Arsenal News 24/7Writer: Rocky7 
Date:Friday February 26 2010
Time: 11:04AM
UK time is: 00:26:05
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Gunners Show The Way As Financial Chaos Reigns
In a week in that has seen/may see Portsmouth Football Club go into administration as they fight to remain in existence and reports claim that the Premier League accounts for more than 50% of all football debt across Europe, Arsene Wenger's Arsenal show how a football club should be run.
Arsenal Chairman, Peter Hill-Wood today announced via Arsenal.com profits of £35M and the reduction of debt by almost £130M.
"I am pleased to report that the Group has delivered another profitable set of results for the first six months of the financial year.'
'There has been remarkable progress at Highbury Square over the last twelve months and it is clear that the next couple of years will see our property activities delivering surplus cash. This is very good news, although I would not want to speculate on the exact quantum or timing of this. How we will use this surplus remains undecided but, in addition to investing in the team, I think we will examine investment in Club projects and infrastructure, both in and around Emirates Stadium, which will provide a long lasting benefit to the Club and our tremendous, loyal supporters.'
'Looking ahead, our strong financial base allows us time to take a measured and diligent approach to determining the Club`s direction beyond our move to Emirates Stadium and into the next phase of growth."
Whilst some of the more bizarre (and I'm guessing mentally challenged) members of the Arsenal community are reporting that the club are paving the way for a take over of Arsenal Football Club by clearing the debt as quickly as possible to make us a more attractive prospect to wealthy American or potential suitors and subsequently plunging us back into debt, in reality what the club has demonstrated is that with meticulous planning and good management, not only can you build a new stadium, buy players and compete for trophies (ok we haven't had one for 5 years, but we've still competed) but you can create a financially stable future for the club and it's fans.
Yes it has been frustrating not to win something for 5 years (bigger picture, there are literally 100's of clubs who wish they had won silverware as recently as 5 years ago), but would you really forego the future of your football club for short term glory?
Maybe you should speak to the fans of Leeds United, Bradford City or Portsmouth before answering.
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Your Comments
Agree 100%
Can't understand the aguments being made by the sites stating the club is being fattened to make a sale more likely. If the club is debt free the shares are worth more - thus a takeover becomes at least as expensive if not more !
Anyone who thinks paying off the debt early is a bad idea are either financially inept or Gordon Brown. All the time we have large debts a large chunk of the money we generate goes on paying the interest not on players or anything else the club want to do with the cash.
Its no different than having a mortgage, any overpayment not only saves you the interest on that month but all the months upto the loan being repaid.
With the rest of the prem (and many in europe) in financial peril or soley reliant on a sugar daddy to remain solvent, a debt free Arsenal FC will be a solid powerhouse for years to come.
thedom
I can see both sides of this argument. Of course what Le Grove is saying is somewhat far fetched, however, there is certainly some good points in their argument........thedom, the point you make about being debt free pushing up the share price is exactly what they are talking about. It means the current shareholders would get more money when they sell. Whilst I also think Rocky7 has some valid points you do have to question why PHW & Fiszman have both sold shares to Kroenke over the past few months if they have no interest in a takeover??
Ashburton Gooner
I will also say, that personally, I cannot wait to see the club debt free. I believe Gazidis said in his interview that the debt has further reduced since these accounts to 194 million or so. When you consider that Arsenal have 101 million of cash in the bank you can see that they are very close. Hopefully we can get a big kit deal next next year either from Nike again or one of the others. We got 55 million last time so maybe we could get an even bigger one.
Ashburton Gooner
The thing is that the club is paying off the debts by itself, no sugar daddies coming to the rescue, and it's doing so WHILST making truly massive profits, so why does it to be made a more attractive prospect? Infact, the club should be more attractive to Kronke now whilst the share prices are in their lower state. If he was in it for the money now would be the time to buy. Complete scaremongering bull crap. I have my fears that by the time our club is in a position to dominate that the league will have fallen to pieces due to the inept running of other clubs, but that's not our fault and we can only carry doing what we're doing with the hope that other clubs see the light and begin to live within their means.
Rocky7
AG - I thought we sold ourselves short with the last deal, and with Ivan in charge I reckon he can muster up a pretty tasty deal.
Rocky7
Impressive to wipe 130m debt in such a short space of time.
paul_ownz
R7 - We sold ourselves short with Emirates sponsorship but I thought the kit deal with Nike was pretty good. Lets hope we can get a real massive one next time though........ With regards the shares Kroenke has a slight problem in that Fatmanov is offering more than he is prepared to. Kroenke won't go above £8500 yet Fatmanov is still buying shares here & there for over 9K. I believe Kroenke will make his move this summer (after may so he doesn't have to offer more than his 8.5K), he could possible get control if PHW & Fiszman are with him but he has no chance of getting the whole club because Fatmanov will not sell at that price.
Ashburton Gooner
Yes you're right ... it was the Emirates deal I was thinking of. I don't know which kit makers pay the best, but I'd prefer we went back to Adidas next time around. Much classier looking imo.
Rocky7
I think you might be disappointed then, as everyone seems to believe we'll be switching to Puma.
Ashburton Gooner
Can we have a bit of both worlds now, please? Both Arsenal Football Club & Arsenal Property Holdings.
shewore
PHW and Fizman have sold small amounts of shares to Kroenke recently so that Red White Holdings and MR Usmanov cannot launch a takeover bid in response to Lady Bracewell Smith renenging on the lock out share contract and offering her wares about. So proud of Arsenal looking after its fans like a responsible father figure - looking foward to some pocket money in the summer to spend on players ... or a player ... or some youngsters ... :)
herobeard
And Spurs have got a squad virus again - those dirty spuds. Are they going to blame this on not getting 4th place - again? HAHAHAAH
herobeard
Ashburton Gooner, there is not ONE valid point being raised by Le Groan. Each and every question that they have posed on their website today regarding the financials is a sign of their ignorance. They are in effect alleging that Arsenal are doing an Enron with their accounts. A very foolish allegation to make for a publicly listed club which is by far the best run in the country. As Rocky has mentioned in the past, Le Groan is a fair weather website which may as well be called Le Bridge tomorrow.
Deltaforce
Excellent news for the cluba nd another strong indication of how well we are run. I am uncomfortable with this notion often propagated that somehow keeping the club in good shape and winning trophies are mutually exclusive concepts and that Arsenal are sticking their flag into the ground on one side and not the other. This once again demonstrates our abaility to compete long term. Even United and Liverpool aren't on ground that sure at the moment.
Little Dutch
Good points Delta - I don't know if Le-Grove realise this but Arsenal Football Club have a team of people scouring the internet for any issues of copyright, slander, etc etc etc, and labbeling Gazidis a con artist might not sit too well with them.
Rocky7
Quote : AG "pushing up the share price is exactly what they are talking about"....... I understand that that my be what they are talking about but they seem to forget the majority of the holding (over half) is held by Kronke and the Fat one. Whilst Fiszman has a large holding PHW does not (less than 1% I think) So the increase in value is mainly helping the club and possibly making it more expensive for a single party to take over as the property debt risk reduces. Kronke may have paid around £8.5k in the past but the bulk of remaining shares IMO will not sell that cheaply. The ideal for the club would be to pay off its debts, maintain multiple owners and then start to invest the newly found surpluses in the team. The next manager will want to spend a lot more than Wenger.
thedom
I firmly believe that one of the things holding Wenger with us is his determination to see this all through. If we were to lose him now no doubt we'd end up with a manager that doesn't understand what's going on here, and the only person Wenger trusts to get this job done is himself. Once we are completely self sufficient I believe AW will start to think about a retirement date.
Rocky7
I agree Rocky. If Domenech's incompetence pains even some non Le Blues fans, one can imagine how much AW will be pained by his home country not satisfying their potential. Do think if AW leaves us sometime in the future, it will be for managing the French football team.
Deltaforce
It is also fairly safe to assume that there is scope for even higher future revenue streams for AFC through renogotiation of contracts, recovering property prices and higher global shirt sales amongst other sources. Our debt can be expected to decrease every year going forward. The only factor which can increase our debt is a leveraged takeover ala the Glazers/ Hicks et al. Hope all AFC fans unitedly oppose any future leveraged takeover. Even from Kroenke. Lets not even talk about the fat one - hopefully he will be frozen out of all contention soon.
Deltaforce
Really happy about todays financials. My concern would be exactly what was said. We get out of debt, raise the value of the club, someone be it Kroenke or whoever, decides to buy it, succeeds and then lumps all of the debt back onto the club ala United and suddenly we are paying for it all over again. I guess this is always a threat regardless of whether you are solvent or not and hopefully the board are good enough to consider the fans regardless of what price they get per share. I think the point is that something should be done about buying clubs. You should have to have a certain amount of the cash initially (say 60% deposit) and the debt should be the owners alone, not the clubs.
Fab04
Much as I like the idea of being 'self-sufficient', I don't think that would change if Kroenke came in. I doubt he'd tamper with the club's financial set-up. Like any owner, he would take his share of the profits, but I don't think he'd dramatically alter the club's investment strategies in any way other than extending them, especially in the US. I also doubt he'd plough his money into the current expenditure bill unless he had a good idea of how that payment would help its own regeneration, or contribute significantly in the aquisition of players. I know our future appears to be steady, but a football club's finances can change very quickly with just a couple of unwise moves and a manager/CEO who isn't up to scratch. I don't see Gazidis leaving for a long time, but Arsene will unfortunately most likely go fairly soon after the club appears steady at the top. If Kroenke takes ownership of the club, and we appoint Arsene's successor wisely, we'll be on a good path, but many other owners would bring in their own manager of choice, a move which has proven unsuccessful in almost every case, and if this and other decisions conflict with and restrict Ivan's powers, he may well take off aswell. It may sound a bit far fetched now, but you only have to look at the likes of Leeds, Bradford, Newcastle and, of course, Portsmouth, among others, to see that it could well happen if the likes of Usmanov take control of the club. This is why, although my slightly nostalgic principles of 'total self-sustainability' may conflict with the idea, I would be somewhat relieved if Kroenke became our owner, because if he doesn't it would only be a matter of time before somebody else does.
ArsenalRob
I have to pick you up on one point deltaforce, if Wenger manages France, or any international team, I will deep fry my balls while they're still attached, sever them with a knife and fork and chow down on the sizeable portion that ensues and post the vid on YouTube. There's more chance of me taking over
Little Dutch
DF - Whilst I cannot agree with the way the Le-Grove writers have made their point, they are in effect of the same mind as yourself. They don't want a debt free club thats then taken over & placed back to square one with huge debts......Herobeard, Fiszman has sold over 8% of his holding to Kroenke so it's hardly just a few shares and to be honest it has nothing to do with stopping Usmanov get his hands on them. After all how can Usmanov buy them if Fiszman or PHW won't sell?? At present Kroenke, Fiszman & then a few others have enough shares to prevent a takeover from Usmanov regardless of whether Bracewell-Smith sells to him or not.
Ashburton Gooner
A very small part of me wants Wenger to manage an international team now, simple for this notion ...*goes to youtube* "LD's deepfried scrotum" ... :)
FuiKaka
It's amazing how fast they're wiping off the debt - the Highbury flats selling much better than before as the economy's picking up a bit? Every single time I've read the Club's financial results, I've felt I'm glad I'm a Gooner. Imagine for the scousers or mancs (not to mention the poor fans or Pompey or Cardiff) their versions would make pretty depressing reading really? One word: pride.
GoonerLou
Btw, watch this video, Ivan Gazidis on the numbers: http://www.arsenal.com/news/news-archive/ivan-gazidis-video Impressed almost everytime I've seen him speak.
GoonerLou
The leGrove writers are mentally handicapped whinging bitches who do nothing more than whine every time somethign good happens, because it IS good and they cannot bask in misery and failure. We wiped off £130 million + off of our debt and they still moan, if they found a fiver on the floor they'd whinge about having to pick it up. Best thing to do with *****s like that is to ignore them.
LondonGooner
Ashburton Gooner, I suppose you think I'm an "AKB" then? There are many ways our club and team can be improved but there is a way and method of criticism. The way Le Moan goes about its points is quite bereft of intellect. Am sure quite a few members on VA can easily refute each and every point they made on their blog today. Whats more, if the points are refuted on their blog, your comment will be banned. Yes. Even if there was zero abuse in ones message. Guess you have become a bit brainwashed listening to P & G without any rebuttal from any other contributor.
Deltaforce
GoonerLou, was that you on LG today extracting the urine? That was really funny.
LD, that sure was a very graphic scenario you painted about AW managing France :-) I cant see AW managing another club barring PSG so thought the only choice he had was the French national team or PSG.
Deltaforce
I thought it was fantastic that Whoever wrote their blog today thought we should play without song 2moro because "stoke bypass the midfield" Song is one of our better aerial players and its his job to shield long balls in front of the back four, anyone with that little football knowledge should refrain from writing about it.
iceman10
Lol iceman. Also funny was their cocksure belief that the club is being made debt free for the sole reason of being sold to Kroenke. How can they assume that the board and other smaller shareholders including AST will approve of a leveraged takeover. Arsenal have been lucky to have witnessed the ill effects of leveraged takeovers at United & Pool. The way they go about assuming things about the club is delusional at best and downright dishonest at worst.
Deltaforce
The headline of their Blog is a scandal.
iceman10
Wonder why Rocky didnt mention le-grove by name , even though it was obvious he was referring to them :) .
Sajit
Deltaforce - To be honest the term AKB never entered my head, I thought we was just having a discussion, the fact you need to start saying I've been brainwashed despite the fact I stated clearly I don't agree with the way Le-Grove go about things tells me that actually you cannot handle a difference of opinion, which is a shame really. It seems that all blog sites have become the same, if you have a different opinion to one of the other bloggers you're labelled a chav or a spud. Personally I like a difference of opinions it's just a shame people cannot control themselves online.
Ashburton Gooner
I came here to see if the le-grove scandalous post was being discussed here. Sure enough.
I tried reasoning there but that place is a mess
Sajit
Delta no, hell no. I swear I only went there once or twice in my lifetime. About a year or two ago. Never since cos I decided to ignore them from the newsnow list, for good reason obviously. I'm too sane to read anything there. And despite your mentioning there's something funny posted possibly by another Lou there, I won't go to check it out, thanks.
GoonerLou
I have to pick you up on one point LD, if you manage France, or any international team, I will deep fry my balls while they're still attached, sever them with a knife and fork and chow down on the sizeable portion that ensues and post the vid on YouTube. There's more chance of me taking over.
ArsenalRob
Well AG, if you hadn't attempted to judge me in your previous post saying that there was not much difference between me and that horrid blog, I wouldn't have responded to you. But then you only seem to like dishing it out.
Deltaforce
Have to say your future is looking bright when you consider the debts of Man Utd and Liverpool. If you can prevent someone buying you and saddling you with massive debts like the Glazers/Gillete/Hicks did etc then you really have nothing stopping you for investing heavily in your side. For the last 5 years youve only been 2 or 3 quality players away from being fantastic - will Wenger spend though? A change of policy (or dare i say a new manager) in the transfer market and i cant really see anyone preventing you clearing up this decade with Chelsea's side ageing, Utd and Pool in debt and City still cack. With such impressive profits like the ones youve just made, there's no excuse other than managerial stubborness why you dont go splash big money bring in a world class keeper, defender, winger and striker and dominate. As a Spurs fan i hope you don't but you really should be doing!
HuddersfieldYiddo
Deltaforce - Go & re-read my comment, I said you were of the same mind in regards to not wanting a club that gets itself debt free only to be taken over & placed in huge debt again by a new owner. This is your quote from earlier "Hope all AFC fans unitedly oppose any future leveraged takeover. Even from Kroenke." Thats the exact same thing that Le-Grove don't want (they have just made the point in a very poor way). If you see that as an insult then I cannot do anything about it, however, it was never intended as such & I have no interest in getting into an online argument with you or anyone else.
Ashburton Gooner
These excellent results have come about mainly due to the upturn in the property market. The football side of things is still showing the same solid signs of growth in the top line. However, I am a little concerned by the increase in wages (claimed at approx 8M in the half year) which would make a 16M increase by the end of ths year. Arsenal already pay one of the highest wage bills, and I do understand this increase is due to the Webster and Bosman rulings. I'm just concerned that this wage increase is not sustainable in the long run.
prits
Cheers AG. No argument from my side anymore.
Deltaforce
The extra £8.6m is largely due to contract renewals as the notes to the accounts state. The club has renewed something like 17 player contracts including those of players like RvP. It is sustainable though obviously has an effect on transfer budgets - but that's the same for everyone.
Amos.
Dont get me wrong - wages as % of turnover will still remain a healthy number for Arsenal, despite the wage increase. However, with season ticket prices being frozen (a good move), and TV money not increasing significantly (unless a new deal can be struck from 2011 onwards for a higher amount), then the increase in expenses will outstrip the increase in revenue. Though this problem will impact Arsenal, it will impact other clubs more severely. This is only sustainable for the next 2-3 years. Something has to give at some point, and it will have to be player wages.
prits
The financial fair play rules due to come into effect by 2013 should help bring some downward pressure on wages but exchange rates and national taxation policies will also have an effect on where the top talent goes and what might have to be paid to keep the very best here.
Amos.
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