in debt and have £100 in the bank as this covers the FFP requirements.

    Rate this comment: Thumb up 3 Thumb down 1

  49. Neil

    The problem is Wenger keeps getting top 4, and the money generated is not so different to any top European club. He keeps doing it without spending and I get the feeling that he’s being egged on to keep doing it.

    Let’s face it, Kroenke is a business man and he will be happy to get as much as he can for as little as possible.

    Unfortunately, as good as Wenger is, he cannot perform miracles year in year out. Something’s got to give.

    He may just pull it off this year, but I PRAY that Wenger has asked for a massive fund to buy the quality needed.

    I was interested at Arsene’s comments before the West Ham game, in which he said it was not necessary to divulge every detail of the inner workings of the club.

    That can be read two ways:

    1) We have no money to spend as Stan is a tight sod, but I don’t care as I get 7m per year. So be quiet you plebs.

    2) I’ve had a few rows with the board. I thought they were good people but it appears not. However, I threatened to leave and they shat themselves. They gave me the money and I’m gonna do my best.

    I hope and pray it’s option two.

    Rate this comment: Thumb up 2 Thumb down 0

  50. craig2500

    Usmanov has stated he would pay the debts off using the funds in the bank and cover the charges/interest payments with his own cash. That way we would be free and clear no worry

    Rate this comment: Thumb up 5 Thumb down 2

  51. mike

    Revenue does not equal earnings. And looking at a single year is disingenuous. Man U, City, etc take on considerable leverage to spend more today, while hoping the penalty limits expand in the future to allow them to service and repay that debt. Its a bet the system will buckle.

    There’s certainly a balance, but this system puts the focus on sourcing talent. There are similar systems in the US (NBA, NFL, MLB). The teams that continue to thrive are those that are the best at evaluating talent.

    Gigi – i hope that was a joke.

    Rate this comment: Thumb up 1 Thumb down 0

  52. Smaryll

    @Craig2500: I agree that lending agreeements will have these clauses (mortgage agreements do as well) but how do you know these clauses haven’t expired? Have you seen the documents? If these fees are still applicable I’d like to see how punitive they are as holding £100m (example) in the bank to cover £100m of debt that was taken out 6 or 7 years ago (when interest rates were higher) does not make economic sense.

    Rate this comment: Thumb up 2 Thumb down 1

  53. Wengy Pls

    Arsenal is reminding me a lot of Apple. Both are known for their beautiful products (although potentially overpriced for consumers) but have taken a dip recent years due to their failure to reinvest in their groups and are simply holding cash. This lack of reinvestment has led to great financial results for those at the top, but new threats have started to damage their competitive advantages (Nokia/Samsung for Apple, Man City/Tottenham for Arsenal) and now both are facing a decline because of it.

    At the same time, however, both are fully capable of being elite again and their fans/shareholders hope that this recent decline in results will be the catalyst that gets management to reinvest and rise to the top again.

    Rate this comment: Thumb up 2 Thumb down 1

  54. dboy

    Here is the best selfsustaining model. Customer is King! And if Arsenal continue on the route they’re taking that is not competing for honours and coming up trophyless, buying crap players etc. We will defenitely see more and more empty seats and that would mean less profit and not even ffp would help us! As a matter of fact I don’t see ffp working 100% because like everything else it still has to be tested. So if Gazidis and Wenger are relying completely on ffp. I would say we will have two more trophyless seasons.

    Rate this comment: Thumb up 9 Thumb down 2

  55. stephen187

    loosing out on 30m by missing champions league..loosing £££ of potential sponsors, and all the youngsters/emerging markets buying citeh/cheslki shirts…ivan’s plan is sooo genius isn’t it..=l and for ffp..citeh and chelski owners will use other companies from there group to offer ridiculous sponsorship deals..30m spent and removal of wage cap 5 years ago and we would regulary be winning the prem.

    Rate this comment: Thumb up 6 Thumb down 0

  56. Neil

    Looking at some of the earlier comments on this thread, it appears that it has been hijacked by Stan’s ‘Gestapo’. Just like one or two other sites when anyone discusses finance.

    Look you idiots…I’ll make it clear for you.

    How are we BOTTOM of the table of ALL current PL clubs when it comes to money spent on players from 2008 to date, after deducting player sales?

    Players. You know. Your PRODUCT!

    I’ll tell you why. Wenger keeps pulling it off (top 4) and you are loving it.

    Just give him a massive wedge of cash or GTF away from my club.

    Rate this comment: Thumb up 2 Thumb down 4

  57. Richard

    I don’t think any of Stans businesses are successful, profitable yes, success is just an accident if it happens

    Rate this comment: Thumb up 3 Thumb down 0

  58. craig2500

    @ Smaryll dont ask silly questions obviously i havent seen the papers or arrangements.

    Loans and mortgages are paid in different ways Fixed term, variable term, interest only and so on all im am doing is stating what i know from reading every article in regards to the matter for the last 7 years. We have £100 million in the bank right now, if we wanted to pay off the loan from what i know it would mean maybe a year or two years interest as the loan agreement states we pay it for another 3 or 4 years. The clubs view is why waste £20-30m when you dont need to especially when the money in the bank is also earning interest.

    Rate this comment: Thumb up 1 Thumb down 1

  59. G-Force

    Let’s just get this out in the open. Ar$ene, Gazidi$ and co. have been preaching about FFP for years. You could liken these greedy people to lobbyists waiting for the bill of FFP to pass in congress (UEFA).

    The reason why they want the ‘bill’ to pass so much is because they CAN CONTINUE to do what they are doing now – only this time, with greater authority as they will now be backed by “congress”, which means that nobody can question their greedy methods.

    In essence, it all comes back to one thing – securing their PROFITS. So if Arsenal fans expect that the club will be in a better position and start spending money on quality players IF FFP kicks in – you are severely way off. Arsenal will not spend and will continue to operate the way they do now. Other clubs will find other ways around it.

    That’s why Ar$ene, Gazidi$, $tan and co. OUT!!!!!!

    Rate this comment: Thumb up 7 Thumb down 2

  60. zdzis

    This piece is misguided on so many levels…

    First of all, since when is self-sustainability Kroenke’s idea? He just bought into this, we were already doing it well before he came in! Just shows how long you’ve been looking at Arsenal.

    Second, the FFP have already “kicked in,” even if no top club has yet been caught red-handed. The rules have been in effect for a year or so already. The question is not “will they be introduced?” but “are they gonna affect Arsenal’s situation?”

    Third, a club’s revenue determines its financial position, but Deloitte’s table doesn’t determine anything at all! Even if Arsenal drop out of the list and continue to break even, the club will work just as well as it did before. Also, ManU (and maybe Liverpool) aside, English clubs lack the financial base Arsenal enjoys. They need powerful sponsorship deals to pull of their financial stunts. This means that in case of a cock-up the club will go down. If the deals turn out not to fulfill the FFP, the money’s gone. If the oil money goes, the club’s gone. Self-sustainability is simply a requirement for a top club, and when it can sustain itself, its hands are free to grab the best sponsorship deals and use that money on new players, facilities, staff.

    I don’t always post comments on this site, but when I do, it’s because of this kind of crap.

    Opinions divided. What do you think? Thumb up 4 Thumb down 9

  61. Big Gun

    This is old news, the likes of which most of the fans have been well aware of for over 4 years now. But then you fans like Dr Pepper and a few other Pro Kroenke fans who would bet their life savings on Kroenke and Gazidis’ plan being water tight and effective in approximately 2 years.

    End of the day, the footballing industry and the global corporations that have invested, are all aware of one thing, which they take advantage of on a daily basis. This ‘thing’ is called human nature. It is human nature to want to be associated with success. No one really wants to be supporting a losing team, unless you are absolute die hard fans (which the majority of fans in England are.) The problem is that the market is not aimed at the die-hard fans. It is aimed at the overseas market, where fans are like chaff blown in the wind, supporting a different team every few years as long as they are winning. The amount of Chelsea and City supporters that have suddenly appeared here in my country is just mind blowing. Now the multi-billion dollar companies that have tied themselves in with the footballing industry are catering for ‘these’ types of people. T.V rights, endorsement and sponsorship deals for merchandise are all aimed at the overseas market. The fans in England are small fry to them, because to them, that market in England is rigid and not as lucrative.

    Arsenal are getting the short end of the stick, because no one really wants to be associated with them, especially not the new generations being introduced into football. We NEED to start winning trophies again. To do so, a few things MUST change. The wage structure needs to be altered to accommodate our star players in keeping them and also to make it more attractive for new signings. After all, football to these players is a profession and their lively hood – a job if you will. Secondly, as we are all aware of, WE NEED BETTER PLAYERS to mount a serious challenge for some titles. It’s not like Arsenal have a complete rubbish squad. We are 90% there. Just 2 or 3 more quality players and we can be a force to be reckoned with.

    Arsenal need to start spending. Period. We need to start winning stuff SOON like next season soon. Otherwise we will just fall further into mediocrity and it will take EVEN MORE money to pull us out.

    I really hope and pray Wenger signs some quality in the next few days.

    Rate this comment: Thumb up 5 Thumb down 0

  62. zdzis

    Also, the poblem with FFP is not that it will solve Arsenal’s “woes” – how would it do that?? FFP will simply put a premium on transparency, limiting, perhaps, the possibility of signing an owner’s firm as a club sponsor.

    Arsenal don’t need to be saved, they just need to keep on doing their thing for a couple more years. Whether FFP “kicks in” or not, the club will be in the clear anyway.

    Rate this comment: Thumb up 0 Thumb down 6

  63. gonner4life

    I think the club is run very wel with only the debt to pay off thats fine no worrys der, Why r people makin a issue of this article it’s all bullshit anyway and us gonners r fightin amongs r self’s. Has anyone done der home work on this w**ker called stan kroenke i saw on a site sayin how he has just spent money buying x2 Shopping centres and Ranches f**kin ridiculous and WTF is going on like i’v said all the time let Usmanov join and invest in building a winning team dat can have success for a long time to come plus r revenue will explode.

    Rate this comment: Thumb up 1 Thumb down 2

  64. Smaryll

    @ Craig2500: @ This question was simply to see if you had any concrete knowledge of any of what you have stated. Stop widly speculating on something on which you have no evidence and passing it off as fact. Did the £20m-£30m fee that you have stated come from anywhere other than thin air?

    My point remains that any short term cash that Arsenal have in the bank cannot be making as much interest as the interest accruing on the long term debt (whether it is fixed or variable). If you can find a bank account that does give us all the details please :). I am, in the absence of any further information, unsure if the board are even managing their cash efficiently.

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  65. G-Force

    @ zdzis

    FFP will solve Arsenal’s “woes” as if other clubs are forced to spend within their means, they will find it hard to spend excessively to bring in top quality players like they do now. Hence it not only weakens the competition for Arsenal but also they can continue to focus on making their PROFITS.

    FFP till this day is filled up with so many loose threads, so it will be interesting to see what will happen when it kicks in PROPERLY.

    Rate this comment: Thumb up 4 Thumb down 1

  66. craig2500

    this paragraph is taken from a financial site proving that the bonds are longer than i originally thought, allot longer.

    “Despite the high interest charges, it is unlikely that Arsenal will pay off the outstanding debt early. The bonds mature between 2029 and 2031, but if the club were to repay them early, then they would have to pay off the present value of all the future cash flows, which is greater than the outstanding debt. In any case, the 2010 accounts clearly stated, “Further significant falls in debt are unlikely in the foreseeable future. The stadium finance bonds have a fixed repayment profile over the next 21 years and we currently expect to make repayments of debt in accordance with that profile.”

    Rate this comment: Thumb up 3 Thumb down 0

  67. craig2500

    So if we paid the debt off early we have to pay the interest of every year for 21 years which is shitloads more than £20-30m upfront

    Rate this comment: Thumb up 0 Thumb down 0

  68. craig2500

    i would try and post the link but they never let it through so here it is just close the gaps swissramble. blogspot.co.uk /2012/10/arsenal-song-remains- same.html

    Rate this comment: Thumb up 0 Thumb down 0

  69. bob

    Some people have made their points against this article but it does not make a dam bit of difference who is right, the bottom line is Arsenal need to spend money on two or three top players, not as mush as the other clubs have but between 20 to 35M, say 35 for one top top player and 20 to 25 for the others. They are happy to take that amount when they are selling, so we not buy at that amount.

    Rate this comment: Thumb up 2 Thumb down 0

  70. Smaryll

    @ Craig2500: I appreciate what you are saying, but I’m sure that the inital bond issuance was £260m with £50m of that to be repaid by 2013 and the other £210m by 2020. Why is this repayment date now 2029 – 2031? When did this refinancing happen? And why are the club selling players to cover interest repayments on debt which they could be using to pay off the debt on the original maturity? Whatever the answer is, someone has severely messed up with the cashflow somewhere and the team, and subsequently the fans are suffering.

    Rate this comment: Thumb up 0 Thumb down 0

  71. voon noon

    Profit isn’t revenue… the amount the other teams spend will be very close to if not more than their revenue… also, you’re forgetting arsenal don’t have any where near the £500 million debt that united have… READ YOUR FACTS FIRST BEFORE POSTING ARSENAL DAMAGING RUBBISH AND GET BEHIND THE TEAM

    Rate this comment: Thumb up 1 Thumb down 1

  72. Nick the Greek

    Ref Mark Simpson post :
    What planet are you on ? Man City have no debts they do not owe one penny to anybody .
    A very astute buisness man invested and started to grow a business , He identified a long
    Time ago . That investment after his initial outlay , as started to reap benefits . Stop your
    moaning and groaning , Man City are in front of Arsenal in many ways . It’s up to all teams
    To raise the bar and catch City . Not bleat on how they do not deserve what there owners
    Pump into THERE BUISNESS .Man City are here to stay , just look at things being put in
    Place , state of the art , Hospital , Training Complex that is the best in the world . Youth
    Project implemented , that is for the whole community .
    Even it’s ticket pricing for young and old is fantastic . You keep paying through the nose
    What a fantastic caring club you are !!!!!!!

    Rate this comment: Thumb up 4 Thumb down 0

  73. craig2500

    @ Smaryll so you are saying we pay back what we owe only? £260m?. Im not wasting anymore time when you can’t at least understand everything comes with interest.

    “Since 2007 Arsenal have generated a very healthy £376 million operating cash flow, but have spent £71 million on capital expenditure, £110 million on loan interest and £64 million on net debt repayments, while the cash balances have risen by £118 million. Astonishingly, only 1% (one per cent) of the available cash flow has been spent in the transfer market.”

    so you can see that we have paid more interest than money from the loan, thats why Wenger talks every year about £15m-£20m debts to pay off.

    Read learn end of im tired

    Rate this comment: Thumb up 1 Thumb down 0

  74. YOO!#

    WELL.. IM NOT SURE WHAT WENGER AND THO BOARD ARE DOING ABOUT TRANSFERS.

    Until i see physical evidence of a few signings, like what wenger said this week is what somes up this whole transfer policy bullshit,, _Zaha appeals to me,, week later hes never been interested in the player. sø why tell the press he appeals to you !?.. Hope its a cover up tho to get people off his back while trying to prepare a signing of real quality, i hope. But in supporting such an unrealible club of late it wouldnt suprise me if we get none or maybe one player..

    Rate this comment: Thumb up 0 Thumb down 0

  75. Jamie

    I am an American Gooner and I believe there is a financially prudent way to spend more without going overboard like chelsea and city. I would rather make a little less and reap some rewards than to make a lot of money but have no silverware. If we sell players ALL that money should be reinvested in quality. We haven’t done that. And more importantly when we sell, I’d rather we get less and ship them to the continent. i would care less if rvp was scoring goals in Siberia, but our foolish board sends him to one of our rivals for an extra 1-2 million pounds. Where would mu or mc be if they didn’t have our former players?

    GO GUNNERS!

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  76. Arszeal

    Your Article is based on assumption that without spending we can not win anything!

    Rate this comment: Thumb up 0 Thumb down 0

  77. Dez

    The board and Wenger are too hungry for money. They are obsessed by it. FFP will even make them want to spend less and less. What top players are going to want to come to arsenal.They board have ruined the club and don’t care enough about the fans. They do need to fail big time to change their ways

    Rate this comment: Thumb up 0 Thumb down 0

  78. Smaryll

    @ craig2500: Ha, ha. Had to laugh when I read this. Er, if Arsenal opted to repay the bank debt earlier (instead of taking on the bond debt – stop calling it a loan) the club would pay less interest over the long term. Someone in the club has misjudged the potential income from the club with the Emirates move and realised in 2006 we’d need to finance for longer. How on Earth that happened with CL income, tickets and player sales all being more than could have been expected with the amount invested in our squad I’ll never know. We were told at the time that the move to the Emirates would increase the clubs ability to compete but the opposite is true. Now the club is left to pay off this debt for the next 19 years (£20m last year including £14m interest and £6m debt repayment since you ask). If income does not keep pace, as this article is suggesting, those repayments could start to look very big.

    You’re as bad as AFCEdwards, pretend you know what you’re talking about with condescending comments but really have no basic financial sense. Consider this a lesson. Now get back to studying for your GCSEs. You won’t be able to cut and paste from external sources in the exams you know.

    Rate this comment: Thumb up 0 Thumb down 0

  79. craig2500

    @ Smaryll like all the d*ckless wonders on here you want to get personal ok

    I started off with the basics on what was going on and actually found detail to shut you up because somehow you seemed to be the expert and brought nothing to the table.

    But what i originally stated was true a) our income on the Deloitte table has not increased enough each year b) our commercial deals were terrible c) debt payments each year needed us to make money from transfers d) paying the debt early is not possible without cost e) we have around £100m in the bank which covers the loan for FFP

    What have you said apart from making up whats in your head and AFCEdwards was an aggressor stating Bob and this site was not for Arsenal fans which everyone seemed to agree with.

    Also im 33 years old so if you want to go bring your wise cracks down to the stadium instead of being a keyboard warrior

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  80. vp

    The bottom line is that there’s no economies of scale to be derived from the existing model. All we are is a risk free return for the owner and people need to get use to this.

    Those who keep harping on about the FFP are as deluded as our pathetic chairman. If you decide to think outside the realms of the AGM you’ll realise just how unethical and economically flawed are business model really is.

    How can the club continue to use long term liabilities as an excuse for the lack of short term investment is an absolute joke-Open your eyes people!!

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  81. Smaryll

    @Craig2500: Ha ha, I seem to have touched a nerve. Defeated by logic so have you resulted to pathetic insults and threats of violence? Grow up little man. If you want to “go”, then I’ll see you on Wednesday night. I have brown hair, my measurements are 34-26-32, and I usually wear jeans instead of a skirt to games at this time of year ;)

    You seem to be struck with a little of the AFCEdwards disease of jumping in with both feet before properly reading what people have said (I have no idea why so many people are agreeing with “his” first comment, and the other contributions are senseless). I am actually agreeing with most of what you have said, my point is that the board have mismanaged this and saddled the club with debt for longer than necessary and I would like to know why (obviously Kroenke will be long gone before this debt is repaid). This is something you don’t appear to have grasped. Maybe when the red mist has cleared a little….

    Anyway feel free to respond with more nonsense befitting someone half your age.

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  82. One AW

    man city spend over a million pound a day u on wages and everything else bob what is your point we still make ten times more proft than these muppets in all areas we just need to spend some off it and sooner rather than later dont talk about chelsea they cant sell out a 40 000 stadium so bollo*cks to your revunue quote we are a much bigger team than them and always will be you are talkin out of ur bum

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  83. craig2500

    @ Smaryll how am i defeated by logic if im the only person on this entire page thats posted the correct information, all youve done is heckeld me the entire time telling me interest rates have changed, the money cant make interest on the short term and nonsence about paying £50 then £210 by 2020. You said i cut and pasted well i had to and even then you thought you knew better.

    Arsenal are crippled by the debt paying massive payments which is why we have not bought players. This season we had new commercial deals which cover that £20m or so now and free’s up the transfer money for Arsene but as you can see he hasent spent it.

    You can understand his ramblings like today stating each team should only be allowed to make two transfers because his hands are tied up tight than Pamela anderson during a s*x session.

    Usmanovs money would not buy £40m players but he would cut that debt off early and be crucial in getting better financial deals which he has publicly stated he would do.

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  84. craig2500

    Arsenal are not being honest with the fans, we may go another 5-10 years before things change unless we have a new board to push us forward

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  85. craig2500

    I think by the time the debt on the stadium is paid the fans and their hard earned ticket money would of probably paid 1billion for the Emerates while also funding the fourth highest wage bill for a bunch of no bodies. Although i am happy with the current team bar two additions and that dead would to be burnt

    I apologise for my reaction was a long day yesterday, lets unite and discuss tomorrows match on a happier thread..

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  86. One AW

    MAN CITY BOUGHT THERE OWN STADIUM NAMING RIGHTS YOU CLOWNS THEM AND CHELSEA ARE NOT FOOTBALL CLUBS BUT BANKS AND A RICH MANS PLAYTOY

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