Tag Archives: Arsenal

Player sales to finance 65% of Arsenal’s £180m summer spending spree

In a recent blog, we touched on the subjects of amortisation and player book value.

If you do not have time to firstly read this blog, amortisation is the accounting tactic of spreading the cost of a player’s transfer fee over the length of his contract – with it being further amortised if a player extends.

Meanwhile, a player’s book value is the difference between what we bought a player for, minus what the value of the transfer fee already amortised for. Book value is a more important metric at assessing profit / loss of a player than the simplistic net profit.

To take this thinking a step further, and to try and look into the future, I thought it would be interesting to look at the players that could possibly leave us this summer and assess:

  • What their book value is
  • What profit (or loss) we are likely to see if they are sold
  • What saving they would make us in amortisation costs if they were sold

As discussed in the previous blog, book value is important as it is this difference that determines if you show a profit or loss in your accounts following a player sell.

Sell for less than their book value and you have to use additional funds to offset the difference, whilst it is the amount your sell for above the book value that becomes available to purchase replacements (and not the entire incoming transfer fee).

Assessing the amortisation saving is also important as that determines what can be spent on new incoming transfers without us needing to increase costs – IE if Player A was costing us £10m a year and we sold them, and signed Player B for £50m on a 5-year deal, our outgoings per year would be the same (without taking into account wage differences, agents fees and bonuses).

Together, book value profit determines your new cash flow when buying a player, whilst amortisation helps you understand how much space you have in your accounts to add additional costs (once the outgoing players costs have been taken off).

Note: Ramsdale’s book value has been incorrectly calculated. It should be £8m, with £16m amortised. That would increase his book profit to £17m and make the total book profit £126.12m.

Now a caveat before I start, as I know a few of you will be jumping to the comments straight away – the market value is taken from Transfermarkt. Whilst I understand that this is not accurate (as a player’s value is based on what a club will pay for them, not on an algorithm), it is a good place to start.

Every player that looks overvalued (Tavares, Nketiah) is offset by someone that is undervalued (Ramsdale, Lokonga). I think if we received north of £150m for the 8 players mentioned above, we will be doing well.

So this is where what we learned in the last blog can be put into practice.

£158m incoming transfer fees will equate to a book profit of £126.12m. That means that once the remaining unamortised transfer fees is accounted for, we will still be showing a nice profit.

When you consider I have a 5 man hitlist for the summer (yes, I know my list means nothing), which should come to around £180m in spending, we would only need to find an additional £70m in cash money to pay for these new signings.

When it comes to amortisation savings, things are maybe not quite as rosy.

The 5 players that did not come through our academy cost us in the region of £21.44m a year in amortisation costs. I am going to round this up to £21.5m. If you take me £180m and divide it by 5 (all likely to join on a 5 year contract), then the amortisation costs of those coming in will cost £36m. That is a difference of £14.5m

What is interesting is that the amortisation saving, over a 5 year period, comes to £107.5m. So not too far off the £126m we would make in book profit.

So I can comfortably say that if we sell the 8 players mentioned above, we can spend around £110m with it having zero impact on our finances – again, we are not taking into account wages yet. A blog for another day that.

So where does the additional £60m that we need in cash flow come from, and £14.5m in additional amortisation costs? Well that is not an easy answer.

The additional funds will come from one of two places – making savings and increasing further revenue.

Under making savings are things such as wages – if the 5 coming in cost less per annum than the 5 leaving, that saving can simply be transferred across to the amortisation line of the accounts (think when you adjust your budget on Football Manager).

You get Partey’s £200k salary off the wage bill and replace him with someone like Martin Zubimendi on £115k a week, that is a saving of £4.4m a year.

Likewise, I have not accounted for Mohamed Elneny and Cedric Soares. The pair will leave us for nothing at the end of the season (Elneny’s amortisation is so low after 8-years at the club it was not worth factoring in), but cost us around £6.5m a year in wages.

Considering they will not need to be replaced, that is a huge saving that can be put towards covering the increased outgoing.

The second one is further increasing revenue.

Champions League revenue for this year will make a huge difference. We can probably expect to earn around £80m more from this season’s European exploits in comparison to last year’s Europa League. That would more than pay the difference.

We can also look at selling some of the academy graduates that are not up to grade – I am thinking Arthur Okonkwo (who since writing is leaving us on a free) and Charlie Patino. you would expect those two to raise us around £10m combined. That £10m can go straight into purchasing new players.

So if we get things right in terms of outgoings this summer, we could comfortably finance a move for £180m worth of new signings without our costs increasing dramatically.

And whilst the net profit merchants will point to a £70-80m net spend, we will all know this does not really matter. What matters is what is in your accounts and that is amortisation and book value.

In the 3rd installment of this mini-series, I will explore the 5 players on my list, and the financial implications of signing them against what we could be selling. I will also further explore the salaries of those who might leave compared to those coming in and see if we can end up with a “net zero” summer.

Have a great day.

Keenos

Ange learns Tottenham have “a loser mentality fanbase.”

“What will be will be”.

When I read that before the game it bought everything into clarity to me.

We were not reliant on a favour from Spurs, nor were Spurs going to help us win the league. This was just another game in a marathon of games to determine who the best team in the Premier League were. And in the end the result was what most of us were expecting.

Uninspiring Spurs

Spurs did not really turn up for the game, but this has nothing to do with them downing tools due to the title race situation

Since Ange won London Manager of the Year, Tottenham have played 12, and won just 5. They went into 2024 in the title race, with many online experts claiming they would run Manchester City all the way. They have collapsed in 2024 and the league table since 1 January has them 8th.

It was not their choice to put in an uninspiring performance against City. They are just an uninspiring team who embarrassingly celebrated beating Sheffield United at home back in September like they had won the league.

Whilst their fans celebrated like the winners they are not, yesterday’s defeat was their 5th in their last 6 games. They have dropped out of the title race, failed to finish top 4, and might drop out of the European places all together.

Ange is quickly learning why Tottenham are such a failure of a team. Their fans have a loser mentality.

Over the last 30-odd years, the biggest success for Tottenham fans is Arsenal not winning a trophy.

Whether that was 95, 99, 00, 06, 2011, 2019 or 2023. Tottenham have had so little success in the last 3 decades that they resort to celebrating our failure like it is their victory. And it was no different last night.

Whilst their fans celebrated losing a game at the final whistle, Ange Postecoglou was seething. There is a clear separation here between their manager who wants to win things, and their fans who are more interested in Arsenal not winning.

Tottenham fans may well have been celebrating into the night. But once again they were celebrating their another teams failure rather than their own success.

Tottenham are an uninspiring team with a loser mentality fanbase.

Magnificent City

Last season the narrative was that Arsenal had bottled it. That we had fallen off. What City had done in the 2nd half of the season went unnoticed – To clinch the title they went on a 12 game winning run, and won 14 from 15. It is form that would win the title in any year. Except this.

With Arsenal chasing them all the way, City have had to up their game to yet another level. They are on an unbeaten 22 game run, winning 18 and drawing 4. Zero losses. You need to praise that sort of form (regardless of the charges).

City are not top of the double because Arsenal bottled it, nor are they top because Spurs rolled over and let their bellies get tickled. City are top because they deserve it.

Brilliant Arsenal

The 18 games City played before they lifted the title in 2022/23, City’s form read: P 18 W 16 D 1 L 1. It is that form that won them the title.

12 months on and our form is eerily similar – P 17 W 15 D 1 L 1. Beat Everton on Saturday and we would have showed the exact same title winning from that City showed last season.

Arsenal’s form in the second half of the season has been exceptional. The only difference being our run started with 18 games to go, City’s with 23 games.

In the last 17 games, we have shown the form that would get us the equivalent of 102 points. Over the last 22 games our average drops to an equivalent of 86 points, whilst City’s maintained at 100.

What we now need to do is put together a full season – the first half of last season and the second half of this. But ev en that will not guarantee a title as Liverpool showed when they got 97 points and still finished second.

I am still very very proud of what they boys, and Mikel Arteta, have done this season. We have pushed City closer than last year, stayed in the title race longer, and all whilst playing Champions League football.

But proud does not win you trophies, and that is the next step for this Arsenal side. We do not want to become Spurs under Mauricio Pochetinno who celebrated just competing and never won anything. We are The Arsenal and we need to win trophies.

And it is not over…

A lot of people will be writing our obituaries today. But the title race is not yet over. It still goes down to that last game of the season.

I do not expect West Ham to get anything from Sunday’s game. They are nearly as bad as Tottenham with just 2 wins from their last 6. They have collapsed in the last dozen games and their European hopes have diminished and manager set to leave in the summer.

But where there is hope there is the potential of glory, and I will still be going Sunday with a little bit of belief. Not much, but a little.

The odds are against us. Not since 1989 has a team starting the last day top failed to win the league. But then we all know what happened that year.

UTA

Keenos

Match Report: Man U 0 – 1 Arsenal

Manchester United (0) 0 Arsenal (1) 1
Premier League
Old Trafford, Sir Matt Busby Way, Stretford, Manchester M16 0RA
Sunday, 12th May 2024. Kick-off time: 4.30pm

(4-3-3) David Raya; Gabriel Magalhães, Ben White, William Saliba, Takehiro Tomiyasu; Thomas Partey, Martin Ødegaard (c), Declan Rice; Bukayo Saka, Leandro Trossard, Kai Havertz.
Substitutes: Aaron Ramsdale, Gabriel Jesus, Emile Smith-Rowe, Gabriel Martinelli, Eddie Nketiah, Jakob Kiwior, (Jorge Luiz Frello Filho) Jorginho, Fábio Vieira, Oleksandr Zinchenko.

Scorers: Leandro Trossard (20 mins)
Yellow Cards: Bukayo Saka, David Raya
Arsenal Possession Percentage: 46%

Referee: Paul Tierney
Assistant Referees: Scott Ledger, Mat Wilkes
Fourth Official: Darren Bond
VAR Team at Stockley Park: VAR John Brooks; AVAR Constantine Hatzidakis

Attendance: 64,137

Our penultimate match of the season, and it just has to be Old Trafford on a sunny Sunday afternoon. Of course, after yesterday’s results, it is more important than ever to gain maximum points from this afternoon’s game, nothing else will do at this stage of the season. Apparently, there are fitness concerns over Bukayo Saka and Takehiro Tomiyasu; but however, if they are available it would mean that Mikel Arteta will be able to name the same starting eleven for the fourth match in a row!

We kicked off proceedings at Old Trafford, and immediately we brought the match to the home team by pressurising their defence into conceding an early corner. Bukayo Saka had the first shot of the game, which André Onana comfortably saved.

At the other end, Rasmus Højlund had a chance to score, but fortunately he scuffed his shot, and then Alejandro Garnacho also had a chance to score, but his shot was deflected for a corner. Declan Rice then made a very nervy, but weak back pass to David Raya, but fortunately the ball was cleared.

The home team advanced deep into our half through Diogo Dalot, and as the ball came loose, Declan Rice cleared it for a United corner, which went nowhere.

We then started to get a grip and had a period of good possession, and then on the twentieth minute we opened the scoring when Casemiro could not get out of the United penalty area quick enough and Kai Havertz was onside down the right wing. He simply sauntered into the Manchester United box and slotted the ball across for Leandro Trossard to tap the ball home from close range.

Now that we have scored, we were starting to control the game. Declan Rice advanced towards the United penalty area, but he lost the ball and it fell to Takehiro Tomiyasu who’s strong shot bounced off a United defender, and a couple of minutes later, Ben White was unlucky not to score when he hit the ball over the crossbar from a very tight angle indeed.

On the half hour, the home team got into our penalty area, but the shot from Casemiro was headed clear by Gabriel, which was good defensive play indeed.

A diagonal pass into the our penalty area from Casemiro which was chested down by Ben White back to David Raya, which was a good move, and after Amad Diallo stood on Thomas Partey’s foot, which although the United team appealed for a penalty (which it obviously was not), everyone took the opportunity to have a well-earned drinks break.

A poorly taken corner kick by Diogo Dalot ended up with a United player fouling Kai Havertz, and after the subsequent free kick went seemingly nowhere, the match carried on.

Amad Diallo passed the ball to Garnacho who was pushed down the line by Ben White. He sent a low cross-shot into the penalty area which was beautifully palmed away to safety by David Raya. During the three minutes injury time the home side put our defence under pressure, but we held out very well to end the first half a goal ahead.

Manchester United kicked off the second half, and almost immediately Diogo Dalot ran down the wing, but Thomas Partey slipped as he tried to clear the danger, but fortunately William Saliba was on hand to kick the ball away. Shortly afterwards, Martin Ødegaard started a good move out on on the right wing and found Leandro Trossard on the left wing, but his diagonal cross was far too heavy for Kai Havertz to do something with, and so the ball bounced out of play.

We started to gain a lot of possession, and we almost grabbed a second goal when a shot from Declan Rice was blocked on the edge of the penalty area and after the ball ended up on the left wing with Leandro Trossard, the United defence again closed down the space to stop Bukayo Saka turning the ball into the back of the net. Shortly after the hour mark, space opened up for Martin Ødegaard but his shot went straight at André Onana, and a minute or so later, Gabriel Martinelli replaced Leandro Trossard in order to press for more goals.

With eight minutes of the match remaining, Bukayo Saka slid off the steep slope behind the goal and clattered into the advertising hoardings. Mikel Arteta told him to go down, which he did, and was quickly replaced by Gabriel Jesus.

After yet another Arsenal corner, the heavens opened and torrential rain replaced glorious sunshine in seemingly an instant. A minute before the end of normal time, Alejandro Garnacho ran at our defence again, but was expertly blocked off by William Saliba. In the six minutes injury time, Jakob Kiwior and Jorginho replaced Martin Ødegaard and Thomas Partey to try and shore things up, which worked very well as soon as they came onto the pitch. Shortly after David Raya easily collected a cross, referee Paul Tierney blew his whistle to signify the end of the game.

And so this season’s title race will go down to the last match of the season next Sunday, irrespective of the result between Tottenham Hotspur and Manchester City on Tuesday. Today’s match was not the prettiest of games, but we got the three points which is what counts at this stage of the season. Everyone did as well as they could today, especially when the downpour happened five minutes from the end of time. All eyes on Tottenham Hotspur Stadium on Tuesday evening, then. Well done, chaps!

Remember everyone, keep the faith, get behind the team and the manager, as this season is going to be crucial for our future success in all competitions. Stick with the winners. Our next match: Everton at the Emirates on Sunday, 19th May at 4.30pm (Premier League). Be there, if you can. Victoria Concordia Crescit.

Steve

Too Dearly Loved To Be Forgotten: Arsenal v Racing Club de Paris 1930-1962 by Steve Ingless (Rangemore Publications, ISBN 978-1-5272-0135-4) is now available on Amazon