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HOW DOES THAT MAKE SENSE?.


Coopsie
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I'm sure we all saw yesterday that Arsenal were named as being officially the second richest club in the world behind Real Madrid.

Well I was watching the report on SkySports News and in the same report they went on to say that the Arsenal debts are £364million.

I realise that I'm probably not the sharpest knife in the drawer BUT how is it possible to be the second richest club in the world, yet be £364million in debt?. I realise that with the superb stadium and increased revenue, their assets are extremely valuable BUT they haven't won anything for a while and I just can't get my head around the whole "we're in debt but the 2nd richest club IN THE WORLD" thing. :wacko:

As I said in the topic description, "this is not a dig at Arsenal". Far from it infact, the start that they have made is incredible considering they were all but written off by a vast majority of pundits and fans (not me though, previous post's will confirm that). The thing is, teams generally get better as the season goes on, so should Fergie be shitting himself?.

Anyway, if anybody can please explain to me how the figures I mentioned make sense, I would appreciate it.

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Indeed it was local boy BUT I already knew that. What I don't understand is how can somobody or something be the second richest in the world when it or they are £364million in debt?. Or is that another Arsenal FC?.

You see what I'm saying mate, there is only one club in the world better off than them BUT they are £364million in debt, how on earth does that make sense?. Spurs have absolutely NO DEBT whatsoever and make a vast profit margin every year but are only the 13th richest club in the world. There are also other clubs with no debt that aren't even in the top 30. It's truly baffling

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Guest Helston Patriot

maybe if spurs didn't spend £30million on shite last season they would be higher than 13th!!

I think it was the Daily express today which claimed Wenger NOW has a transfer budget of £63 million..

Quote from bbc sport;

BBC sports editor Mihir Bose says Arsenal can now argue that this brings them into the big league of European earners, just behind Real Madrid.

"Manchester United will have to put on another £32m from last year to match the Gunners - Chelsea will have to show an increase of nearly £50m; Liverpool £80m and Tottenham £127m to match Arsenal," stated Bose.

He added that Arsenal project that the "Emirates effect will continue to produce vast sums of money for years".

Correct myself..

"We had £73.9m cash at the year's end and we are telling people today we've got increased cash balances at this juncture."

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You're right HP, it is indeed £70million that Wenger has to spend if he chooses to. However, we all know that he'll never need to spend that sort of money.

I also see what you're saying about Spurs HP but we're still financially better off than Arsenal are (for now) because we have absolutely NO DEBT and the second richest owner in English football behind Roman Abramovich but I wasn't looking to get into an Arsenal v Spurs argument, I was just trying to make sense of the whole "second richest club in the world" thing with the huge debts they have.

Think about it, If Arsenal continue to make £70million each year and don't give anything for transfers, in 5 years they will be debt free and truly operating at a profit.

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Guest Cornishdave1980

Evening Coopsie you raised a great point here, I to was staggered at the news real. I understand why but it still makes no logical sence that a rich club can hold debt im pretty sure Forbes only publish people who have money!

However if it is based on Turnover alone then hey give it to um but then are we going to have loads of other sub sections like richest club based on pie sales or richest club based on transfer activities.

I personally feel the richest club should be the one with the highest pre tax profit.

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Thankyou very much cornishdave, it's just non-sensical to me. Even Real Madrid being top baffles me.

I read a few months ago that they are funded by either the Spanish government or the Spanish royal family (can't remember which). How is that fair?. I think you're right about how it should be done/based upon pre tax profit. That way we the fans would have a true idea of how the club we support is sustaining its-self from the money we pay for shirts, tickets, merchandise etc.

I just want to point out once again that I am in no way having a dig at Arsenal. Their stadium is truly spectacular and when you look at the figures they have announced this week, it's clear to see why so many clubs now feel the need to move to pastures new, rather than just increase the capacity of their "traditional" stadium.

Spurs could not increase White Hart Lane above 42000 and even if they could, the road network is stupidly inappropriate for the traffic that would come with a facility the size of the Emirates stadium. Ironically it appears that one of the sites being considered for a new ground for Tottenham is at Tottenham marshes where the club was set up 125 years ago by Rev John Ripsher. Only time will tell BUT there is a promised announcement coming at the end of the year about what will happen regarding the relocation of THFC and I hope and pray that we have something similar in mind to what Arsenal have done.

It may bore some of you but I found this quite an interesting read when I discovered it.

http://www.telegraph.co.uk/sport/main.jhtm...4/sfntot124.xml

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Guest Cornishdave1980

Interesting read always like to stock up the football knowledge! i wonder if Sir Francis Drake ahd anything to do with Argyle.

Coopies just to clarify the Kings of Spain wiped Real Madrids debt back in the 90's, they orginally rented there ground from the council but the King decreed as its his club they would only pay a minimal fee.

If you thing back only 3-4 seasons Chelsea were on the verge of bankrupsy but then Chelski deveolped and you here there fans claim they will be the richest club in the world, i beg to dither all their asparations rely on one man remaining interested.

I personally prefer the PLC clubs, as you have a bigger picture of the fincial structure per a tax year, however with th influx of foreign investors that luxury will soon go and all our major clubs will be run in secrecy, as fans is that what we want?

:thumbsup:

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I'm more than happy for Spurs to remain a PLC and it appears that the Arsenal shareholders are in no way intending to sell their shares either. However, this russian guy (can't remember his name) is still slowly buying up more shares and owns something like 24% of the club now. If he reaches 29% he has to offer to buy up the rest of the shares and Arsenal will also become one of those clubs living on the edge hoping that their "sugardaddy" doesn't get bored with his new toy. It's a risky route to take but it's easy to understand these clubs opting to go that way because it offers a short term quick fix to problems that looked unsurmountable before the investment was made. As you said, Chelsea were pretty much finished before Roman stepped in. The question is, "where will they be if/when he gets bored?.

As for Plynouth Argyle cornishdave, it appears that Sir Francis Drake had nothing to do with them.

http://www.bbc.co.uk/devon/sport/clubs/argyle_history.shtml

However, isn't it good to know that the concept of this solid westcountry club was dreamed up in the local pub.

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Hope you don't mind me asking a questin here, but did the report say Arsenal were _IN_ debt for 364 million, or that their _debts_ were 364? (Sorry, my inadequate Yank keyboard doesn't have a pounds sign).

Because if that's just what they owe, then it is possible for them to still be second-richest because their credit column (stadium, players, sponsorships, merch. rights) would be greater. So if they owed 364, but had assets worth, say, 800 million, then their value is still 436 (or whatever) and that would be the second highest total? Does that make sense?

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ManUre being worth more would make sense -- but do we know that they're tops in all the income categories? Is Old Trafford worth more than the Emirates, for instance? And doesn't United have some massive debts that lousy American brought to the Club? Or have those been shifted again?

I'm just trying to make sense of the rankings -- it doesn't matter to me if Arsenal are first or last (they'll never be Liverpool!).

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Guest Cornishdave1980

Now now children lets not live in the past! :thumbsup:

Xembla if your asking is Old Trafford worth more than the emirates the simple answer is i dont know! Old Trafford has in the region of 16000 more seats so id like to think that could generate a fair bit of revenue over a season although im pretty sure you probably have to pay through your ass for a pie at the emirates

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Guest Helston Patriot

Just some thing i found..From 2006

With the repayments of debt now restructured over a longer term, and match-day revenues set to rise significantly over the coming seasons, managing director Keith Edelman said the club is strong financially.

He compared the new stadium to buying a new house, in that a mortgage does not financially strap a homebuyer, and that a buyer will pay a lot less per year over 25 years than, for example, 10 years.

"It is like an individual buying a new, bigger house into which you have put more equity: you will have a bigger mortgage, but overall be in a stronger financial position," Edelman said. "The two things are completely separate and you do not say, 'You have no money to spend because you have a mortgage.' A mortgage is something you pay off every month, 'X' amount over a number of years then you look how much cash you have in your pocket to spend.

"Previously we had a 14-year repayment schedule, on which the interest rate was quite high. Because we sold the stadium out and it was being delivered on time and on budget, we were able to go into the financial markets and get a deal which was very attractive for the club which moves the debt out to 25 years and reduces the interest rate by about 2 percent.

"So we have lowered our debt repayments substantially every year. It is a good deal for the club and it means we have more money to invest in players and team development."

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Even better news HP is that it appears that there's not really much need to invest in new players or the team. Such is the quality of Master Splinter (Or is that Arsene Wenger). The guy is a genius of a manager, however, he still has to start winning silverware again now that the Arsenal machine is rolling again. Don't you think?.

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With the way they're looking in the premiership at the moment there could be a repeat of the "unbeatables" historic season?. I think they'll be setting their sights on a bigger prize than the carling cup (and so should their fans). Don't get me wrong here HP, "I HATE ARSENAL" but I'm intelligent enough to compliment anyone or anything that is of a good standard and at the moment Arsenal are of a VERY GOOD standard indeed.

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Guest Cornishdave1980

I too have to agree Arsenal are by far the most pleasent team on the eye, i could happily watch them play football everytime there on the box. However before all you Arsenal fans get slightly carried away just stop and think for a second, what normally scuppers Arsenal season in recent years?

Winter period espically away games

A key player injured(you haven't had one yet but you never know.

Also something to consider is several of your key players will be away for the African Nations.

Dont get me wrong im not trying to knock Arsenal i just think you need to look at the bigger picture.

PS - The league now has to be considered a major trophy as there are 4 top teams competing for 4 trophies, each one now means something

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