Tag: Finances

The Economic Vindication of Arsène Wenger

On By jamesgillespIn Arsenal, Finances31 Comments

Arsène Wenger has had a tough time in front of the media over the last few years. Arsenal are still playing the high class, crisp passing game everyone loves (or loves to hate), but silverware has not been forthcoming. Recently the economic figures have been released, revealing that Arsenal’s turnover is exceeding Premier League records, and this in itself can be seen as a step forward.

A graphic from the Guardian

However, the harshest critics are those who completely lack perspective. The easiest way to visualise the project that Arsène Wenger and the back-room staff at Arsenal have been working on is to split it into three stages. The first stage was the moulding of the club in Arsene’s image, and the transformation of Arsenal from a good team into a successful, world class team. This was completed, with many years of silverware, and high achievements.

Continue reading “The Economic Vindication of Arsène Wenger” →

Toure is gone – We now need reinvestment in players

On By jamesgillespIn Arsenal, Transfers15 Comments

Emotional attachment aside, if it goes ahead then the sale of Kolo Toure to Man City is a good piece of business. £16 million for a player whose best years are behind them and who struggled to perform last season (a very low rank on OPTA stats) suggests that Arsene knows what he is doing.

Toure is set for a medical today at Eastlands and the deal seems likely to be finalised.

It is a blow for the club in terms of experience, but judging  on Wenger’s comments after the Haladas game he sees the sale as necessary. Toure wanted out in January and we have 7 central defenders already on the books. It looks like it will be Vermaelen and Gallas as our first choice, leaving Djourou, Senderos, Silvestre and possibly Song for cover. The cover isn’t top quality, and Vermaelen is new to the Premiership,  but it could work out.

Wenger has some money to play with now, although we may not necessarily see new faces at the club. It would be a confidence boost, for the fans and players, but Wenger seems to want to stick with the current squad.

Bar a Flamini style transformation, Denilson, Song and Diaby are not quite good enough to warrant first choice in central midfield with Cesc. That in my opinion is the only area that needs strengthening in the squad. The profits from our sales leave us with up to £30 mill to spend (or £15 mill if you count Arshavin’s fee). That needs to be reinvested in at least one player.

Wenger is remodelling this team to challenge for honours, but our weakness over the last two years has been a lack of strength in depth and experience. I’m fine with Wenger selling players on, we make a profit, and generally he knows the right time to sell, but these players must be replaced.

Kolo’s departure may prove to be a good piece of business, but the squad still needs some additions.

Arsenal reject Usmanov’s cash offer – Be patient!

On By jamesgillespIn Arsenal, Transfers12 Comments

Ivan Gazidis has rejected the offer of cash for transfers from investor Alisher Usmanov. It is a significant show of belief in the strength of Arsenal’s business model and a put down for Usmanov.

It is a very thinly veiled attempt at winning more favour with the fans and putting pressure on the club to buy more players ala Real Madrid. Some fans will be annoyed at the way the board have just rejected this offer, but if it had been accepted then it would have set a dangerous precedent of involvement on Usmanov’s part.

The best thing the club can do is stick to it’s sustainable model of business. The cash thrown about by the likes of Real Madrid is unrealistic and in the long term it gets you nowhere, building a team with character and understanding is more important.

The pressure on Arsenal to win trophies will always be there, and until Arsene wins one with this generation there will always be critics of club policy. The potential is there, as it has been for several years, Arsenal fans just need to learn the art of patience.

Arsenal will be soon be Kroenke’s club

On By jamesgillespIn Arsenal5 Comments

Stan Kroenke is manouvering his way to the top of the pecking order in the Arsenal board. Since his introduction to the club in 2007 we have seen him steadily accumulate shares, and this culminated him being invited to join the Board as a non-executive director in September 2008.

He has now taken a 20% stake – buying 8% from Danny Fiszman, and becoming second largest shareholder after Usmanov – spending £42 million – he is serious about this.

Kroenke took an 11.26% share off ITV in April 2007, and the Board were initally hostile – it was the beginning of a period of turbulence which saw Dein lose his position on the Board, and is still having repercussions today. Dein then sold his stake to Usmanov and suddenly Kroenke seemed like the good guy. The Board invited him in and is now setting him up as the defence against Usmanov and Dein.

This sale has come at a very important time – April 2009 is the end of the lock-down agreement set by the Board – they may now sell their shares to whoever they want. By increasing Stan’s share they are effectively blocking Usmanov. The situation was dangerous as Lady Nina is known to be unsettled and may sell her shares very soon.

Share in Arsenal

  • 25.0% Alisher Usmanov
  • 20.5% Stan Kroenke
  • 16.1% Danny Fiszman
  • 15.9% Lady Nina

Fiszman has given up his position as the second biggest holder, but still wields considerable clout. Usmanov seems unlikely to increase his stake; owning 30% would mean that he would have to launch a take-over bid – not likely at a time when his personal wealth is dwindling.

The lockdown agreement allowed Board members to trade between themselves – and this is the important part – it allows them to leave Usmanov in the cold. This is why Kroenke was invited onto the Board; to allow him to acquire shares. Kroenke is the Board’s choice to lead Arsenal.

The fact that Gazidis was appointed in January 2009, a man who has had contact with Kroenke in the MLS, is important. He may well have been Stan’s choice and hints further at the large scale shift in power within the club. The partnership with Colorado Rapids – Stan’s US football team also points to closer ties.

Personally I would prefer the Board to stay in the hands of the ‘old guard’, but Kroenke has made some promising comments:

“I will continue to work closely with my board colleagues to maintain the stable environment in which the club operates and to preserve the self-sustaining business model enjoyed by the club.”

This makes me hopeful that Stan is the right man for us. It seems inevitable that Arsenal will be in foreign hands in the near future, but Stan has experience in sports clubs and is a proven stable investor.

If he really is interested in maintaing Arsenal as a sustainable club then I am all for him.

Kronke joins the Board as Arsenal’s profits announced

On By jamesgillespIn Arsenal, Transfers3 Comments

Stan Kroenke, an American shareholder has joined the Board as a non-executive director. He owns a 12% stake in the club and Arsenal say he was invited in because of his experience in managing sports businesses and in expanding financial prospects.

The BBC reports:

“His firm Kroenke Sports Enterprises (KSE), owns the Denver Nuggets basketball franchise, the Colorado Avalanche ice hockey team and Major League Soccer side Colorado Rapids.”

It’s an interesting move, but one which I thought was likely. It makes sense for the Board to try and recruit a sensible ally if they are to maintain any control over the club from outside investors such as Usmanov.

They are pre-empting any takeover by forming an alliance with Kroenke, which also protects them from buyouts, as Kroenke now has agreed not to sell his 12% without consulting the Board.

This news comes as Arsenal announced a £36.7 million pre-tax profit for the year ending May ’08, rising more than £10m over the previous year’s profits.

Turnover was also up, from £200.8m to £223m, the move to the Emirates, and lucrative TV sponsorship are cited as major factors.

Peter Hill-Wood, the Chairman told the press:

“This club is ambitious for success and I believe that the strong financial position which the group has established, as confirmed by the results for the year, provides the best possible platform from which to deliver that success for the long-term,

“We are committed to operating the club as a business which is financially self-sustaining. This is clearly demonstrated having achieved our second highest ever pre-tax profit of £36.7m.

“Over the last two seasons Emirates Stadium has taken our football revenues to a new level, but we cannot be complacent. Accordingly, we recognise the need to further develop the business commercially on a worldwide basis.

“We have reported significant growth in turnover to £223m reflecting a growth in our core football business. There are two main reasons for this. Firstly, new Premier League domestic and overseas TV deals have led to a rise in broadcasting income of £24.1m to £68.4m, and secondly, matchday income was £94.6m and remained the most important component of the Group’s income.”

“We moved to Emirates Stadium in order to compete with top European sides, not only on a financial footing but from a footballing perspective,” he added. “The healthy financial returns from moving to the Emirates are the fruits of our labour so far, but just as important is the team’s performances at our new home.

“Given that we have only lost one match in 58 competitive matches since moving here in 2006, Emirates is certainly becoming the fortress that Highbury once was.”

“The most significant factor is the new TV deal which has increased income by just over £24m. In addition, the inaugural Emirates Cup which we hosted in 2007 brought in £4m.”

On transfer funds, Hill-Wood had this to say:

“In answer to your question, yes funds will always be made available to Arsene to improve the quality of the squad and we have consistently stated that adequate funds are available to him if needed.

“We maintain a constant dialogue with Arsène and whilst there is not a set figure in place we are always able to buy additional players should he choose to buy. We have every confidence in Arsène and trust in his judgment, so he decides whether he needs to strengthen his squad.

“The accounts which we have released today show that the Group had cash balances of some £93m at 31st May 2008. This is clearly a very healthy position from which to support the manager’s spending plans.

“However, it must be recognised that £31.5m of this cash is held as security for the debt service of our Bonds and its use is therefore restricted, also there is a strong degree of seasonality to our cash flow with season ticket renewals during May having a positive impact on the year- end cash figure.”

“We have every confidence in Arsene and trust his judgment. It is not about spending a specific amount of money, it is about investing in the right people. It’s about having the right players with the right quality and the right spirit. People easily forget that we were not too far off winning some silverware last season. The margins are so small.

“We may have a young squad but they are talented and have one more year’s experience. They are managed exceptionally well by Arsene and we have every confidence that they will have a successful season.

“We strongly believe that to compete at the highest levels of professional football the club has to have a viable business that can pay its own way. We strongly believe this is the only way in the long-term.”

So, in summary, the move to the Emirates has been crucial in building financial strength, so now we can compete with the best in Europe. Wenger has money available and the backing of the board. In our current situation we can survive as a business which can pay it’s own way – i.e. no big investors like Abramovich!

Arsenal’s finances – an analysis

On By jamesgillespIn Arsenal1 Comment

I came across this link earlier which I think is worth sharing with you.

It goes over Arsenal’s revenue streams, looking at why foreign investors might want to buy Arsenal out. There is also analysis of shareholders.

Click to read the article.

Check the link here at Arsenal Column. Or click the picture above.

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Where are Arsenal heading? Transfers and Chief Executives

On By jamesgillespIn Arsenal, Transfers18 Comments

According to Arsene Wenger, Arsenal are close to appointing a new Chief Executive. The position has been filled by Ken Friar, the ex-Managing Director, since Keith Edelman’s departure in April.

The lack of leadership in this position perhaps explains why we have struggled to bring players in this season.

Wenger told Arsenal.com:

“It is progressing quite well. We are getting to the end of the story. I am involved in it and I am consulted for it but it is down to the board to make that decision.

“Having consulted me, they will take the responsibility to name the right person. I think the decision will be made soon but I don’t know exactly when.”

A rather large hole was created when David Dein left the club, and we need someone who can play his role in the day to day running of the club, and in transfer negotiations. The Board seem rather distanced from Wenger, and we have been in limbo since the depature of David Dein.

Hopefully a new appointment will help iron out difficulties and play a large role in Wenger’s relations with the board and in transfer negotiations.

Talking of transfers, it was disappointing to see that we hadn’t snapped up a last minute midfielder on deadline day, but it will be interesting to see what happens in the coming days, as we are linked with Ghana’s Steven Appiah, who played for Ghana last night.

He would be available on a free, so we coud sign him up straight away, but he has struggled with knee injuries, and we don’t need any more injury prone players. Also I’m a little worried that clubs such as West Ham have shown the most interest..

Also, a bit of fun here, check out this post by Block19er at Clockenders.

I’ve also been introduced to a news service called FeedZa recently. You can see their football section here, and vote for stories you like. They list a lot of sites and it makes interesting reading, but it needs your input! Have a go!

Arsenal make £1.65 million!

On By jamesgillespIn Transfers3 Comments

Fabrice Muamba the ex-Arsenal midfielder has left Birmingham City for Bolton for a reported fee of £5.5 million. The reason this affects us is because when Birmingham signed Muamba from Arsenal we put a 30% of next sale clause into the deal.

This of course means that we get 30% of the cash which Bolton paid. If that is £5.5 million, then an astute piece of buisness just brought us an extra £1.65 million for Wenger to spend at the shopping mall we call Euro 2008!