Sunday, April 11th, 2010 « Untold Arsenal: Arsenal News. Supporting the Lord Wenger in all he does

Today’s Sponsor: “Making the Arsenal”. A book utterly unlike any other book ever written about Arsenal FC. If you have ever wanted to know what it is that is so utterly incomprehensibly special and different from every other club, this book will go some way to explain that.

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I am going to start by stressing that this article is based on a set of questions, not a set of answers.  It contains personal opinion not a wholesale accusation of things that are untoward.  I am quite happy to be told, as a result of this article, that I have got all my financial knowledge wrong, and that there is nothing amiss with the financial reports coming out of the two semi-finalists who play today (Sunday 11th April – the eve of World Cosmonaut Day in case you are interested).

The story presented by each of the two clubs is the opposite in terms of financial wherewithal, but neither make any sense.

The Tiny Totts claim to be making lots and lots of profit, despite all their transfers.  In fact they are so good at running the story that they are making a profit that even newspapers like the Guardian which does finances better than most, recently used the story of Tottenham’s financial magnificenceas a way of bashing Liverpool.  Look, they say, Tottenham can make money and buy players why can’t the Insolvency do the same?

But that story was so eccentric in its reporting that several people (and it wasn’t just me using different names) wrote in to say that this was crazy.  The paper doesn’t seem to have replied.  I wonder if they know what’s going on, but can’t say, or if they haven’t realised that something is very odd.

The fact is that for years Tottenyham (which actually was a typo but I’ve left it in because it amused me) have been spending money on players – it is not just an Arry thing.

So when the Tinies financial statements suggest that they buy all these players and then make a mega profit on transfers people begin to wonder.

According to Transfer Market web site the Totts comings and goings for just 2009/10 alone were

Transfer revenue: £26.820.000

Transfer expenditures: £36.270.000

Loss: £9.450.000

In fact over the past three seasons they have spent an amazing £130 million more than they have received and yet they still made a profit!  And that takes into account the profit they made on Berbatov.   In other words, Arry has done his usual, as he did at Portsmouth, and the debts are there to prove the point (£55m net loss last season alone).

And still they declare profits all the time.

So how do they do this? I have no idea.  I have looked at the figures – and as I have admitted before I am not an accountant, and I don’t work in accounts.  In the real world I employ accountants who present me with figures for my company and then patiently answer my questions when I try and work out what they mean and what my company should do about these figures.  If I were running Tottenham, the meeting, I fear, would be a long one.

How can they make all this profit when they are wasting a fortune year after year after year on transfers?  That is my simple question.

(Incidentally, and to pause before we go on to Portsmouth, Arsenal’s record for the season is

Transfer revenue: £42.930.000

Transfer expenditures: £9.000.000

Profit £33.930.000)

The year before we lost £14m, and in 2007.8 we made £16.5m so roughly over the 3 year period we made around £36m.

Now on to Portsmouth. This season they have made £34.8m on transfers.   Last season they made a profit £24.2m  and the season before that they lost £26.4m    So overall they are showing a three year profit of around £32m.  And yet they are utterly, totally bust in every meaning of the word.

Let’s summarise this:

• Tottenham’s 3 year transfer record is a loss of £130m.
• Arsenal’s transfer record is a profit of £36m.
• Portsmouth’s transfer record is a profit of £32m.

And yet all the financial reports are that Portsmouth are so bust they have to pay off most of their staff, and that Tottenham are so flush with profits they are building a new training ground and hoping to build a new stadium.

What the hell is going on here?

The connecting factor between Portsmouth and Tottenham is the manager, and I insist, I make no accusations here.  He is due his day in court soon, as are two other Portsmouth people – Maderic and Storrie – and it would be wrong to spread rumour and gossip before the trials where the accuser is Revenue and Customs.  The issue is about the tax these people pay, not about what happens in the club they used to be at.

So what I am now doing is asking someone who is cleverer than I am to relate the Tottenham and Portsmouth accounts to these transfer figures and explain how Tottenham, who don’t have the benefit of a 60,000 stadium with maximised numbers of boxes and exec arrangements, who don’t have Champs League income, and who generally don’t finish high up the league and so don’t get Arsenal’s TV money – how do they make a profit, despite their buying and selling.

And while we are at it, although Portsmouth have a small ground with no facilities how do they get into this financial mess when their transfer dealings are under control?

I am open to suggestions.

Tony Attwood

The index of past articles is still running a few days old but there are some good pieces there if you flick back – but I am hoping early next week we can get that sorted without destroying the new layout!

Meanwhile on the Making the Arsenal site we have got to the moment 100 years ago when Arsenal themselves almost went bust.  It was down to the results in the last 3 games of the season.