How can Wenger possibly raise £24m pa from player sales?
Thursday, 24 July 08, 06:17 PM
The answer is - he can't. Wenger has never raised a £24m net profit from player sales and it's unlikely he ever will. Even when Anelka left in 1998 I bet he didn't earn the club a £24m net profit. The very suggestion is fantasy. Do you really thing Arsenal football club are going to spend £350m on a new stadium on the proviso their manager can sell £24m net worth of players per annum for the next 17 years? My 6-year-old nephew could come up with a better business plan than that.
And if indeed this was the case, then Wenger is failing miserably to please his employers. In his first season at the Emirates, the Frenchman netted a £16.6m profit from transfer dealings and so far this year only £1.83m, which, presuming Adebayor stays, will likely end up a deficit after promises of a further squad addition. In fact, since 2003, Wenger has spent £7m more than he's raised from transfers - so the allegation that he will have to earn the club around £130m over the next 5 years is simply preposterous.
Of course, it's inevitable that the current economic climate will throw question marks over Arsenal's financial model. Yes there is worldwide credit crunch, but how serious it is and how much this will effect football remains to be seen - attendance figures for 2008-2009 season will tell us a lot more about how the financial climate will impact middle-class families. But as far as Arsenal is concerned, they're too entertaining to watch by far. If attendances drop, Arsenal are the sort of team Sky would put on more to attract audiences back.
So what do Arsenal have to worry abut financially? Well, property prices are freefalling, down 10% since last year, and probably another 20% over the next two years if analyst predictions are accurate. Will this affect profits from Arsenal's Highbury Square development? Unlikely. All properties in the North, East and West Stands were snapped up as of May 2006, 95% of the apartments have now been pre-sold and only 2 purchasers - probably propety investors looking for a quick buck - have pulled out, surrendering their 10-20% deposits.
More could follow suit, but it seems unlikely. You need to be incredibly wealthy to own such a prestigious property and wealthy people are not swayed by the "possibility" of a correction in the housing market losing them 10% here or there. Besides, this is not any-old investment, it's still a sound financial investment long-term and also an investment of the heart. Think about it, you're very wealthy, you love Arsenal, you have a season ticket and now you can get to live in a secure, luxury apartment 200 yards from the club's luscious new 60,000 stadium. You only get to live once, so what's it going to take to kick that apartment into touch and blow your big chance?
Yes, Arsenal probably do have to find a £24m surplus each year to pay their creditors, but not through player sales. They can bump up season ticket prices a tad (the debt is fixed-rate, attendance prices won't be), sell two million burgers and chips for an extra £1 per chomp, book some bigger high profile Emirates events or simply use their imagination - like selling Gilberto Silva for £1m and gaining another £2m from his absent salary. It's not a problem for Arsenal's marketing team, and rest-assured the wavering financial climate will have been carefully accounted for well before the building of the stadium was complete.
As for Wenger, he is keeping the purse strings tight, mostly because he thinks this is the responsible thing to do for a club with a large stadium debt. Keep remembering, Wenger is not like other cheque-book managers who blame all their failures on financial support, or lack of it. Sure he is fortunate in that he works for a board that does not pressurise him to win trophies, only to compete to win trophies - he's good enough to survive comfortably within that unique world of boardroom expectations that few managers have the luxury of existing within - a luxury he's earned.
However, neither is Wenger beyond criticism - no manager should be. Make no mistake, he's not financially handcuffed enough
that he can't afford a couple of top class players to add serious strength in depth to key positions. In my mind, there's no doubt that this team is fairly close to winning something major
without having to take big financial risks to attain it, and Wenger should be judged on his ability to achieve that without using money, or lack of it, as the backdrop for an excuse by either
himself, the board, supporters or media.
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Thankyou. This is a seriously good piece of rational analysis. I find it very convincing. I'd only add that AFC made an operating profit of circa £60m last year, didn't they? Even if you take £24m from that to service the debt, you are still left with £36m to play with (and more if players are sold). Wouldn't satisfy Benitez or any Chelsea manager, of course, but neither is it penury - especially when you are starting with a team that is already 90% of the way to being a trophy-winning one anyway.
Keep the faith.
Well, what a very balanced and altogether different view than those that have been painted by Armageddon sites such as ANR.
I too found it hard to believe that what Wenger said (if indeed he said it at all) actually meant 24mil a year from player sales.. It makes much more sense when you just say 24mil profit, full stop. I'm quite sure a club with its fingers in as many marketing pies as Arsenal would have little problem achieving this. Nice post, hope to see more!
Thanks for this. I could not believe what I read on "the other blog". Honestly, I was so disgusted with it. Thanks for the voice of reason.
me thinks whatever sir wengwe said at so called meeting was twisted & spun as per usual by our beloved arsenal hating media scum-it makes no sense at all when you analyse it-myles palmer-should do better research as he's losing credibility fast!!!
Nice post, well written. I think it's quite obvious that Wenger was talking about raising 24m to service debt from the overall profit, and not by the sale of players alone. Arsenal has a very large income and the club is profitable. It has been in a season that we finished 4th and reached only the 1st knockout stage of the Champions League...
However, I can see why AW said he has to sell at least one player every summer. In order to manouver more freely in the transfer market, you need to generate even more money, but more importantly- when you work under serious debt like Arsenal (it doesn't seem to affect ManUre or the Chavs, but their day will come), you have to cut in your main expanditure- our wage bill. By selling Gilberto, for example, we earned 2m pounds worth of salary. Not to mention the sales of Ljungberg and Henry... That is more important, I believe.
myles palmer-should do better research as he's losing credibility fast!!!
he's already lost it. i tune into Arsenal blogs to read about The Arsenal not about liquid lunches with his kids watching bands on Eel pie Island.If there is no Arsenal news on Arsenal news review then don't bother posting it.
hes put a link to your article.. 
32 Comments
Careful fella
With sensible level headed unsensationalist pieces like this you are bound to get abuse!
I dont suppose you saw the garbage by Myles Palmer?
i certainly hope myles palmer is reading this, his reasoning and factual findings are a joke, im sure arseblogger and other sensible gooners would agree with your reasoning.. i sure do. First visit to your blog mate, n im impressed.. keep it the arsenal way, classy!