Tag Archives: Arsenal

Arsenal’s £200m War Chest – The Truth

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So Arsenal director Lord Harris of Peckham has announced to the world that “there’s over £200million in the bank.” As expected, this has led to the usual Twitter brains demanding we “spend some F’ing money” and the usual lazy journalists leading with headlines such as The Expresses  “Arsenal’s £200m War Chest.”

The fact is, Arsenal having £200m available for transfers is a big myth. We do not.

Yes, it is correct that we have £200m in the bank, but this is not unusual for this time of year. Season ticket money has just been paid, alongside lump sums of sponsorships and other incomes. I bet if you look at every club throughout the Premier League, they are all cash rich at the moment – bar Liverpool who have spent everything.

Now every adult will know, having money in the bank is very different to having money to spend.

For those who get paid monthly, you will be aware of this scenario.

You get paid on the 31st of the month, it so happens to be a Friday. You have £2,000 sitting in your bank account. Your bills go out on the 1st of the month – your mortgage, your car lease, your TV licence, your Sky Subscription, your utilities, your monthly travel card, etc. As the 1st is a Saturday, these bills will not come out of your bank until the Monday. These expenses come to £1,500.

So what do you do? Go out with the work mates on Friday? Sit in the sun drinking all evening, before heading to Rainbow’s Sports Bar on Shoreditch High Street. Wake up Saturday morning, round of golf with the lads, before an all day session leading to you ending up buying Champagne for everyone in a bar in Islington, getting home 5am Sunday morning. Sleeping off the booze, having KFC for lunch and a Chinese for dinner.

Throw in a few taxi’s and that new driver you bought playing golf, you have had a turn out, of a weekend, a stag do of a weekend even.

You check your bank balance on Monday morning. Your bills have gone out, and then it hits you, you spent a little too much over the weekend. Your bank balance currently sits at -£245. And it is another 27 days until pay day, and you have not bought any food yet.

Looks like you will be leaving off rice and ketchup for the month and not going out again.

The fact is, despite their being money in the bank, this does not mean you have all the money to spend. You have outgoings as well as incomings. You need to budget for those outgoings. Whether it is short term like your phone bill, or long term like saving for Thailand next year. And this is the same with business.

Lord Harris sells carpets for a living. When he sells a rug, does he go off and buy cocaine and champagne to celebrate? No. Because he knows he needs that money as he has a bill to pay to his rug suppliers for the latest delivery. The £199 he got for that gastly Persian rug is already earmarked for other things.

And football is also the same.

Arsenal might have £200m in the bank at this moment in time, but from that money, they need to budget, not just for the month, but for the year.

In the 2013/14 accounts, Arsenal’s operating expenses were £250m. This included £166m in staff costs. Also known as wages.

So Arsenal are sitting there, with £200m in the bank, but know they have to pay out £166m in wages over the next year. And in other costs associated with running the club, such as ground maintenance, policing costs, and buying the tea for the tea lady to serve, that £200m soon disappears.

Obviously Arsenal still have more money to come in, mainly from sponsorship and TV – the turnover (ie money in) during 2013/14 was £300m, This will cover further costs and leave money left over for transfers.

Arsenal know what they have to spend in their bank on transfer. They are not stupid businessmen. They run FTSE 250 companies, they have been Director’s of the Bank of England, they are self-made billionaires, they are Oxford educated. They know what they are doing.

I am sure they know a darn site more than an unemployed benefit claimant on twitter shouting ‘Spend some F’ing money’ who is probably up to his eyeballs in debt due to over spending and not having a clue about budgeting. Or the fan who lives his life online, bought Karim Benzema for Arsenal from Lyon on Football Manager 10 years ago and does not understand why Arsenal do not simply offer £100m for a player, and when it comes to negotiating the contract, click the players name, change the big to £0, click back and offer the player the contract. Messi on a free, it’s easy on a computer game (is this glitch still on the game?)

Arsenal have £200m in the bank, that is correct. But they do not have £200m to spend. The figure, according to the Arsenal Supporters Trust,  is closer to £60m. Yes, we could debate why that money has not yet been spent, but that is another blog for another time.

In summary, ignore the sensationalist headlines, we do not have a £200m war chest, and if you think we do, enjoy eating rice and ketchup every month.

Keenos

Wojciech Szczesny a target for Premier League rivals?

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It seems now, after months of speculation, the Wojciech Szczesny could have played his last game for the club.

Back in January, after the smoking incident against Southampton, Arsenal legend John Jenson said on Danish TV that Szczesny’s Arsenal career was pretty much over. At the time, many scoffed, questioning how the former Danish International would know such information. Zero Premier League appearances and a Petr Cech later, it appears his Arsenal career is over.

At the time of signing Petr Cech, it was expected that David Ospina would be the goal keeper who makes way. With Sczcesny given the opportunity to be understudy for the form Chelsea keeper and be given time to develop and learn from an experienced senior player – something which he has never had in his career.

But it now seems that it will be Sczcesny who is moved on, rather than Ospina. According to current reports, his likely destination at the moment is Italy, Roma to be exact. A loan deal with an option to buy. However, there is a very good chance he could end up at one of Arsenal’s Premier League rivals. Manchester City, Liverpool, Manchester United or Chelsea. Here me out.

There is only one reason Arsenal have not already dumped Sczcesny. He is home grown.

We have seen this summer how important having enough home grown players in your squad is. Manchester City have spent an extortionate amount on Raheem Sterling. They have also reportedly given Fabian Delph a £100,000-per-week deal.

You then have Chelsea. Set to offer £30m to Everton for John Stones. A lot of money for someone who has only started 38 Premier League games. It will be a transfer which will exceed the £29.1m Manchester United paid for Rio Ferdinand, who at the time had 171 Premier League appearances and been part of a Leeds side that had recently made the Champions League semi-finals. And he had 28 England caps.

There are many other examples of the ‘home grown’ levy. Luke Shaw to Manchester United, Calum Chambers, Theo Walcott & Alex Oxlade-Chamberlain to Arsenal. Andy Carroll to Liverpool. The wage being paid to Milner. English players, especially young talented ones, are expensive.

When you think that Arsenal signed Per Mertesacker for under £10m, a centre back who at the time had 70+ German caps, and then signed Calum Chambers for nearly twice as much, a played who was not even a Southampton regular, it really opens your eyes up.

The issue obviously stems from a lack of decent home grown talent. The top clubs are not developing their own players, and those clubs further down the chain are not developing too many more. Just look at England’s poor showing at the recent Euro U21 tournament. With both the Premier League and Champions League quota on home grown players, it creates a massive demand for top home grown talent, but without the supply.

So what does all of this mean for Wojciech Szczesny?

Despite being Polish, Szczesny is considered as home grown, having joined Arsenal at 16 – the home grown rules dictate that a player must have been at a club for 3 years before he was 21. This means he is a valuable asset and worth a lot more than he would were he not home grown.

Added to him being home grown, he is still a decent goal keeper. Easily good enough to be 2nd choice at any of the top Premier League sides. At just 24, he could still become a first choice, but at worse, he has a decade ahead of him.

With Manchester City and Chelsea desperate for home grown players, Liverpool after a back up keeper for Mignolet, and Manchester United looking for a De Gea replacement, Szczesny would have plenty of potential suitors on the UK market. And with his home grown status, his value rockets.

The reports are that Roma will have a £3.5m first choice on him. This would be a silly move for Arsenal. In the current market, were Szczesny’s value is increased, Arsenal could receive a fee closer to £20m.

If Arsenal were to sell him to Roma, it would not surprise me if within 2/3 years he is back in the UK, with Roma making a big profit on him. Home grown is that valued.

If Arsenal are looking to move Szczesny on, selling him to a Premier League rival will be the best deal for the club.

Keenos

 

Is Olivier Giroud worth £130k a week?

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Last night is was announced that Olivier Giroud was on the verge of signing a new contract with Arsenal, paying him an astonishing £130,000 a week. The first thought is “Wow! That’s a lot of money” and it is.

But is he worth it?

In football, players are a stupid amount. They are all on too much money. But that is life. When TV revenue is as high as it is, and the TV companies are paying for those footballers on the pitch, the money will always flow down to those footballers. Every time a new TV is signed, agents up and down the country knock on the managers door of their clients and demand a bit of a slice of that pie. And more often than not they get it.

You only have to look at James Milner. He is on £150k a week. Raheem Sterling has just signed for Manchester City for £200k a week. When Manchester City signed Adebayor, they paid him £170k a week. Nasri £185k.

At Manchester United, Wayne Rooney earns a reportedly £275k a week. He has scored 49 goals in the last 3 years. Olivier Giroud has scored 58 goals in the same period. The previously mentioned Adebayor also got 58 goals in his 3 full seasons at the club.

Many Arsenal fans want the club to sign Karim Benzema. He gets paid around £240k a week. Olivier Giroud keeps him out of the French national side.

The money footballers get paid grossly high. Rather than compare Giroud’s £130k a week to that of the normal man (or soldiers wages) it should be compared to his contemporaries. You do that, and you realise that £130k a week is probably right for someone of his talent. A first choice international striker, playing for a top European side, scoring consistently.

It is not just footballers that have crazy salaries though. Lewis Hamilton is paid £32m a year (£615k per week) to drive a car round in circles. Top cricketers in the Indian Premier League can earn over £1m for just 6 weeks work – £166k a week. And then we have America, where NBA, NFL and baseball stars can earn into the hundreds of millions throughout their career.

Sport has become such a commercial vehicle, TV companies and sponsors are willing to pay billions to be associated with it, and these billions end up in the players pocket.

So is Giroud worth £130k a week? In the inflated, bloated, cash rich would of football, you would have to say that is his par salary.

I agree, it is sickening.

Keenos