tag:blogger.com,1999:blog-487486960623783530.post639966395839009690..comments2024-02-29T09:58:18.342+01:00Comments on The Swiss Ramble: Arsenal's Mystery DanceThe Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.comBlogger79125tag:blogger.com,1999:blog-487486960623783530.post-54926852405838617372017-03-14T18:01:55.478+01:002017-03-14T18:01:55.478+01:00Good post.Good post.Tony M.http://entryleveljobscam.blogspot.com/noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-83755809672250820982012-06-03T01:35:17.151+02:002012-06-03T01:35:17.151+02:00Yes, I think the AST are a group to be avoided, th...Yes, I think the AST are a group to be avoided, they don't have the best interests of anyone at heart.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-33132773082008281762012-05-07T22:06:39.294+02:002012-05-07T22:06:39.294+02:00What a load of tripe!What a load of tripe!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-41253270042629949882012-05-07T15:22:14.058+02:002012-05-07T15:22:14.058+02:00This is the most comprehensive review of Arsenal&#...This is the most comprehensive review of Arsenal's business model....Good one!!debankyhttps://www.blogger.com/profile/07318034392240914725noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-54188385418673811892012-04-19T22:43:03.949+02:002012-04-19T22:43:03.949+02:00I think 2014 is dead wrong. A year or two leading...I think 2014 is dead wrong. A year or two leading into a new shirt deal, or any other major commercial agreements, we want the club to be top of the table, deep into the CL, and winning domestic trophies. Waiting until after those deals to spend money will weaken the long term commercial income.....a place we have been for far too long.<br /><br />We have basically maxed game day revenue, successful runs will bump up broadcasting cash, and commercial income needs to be the final anchor lifted.<br /><br />As always....great blog!!!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-8366505001663141152012-03-29T03:26:45.543+02:002012-03-29T03:26:45.543+02:00This is indeed an insightful posting as always. An...This is indeed an insightful posting as always. And the opinion remains. The Arsenal board messed it up on the commercial revenue front. Yes, we needed the money for the stadium at the time. But the club should have had the foresight to not lock down the revenue stream in such a pathetic manner with a long-term deal. Or they should have done what Chelsea did with Umbro back in 2005. I am not sure if such as thing was even mentioned in the contracts, but we should be able to re-negotiate the price or cancel it altogether with a pay-back. <br /><br />That extra 20-25 million quid each season could have meant SO much. Who knows, maybe it could have been an answer to Arsenal's defensive problems, in the form of a truly world class player. And hence maybe, it could have lead us to a title. <br /><br />Anyway, I am man of prudence and patience. 2014 is not far away. It would be a fairy tale uprising for Arsenal if we were to pen lucrative sponsorship deals, buy world class players, retain the stars they have and hopefully see the desired effects the FFP rules in other clubs.indicseerhttps://www.blogger.com/profile/02269009166584428446noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-62784726662657045882012-03-22T12:07:29.846+01:002012-03-22T12:07:29.846+01:00you're missing interest.you're missing interest.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-53857833631867473552012-03-21T18:02:05.084+01:002012-03-21T18:02:05.084+01:00First and foremost, brilliant analysis. You make i...First and foremost, brilliant analysis. You make it easier for amateurs to understand what is happening behind the scenes.<br /><br />250m over 20 yrs would mean 12.5m a yr. If we are paying 20m a yr including interests and capital repayments, we'll be paying a total of 400m at the end of 20 yrs. What am I missing here? I went through your analysis again but couldn't answer it myself. It'd be nice if you could clarify. Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-25780785839040675512012-03-20T16:33:07.492+01:002012-03-20T16:33:07.492+01:00Interesting post as always, however I do have to q...Interesting post as always, however I do have to query one part of your analysis.<br /><br />You put Arsenal fans in the 'long suffering' category, I can think of many fans who would take seven years without a trophy as normal service rather than long suffering!!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-8242240546866376322012-03-18T13:54:00.360+01:002012-03-18T13:54:00.360+01:00I read your blog for long months nos, and it is so...I read your blog for long months nos, and it is so entertaining. I also promote it to friends supporting orner clubs. Last example, an Hearts supporter, who himself forwarded it to other supporters. Congratulations.<br />Now one point and one question.<br /><br />In France there is also the debate about wages being too high, especially mediocre placers. So the clubs are trying to implement schemes based on performance and results, the variable part being more important. Like it is being done in other industries.... My own pay slip shows it! Do you know whether this is being applied in AFC? And in other EPL clubs? <br /><br />The question: being based in Switzerland, are you following the news about the Swiss League? And the recent stories of bankrupted clubs? If yes, would it be possible you write an article about Servette FC? Or about the economy of Swiss football? <br /><br />Tanks again for your marvellous blog, from a fan of football, of AFC and of Servette FC.<br />FrançoisAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-30380733749566561002012-03-14T22:21:11.880+01:002012-03-14T22:21:11.880+01:00What an amazing article. This answered many of my ...What an amazing article. This answered many of my questions about Arsenal that the Guardian has hinted at, but didn't apply enough column space to deal with properly. Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-42094527824225957102012-03-13T21:27:41.632+01:002012-03-13T21:27:41.632+01:00(whispers) one point behind.(whispers) one point behind.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-39723734907728062172012-03-10T16:00:07.206+01:002012-03-10T16:00:07.206+01:00Great blog!
Benfica is on the verge of renegotia...Great blog! <br /><br />Benfica is on the verge of renegotiating the broadcasting rights, and is considering broadcasting them on its own channel (that already exists). It has already turned down 22M€ a season from the company that holds the righs today. If that were to happen it would be the first time for a european clube, no?<br /><br />I hope you'll do an analysis of Benfica's finances after they release their data for the 11/12 season.Sérgiohttps://www.blogger.com/profile/13593510605499948897noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-71941431611748748932012-03-08T12:14:50.922+01:002012-03-08T12:14:50.922+01:00You are a great analyst man, Thanks for your all f...You are a great analyst man, Thanks for your all fantastic blogs.Holdennoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-73286593910802392782012-03-02T14:04:23.718+01:002012-03-02T14:04:23.718+01:00OK, but the first FFP monitoring period where 2011...OK, but the first FFP monitoring period where 2011/12 drops out is 2015/16, which will include 2014/15, where the main sponsorship deals should have significantly increased after they have been renegotiated in June 2014.<br /><br />I do share your concerns about this tricky balance and would not be averse to more cash being injected into the club either via a rights issue or a loan from Kroenke. I actually wanted to include a section on some possible actions here, but decided to exclude it, as the piece was already of epic proportions.<br /><br />I am on the whole supportive of the AST's objectives and have had many discussions with Tim about the financials. That said, I think that the comments around FFP were unnecessarily misleading and were certainly taken out of context by some in the media.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-1319057680421312592012-03-02T13:41:19.897+01:002012-03-02T13:41:19.897+01:00I think that you're right about the Rangers ca...I think that you're right about the Rangers case being a precedent for actions against some English clubs, but my understanding is that Arsenal have already settled with HMRC a few years ago.<br /><br />I've had loads of requests to look at Rangers, but there are a couple of problems: (a) the story changes on an almost daily basis; (b) as you say, the most recent accounts are not available.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-15367737965565683972012-03-02T13:41:05.819+01:002012-03-02T13:41:05.819+01:00I don't disagree that with the 2011/2 transfer...I don't disagree that with the 2011/2 transfer profits in the bag passing the FFP test isn't going to be an issue until that year drops out of the monitoring period. My point is that getting an improved team performance whilst having to reduce levels of investment in the squad in terms of wages and player purchases to balance the books is going to be very hard and something I can't recall other clubs achieving. The club rejected a call for a rights issue in 2009 and the concern remains that we may continue losing our best players, that really was what I am saying. As to my comment, I'm not censuring anyone, I'm merely emphasising that the hole being faced is somewhat larger than 2010/11's results initimated.<br />If you ever want to ask questions or challenge please do contact us as we don't always go into the explanatory detail you do in a blog on a short release to members.<br />SimonAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-76668426932149439902012-03-02T11:01:02.685+01:002012-03-02T11:01:02.685+01:00I thought that RM owed all their money to various ...I thought that RM owed all their money to various banks.<br /><br />Hilariously they annoyed Barca fans by borrowing lots of dosh from a Barcelonan bank relatively recently.mrswoonoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-24428371863010923482012-03-02T10:13:21.037+01:002012-03-02T10:13:21.037+01:00There was the usual breathtaking arrogance in Simo...There was the usual breathtaking arrogance in Simon's post that we have come to expect from some members of the AST who take themselves too seriously. Their analysis of Arsenal being in danger of falling foul of FFP on the back of not qualifying for the CL for a season was a whole lot of hogwash.AJnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-43328975374520303762012-03-02T08:41:59.960+01:002012-03-02T08:41:59.960+01:00Simon,
Quite frankly, it’s a bit rich that the AS...Simon,<br /><br />Quite frankly, it’s a bit rich that the AST censures me for lack of detail here when your own statement, despite describing it as a "detailed assessment”, only quantifies one item, namely the £27m that would be lost in UEFA’s participation and prize money. Ironically, that figure is taken from the 2010/11 season, which in my piece you criticise for being out of date.<br /><br />Yes, the costs will increase in 2011/12, which I did mention in my narrative, though this is not always as simple as annualising (doubling) the growth reported in the Interims. I would agree that the growth in wages is likely to be £15m, but player amortisation is not quite so straightforward. For example, in the previous interims, this fell by £3m, which would imply an annual reduction of £6m, but in fact the full year decrease was only £3m.<br /><br />As you say, some of this increase in the cost base will be covered by revenue growth, but you then strangely ignore the financial impact of one of your principal themes, namely profit on player sales, which will be at least £57m higher in 2011/12 than 2010/11. Granted, that is not necessarily how you would want the club to make money, but that is a done deal. That will provide some breathing space for FFP’s first monitoring period, which covers the two accounting years 2011/12 and 2012/13.<br /><br />You have also not mentioned the impact on the cost base of Arsenal failing to qualify for the Champions League, which would mean lower costs for inter alia staging home games, travel to away games and performance bonuses.<br /><br />Furthermore, you have once again ignored the adjustments allowed by FFP for excluded costs (nearing £40m), acceptable deviations and salaries of players signed before June 2010 (the latter for the first two monitoring periods).<br /><br />This should tide Arsenal over (at least in terms of FFP) until the cavalry arrive in the form of higher commercial deals in 2014, when we can expect an uplift of around £30m per annum.<br /><br />I don’t disagree that failure to qualify for the CL would have a substantial impact on Arsenal’s cash flow (I described this as the “real world” in today’s Arsecast), but I’m struggling to see how this would cause the club to fail to meet FFP.<br /><br />There's no doubt that Arsenal face a lot more challenges in the next couple of years than the headline profit figures would suggest (that was sort of the point of the article). However, there is a sizable cash pile available, even after taking into consideration factors such as seasonality and the debt service reserve, which should be boosted by more cash from property development.<br /><br />It is indeed a tricky balance, but that's why the club has a highly paid executive management team. Right?The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-9212919491486321652012-03-02T02:16:17.513+01:002012-03-02T02:16:17.513+01:00Judging by the table on matchday income above, the...Judging by the table on matchday income above, the extra seats (and corporate boxes) bring in an extra £1-2m per game, depending on how much is down to high ticket prices. Even at a conservative £1m, the extra income from home games is more than enough to compensate for the interest payments.<br /><br />Additionally, the extra seats will keep making money once the debt is paid off, leaving us in a much better position then. By then, of course, Liverpool will probably have moved to a larger stadium, but they'll be in the "paying off" phase.<br /><br />One question: does the "matchday income" figure include things like programmes, beer and snacks? What about all the business the club shop gets?Glennhttps://www.blogger.com/profile/15217164008355508425noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-40938240552990964592012-03-02T01:09:38.089+01:002012-03-02T01:09:38.089+01:00Is there any truth in rumours that Arsenal have a ...Is there any truth in rumours that Arsenal have a large potential tax bill due to use of EBT's? I've heard it suggested that the current HMRC vs Rangers case could provide the precedent which would free the Revenue to launch cases against a number of top flight English clubs.<br /><br />Cheers - loving your work. Do you have any plans to examine Rangers in the future? I would love to see an neutral [l assume] examine their financials, although audited accounts may be a long time coming.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-71513039595263285112012-03-02T00:30:57.008+01:002012-03-02T00:30:57.008+01:00Swiss,
Question 4 was “what is the impact of Arsen...Swiss,<br />Question 4 was “what is the impact of Arsenal failing to qualify for the champions league?” I can’t see you answered that one. You did calculate what you think the FFP adjusted pbt of the club used to be in 2010/11 but I can’t see how that answers the question as its out of date and doesn’t consider the impact on revenues of not just missing out on UCL prize money but UCL matchday revenue and sponsorship payments linked to UCL performance and of the wider impact on matchday, TV and commercial revenue of having a team that is outside the top 4.<br />Surely your starting point should be 2011/2 football pbt before gains from player sales? Player sales are the likely reaction of the manager to managing the financial problem posed by failing to qualify. Outside of raising equity finance, player sales are the only real tool open to get cash in and costs down, it is the solution to a problem you’ve not fully quantified.<br />On that basis, rather than starting at a football pbt of £4m you should probably start at the football loss before player sales of £2m in 2010/11. You should then add the increase in the wage bill (minimum £15m) and amortisation charge (£12m) being seen in 2011/2 if the half year results are extrapolated for a full year. From that we can deduct revenue gains over the year as a whole (some commercial income, maybe £5m if the first half is extrapolated) and some extra matchday revenue from one extra carling cup game and the 4% ticket price rises less no league cup final and reduced EPL merit and appearance fees (say £9m in total for revenue). That’s a £20m football loss to which one must add the potential loss of revenues in 2012/3. You then have some scale to the potential problem facing Arsenal and the losses that need funding from free cash, residual property assets or player sales. Remember that Arsenal need to ideally keep their best players, add more quality to the team and improve on the pitch performances to recapture a top 4 spot whilst managing this problem. Sure there’s perceived as being a lot of slack in the enormous size of the playing squad and wage bill but balancing all these factors and delivering a team capable of justifying a top four spot over the next two to three years will require a markedly improved performance.<br />Simon at the ASTAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-48388875134982188812012-03-01T22:31:59.951+01:002012-03-01T22:31:59.951+01:00If Arsenal had stayed at Highbury and thereby avoi...If Arsenal had stayed at Highbury and thereby avoided interest on the Emirates' debt repayments and poor commercial contracts would the club have more or less money today? Liverpool and Chelsea both have similar incomes without moving to new stadia.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-55546080752550216842012-03-01T22:28:00.813+01:002012-03-01T22:28:00.813+01:00I can't give enough commendation to your effor...I can't give enough commendation to your efforts to digest extensive financial information about football and present it, in massive detail, in layman's terms. I, for one, have had my understanding of football finance overhauled by reading your blog.<br /><br />One thing I'm curious about, however, is your comments on Arsenal's debt. You've said in this article, and previous posts about Arsenal, that Arsenal is now in no hurry to pay off its debt: it only has the long-term stadium bonds left; it's unlikely to pay them off ahead of schedule; and it would likely face penalties for trying to clear them. Under this assumption, it seems Arsenal is breaking even so long as it budgets for the £14m a year in interest payments, and doesn't need to make any further profits. As such, you estimated in this post and your last one that Arsenal has ~£50m in surplus money to spend. Indeed, it seems, as far back as March 2010, you calculated that Arsenal would have sizable transfer budgets available. Obviously, since then, Arsenal have been making profits above and beyond what was needed to clear the short-term debt and cover their interest payments.<br /><br />What strikes me, however, is that this surely (feel free to correct me if I'm mistaken) neglects the importance of net debt, does it not? While Arsenal may indeed have the freedom to spend their surplusses, now that that money is no longer earmarked for debt obligations, would it not be more beneficial to the club in the long-term to use it to offset their stadium bonds? They may not be able to lose their gross debt obligations of ~250m, but can they not at least offset the 14m interest payments through interest payments made on their own surplus assets? Can they not raise the £250m early, and use it to produce interest offsetting the ~£90m in total interest payments until the last of the bonds expire in 2020? Not only does it achieve this, but it means the club needs to raise no further finance in the future when the bonds expire and need to be paid off. These seem sufficient benefits for reducing net debt to zero early, even while gross debt remains at £250m. While the austere financing required to do this obviously hurts the club in the short term, it means that, in every year after net debt is cleared, the club shall have more resources to make use of. As far as I can tell, you don't seem to have discussed the possibility of the club's decided to continue austere budgetting, even though it looks like the path the club is currently taking, and it seems to have tangible long-term benefits. Have I missed something here?<br /><br />At the moment, the club seems to have made remarkable progress to eliminating its net debt. Although the mid-year slump in cash balances means net debt has currently risen, it seems that, by the summer, this year's hefy profits shall leave the net debt reduced from £98m in 2011 to ~£50m (which may be negligible if you exclude the £30m in everlasting debentures and include the soon-to-be booked profits from Queensland road). When the club appears so close to eliminating its net debt, surely the frequent calls for it to spend its surplusses on the pitch are misguided? Too look at Arsenal's current trophy-droubt optimistically, when the club history of this period is written, this period may be seen as a 'decade of debt' whose negative repurcussions end when the stadium-necessitated inferior commercial deals expire in 2014. While the club may have been able to achieve more during the decade, if only it had spent more, the subsequent period, in which its resultant resources shall be so much greater, shall surely make the austerity worth it?Inquirer about net debtnoreply@blogger.com