goon wrote:
mdgoonah41 wrote:
yes it does matter. if your projected revenue is £350m in 2016 and £375m next year, you factor that in when planning your expenses.
Right, but revenue has nothing to do with when the cash leaves the account, neither does a budget.
think of it like this. lets say that arsenal enters this summer with £200m in cash reserves, and they determine they are willing to spend up to £60m of actual cash this summer. no team will only plan for the current window. arsenal probably has 3 and 5 year models internally to forecast revenue, increases in wages, other ancillary costs. the cash reserves that we have will always fluctuate and there will be increases each year to the cash coming into the club from sources like the tv deal, commercial revenue, our foreign tours, etc.
so what arsenal probably have, on a rudimentary level, is something that looks like this (i just made up the numbers for this exercise, dont treat them as actual reported numbers obviously)
if you take a transfer fee like xhaha's, lets just assume it was £30m. the real world value of £15m in 2016 will be different from the value of £15m in 2017 due to inflation/currency exchanges and whatever else. that is why teams (not just football teams, but all companies) try to spread out costs over multiple years. if you lock in a number in 2016 and then you can pay that number off over 2-3 years, there is a chance that £15m in 2016 is really only "worth" £14.8m in 2018 dollars. just as an example.
so if we set up the xhaka fee to be paid in 2 installments of £15m, one this year and one next year, that absolutely does impact how much money we can spend. that £15m due in 2017 counts against the 2017 projection, not the 2016 projection. the 2017 projection is likely to be higher than the 2016 projection. whether the £15m is 4.0% of our projected revenue or 4.5% of our projected revenue is not inconsequential, especially to an entity run in such a fiscally conservative manner as arsenal is.
