Arsenal reveal pre-tax profits of £49.5m

* Group profit before tax was £49.5 million (2010 - loss of £6.1 million)

* Profit on sale of player registrations amounted to £63.0 million (2010 - £4.0 million)

* £74.7 million of investment in new players and extended contracts pushed amortisation charges up to £17.3 million (2010 - £10.1 million)

* The resulting profit from player trading was £46.1 million (2010 - loss of £5.9 million)

* Turnover from football rose to £113.5 million (2010 - £97.6 million) with increases from match-day (four additional games played) and commercial income streams

* Operating profits (before depreciation and player trading) from football increased to £15.2 million (2010 - £9.4 million)

* Period of minimal activity, as expected, in the property business with turnover of £3.2 million (2010 - £22.5 million) and operating profits of £0.5 million (2010 - £3.3 million)

* Group has no short-term debt and continues to have a solid financial platform from cash reserves of £115.2 million (2010 - £110.4 million).

Ivan Gazidis, Arsenal CEO:

"We always have to keep some money in reserve in case things don't go our way (failing to qualify for the CL). We do spend. Last summer we spent £75m on new signings and new contracts for current players. Arsene Wenger has an excellent track record in signing new players. We don't get every one right, but we get most right. We know we are not where we want to be. We want to finish in the top 4 and it's in our hands. We can achieve CL qualification, then rebuild and regroup in the summer and come back stronger next season."

Peter Hill-Wood, Arsenal chairman:

“We are proud of Arsenal’s record and consistency over many seasons and have the foundations in place, at every level of the Club, to ensure we remain a force in the seasons ahead.”

http://www.arsenal.com/news/news-archive/42211/arsenal-holdings-plc-financial-results

Here's the interview with Gazidis, for those who can't be bothered to go through the whole document.

http://www.arsenal.com/news/news-archive/ivan-gazidis-on-the-club-s-financial-results

And the two most relevant answers in regards to transfers:

How much of the funds are available to the manager?
IG: “We have a healthy cash balance of £115 million at the half year, but it is important to understand that not all of this money is available to spend on transfers. The reason for that is that we have running costs during the year. We get a lot of our money up front from season ticket renewals. We have running costs at the Club; the players' salaries and so on. So that amount goes down during the year. At the same time, we also have to keep some in reserve in case things do not go our way. But having said all of that, there is money available. We do not talk about an exact figure and there is a very good reason why - because it would impact our negotiating position with other clubs and that would mean that we would not be able to do what we want to do as efficiently as we want to do it. But we do have money that is available. We have to invest efficiently, we have to do it sensibly as we do not have the kind of money that other clubs have. But we have enough I believe, if we do it well, to be able to compete at the very highest levels of the game. We have a manager who has a fantastic track record over time of getting those types of decisions mostly right.”

Will the situation change if we fail to qualify for Champions League next season?
IG: “The most important aspect of the Champions League is the sporting one and that is what the Club is focused on. We have a fantastic record in the Champions League, we have been there 14 years and in the last 12 years we have qualified out of the Group Stage. So it is a really good, consistent record of success and there is an expectation around the Club that we are in that competition every year. At the same time, we cannot gear our entire financial model around that expectation because that would place the Club in jeopardy if we did not qualify. So we have always got to keep something in reserve in case things do not go our way and I can assure fans that we would be able to be resilient and reinvest in the squad if things didn't go our way and we did not end up qualifying for the Champions League so that we get back into the competition in the following year.”

there is money available. We do not talk about an exact figure and there is a very good reason why - because it would impact our negotiating position with other clubs and that would mean that we would not be able to do what we want to do as efficiently as we want to do it.

He has a very good point here.

Financial blogger Swiss Ramble will be doing something on these results soon, so keep an eye out for that.

There's nothing new or surprising about these results, though, really. Of course we have a healthy cash balance, and naturally that balance will decrease because of running costs and the like. Those running costs wouldn't actually be as high if we weren't paying absurd wages to average players, so it's an area that's in desperate need of sorting. It's logical and sensible for the club to keep cash in reserve in case things don't go well, though how much is the pertinent question.

Gazidis mentions we don't have the money our rivals do, which is most likely true. However, I think it's safe to assume there'll be a decent amount of cash for Wenger to spend in the summer; an amount that will hopefully be boosted by player sales.

idiot of a team sometimes.. (NO OFFENSE)

why reveal now, wait.. now those elfish french teams who want us to pay $8M for the 18 year old when we can just pay $1 Million

If we can sell the dead wood we don't need to the club to spend any of the profit they made on buying players.

We can get 50 million for the useless players.

Chamakh 8 million
Bendnter 10 millio
Almunia will give any team 1000 dollar if they will take him.
Squid 2 million
Arshivan 8 million
Denilson 4 million
Vela 7 million
Park 4 million

I would sell Diaby but who is dumb enouph to buy him?

A quick browse around certain people on Twitter has revealed that we can, apparently, break even without player trading. Don't think that's "falling foul of FFP regulations", somehow.

aleumdance wrote:idiot of a team sometimes.. (NO OFFENSE)

why reveal now, wait.. now those elfish french teams who want us to pay $8M for the 18 year old when we can just pay $1 Million

What are you going on about? Arsenal, as a public company, are legally obligated to reveal these results. 28th Feb would have the last day they could've done it.

So Arsenal could've revealed their profits during the week we got smashed by Milan, or after the day we smashed Spurs... yeah, I know what I'd do.

I was joking Jay

as soon as our shirt deal with emirates and Nike expires our profits are gonna soar.... we are way down the list in the amount we get from them

imalegend wrote:as soon as our shirt deal with emirates and Nike expires our profits are gonna soar.... we are way down the list in the amount we get from them

When does it expire do you know?

Raptorgunner wrote:

imalegend wrote:as soon as our shirt deal with emirates and Nike expires our profits are gonna soar.... we are way down the list in the amount we get from them

When does it expire do you know?

2013 n 2014 iirc.. bt nike has an option to extend 2 more yrs i think..

Once we sort out our diabolical commercial deals n we'll be in an amazing position. Granted, we are essentially staying afloat due to player sales, we have the potential to be in the top 3 revenue grossing teams.

I suppose there isn't much more we can bitch about, besides a load of players on big contracts; bendtner, diaby, djourou etc. Once we get rid of those players, we'll be in an even better position

i can see our profits improving by atleast 40%-50% or more once the fringe players are sold and new deals are done... and our commercial deals probably doubling

this is according to Swiss Ramble's last year analysis.


"It’s not overly dramatic to say that Arsenal leave at least £30 million a season on the table, because of these historical commercial deals, which would fund the purchase of one great player every season. One of the club’s biggest challenges is how to bridge this gap until 2014, when these deals are up for renewal."

SUPERCARTTS wrote:Once we sort out our diabolical commercial deals n we'll be in an amazing position. Granted, we are essentially staying afloat due to player sales, we have the potential to be in the top 3 revenue grossing teams.

I suppose there isn't much more we can bitch about, besides a load of players on big contracts; bendtner, diaby, djourou etc. Once we get rid of those players, we'll be in an even better position

We just signed to big contracts so another 4 or 5 years.

Raptorgunner wrote:

there is money available. We do not talk about an exact figure and there is a very good reason why - because it would impact our negotiating position with other clubs and that would mean that we would not be able to do what we want to do as efficiently as we want to do it.

He has a very good point here.

TBF he could take the Barca route and say we have an X amount and we aint spending anymore.

Give us him for that or we f*ck off

Great Leader Sprucenuce wrote:

Raptorgunner wrote:

there is money available. We do not talk about an exact figure and there is a very good reason why - because it would impact our negotiating position with other clubs and that would mean that we would not be able to do what we want to do as efficiently as we want to do it.

He has a very good point here.

TBF he could take the Barca route and say we have an X amount and we aint spending anymore.

Give us him for that or we f*ck off

When Barcelona come looking for you, the club is *bleep*, I dont know how teams even get the right amount of money for the players they selling. Once Barca wants a player the player will go strike and pay his way out like Cesc did payed his way out.

Raptorgunner wrote:If we can sell the dead wood we don't need to the club to spend any of the profit they made on buying players.

We can get 50 million for the useless players.

Chamakh 8 million
Bendnter 10 million
Almunia will give any team 1000 dollar if they will take him.
Squid 2 million
Arshivan 8 million
Denilson 4 million
Vela 7 million
Park 4 million

I would sell Diaby but who is dumb enouph to buy him?

I think you're a bit optimistic with your prices..

Samuelj29060 wrote:

Raptorgunner wrote:If we can sell the dead wood we don't need to the club to spend any of the profit they made on buying players.

We can get 50 million for the useless players.

Chamakh 8 million
Bendnter 10 million
Almunia will give any team 1000 dollar if they will take him.
Squid 2 million
Arshivan 8 million
Denilson 4 million
Vela 7 million
Park 4 million

I would sell Diaby but who is dumb enouph to buy him?

I think you're a bit optimistic with your prices..

I tried.

Raptorgunner wrote:

Great Leader Sprucenuce wrote:

Raptorgunner wrote:

there is money available. We do not talk about an exact figure and there is a very good reason why - because it would impact our negotiating position with other clubs and that would mean that we would not be able to do what we want to do as efficiently as we want to do it.

He has a very good point here.

TBF he could take the Barca route and say we have an X amount and we aint spending anymore.

Give us him for that or we f*ck off

When Barcelona come looking for you, the club is *bleep*, I dont know how teams even get the right amount of money for the players they selling. Once Barca wants a player the player will go strike and pay his way out like Cesc did payed his way out.

Probably since they win and everyone knows they will challenge for everything they are in. Here come play with the best players in the world or you can go to arsenal and play with a lot of potential.

Looking forward to the summer - if we get 4th.

I actually anticipate the board being desperate to make up for last summer's shopping market spree on Aug 31st.

Financially we are set for next season I would say, now it's a job of management staff to make the best out of our rosters.

We are a football club in the first place. Above any financial returns, its high time we switched our focus to on-field success.

Not saying I am not proud of what Samaritan activities the club engages in or the financial returns.

But we have waited long enough. Time to get some trophies into our cabinets.

We need Gervinho to say Hazard has Arsenal DNA, as well as Vermaelen and RVP.

http://swissramble.blogspot.com/2012/02/arsenals-mystery-dance.html

Swiss Ramble's analysis of our finances. It's a lengthy read, but has a lot of good information.

I'll pick out some of the more relevant bits.

On where Arsenal struggles financially:

Let this graph tell the whole story.



On "falling foul of FFP regulations":

Swiss Ramble wrote:As for Arsenal struggling to meet FFP, that seems very dubious to me. Even if the revenue were to fall by £45 million, this would be accompanied by cost reductions, e.g. hosting games, travel and performance bonuses. There is also plenty of room to manoeuvre in the wage bill, but that may not even be necessary because of the “healthy” costs that UEFA exclude in their break-even calculation.

...

Once those expenses are added back to the football profit of £2 million (the £13 million profit from property development is also excluded), we have an FFP profit of £40 million, which should be ample to cope with a Champions League shortfall. That said, the annual cost base is likely to increase by around £20 million following the rise in wages and player amortisation, though much of this will be covered by revenue growth (excluding Champions League). On the other hand, 2010/11 had relatively low profit on player sales of £6 million.

If this is insufficient, then it should be noted that clubs will be allowed to absorb aggregate losses (“acceptable deviations”) of €45 million (around £38 million), initially over two years for the first monitoring period in 2013/14 and then over three years, as long as they are willing to cover the deficit by making equity contributions. The maximum permitted loss then falls to €30 million from 2015/16 and will be further reduced from 2018/19 (to an unspecified amount).

If that is not enough, there is a clause in the small print of the FFP regulations (Annex XI) that allows for the wages of players signed before June 2010 to be excluded from the calculation, assuming their contracts have not been extended after that date, so long as the club is reporting a positive trend in the annual break-even results.

On our transfer budget:

Swiss Ramble wrote:In terms of how much money is now available, the noises coming out of the club are a little contradictory. After last summer, Gazidis said, “We deliberately kept some powder dry… There are funds available to invest in a significant way in January and next summer.” He was backed up by the owner, Stan Kroenke, who defended Arsenal’s lack of spending thus, “It wasn’t because the money wasn’t there. We have the money.” However, Wenger said last week that it was not true that he had £50 million available, as estimated by many analysts including the AST and yours truly.

That is the amount available in cash, though to an extent that is not really meaningful, as most transfers are funded via stage payments, e.g. Arsenal are currently owed £19 million by other clubs, but in turn owe others £23 million, so all the transfer money is not needed upfront.

Furthermore, Arsenal’s strong balance sheet would allow them to take on some additional debt, especially as this could be supported by the cash still to come from property development.

Adding to the above, on the matter of wages :

There are clearly issues with Arsenal’s equitable wage structure, which means that the best players like Robin Van Persie are not particularly well remunerated (by modern standards), while fringe players like Abou Diaby, Marouane Chamakh and Manuel Almunia are handsomely rewarded for their efforts. This was epitomised recently by Johan Djourou’s new £50,000 a week contract, which seemed more in recognition of his frequent interviews with Arsenal.com than his defensive ability.

Not only does this policy reduce the money available to attract world-class players, but it also makes it difficult to move on under-performers, hence loans for Bendtner and Denilson. While there is some logic in giving youngsters good contracts, as it prevents other clubs from snapping them up for free, it is questionable whether this has worked out for Arsenal, given the relatively small number of success stories. My hope would be that one of Arsenal’s smart executives is conducting a review of whether this approach is the most appropriate in 2012.