SOMETHING Isn't Adding Up....

[Martin Daoust]

http://www.arsenal.com/article.asp?thisNav=news&article=495029&cpid=703&title=Wenger+-+I+am+too+busy+to+sign+a+new+midfielder+right+now

More strange stuff - at best it shows the Board's lack of a football man since it expelled Mr. Dein has harmed the team, and that their refusal to appoint a proper replacement - Mr. Fiszman reportedly even said Mr. Dein's replacemnt apparently doesn't need football expertise - can only hurt the team that much more - but keeps the cash reserves growing and growing. And for what then?

I am hearing reports we already have 50 million in ncash reserves and will have 100 million in the next annual report. For what then? What do we need to reserve 100 million pounds for? 20 million, 30 million, 50 million- fair enough. But ONE HUNDRED MILLION? Again it isn't adding up, at least not the way we were told it would....

[dossantos]

I am hearing reports we already have 50 million in ncash reserves and will have 100 million in the next annual report. For what then? What do we need to reserve 100 million pounds for? 20 million, 30 million, 50 million- fair enough. But ONE HUNDRED MILLION? Again it isn't adding up, at least not the way we were told it would....

Hi there, long time lurker, first time poster. Gooner through n through. As a college student with one corporate finance class under his belt i couldn't resist replying to emphasize how important cash reserves are to a business such as Arsenal Holdings plc.

As you know, Arsenal have large debt from the construction of AshGrove and various development projects (like the Highbury conversion). I am not too familiar with the debt structure they maintain, but they need strong cash reserves to maintain solvency in paying off the debt, and in paying off the current costs of construction, and the other operational costs they encounter. The economic downturn is probably driving them to hold larger reserves.

I've read through most of this thread and also the yearly and mid-year financial reports (thanks for the motivation), and would say that there is nothing financially wrong with the club (pretty sure the reports are independently audited; overseen by the the british equivalent of the US' FEC). But, you have to remember that a year removed from the open of the Grove there are factors that should make them frugal in the transfer market. As an example, they've spent to make Highbury into housing, but since it is yet complete, they cannot collect from the future tenants (despite being almost completely presold) until after they finish work sometime in 2009.

Anyway, not sure how old you are, but at my age im prepared to wait 3-5 years until total Arsenal dominance begins :D (could be sooner, i mean come on they were 4 points away last year).

[michaec]

http://www.arsenal.com/article.asp?thisNav=news&article=495029&cpid=703&title=Wenger+-+I+am+too+busy+to+sign+a+new+midfielder+right+now

More strange stuff - at best it shows the Board's lack of a football man since it expelled Mr. Dein has harmed the team, and that their refusal to appoint a proper replacement - Mr. Fiszman reportedly even said Mr. Dein's replacemnt apparently doesn't need football expertise - can only hurt the team that much more - but keeps the cash reserves growing and growing. And for what then?Yes, we need someone to do the Dein role. That has been admitted by the board and they have said they are currently looking for someone to comne on board. What do you want them to do, walk out the front door of the stadium and drag in the first person off the street they find to do the job?!? I'd rather they take their time and get the right man.

I'm not sure that the person who is eventually hired does need football expertise. I would think that Wenger and his staff on the football side are the football experts and should be identifying players to bring in while the person hired negotiates the contracts and transfer fees in consultation with the manager and the board. If you're talking about contacts in the football world then that can be built up and I'm sure the current board have been around long enough to make plenty of introductions, it's not like you can just take a sporting director (for want of a better job title) from any top club just like that is it?

[Martin Daoust]

Yes, we need someone to do the Dein role. That has been admitted by the board and they have said they are currently looking for someone to comne on board. What do you want them to do, walk out the front door of the stadium and drag in the first person off the street they find to do the job?!? I'd rather they take their time and get the right man.

I'm not sure that the person who is eventually hired does need football expertise. I would think that Wenger and his staff on the football side are the football experts and should be identifying players to bring in while the person hired negotiates the contracts and transfer fees in consultation with the manager and the board. If you're talking about contacts in the football world then that can be built up and I'm sure the current board have been around long enough to make plenty of introductions, it's not like you can just take a sporting director (for want of a better job title) from any top club just like that is it?


I think that post would not be unreasonable - except for the recent comments - the football staff is too busy dealing with the football team already there! That's the troubling thing again - and really the theme of this thread - it doedsn't add up to bring in someone who can do the contracts but can't help locate the players and thus offer the more proper transfer fee and wages, as David Dein could, or could help Mr. Wenger to.

You have to have a money man who is also a football man because if the only football man you have is too busy with the team he has to strengthen it you have a real quandry. It also raises the question of why the Club or Board -or the Manager - wouldn't want a football man to work with Mr. Wenger. After all whatever you think of Mr. Dein at this time, there's no denying he and Mr. Wenger formed the most successful partnership in Modern English Football from 1997-2004.

[Martin Daoust]

Hi there, long time lurker, first time poster. Gooner through n through. As a college student with one corporate finance class under his belt i couldn't resist replying to emphasize how important cash reserves are to a business such as Arsenal Holdings plc.

Welcome aboard. dosantos, glad to have you here, especially with your background and education in this field which does get a bit - just a bit - tricky for all of us one time or another...

As you know, Arsenal have large debt from the construction of AshGrove and various development projects (like the Highbury conversion). I am not too familiar with the debt structure they maintain, but they need strong cash reserves to maintain solvency in paying off the debt, and in paying off the current costs of construction, and the other operational costs they encounter. The economic downturn is probably driving them to hold larger reserves.

I've read through most of this thread and also the yearly and mid-year financial reports (thanks for the motivation), and would say that there is nothing financially wrong with the club (pretty sure the reports are independently audited; overseen by the the british equivalent of the US' FEC). But, you have to remember that a year removed from the open of the Grove there are factors that should make them frugal in the transfer market. As an example, they've spent to make Highbury into housing, but since it is yet complete, they cannot collect from the future tenants (despite being almost completely presold) until after they finish work sometime in 2009.

I don't think anyone would expect anything less than some cautiousness form our Board, and even some frugality. I think where we would not agree is on just what is frugality right now. I would believe at this point we should be able to spend 15-20 million net this summer, allowing us to get both a decent defensive midfielder and central defender or a single top-notch defensive midfielder or central defender - and still have in the next reports 80-85 million in cash reserves. I agree with your assessment of the Club's finances and the impeccability of their reports. Which means why can we not simply buy the key player or players I think we all agree(where have I heard that before?)we need to seriously challenge for honours. That we cannot or more likely will not invest to that worries me deeply right now for this year and beyond perhaps.

Especially when Ken Friar confirms to the Arsenal Supporters Trust that the Board are - despite the frugality you assert is wholly out of necessity(and I'm not questioning you on this) - contemplating taking financial dividends commencing in 2010. If our finances are that uncertain that we need 100 million in cash reserves to surive, then there is nothing to justify taking dividends in 2010 in my mind - and I am not against them doing so in principle.

Or even worse, the rumors, that Mr.Edelman and Lady Bracewell-Smith are looking to sell out, and not for the first time - at one point Keith Edelman apparently was saying that about Mr. Edelman last year, even. Indeed he also originally told the Arsenal Supporters Trust of the discussion of Dividend taking, and if there was an issue of Mr. Edelman being dismissede early maybe its what he said publically that led to that - if that actually happened. Indeed one could argue the discussion of taking dividends has been forced by the Board Members talking of selling out, and not from the shareholders outside the Board.

Anyway, not sure how old you are, but at my age im prepared to wait 3-5 years until total Arsenal dominance begins :D (could be sooner, i mean come on they were 4 points away last year).

Whoa there, young whippersnapper ;) ... In all seriousness I think the issues are whether we should be satisfied with top-four football after what we achieved from 1998-2005, and whether the current financial strategy can not only get us back to the top at all let alone as we achieved under Mr. Wenger before the Stadium became the Club's top priority ahead of the team, and whehther this strategy can even keep us in the top-four indefinitely.

I have to say with all respect to your analysis of the situation, even if allowing for it to be 100% correct, it would seem you are suggesting the proof that Board is not mis-leading the supporters is - given what the Board has said publically - that the Board is mis-leading the supporters, just not for the reasons I would suggest.

And you're right - we only finished four points off(though it wasn't as close as that really), but we have weakened the team in key areas and decreased its depth in those areas as well this summer, and that should concern us all right now while we can still redress this...

[Martin Daoust]

BTW michaec, its been 16 months now - surely they could have found someone in almost a year-and-a-half?

[The Grim Returner]

Bumping - on the slim chance that this thread might just drop off of page 1!

[Lanesra]

I agree with Martin..something isn't adding up !!...................................





It's this......................................















http://img440.imageshack.us/img440/3392/ist2805726smashedcalculak6.jpg (http://imageshack.us)
http://img440.imageshack.us/img440/3392/ist2805726smashedcalculak6.8d633f79fe.jpg (http://g.imageshack.us/g.php?h=440&i=ist2805726smashedcalculak6.jpg)

[Lanesra]

..Or this bloke...................................





http://img237.imageshack.us/img237/672/article00137801f0000057op9.jpg (http://imageshack.us)
http://img237.imageshack.us/img237/672/article00137801f0000057op9.7227706647.jpg (http://g.imageshack.us/g.php?h=237&i=article00137801f0000057op9.jpg)

[Martin Daoust]

Actually what doesn't add up is quite simple:

1) We are one of the richest clubs IN THE WORLD right now.

2) We have 50 MILLION POUNDS in cash reserves as of last year, and should report having 100 MILLION in November of this year.

3) We have a transfer budet for 2007 which was never spent as well as one for 2008 that we've yet to spend.

4) We have a manager who was able to spot and buy and develop more talent with a 21 million pound turnover than clubs with far larger turnovers.

5) We built a new stadium specifically to give the same manager more than a 21 million pound turnover.

6) And now this manager no longer pursues that same proven talent with a TWO HUNDRED MILLION pound turnover and we go three trophyless years after winning the Premiership three times in seven years and the FA Cup four times in eight years.

7) And despite the success of 1998-2005 The Arsenal Board has no problem whatsoever if the club doesn't win silverware after possibly the greatest period in the club's long history, which seemed set to continue.

8) And even though the manager appears to have too much to do himself in terms of scouting and buying and signing players AND managing the team, the Board have yet to appoint a genuine replacement for David Dein despite the indisputable success of his partnership with Mr. Wenger.

9) And even though we have all this money it appears we don't have enough to spend on quality proven players just now but do have enough for the Board to be planning to take dividends for the first time in four decades in just two years (actually a bit less than that).

10) Yet our Board only built the new ground to give the manager more money to buy more players.

11) The board insist they have NEVER denied the Manager support in his pursuit of any player yet its clear the Board's restrictive wage structure would automatically prevent us signing many, even most, top players no matter how much we bid for them, and has probably prevented the manager from pursuing those players at all.

12) Even though we clearly are paying above the odds for the unproven bargain players we buy, including the younger and youngets players around the first team, even as we let many proven players go rather than pay them proper wages.

Someone add all THAT up to making Arsenal a better football team or in the future. And I could add more to that list no doubt.

And I know we paid Ade finally - full credit to the Board for that one thing. But imagine this team right now if we hadn't. EVERY goal we scored against quality competition this summer was either scored by Ade or directly set up by Ade save for one. The Board paid him because they had no real choice - we'd struggle for top-four which the Board are counting on us to achieve. So long as we do that do they care if we actually win anything?

The answer lies in the equation above

[The Jitty Slitter]

Actually what doesn't add up is quite simple:

1) We are one of the richest clubs IN THE WORLD right now.

2) We have 50 MILLION POUNDS in cash reserves as of last year, and should report having 100 MILLION in November of this year.

3) We have a transfer budet for 2007 which was never spent as well as one for 2008 that we've yet to spend.

4) We have a manager who was able to spot and buy and develop more talent with a 21 million pound turnover than clubs with far larger turnovers.

5) We built a new stadium specifically to give the same manager more than a 21 million pound turnover.

6) And now this manager no longer pursues that same proven talent with a TWO HUNDRED MILLION pound turnover and we go three trophyless years after winning the Premiership three times in seven years and the FA Cup four times in eight years.

7) And despite the success of 1998-2005 The Arsenal Board has no problem whatsoever if the club doesn't win silverware after possibly the greatest period in the club's long history, which seemed set to continue.

8) And even though the manager appears to have too much to do himself in terms of scouting and buying and signing players AND managing the team, the Board have yet to appoint a genuine replacement for David Dein despite the indisputable success of his partnership with Mr. Wenger.

9) And even though we have all this money it appears we don't have enough to spend on quality proven players just now but do have enough for the Board to be planning to take dividends for the first time in four decades in just two years (actually a bit less than that).

10) Yet our Board only built the new ground to give the manager more money to buy more players.

11) The board insist they have NEVER denied the Manager support in his pursuit of any player yet its clear the Board's restrictive wage structure would automatically prevent us signing many, even most, top players no matter how much we bid for them, and has probably prevented the manager from pursuing those players at all.

12) Even though we clearly are paying above the odds for the unproven bargain players we buy, including the younger and youngets players around the first team, even as we let many proven players go rather than pay them proper wages.

Someone add all THAT up to making Arsenal a better football team or in the future. And I could add more to that list no doubt.

And I know we paid Ade finally - full credit to the Board for that one thing. But imagine this team right now if we hadn't. EVERY goal we scored against quality competition this summer was either scored by Ade or directly set up by Ade save for one. The Board paid him because they had no real choice - we'd struggle for top-four which the Board are counting on us to achieve. So long as we do that do they care if we actually win anything?

The answer lies in the equation above

Dear god.

I hope one day you owe someone 360m quid in the midst of a global recession. Then I can pester you about why you don't spend 30ms on some overpaid chumps and double everyone's wages :D

[Martin Daoust]

Dear god.

I hope one day you owe someone 360m quid in the midst of a global recession. Then I can pester you about why you don't spend 30ms on some overpaid chumps and double everyone's wages :D

You have such sympathy for these folks. Nobody made them build this new ground.

And the funny thing is even though they never had the honesty to say this move was designed to make them wealthier personally(hence all the comments about how good our Board is - how Arsenal is their first priority since they've never taken dividends - at least not the last four decades)which it appears more and more that it was.

I don't begrudge them wealth, nor do I begrudge them making a profit on their investment. What I do begrudge is investing LESS in the team toi make MORE of a profit. You quite apparently have no problem with that. Even if that is cheating your football team out of greater opportunities for greater success and you and your fellow Gooners out of greater joy in the team achjeving that success. The Arsenal Board isn't supposed to cheat the team or the supporters for its personal gain. The Arsenal Board isn't like that, is it ?

So do tell me you were singing "we've got more money" when United went 2-1 up and the football dreams came to an end. You support the Arsenal Board chasing silver for themselves. I'll support the Arsenal TEAM chasing silverWARE for all of us, thank you....

Next you tell me how hard it is for Exxon Hallburton or how tough it was for Enron or Tyco....

[HomeatHighbury]

You support the Board chasing Silver. I'll support Arsenal chasing silverWARE, thank you....

http://www.bold-and-sassy.com/Best-of-the-web/gifs5/clappinghands.gif

I don't know if you can claim that all he does is support the board chasing money. That doesn't seem quite fair, as I don't think you can know exactly what he is thinking, since, well, you're not him...

But it made for a good line.

[Martin Daoust]

http://www.bold-and-sassy.com/Best-of-the-web/gifs5/clappinghands.gif

I don't know if you can claim that all he does is support the board chasing money. That doesn't seem quite fair, as I don't think you can know exactly what he is thinking, since, well, you're not him...

But it made for a good line.

I'll take it where I can get it :D

I'm not sure that's absolutely 100% accurate myself - though I will say that sounds more accurate of his thinking than say some other people.

But in the spirit of fairness I'll say he should suggest why he thinks having 100 million incash reaserves in essentail to our survival now and why we shouldn't spend 10-20 million this summer to try and make this team into what it really could be between all the unspent transfer budgets of the last three summers, the profits form sell-on fess, the cash reserves, and the actual transfer budget we are told exists....surely we could address our needs from all that money, no?

[The Jitty Slitter]

You have such sympathy for these folks. Nobody made them build this new ground.

And the funny thing is even though they never had the honesty to say this move was designed to make them wealthier personally(hence all the comments about how good our Board is - how Arsenal is their first priority since they've never taken dividends - at least not the last four decades)which it appears more and more that it was.

Its been explained to you countless times why so much money is in the accounts. You also really need to get across the difference between cash flow and profits. For instance, Arsenal takes 3m per home game. Therefore at financial year end there will be a huge amount of money in the accounts.



I don't begrudge them wealth, nor do I begrudge them making a profit on their investment. What I do begrudge is investing LESS in the team toi make MORE of a profit. You quite apparently have no problem with that.

It is actually a business for one thing. A business from which they have made nothing much. The profit is all on paper. And has been mentioned 1000 times. If they wanted to make money - clearly they would sell up, and stick the money in the bank, rather than hanging out for dividends in 2010 which would amount to some absolutely crummy single digit return.... do the maths!


Even if that is cheating your football team out of greater opportunities for greater success and you and your fellow Gooners out of greater joy in the team achjeving that success. The Arsenal Board isn't supposed to cheat the team or the supporters for its personal gain. The Arsenal Board isn't like that, is it ?

There is simply no evidence whatsoever to support this conclusion.


So do tell me you were singing "we've got more money" when United went 2-1 up and the football dreams came to an end. You support the Arsenal Board chasing silver for themselves. I'll support the Arsenal TEAM chasing silverWARE for all of us, thank you....

Next you tell me how hard it is for Exxon Hallburton or how tough it was for Enron or Tyco....

WTF?

[Martin Daoust]

Its been explained to you countless times why so much money is in the accounts. You also really need to get across the difference between cash flow and profits. For instance, Arsenal takes 3m per home game. Therefore at financial year end there will be a huge amount of money in the accounts.

Yes, and its also been explained by people that that money can be used either for the team or for paying dividends if they choose to do so. It is not standard operating procedure but it can be done if they choose to.

It is actually a business for one thing. A business from which they have made nothing much. The profit is all on paper. And has been mentioned 1000 times. If they wanted to make money - clearly they would sell up, and stick the money in the bank, rather than hanging out for dividends in 2010 which would amount to some absolutely crummy single digit return.... do the maths!

So then you accept the Board and shareholders making a maximum profit is the number goal the club should have? Ahead of competing as best as possible to win silverware, I take it...

BTW I am hearing that Mr. Fizsman and Lady bracewell-Smith may be looking to do just that, but they don't have a buyer...

As to your last point, then why would Alisher Usmanov be pushing for them - indeed some here suggest that is the only reason we are considering taking them now - in all serious they would be making less money than if they sold - but they haven't been making ANY money really, have they? That's all the more reason to suggest THAT and NOT the football team's increased success drove building the new ground for some.

There is simply no evidence whatsoever to support this conclusion.

Sure there is - the football team, its performance, and its makeup from 1998-2004 and from 2005-2008. Especially now with that much more money available, and that's just a start....

[yossarian]

Guys, please either engage Martin in discussion on this issue or don't post here. He's agreed not to bring this issue into other threads....so please respect his desire to discuss board issues here without trolling or trying to threadjack. Thanks.

[phishy]

Guys, please either engage Martin in discussion on this issue or don't post here. He's agreed not to bring this issue into other threads....so please respect his desire to discuss board issues here without trolling or trying to threadjack. Thanks.

and martin talks about censorship.. lol.

[bigINTERNETTOUGHGUY]

and martin talks about censorship.. lol.

while I DO agree with you...I must credit Yossarian for doing an excellent job moderating the boards. I'm sure it's a pretty thankless task and I can't imagine that he likes deleting responses.

But so that this post doesn't go completely OT...Martin, you seem to be saying the same things over and over again. While it's your right to do so, don't you ever get tired of making the same argument? I'm really curious to know why you persist so diligently since you're pretty unlikely to convince the board to change their policies and I doubt that you'll convince anyone around here if you haven't done so already.

Just to be perfectly clear, I'm not questioning your right to make (the same) arguments, just wondering about your motivation for doing so.

[Rewinder]

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