Meatwad wrote:
Anzac wrote:
https://www.bbc.com/sport/football/45921441
Arsenal confident that 'self-sustaining business model' will bring major trophies
I don't have an issue with self-sustainment in principle, but I do want to see us increase our commercial revenues substantially, and I also want us to use the revenues better/smarter.
IMO we will be unlikely to achieve major success unless we change what/how we do things in terms of our revenues as much as we are doing on the pitch. As such the issue isn't so much the lack of investment by the owner, but the risk adverse approach to spending those revenues, and more importantly the refusal to contemplate short term debt during the season.
where did you get that from? any reading of our financial reports (when they use to put them out twice a year) would show that we always had short term debt to cover expenses. and then you have transfers; those that are paid off in full are even rarer these days for any club, so most of our player buys are made in installments and that's debt.
I've read it in a couple of articles a while ago that were interviews with the likes of AW and Gazidis.
In it they were saying the way the transfer budget in determined is to take our on hand revenues, and to then deduct ALL known expenditure for the entire season/financial year, and the budget is what is left at any given time. Any revenues not yet received is not included until it hits the accounts. The transfer budget also includes any new increases to the wage budget during the year - players and staff, new signings or not.
We saw living proof of this when we got part of the Puma deal payed in advance to impact the transfer/wage budget at that time.
We also saw the downside of it when most PL teams spent their new TV revenues the season the new deal took effect - effectively spending in advance of receiving the revenue at the end of the season, whereas we waited until the revenues had been received.
Likewise we have been told for the best part of a decade since before the move that we do not include CL revenues in our financial planning for each season, which is why we supposedly had a 2-3 season window to regain CL before it would start to impact in terms of budgets. That said I think the increases to our budgets post the TV deal are such that our budgets are impacted regardless because of the methodology used to determine them. IIRC there were reports that once AW had signed his last deal the first thing he did was to give his staff a pay rise ahead of the start of the transfer window. Those increases would have reduced the budget then available to negotiate the new deals for Sanchez and Ozil, let alone any incoming transfers baring in mind that both transfer fee and wages come out of the same budget - IMO putting the cart before the horse.
The reasons given for this methodology was to ensure that we knew our operating costs were covered for the season/financial year, and that we would then return a pre-tax profit.
IMO the downside is that we don't use our full known revenues at any transfer window, as essentially the prizemoney and TV money do not get paid out until the end of the season, let alone that until the current TV deal our revenues are heavily reliant upon match day income. Essentially it means that we deduct the new season's operating costs from the end of season payments to then determine our new budget, rather than deducting the new season's known expenditure from the entire revenues received as a base line (with prize money and TV payments subject to finishing league position). For example we will not consider the increased revenues from our new kit deal until we receive them in payment, even thought we already know when and how much. As such if those increased revenues are being paid at the start of the next season, we could use that known increase in the transfer budget now it we determined it would make a difference to this season. Yes that may see use reduce our profitability at the end of this season as we have not yet received those revenues, and they'd need to be deducted from next season's budget as having already been spent.
Bottom line according to Forbes and Deloitte despite not having CL revenues for 2 seasons we are both the 6th most valuable and 6th richest club in terms of revenues, let alone that we still supposedly have over 100m in Cash Reserves. Our revenues are level with PSG and ahead of CFC & LFC yet we have been out spent last summer by a number of mid-lower table & promoted clubs having reportedly spent close to or over 100m. Now we can only afford a budget of 40m for next season? That for me means we are either doing something very wrong with our finances, and/or we are not very good at what we are doing with it. Cash flow was the Achilles Heel during the decade of the stadium project with the front loaded deals, and I suspect our methodology hasn't changed and as a result is having much the same effect.
EDIT: Just to make it clear finance is not my field and I do not read the club accounts, and have not read The Swiss Ramble blog for some time.
