Untold Arsenal: the stories no one else runs » 2008 » May » 21

21/05/2008 by Tony Attwood.

Tonights the big night.

The two most indebted clubs in the history of football, who between them owe over £1.5 billion and have absolutely no way of paying it back.

One of them the most notorious anti-footballing team of the present era, the other sinking deeper and deeper into the financial mire.

Meanwhile in the real world Arsenal continue with attacking football, signing the greatest young players – two more on their way today.

But does anyone notice?  No, of course not, they are hypnotised by debt.   The debt of football, the debt of three of the top four clubs, totally out of control and getting worse.

There’s more details in the article below.

21/05/2008 by Tony Attwood.

The two teams in tonights cup game owe 1.5 billion pounds between them.  They are the most debt laden clubs in the world – and the fact that they have made it to the final says something utterly awful about football.
This is Match 39: the great dream of the English Premier League.   A game played between two EPL teams on foreign soil.

So here it is Manchester Megadebt vs Chelsea Megadebt.    And you don’t get much more debt than that.

Starting with Chelsea who owe an amazing £736 million.  £578m of that is owed to one man Mr Abramovich.  It was often said that he had “given” the club the money – but no, not really.  As the figures finally reveal what we have been saying all along – he has only loaned it.  If the gets bored, or suddenly loses his money in a court case over oil rights (and we are not suggesting either is likely) or tragically gets injured or taken ill (and it happens to all of us in the end), then the club has 18 months to repay the money.

Then there’s Man U – they owe £764m, which is mostly made up of the debt run up by the Glazier family.   They are unable to make repayments on all that debt (the club made £40m profit last year so all that went into paying the debts, but this was nowhere near enough) and so the debt is rising.  There is nothing illegal or wrong in this – it is a statement of fact – as long as the profits aren’t big enough, the debt just gets bigger and bigger.

So is there something special about Euro Cup clubs and imbecile levels of debt?  Well, yes if you also include Liverpool – there, the owners claimed they would put no debt into Liverpool (2006) and then they put all their debt into Liverpool (2007).   They are paying interest at around half the rate of Man U – so only half the problem, but the Liverpool income is nothing like the Man U income, so there are big problems ahead.

But what of Arsenal?  The debt here is around £360m, which makes it look as if they are in the same boat as the other clubs.   But here’s the twist.

First, Arsenal are about to get in the money on their old ground at Highbury – so far the accounts have only shown the expenses of demolishing and rebuilding Highbury, not of any income (about £140m).   Then there are all the properties that Arsenal bought around the new Emirates Stadium.  They have in many regards been re-furbished or demolished, and again there is no income yet on the sale of the land or the properties.

Second, Arsenal’s debt is not just a debt to buy a club (a debt which has no guarantee other than the club itself).  Arsenal’s debt is a mortgage just like the mortgage on your house.   As such the rates of interest are about half those paid by other clubs – because the debt is secured.

What’s more, Arsenal’s income shot up dramatically when the club moved from Highbury.  Even after the mortgage repayments Arsenal earn far more month by month than they did before – so Arsenal are better off than 5 years back, whereas all the other clubs are infinitely worse off.

Does it matter?  Well ultimately it must do, because one of Man U, Chelsea and Liverpool, will ultimately fail because their debts long term are unsustainable.  And when that happens the whole EPL edifice will crumble.    Arsenal will survive because its debt is a mortgage rather than a speculative loan based on nothing but the club’s ability to earn more money in some unspecified way in the future.   But they should start planning for life after the EPL – presumably in a Euro league with clubs like Inter, Milan, Real M and Barca.

21/05/2008 by Tony Attwood.

 More Untold Arsenal awards

Superstar of next season: Theo Walcott.   Suddenly, just when we all expected it not to happen, he exploded.  The one thing that was wrong – his inability to avoid being drawn into blind alleys where he lost the ball – vanished.   It was as if he thought, “Bugger this, let’s do something” and off he went.   A season of that and you will only hear his name

Unexpected star – Alex Song.  Voted Wenger’s worse buy simply because of one duff game against Fulham, Song looked good in Africa, and has at the end of the season looked really terrific.    If he turns up in Flamini’s position next season, do remember that the idea was first mooted here.

Young player of next season: Carlos Vela.  Who else could it be.  Mexico are not the best team in the world, but they are not slouches either, and he’s their centre forward.  He Eduardo can come back and the others stay fit we will have five centre forwards next season, so he might not get too many games outside the cups, but when he plays he will score.

Player of next season: Robin van Persie.  Saying it is going to be Cesc is too obvious.  Robin is a sensational player who has had injury problems galore – maybe this time he will make the breakthrough and play a brilliant season without injury.  “Maybe” because there’s the Euro competition first, and that’s where he got done last time around.

Comeback of this season: Bolton away.   OK it was a messy goal, but it was the first flicker of a recovery following the awful run after the assault on Eduardo

Comeback of next season: Tomas Rosicky / Gilberto Silva.  Either or both would do me.   Gilberto’s performancs have been erratic, but we got flashes of what made him so vital to us for year on year in the past.   Rosicky has been injury prone, but maybe the very very long lay off and thankfully no Euro call up will mean he can come back and become Little Mozart once again

Try some of these (Gooner News doesn’t highlight them all)

20/05/2008: It’s debt vs debt in Match 39

20/05/2008: French miss out on top players

20/05/2008: Yes it is on. We’ve got Nasri

19/05/2008: Untold Arsenal Awards: Best and Worst Moments

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