First off I just want to put a disclaimer up to say that the following are estimates, but I hope you'll agree that they're pretty reasonable.
The conclusion to these rough calculations is that I now believe that the Emirates stadium development has paid for itself (in only 6 years) and now we are in such a strong position financially that the next 6 years will be MUCH brighter.
The stadium development was £390 million, of which £260million was borrowed. Say that then after interest, the whole development was around £430 million (perhaps this is a slight overestimate).
According to the article below (1st one), in 2006 the matchday income for the season increased by around £55 million compared to the Highbury days.
We've just finished the 6th season at the Emirates, giving us a total of £430 million - (6 x £55 million) = £100 million debt
However, this £100 million does not take into account a few other factors - firstly I have no doubt that having a stadium such as the Emirates will give us great internation appeal, allowing us to generate higher revenues from both better corporate deals and also through international (and national) merchandise sales. On top of this, the £55 million per year increase will actually be an underestimate as this was the figure for 2006. Instead, it is likely to be higher than this on average over the 6 years, due to increasing ticket prices (d'oh!) which would not have been as possible at highbury.
The above factors plus others I haven't covered (e.g. profits from property sales) would most likely cover this £100 million gap.
So the stadium has now paid for itself, and we're looking at a future with an extra £55 million+ (I reckon more like £70million+) per year to spend, than had we stayed at Highbury and spent that stadium money on something else. That is an extra hell of a lot of money that our rivals won't have, because they weren't as daring as our board as to invest in their future.
Now we can start building the squad that we've all been dreaming of.
Sources (I'm sure they're trustworthy!):
http://populous.com/project/emirates-stadium/
http://www.timeout.com/london/sport/features/1719/New_Arsenal_Stadium.html
Stadium paid for.. now look to the future
posted on 14/5/12
If we were still at Highbury we probably would have dropped out of top 4 by now, our revenue was a lot lower and we'd be even more of a selling club
posted on 14/5/12
Flawed logic. You are just plucking numbers out of thin air and adding them together. You have taken increased REVENUE and used it to justify our debts being paid off. REVENUE and PROFIT are two completely different things.
The 'mortgage' we took out to finance the stadium was fixed rate low interest bonds that are to be paid off over a long period of time. Thus, we pay off a bit the interest and debt every year (£14million last year), but if we were to pay it all off at once, or at your £55m a year number, then we would incur massive early repayment fines, which is not nice.
One thing that may cloud your perception is that sum figures on Arsenals debt take into account Arsenal cash reserves which are around £160m. This is cash in the bank that we use for cash flow to run the club, and also as insurance encase it all goes wrong, eg no Champs League, Recession, etc
Anywho, so the debt is not paid off, whilst our net debt (debt minus cash) is £97.8 million, our actual debt is still £258million. We will just keep paying this off bit by bit over the next 20 years or so.
posted on 14/5/12
We haven't paid it off completly by any means, but we've paid our big interest short term loans. Also you're not factoring the board insists we have at least £100 million in the bank so we can fall back on if we dont get cl football. I'd post links but I'm on my phone, sorry
posted on 14/5/12
You also completely ignore all the rising costs involved. All the stadium has allowed us to do is increase our wage bill. In 2005 our wage will was £66million. It is now currently £124million. This rather massive £60million yearly wage bill increase was rather conveniently left out of your calculations.
It might interest you to know that in 2006 our pre tax turn over was £15.8million, in 2011, it was £14.7million. So it is quite clear that whilst our revenue has gone up, so has our expenses. The profit on the property side of the business inflated the profit margins in 2008,2009,2010. But just looking at the football side of things, the increase in matchday revenue has been matched by wage increases, and the profit is roughly the same as it was in at Highbury.
The only time we will start to see large financial gains is when we can renegotiate our shirt deals with Nike and Emirates (2014) and eventually our stadium naming rights (2021), these new deals will add to the profit margin anything up to £25million (Assuming we can match man city's £400m 10 year deal)
posted on 15/5/12
I always thought Wenger was crucial in the design of the stadium and he had the most input on this.
posted on 15/5/12
AWMH - You're missing the point i'm getting at. I'm not literally saying that the stadium debt has been paid off, of course it hasn't, it says so on the financial records.
And no I'm not saying that we're no longer in debt, we are blatently still in bit of debt (close to £100 million)
What I am saying is that, if EVERYTHING had stayed the same as it has, with the exception of building the new stadium, i.e. we had bought the same players for the same amount, sold players for the same amount, wages had gone up etc. If all of that had stayed the same and we had not moved from Highbury, based on these figures we would still be in about £100 million pounds worth of debt right now.
posted on 15/5/12
The difference being that the debt wouldn't be due to the stadium, it would be debt due to simply being unable to afford all the expenditures on wages, players etc. that we've had over the last 6 years.
posted on 15/5/12
If we never built the stadium, nothing would have stayed the same. With an increase in wages and no increase in revenue we would have made massive losses every year, Kroenke and Usmanov would never have been interested in the club, the banks would not have loaned us the money, and Arsenal would be bankrupt....
We simply don't, and never will, have the money to compete with City. If you take our Profits for the last 5 years, they are equal to the combined 5 year contracts of Aguero and Y. Toure (Transfer fee + 5 years of wages), its ridiculous money and something we will never be able to afford. All we can do is keep buying reasonably priced players and relying on Wenger to turn the team into something special.
posted on 15/5/12
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posted on 15/5/12
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