Anybody seen Arsenal’s £138 million?
By Ivan Merc
“We generate revenue and we reinvest all of that revenue in football”
Ivan Gazidis recently described Arsenal as “an incredibly transparent football club”. There is a very good opportunity to prove it.
AFC reported the pre-tax profits all five years after moving to the new ground. Pre-tax profit means that wages, player trading, interests on loans and bonds, stadium maintenance and everything else is already deducted from the income.
Of course the taxes were paid after but not a lot as in 2010 the club got a tax credit of £17.5 million.
So finally Arsenal, after all costs and taxes made £138 million pounds of pure profit.
Where is this money? Why was it not invested in the team? Is the club sitting on funds? And will they remain sitting rather than strengthening the squad?
Mr.Gazidis also recently pointed out that “to me (Arsenal) is the most ambitious football club I know”.
Does it mean that sitting on huge amount of money instead of investing it in the squad is the equivalent of “ambition” nowadays?
According to the last Deloitte’s Annual Review of Football Finance, Arsenal’s net transfer spend was £1.9 million in the period 2006/07-2010/11. Less than £2 million.
And at the same time they kept £138 million in hand. Is that ambition to win?
Maybe the club simply hasn’t got £138 million at its disposal? So where is the money again? It has been declared many times that club doesn’t pay dividends. But what did the club pay for over all these years?
It is a very good opportunity to prove the club’s transparency. Just tell us where is the £138 million and why it has not been invested in the squad.
Do you believe Mr.Gazidis will take this opportunity on? No?
You are wrong – he has taken it already.
“We generate revenue and we reinvest all of that revenue in football”.
But dare I ask - where is the £138 million?
25th September 2012
User Comment and Reaction
User comments on this article are now closed. If you want to continue the debate, why not do so on the Gooner Forum.
jen 10:28am 25th Sep 2012
LOL.. pity people who dont know about business... - Post No. 29085
kagoro 10:40am 25th Sep 2012
you didn't indicate where they are getting funds to pay for the stadium loan. probably you need to look at their cash flow, which indicates how money received has been utilized. - Post No. 29086
John Brandon 10:42am 25th Sep 2012
To fully understand the finances of any club/business you need three financial reports - your analysis looks only at the P&L which is the statement of affairs for a 12 month period. The Balance Sheet and the Cash Flow statement are equally important. In fact it is very possible for an operation with a positive P&L to go out of business if the Cash Flow in particular is wrong. Examine the Cash Flow statement (or you can generate one from the combination of the P&L and the Balance Sheet to see the movement in Assets and Liabilities) - Post No. 29087
Georgaki-Pyrovolitis 10:44am 25th Sep 2012
Read the Swiss Rambler before you write such ignorant guff! - Post No. 29088
Mark 10:49am 25th Sep 2012
I have been saying this for a while Stan Kroenke is asset stripping. He will make sure the share price is pumped before he sells to Usmanov. - Post No. 29090
Dave M 10:51am 25th Sep 2012
I suggest you take a basic course in accountancy before posing such stupd questions. - Post No. 29091
divingrooney 11:04am 25th Sep 2012
Do you know that Torres was a 125mn pounds package (sal + fees) Or Carzola is a 45mn package(sal + fees) As we cannot pay salary cause of bad shirt deal, this entire amount would get us maybe one great player or 2 good ones. But after next season, this 138mn would become transfer fund. You get my drift... - Post No. 29092
darren 11:09am 25th Sep 2012
First of all i think i remember that arsenal have to keep 100 million in reserve at all time for us to get a good long term credit deal for the construction of the stadium. Arsenal can't spend this money or the interest payments jump, but this money is still talked about like we have it just standing by ready to spend. Second alot of arsenal's commercial deals, that were also longterm to secure the good credit for the stadium, were front loaded. We got a big chunk of cash almost ten years ago but nothing coming in now untill the deals end around 2014. So out of the 138 million, we can't touch 100 of it and the other 38 million is for new player transfers as well as their wages. Also any new increased contracts for existing players, like Walcott, have to come out of that 38 million pot. - Post No. 29093
Socrates 11:11am 25th Sep 2012
Have you ever played the stock market? If you think certain stocks have value but have temporarily inflated prices you accumulate cash reserves until the prices come dOwn then you buy. This is what wengers is doing...economics 101 - Post No. 29094
M Stylez 11:12am 25th Sep 2012
The money has gone in to Kronke Pocket... This is what we are really paying for when we/I buy the most expensive football ticket in the UK. Wenger is the perfect person to run your club and make a profit but most of the funds are raised by the community and love of Arsenal, and therefore the profits raised should be put back in the club and not under Kronke's Pillow! - Post No. 29095
common sense 11:13am 25th Sep 2012
It's gone to paying off the stadium. Do you think the stadium was free? - Post No. 29096
spanner 11:14am 25th Sep 2012
offshore generating ? - Post No. 29097
Paul 11:41am 25th Sep 2012
What is your point?......Spending money does not equal long term success, Arsenal are starting to build up steam again with the basis of a good solid team, we can add one or two "special players" and we should be good to go for the next five seasons. Calm down trust the management, every team goes through a lul, its our time now put all your efforts into backing the club, management and players stop looking for issues to sound clever with. Gooner Glory!!!!!! - Post No. 29098
Joe 12:39pm 25th Sep 2012
Strange article when we're doing so well, shouldn't this be reserved for negative times? Some has to be kept back as security on the loan. The rest is probably so we dont go bankrupt if we repeatedly miss out on Champions League, experience reducing crowds and cant get the Chamakhs/Squillachis off the wage bill. Also Wenger is always saying about Europe imploding so some of it will undoubtedly be being kept in the event that people can no longer afford to go. - Post No. 29100
martin wengrow 12:40pm 25th Sep 2012
Excellent post. Keep the pressure on the board till we get the answers. - Post No. 29101
El Bodgeo 13:12pm 25th Sep 2012
In an Americans bank account. - Post No. 29103
Der Projekt ist Kaput 13:13pm 25th Sep 2012
Could the money be inside Gervinho's forehead? There's enough room and who would think of looking there? Is that the real reason we have him? Come clean, Gazidis!! - Post No. 29104
Sixtay 13:13pm 25th Sep 2012
Simple...it's there for when the transfer market presents a better reflection of player worth. That's T-2years. Remember how long ago 2010 was? No? Then consider we are closer to the beginning of the FFP season than we are to 2010. With the enforced financial responsibility that is expected to come with the introduction of FFP, and with most of our competitors barely slipping in under the requirements, doesn't it seem like a good idea to keep that profit until the market is more representative of value? If you can wait for black friday to buy you desirables, why is it impossible to imagine that Arsenal isn't doing the exact same thing? - Post No. 29105
Corny 13:14pm 25th Sep 2012
This has been covered by Mr Fox who simply said 'its still there' and available for use. - Post No. 29106
Gee 13:18pm 25th Sep 2012
Very interesting point. It is blatantly obvious that we are not reinvesting the money in the squad. Yet again we made a profit on our ins/outs in the transfer market this summer. And yet again we see we are 2 players away from genuinely competing for the league. Not just hanging onto the coat tails for the entire season, to then get 3rd/4th. The frustrating thing is, as you say, we have the means to compete. We have the money to invest. We have the revenue to reinvest and strengthen the squad. For whatever reason we choose not to do it. This is what isn't explained to the fans. Why sit on monstrous cash reserves and make huge profits every season, then tell us it is all available to reinvest. WHY DON'T WE THEN?? It is the WHY we need answers to.. And don't come with the "the players out there are just not available". Of course they are. We just don't want to spend the money on them. - Post No. 29107
chris dee 14:12pm 25th Sep 2012
Hopefully Arsenal are sitting on the funds and saving them for a rainy day and not paying out inflated transfer fees and obscene wages like the money freak shows at Chelsea and City. If the club had listened to some fans moaning about lack of spending on tranfers and wages since the club moved to the Emirates the club would now be up **** creek in a barbed wire canoe. Even if the stadium was fully paid for we still could not match the spending of Sheik Mansoor's oil fields or Abramovich's Russian resources grab. So the club is 100% correct in the way the finances are dealt with. I know we get the old 'we were told the move to the Emirates would let us compete with richer clubs' but that was before City and Chelsea won an endless supply of money. We can still compete on and off the field,because we still pay better wages and transfers than 99% of other clubs. If we had stayed at 38,000 capacity Highbury we really would have been be in trouble,so thank goodness the board took the giant step of moving to a new stadium when they did. Liverpool and Spurs who are both gagging for a new stadium are just getting to grips with the fact that they would now need 600 million quid to build a stadium like the Emirates. - Post No. 29108
Joshua 14:29pm 25th Sep 2012
Why do people persist in writing this kind of clueless stuff? Here's what would be really interesting... let one of these "financial experts" who litter websites like this one explain to us all why businessmen... men who live to make money... risk takers who have made themselves billionaires and millionaires would sit on £138million pounds and do sod all with it? Interest rates are so low that saving money in this environment is as dumb as dumb gets... so why are these people doing it? What is the upside for Kroenke and the board? And remember these shareholders take no dividends out of the club... the only way their money gets a return is if the club is worth more and a winning club with a successful run in the cups and league is worth infinitely more than one sitting on a pile of cash. But according to these experts Arsenal's board are so stupid that they won't even invest in their own team. And people believe this stuff! Why would anyone with any sense who understands money just sit on a 138m like an old granny? Can someone explain this? - Post No. 29109
maguiresbridge gooner 14:45pm 25th Sep 2012
Profit Profit Profit that lovely word the hierarchy and the DDT's favorite buzz word.Good questions Ivan but remember we have the best spin doctor in europe. - Post No. 29110
Rob 16:21pm 25th Sep 2012
The money is deliberately kept back because Kronke borrowed the money to pay the Fiszman estate and the Bracewell-Smith holding, when he took over the Club and he needs to have a nice wedge in reserve, in case his own finances get tight. He's asset rich but cash poor - in other words. Is this the case ? I've got no proof but knowing human nature as I do - I have a strong suspicion it is. - Post No. 29111
RJ 16:58pm 25th Sep 2012
@Joshua - difficult to work out which side of the debate you are on here - but to answer the question "Why would you sit on £135m and not spend it" (1) You have liabilities coming up (debt interest, debt repayment, salaries,....) that you need to pay, so you set some money aside for those (2) you look at your market and struggle to see value - whilst for example £35m in the bank today will be £35m in the bank next year and I will not have earned any interest, £35m in the bank, even without interest, is worth more than say, Andy Carroll who cost £35million plus I then had to pay wages to. - Post No. 29112
Harold 18:08pm 25th Sep 2012
The money's there, lots of it, but Wenger thinks we can win the league without spending it, and that's been the situation for at least the last four years. He's been wrong every time obviously, and will probably continue to be, but he's the person who makes all the big decisions at the club and that's the only reason the cash is still sitting there. - Post No. 29113
Herbert 18:28pm 25th Sep 2012
Another typically negative piece on the gooner! This one is probably the worst researched one iv seen, you are not only an idiot but you have times this very badly and im confused as to how such an ignorant article has been published? - Post No. 29114
Jaffnaboy 19:23pm 25th Sep 2012
P&L figure is meaningless mate.....More to the point Gazidis should explain what is included in other operating charges, around £54m last 2 year. - Post No. 29116
Mandy Dodd 0:48am 26th Sep 2012
The board, to the last man are adamant this money, however much it is ....is not being taken out of the club. If they are telling fibs, they will deserve all that is coming to them, but for now, is it really fair to accuse Stan of asset stripping.....no evidence and no track record and a lot of senior people at the club would be risking reputations. I am not an accountant, but over the years, wages, stadium payments, medical facilities...ok laugh if you want to......training facilities etc would have cost a serious amount of money. - Post No. 29117
Moscow Gooner 6:09am 26th Sep 2012
'If the club had listened to some fans moaning about lack of spending on tranfers and wages since the club moved to the Emirates the club would now be up **** creek in a barbed wire canoe.' Chris, this would all make sense if we didn t have at least one other shareholder ready to invest hundreds of millions in the club. You don t run a football club for profit - at best you run it to break even: your run it for glory and for trophies. Our current 'owners' have no sense of that. - Post No. 29118
Randfish 10:13am 26th Sep 2012
Whilst admitting that I am a qualified accountant and hence should be able to spot the glaring errors in this post, what concerns me more is the fact that the Gooner is willing to post this? All it does is perpetuate a complete myth that money is 'disappearing' or 'an American is asset stripping'. As another poster writes, read 'The Swiss Ramble' blog on our finances, and then make informed comment, rather than spouting rubbish like this article. - Post No. 29121
chris dee 10:15am 26th Sep 2012
Moscow. The club took the decision not to go the Chelsea/City way. So that's the way it is whether we like it or not. So taking that into account we should be happy that our club is run so well.Even City ,if you look at their summer transfers are curtailing their spending on transfers .The only club who couldn't give a toss about money and the club that skewed and pushed up transfer fees and gave obscene wages to players is Chelsea. Our club is run for trophies and glory.I know it has been '7 years',but, unfortunately, we have always had periods like this in our history.And I know it's getting boring but the new ground has to be paid for and Wenger has done remarkbly well to keep us reasonably competetive,and as many people have pointed out it is not just spending money that brings success.Teamwork,teamspirit,a bit of defensive realism helps.A touch of defensive organisation these last few years would I am sure brought a couple of trophies,this is not the responsiblity of the board,this is down to team management and coaching.The signs are that this year we have learnt that lesson. - Post No. 29122
martin 14:55pm 26th Sep 2012
As with the points made in several posts here, the author should wake up and realise that Arsenal is a business, not a public funded body or local charity. Rant all you like mate but you have a choice to go and but a ticket to see chelsea, spurs, fulham or anyone else if you don't like arsenal any more.its quite simple, you have no say! get over it - Post No. 29129
E18 George 15:23pm 26th Sep 2012
The P/L figure of £138mn shows what the club has made over a 5 year period (as stated in the article). The figures are historical. Comments about cashflow and balance sheet are irrelevant when looking back, the question is why has the net transfer spend been minimal over the previous 5 years whilst we have clearly been profitable. Comments about the £100mn being set aside are also irrelevant, if we have to have that money as cash in the bank is has no bearing whatsoever on our P/L position. The P/L is like your bank account, so over the last 5 years we have had obvious weaknesses which could have been addressed using this money - the real reason lies in Wenger's experiment in youth which he now thankfully appears to have abandoned. - Post No. 29131
RJ 16:13pm 26th Sep 2012
@E18 George - sorry - P&L is NOT like your bank account - the cashflow statement is like your bank account statement - shows what has gone in and out. For example, repayment of debt principal (not interest) is not shown in P&L but in the cash flow. - Post No. 29132
celine dion 19:41pm 26th Sep 2012
The negative and condescending responses to this piece of writing are one of the reasons I have started to hate modern football and intensely dislike quite a fair proporition of our fans. For the record, The Gooner is a fanzine. Maybe one that has come a long way, but a fanzine nonetheless. These publications exist for fans to have a word about things that concern them, about the club. It isnt the Financial Times. People telling the author to take an accountacy course need to take a look at themselves. The person telling him that Arsenal is a business, and that he should go and watch someone else if he doesnt like it, is the reason football has lost its soul. - Post No. 29133
Randfish 9:30am 27th Sep 2012
Celine - whilst I ABSOLUTELY agree that to fob the writer off with the 'Arsenal is a business' line and to go somewhere else is dumb and unnecessary, it is also important to establish the facts. And the facts are that £138m hasn't disappeared, which the writer himself believes. To proffer that opinion is also fundamentally flawed, and has to be corrected, or it becomes the accepted truth. As it happens, the financial results are out today, that will show the cash balance of the club, and prove that it hasn't disappeared, it's still there. - Post No. 29136
celine dion 12:03pm 27th Sep 2012
I think what the writer is saying, perhaps badly, is that Gazidis has, oitlsndishy, claimed that all existing money is reinvested on football. Given that we know there to be this approximate surplus cash, and given that it has NOT been invested in the football side, then it is as GOOD as disappeared. In the rhetorical sense. - Post No. 29141
Randfish 15:12pm 27th Sep 2012
Celine - Upon reflection, yes, agree with that sentiment under poor construct. But i suppose, having just looked at the figures and seeing a figure of £153m of cash reserves, that he has an answer! - Post No. 29146
GoonerGoal! 12:05pm 28th Sep 2012
Honestly, never has so much been said about so little to so many by so few! The AWBs and those that believe that “Profits aren't everything, they're the only thing…” will of course refuse to hear a single negative thing said about the path the club has chosen to follow under the Kroenke/Gazidis/Wenger triumvirate, and as always will be very keen to take any differing view into the area of personal insult . Equally, those who oppose their particular view are likely to read treachery, surreptitious planning and as an absolute minimum, “economy with the truth”, in everything they say and in relation to how the club currently operates. My own belief is that essentially Arsenal is a simple money-making enterprise on their behalf, and when the time is right the truth will reveal itself in term of 100’s of £millions finding its way into the pockets of the afore mentioned characters. Some will say they deserve it for their considered business acumen, after all Wenger is receiving £7.5million per year simply for continually keeping the club in profit every year. Well one thing we know, it certainly isn’t reward for continued success on the pitch, but that’s not what’s important anymore, right? Perhaps “profits without honour…” should become the new club motto! - Post No. 29152
russ99 15:05pm 28th Sep 2012
Noting the wage increase at Arsenal and football wide, maybe it's not such a bad idea to go a bit cheap for a year, have a good team rather than a few stars and continue to trim deadweight. That said, I still wouldn't mind a move for Isco or Falcao at the winter deadline since we have so much cash in the bank. - Post No. 29160
5th December 2013
Online Ed: Arsenal take all three points v un-Tigerish Hull