In recent days, people demanding Stan Kroenke (and KSE) inject cash into Arsenal to buy players has increased.
Over the years we have been supporters of the likes of the We Care Do You? collective and Black Scarf Movement.
We have been highly critical of the way Stan Kroenke has owned the club. He allowed the club to drift under the guidance of Ivan Gazidis and failed to hold Arsene Wenger and Gazidis accountable which contributed to our demise.
But we also understand business, and do not expect KSE to put their hands in their pocket and inject hundreds of millions into the club to buy players.
A self-sustaining model is still the right way forward. We do not want to be in heavily debt to an owner just for the sake of buying a couple of players.
KSE are right to not be injecting millions into Arsenal to buy players.
“Do better with what we have”
Since 2016, Arsenal have invested heavily in new players:
2016/17 – £101.77million
2017/18 – £137.5m
2018/19 – £72.1m
2019/20 – £144.3m
That is £455million spent across the last 4 seasons; an average of £113m.
The problem at Arsenal is not that we have not spent enough, but that we have bought (and sold) poorly.
Imagine being a CEO going to an owner asking for a cash injection to buy players. The first question the owner will ask it “why should I inject cash in to buy players when you have spent the clubs money so poorly”.
And that would be followed up with “you have 32 players in the first team squad. Sell players you do not need firstly, and then come back to me”.
We have bought poorly in the last 4 years.
Shkodran Mustafi – £36.9m
Lucas Perez – £18m
Henrikh Mkhitaryan – £30.6m (book value in Alexis Sanchez exchange)
Lucas Torreira – £25.8m
Sokratis – £14.4m
That is over £125m squandered on players.
And that does not take into account £72m spent on Nicolas Pepe on the £350,000 a week Mesut Ozil is in
Arsenal have at least half a dozen players they want to sell (Calum Chambers, Mustafi, Torreira, Matteo Guendouzi, Sokratis, Ozil).
These players could generate above £70million in transfer fees and reduce the wage bill by nearly £40million a year.
That is £110m we have in players we do not want.
Arsenal’s biggest issue is not that Stan Kroenke does not invest in the playing side of the club, but we do not spend our own money well enough.
It is like going and spending all your wage over the weekend and then having to beg your mum for bus fare to get to work during the week.
Kroenke is right to demand Arsenal “do better with what we have” before asking for more.
Buying players
So Arsenal are after Thomas Partey and Houssem Aouar.
The pair would cost the club around £100m in transfers and a further £15m a year in wages.
A further cash injection of £180m from Kroenke would buy both and “pay their wages” for the 5 year deals both would get. But it is a temporary fix.
Even if he fronts the money for the transfers, and left the to finance the wages, it would still be an investment of £100million.
Remember above? We have spent poorly in recent years. We have over £100m in “talent” that we are looking to get rid of.
Why would a business owner invest £100m, when the business has £100m of sellable assets, and has purchased so poorly in recent years?
Kroenke is right not to inject cash into Arsenal’s playing side, which at the minute is a blackhole for money.
KSE have already injected £160m
Earlier in the pandemic, KSE took out a loan that enabled them to loan Arsenal money. In turn Arsenal paid off a huge chunk of the bonds they owed on the stadium, dramatically reducing the debt to the bank.
The terms of the loan from KSE to Arsenal have not been released, but it is likely these will be much more favourable than Arsenal’s repayments to the bank.
What the loan also allows is some flexibility.
Arsenal had to repay the loan to the bank each month, each year. Defaulting would dramatically damage Arsenal’s credit rating.
With the money now owed to KSE, a decision could be made that Arsenal do not start repaying the loan until 2021 or 2022. This would free up over £20million a year in Arsenal’s finances, reducing the pressure on Vinai Venkatesham and Edu to make further cuts in both the playing and non-playing sides of Arsenal.
Keep the powder dry
Arsenal are set to lose publish an estimated loss of £44m for the 2019/20 season. For 2020/21, it will be £80m. It could end up as high as £120m if teams play the entire season behind closed doors.
Add the £3m loss made in 2018/19, Arsenal could be close to losing £200m over 3 years. That is huge.
If KSE were to inject further funds into Arsenal, it would make more sense that those funds are used to manage Arsenal’s debt and offset the huge losses we are set to make, rather than buy Partey and Aouar.
An owner should only be injecting funds in a business when that business is struggling financially. A good owner will finances the debt allowing the business to continue trading and rebuild.
With everything going on in the world, everyone’s finances are going to be stretched, whether you are a day labourer or a billionaire.
It is more sensible that Kroenke keeps his powder dry, and only injects cash to help offset losses, rather than inject cash to sign 2 new players.
We appreciate Kroenke is not everyone’s cup of tea, and that he let the Gazidis / Wenger show go on too long. But we also understand business.
Arsenal’s management need to do better with the money the club generates. Need to buy and sell better. Stop offering contracts that are over market value.
Also you do not want to be too much in debt to an owner.
It is all well and good demanding he injects cash to buy players, but what then if he puts a high interest on that loan and begins to take money out of the club?
Finance from Kroenke should be a last resort, used to help with club operations, not to sign players.
Arsenal were established 131 years ago. We do not last another 131 years by getting heavily in debt buying a couple of players during a recession
If Arsenal lose £200m across 3 years, Kroenke will need to inject cash just to keep the club running.
Lets focus on the long term future of Arsenal, not a short term injection of cash to buy a couple of players
Keenos
She Wore A Yellow Ribbon 
Stanley TikTok wont spend a buck on Asn’l. So don’t worry, you Asn’l Haters.
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However it’s a pain in the ass to say, we need Levy from the Spuds to teach our Board of Direktors how to buy, and how to sell. The man is a genious.
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Levy is the highest paid director in football and in the 19 years he has run Spurs, they have won 1 League Cup
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More Obfuscation and rubbish by “Keenos & Co.” ignoring the pertinent analysis and a cost and benefit analysis.
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Please write a cost and benefit analysis and we will gladly publish
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Points made in the article are valid. But one shouldnt always look backwards. Question is do you purnish current managemenent for mistakes which are not theirs? What the analysis has so ignored is the impact of not qualifying to champions league that would be a consequence of non-investment. Also, basically, every team in the league is strengthening(investing)..This would drag Arsenal way downwards and as a consequence drive the share price(Market Value) of the club down. Additionally, a quick comparison against say Chelsea investment over the years will make Arsenal amounts blush…So yes KSE need to invest or sell the club to people that can.
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One of the first articles that makes sense about arsenal finances…as fans we want to spend spend spend …and any owner who does not spend is a demon…I too agree that Kroenke is a demon and wished he was not the owner of the club
But the truth is we are where we are and liverpool is where they are because we managed our business poorly and they handles theirs expertly
Arsenal has been a basket over the last 5 yrs and Wenger and Gazidis Bankrupted the club
It is easy to spend when it is someone else’s money
With the figures you’ve given above if any of us fans were spending our money …how many of us will continue to spend to keep the madness going…because the mismanagement to this club is madness
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This is a complain by the kse as I see it,what would you say about the likes of man city,Chelsea,man utd and so on,that keep up with the club because they know that the more they spend,the more the result…I would advise Mr kroenke and group to sell the club if they think they are spending too much with no results and let a worthy buyer that will know the need for success come forward,I know many business consortium will be waiting for that great opportunity…leave the club and don’t complain
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Though I am a big fan of financial prudence and living within your wins, I disagree with the above article in this instance.
We are at a critical juncture. We have been out of the top four, and need help to get back in. As Arteta pointed out, others are strenthening so if we stand still, we risk falling further behind.
For a chance, we have a modern manager who is working miracles. He shouldn’t be punished for Arsenal’s mistakes in the transfer market in the past 4-5 years or the dire coaching the team has received under Emery and the latter wenger years which further regressed their potential.
If we don’t support Arteta in realising his ambitions, the minimum being equip him with a squad worthy of challenging, we will lose him. And then we wont be able to attract a top quality manager without promises of further money being spent in the squad.
So KSE have to decided between perpetually remaining a mid table club like Spurs were for couple of decades, or helping the club for the next year or two especially in this time of the pandemic to get them back into the Champions league places before reverting to self-sustainability model.
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Bottom line is: if KSE had shown the relevant amount of interest when the first bought the club, and in subsequent years, there would not have been a cause for this article, you made your mistakes now pay to fix them, if you really care, or get to hell out before it gets worse.
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An accountant is a accountant is an accountant
The spenders and the non spenders are all ignoring the club will be sold To the highest bidder
And if it’s not will end up in the Finsbury Park league.
You have seen Chelsea / Man City Overtake us and soon to be Everton / Newcastle
There will be a super league and only the rich will be invited.
So get the cash out or fade into oblivion
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If purchases were ignorantly.. that means we haven’t bought the right players= you admit we dont have the right personnel => that means we need to buy=> we need investment=> KSE invests half billion on their NFL Team => & Everybody blames ozil for not taking a cut rather than those greedy owners injecting some cash.
You need the frame work to build a self sustaining business … thats what the investment is for.
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I generally like the posts here, but this is a surprisingly shortsighted article.
I cannot agree more to the part where Arsenal is a poor seller (probably the worst), but the other arguments – about buying – is pretty far from the truth. Even the examples are wrong and misleading.
Shkodran Mustafi – £36.9m
While many believe this was the worst piece of defender buying, they are all wrong. Mustafi was an excellent CB at Valencia, and he made Messi the GOAT disappear for more than a single game. Probably he is more suited for man-marking an exceptional opponent, than zonal defense against a physical, tall team, but paying 37M for a 24y World Cup winner was never a terrible business; although it didn’t live up to the expectations.
Lucas Perez – £18m
This was indeed a wrong signing. The board did id under huge time pressure, which is not a perfect excuse, but is not a pattern either. Nevertheless I can imagine worse thing than to pay 18M for a player unfit to the team’s style of play, and who worth 13,5M a year later. Yes, we manages to screw up selling Lucas, but that is more signature of a move than his haste signing.
Henrikh Mkhitaryan – £30.6m (book value in Alexis Sanchez exchange)
Yes it was a disaster, but still probably the best choice to make at that time. Of course the club (Arsene? Ivan?) screwed up big time by letting Sanchez – who was undoubtedly among the TOP 3 players of the PL – enter his final year, but considering this crying over spilt milk, what else could Arsenal do? Let Alexis go for free at the end of the campaign? Grant him a weekly 500k (besides Ozil’s 350)? The Mkhitaryan swap seemed a potential salvage at the time, and could have seen like a good deal. And Mikhi is not a bad player – as he clearly showed in Rome – just didn’t fit the profile and style of Arsenal.
Lucas Torreira – £25.8m
Come on, mate! Lucas is a remarkable footballer. He played great games in Emery’s 4-2-3-1, and never was the weak link in the team. Yes, he doesn’t really fit in Arteta’s 3-4-3, and he probably hasn’t fully adjust to the English football and lifestyle. But bringing Uruguayan up (who was worth 50M half a year after his 26M signing) as an example of poor buying is just plain incompetence.
Sokratis – £14.4m
We bought the experienced CB for 14.4M who was valued at 18M at the time. He played 2 (OK, 1.5) good seasons with us, as we didn’t have a system at the back, and a no-nonsense defender seemed like a good idea at the time. Now he is 32, and Arteta expects more creativity from our defenders, so this is not the time for no-nonsense guys, but he was valued at 16.2M before the pandemic-related devaluation. So again, this is an example of Arsenal’s incapability to know when – and at what price – to sell, but not the epitome of poor business.
Pepe – £72m
Well, the jury is still out there, but Nicolas had an exceptional season with Lille (and was worth 58.5M when we bought him for 72), and Lille was willing to accept installments over several years. There was not a better business to be found; definitely not £80M cash for Zaha. Furthermore Pepe was a major signing to bring back the support of the fans, so let’s not write him down just yet.
Özil – 350k a week contract
Again, this was a lose-lose situation you are trying to disguise it as lack of competence or common sense. I believe that it was the lesser of 3 evils, but I very well may be wrong. However it is hard to imagine letting Mesut go for free or sell him at half price (as we did with Cesc, RvP, Song and co.) would have been shrewd business.
We have the luxury to see things from hindsight, but that is not fair to judge the past decisions upon it. All clubs make good and bad business decisions; here are some notable mistakes:
Liverpool: Benteke, Caroll, Lallana, Downing, Markovic
Manchester City: Cancelo, Robinho, Sané (sell), Bony
Chelsea: Kepa, F. Torres, Drinkwater, Bakayoko
Manchester United: Maguire, Lukaku (buy), Sanchez, Fred, Veron, Bailly, Herrera, Schneiderlin
Tottenham: Sissoko, Soldado, Janssen, Aurier
Everton: Sigurdsson, Iwobi, Bolasie, Klaassen, Tosun
Leicester City: Slimani, A. Silva, Ghezzal, Ward, Okazaki, Ulloa
Arsenal has many flaws, but actually is not among the bad buyers.
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