Tag Archives: Stoke City

Arsenal fans unrealistic to expect Stan Kroenke to pump in billions

Last week Stoke City announced £30.1m pre-tax losses for the 2017/18 season. When you consider that they received £98.8m in TV money for that season, to lose £30.1m is huge mismanagement.

Due to the huge TV deals, football (in the top flight at least) is in an era where clubs no longer make huge losses. That they tend to spend within their needs, and turn over a profit.

In 2016/17, Stoke City made a £5m profit, to then turn that into a £30m loss shows how much they overspent in an attempt to remain in the Premier League.

Why clubs are still willing to get themselves hugely into debt, chasing what they deem to be success, it beyond me.

Whether that success is winning the Premier League or remaining in the Premier League, surely clubs have learnt their lessons from the likes of Portsmouth and Leeds?

That whilst getting yourself into debt might help you to be a success in the short term, it is detrimental to the long term stability of the club.

The fact that in 2016/17, 19 of the 20 clubs made a profit showed that every club was spending within their means, and not getting into huge debt chasing the golden egg. Stoke City getting into huge debt in 2017/18 is just silly.

Only really Manchester City in the Premier League are racking up huge debts – but these are being covered by the owners who have recently been exposed for flouting FFP rules and pumping in £2.7bn.

I bring up the situation with Stoke City as some Arsenal fans have consistently called for Stan Kroenke to put his hand into his own pocket, and finance Arsenal to success.

The truth is that Kroenke is not rich enough to finance us to success, and the only way he could do it is to take out loans against the club to free up cash.

Reality is, Manchester City and PSG are the only two top level clubs who are being bankrolled by owners. Every other club – from Real Madrid to Bayern Munich, Manchester United to Juventus, Borussia Dortmund to Barcelona – operate a self sufficient model. They spend what they bring in.

Now some of these clubs might have some dodgy account, be in huge debt, and have flouted EU state funding rules, but for long term success and stability of your club, the aim is to generate and spend your own money.

Arsenal have ran a self sufficient model for as long as I can remember.

The move to the Emirates was part of this. To increase income from gate receipts to close the gap on those clubs at the top who had 60,000+ stadiums.

By promoting Sven Mislintat to Technical Director shows that we plan to continue this self sufficient model.

Intelligent recruitment, exceptional coaching and solid commercial deals are the key to success for almost every club across Europe. Not just sling a load of money at something and hope it works.

Expecting an owner to bankroll you to success is unrealistic. It is a rarity.

Some have pointed to Liverpool recently, but their owners are no different to what Stan Kroenke is doing at Arsenal. Liverpool spend what they bring in, the owners put in nothing.

Overt he last 5 years, Liverpool have spent nearly £200m more than Arsenal in the transfer market. But this additional income has not come from the owners, it also has not come from better commercial deals – both clubs have similar revenue prior to player transactions.

The extra £200m comes from better recruitment over a period of time.

In recent years, Liverpool have bought better than Arsenal. they have also sold better. Think Coutinho. signed for less than £10million, sold for over £100million.

By buying low and selling high, you can continue spending big to improve the squad. And it is the selling that is important.

Over that last 5 years, Arsenal have sold very poor.

A mixture of having some average players on high wages has resulted in us having to accept low transfer deals from other sides just to get the wages off the book. Overpaying some poor players was a huge part of Arsene Wenger’s downfall.

Liverpool have generated nearly £250m more in player sales than Arsenal in the last 5 years. This means that whilst they have spent nearly £200m more gross than Arsenal, their net spend is over £40m less.

Improving recruitment and pay structure are two key reasons why Mislintat and Huss Fahmy were appointed and, more recently, promoted.

But Stan Kroenke is worth $8.5bn, he has enough money to bankroll us to success i have seen some claim.

This shows a lack of awareness of people between net worth and available income.

Net worth is the total value of all your assets. Cash, property, shares, businesses, and more, minus what you owe. Theoretically, your net worth is what you would have in cash if you sold every significant possession and paid off all of your debts. You can have a high net worth but have no cash in the bank.

Think of things on a smaller level.

You can have an ordinary man living in London, owning a house and a car, have a pension and own a few shares. Lets say his house is worth £450,000, he owes £150,000 on his mortgage. He recently bought a 2nd hand car for £6,000 and has £25,000 in savings. He has no other debts, credit cards or finance. He would have a net worth of £331,000.

But in his current account, for his day to day spending, he has just £178 – he does not get paid until month end.

What this means is today, if he decides to pay for a holiday, lets say Antigua in the new year, he does not have the cash to pay for it. If he wishes to pay for that holiday, he needs to get into debt. whether it is pay on a credit card or take out a loan.

Say he also wants to get his kitchen done. It will cost around £10,000. For that he might need to go to the bank, release some equity in his house, increase his mortgage.

He might have a net worth of £331,000, but he would need loans and mortgages to pay for holidays and his kitchen.

Kroenke is no different to the ordinary man, he just has a bigger net worth.

He does not have £2.7bn sitting in a bank account, ready to splash on Arsenal.

To buy out Alisher Usmanov, he took out a £550m loan. He was able to get a loan of that size due to his net worth, basically leveraging the debt against his current assets.

Remember the theory above? if he sold all his assets, he would be able to pay off all his debts.

Kroenke has another well known loan also outstanding.

Earlier this year, he and his wife, Ann Walton Kroenke (heiress to the Walmart fortune) took out a $2.25 billion loan for the construction of the LA Rams new new Inglewood stadium.

He still has a net worth of $8.5bn, and his wife $6.8bn, so the eye watering loan is easily manageable. The loan is 14.70% of their net worth. The equivalent of the ordinary man we described above (who has a £310,00 net worth) taking out an additional £45,500 mortgage on his house.

This highlights the cash flow of billionaires.

Kroenke did not have $2.25bn to finance the stadium just sitting around. Nor did he have the £500m+ for the rest of the Arsenal buy out. His finances were tied up in other business. Arsenal, the LA Rams, other sporting interests, working ranches and a huge property portfolio.

Do people really expect him to liquidate a billion pounds worth of assets to free up cash to spend on Arsenal?

The other option could be that he could take out another huge loan, and this brings us back round to Stoke City.

Kroenke’s loan to buy Arsenal was taken out by his English subsidiary KSE UK inc. The only tangible asset is Arsenal Football Club Holdings. The loan was not directly taken against Arsenal, it is against the company that owns the club.

The £600m Kroenke spent buying the whole of the club valued the Gunners at £1.8bn. It is safe to say then that KSE UK inc is also worth around the £1.8bn mark.

However KSE UK inc owes the £550m loan. This would leave the company with a net worth of £1.25bn.

If Kroenke was to do what fans want, and spend £1bn spread over an extended period, he would basically have to take out further loans through KSE UK inc. With Arsenal being the main asset of the group, it would be a loan against Arsenal in everything by name.

So what fans want is for Kroenke to take a £1bn loan against Arsenal to chase success.

This is terrifying.

The loan would be used to cover huge outgoings by the club. Transfer fees, wages. Basically Arsenal would run at huge losses chasing the title, using the money from the loan to cover those loses.

But at some point the KSE UK inc and therefore the club will need to start paying back that loan.

In 2003 Arsenal secured a £260 million loan to finance the stadium. This was due to be paid back over 25 years.

What some fans are calling for is a nearly 4 times that amount. What they do not seem to be concerned about is how the club will pay back that loan, and how long it will take,

If a £1bn loan was taken out, and the money spent over a 10 year period, it could take 50 years to pay back. So we are sacrificing our long term future for short term success. Adults demanding that Kroenke finance Arsenal to the title now, at the risk of the club not winning league titles for their children and grand children’s time. How selfish is that?

And what happens if the TV bubble bursts, or Arsenal struggle for a few years in mid table, or good forbid get relegated. Arsenal would be stuck with a £1bn loan, a business model making huge losses every year, and no way to pay it back.

And £1bn over 10 years old not guarantee any success. Manchester City owners have spent £2.7bn over that period!

Anyone that thinks Stan Kroenke has the means to finance Arsenal the way Sheikh Mansoor finances Manchester City is clearly uneducated and do not understand business and net worth.

And anyone that is happy with the club taking out a £1bn loan to chase success is selfish.

Arsenal need to concentrate on replicating what Manchester United have done. Increase spending by increasing revenue.

During the stadium build, it was often said we were look towards Bayern Munich as how to run a club. That still stands.

A strong academy, good recruitment, quality coaching, solid commercial revenue.

This is how Arsenal not only return to title challengers, but ensure we are up their for future generations.

High spending over a short period is boom and bust. It leads to Stoke City, to Leeds United, to Portsmouth.

Back the club, back the new management team, and understand how finances work.

The club are moving forward. They are in a good place. There are improvements that can be made, and these are happening.

We might not be buying our way to success, but only Manchester City and PSG are currently doing that.

For long term stability, long term success, we need to do it the right way, not the easy way.


Alexandre Lacazette, Gooner Fanzine, Stoke City, Liverpool and Safe Standing

Alexandre Lacazette

Yesterday I discussed the future of Alexandre Lacazette at Arsenal. Some people clearly missed the point of the blog.

At no point was I pretending to have a source or inside knowledge that he is leaving. Now was I saying he was useless. I was merely putting forward the point that it would not surprise me if Atletico Madrid renewed their interest in him, and Arsenal decided to cash in and invest in someone different.

It always baffles me when people read the headline, or two or 2 lines of a blog, and then comment. Learn to read the whole thing.

Gooner Fanzine

Stoke City

I hope they get relegated. And then next season do a Sunderland and get relegated again.

The Aaron Ramsey stuff aside, their fans sum up everything that is wrong with football. They scream and shout and cry when they are criticised by the media or other fans, yet are happy to abuse others themselves.

It is actually hilarious that one of their fanzines now wants them to get relegated:

They are nearly as bad as Liverpool when it comes to playing the victim.

Liverpool and Safe Standing

I see Liverpool fans are attempting to “lead the way” when it comes to exploring the safety of standing. Quite ironic that it was their fans behaviour that lead to standing being banned across the United Kingdom.

Everyone always forgets Heysel. It is maybe this guilt that drives the likes of the Spirit of Shankly group. The knowledge that your fellow fans were directly at fault for others.

No one should go to a game and not come back. Whether it be Bradford, Hillsborough or Heysel.

It feels the rest of football is waiting for Liverpool fans to say “yes” to safe standing. That is like the medical profession waiting for Harold Shipman to OK the use of paracetamol.

Safe standing needs to come in sooner rather than later. It could revitalise the dwindling crowds at football. But Liverpool fans should not be put in the position of king-makers.


Arsenal set for defensive crisis against Stoke?

Against Leicester City, Arsenal showed a weakness against the high ball into the box. A weakness which Leicester City exploited ruthlessly with all 3 of their goals coming from crosses into the box.

In Arsenal’s defence, they were playing two left backs and a 21 year old Rob holding at centre back. But it is not really a defence, in both ways.

Leicester continually played balls down the channel between Rob Holding and Hector Bellerin, which dragged the only centre back out of position. This left space in the middle for Jamie Vardy and Shinji Okazaki to attack.

Arsenal were also poor at corners. They lacked leaders at the back, someone to take control of the situation and get his head on it. So often this man is Olivier Giroud, but with him playing second fiddle to Alexandre Lacazette, Arsenal looked short at the back. Literally.

Up next is Stoke City. And there are reasons to worry.

Stoke City have one of the narrowest pitches in the league and have destroyed Arsenal before using the simple game plan of swing as many balls into the box as possible. If over the next few days Arsenal do not develop a game plan to deal with the high ball, the side will once more struggle.

Laurent Koscielny is still out suspended. Stoke City will be the third game after the silly sending off on the last day of last season which caused him to miss the cup final.

Also missing from the game against Leicester was club captain Per Mertesacker.

Having been involved in a gruesome clash with Chelsea’s Gary Cahill at the Community Shield, his wound had not sufficiently repaired itself in time for the victory over Leicester.

The Arsenal website does not have him listed as injured, but they do list Mesut Ozil and Aaron Ramsey as out. My bet is the lad who updates the website is currently face down in a gutter in Magaluf.

Mertesacker’s height in the middle of the park would be key against a side like Stoke City. And his organisation and leadership would see both Holding and Monreal perform better.

Shkodran Mustafi was fit enough to be on the bench against Leicester. Another weeks training under his belt and he should be fit to start against Stoke City. Gabriel is 100% out – injured and set to be sold.

Taking into account the threat faced by Stoke City, if Mustafi and Mertesacker as fully fit, it would be worthwhile playing both alongside Rob Holding. It would even be worth starting Olivier Giroud upfront.

If Arsenal do start with the same defence as they used against Leicester, Arsenal’s travelling fans could be in for another tough day in the grim city.