Friday, 3 February 2012

CASH FROM CHAOS

Money Floyd

Part of what any company relies on is its product and assets. That’s basic stuff yeah?

A football clubs product is what goes on out there on the pitch, its ability to entertain and produce results, trophies and success.

Its assets are the playing staff; it’s workforce if you like.

Investment is needed in any successful business but getting rid of your assets without gaining the finances with which to reinvest is a foolish approach, furthermore choosing not to reinvest after losing assets couple be construed as asset stripping. So far so simplistic.

It is a financial fact that the building of the Emirates stadium was a venture that accrued debt. Presumably a plan was put in place to repay that debt with some projections based on future earnings development deals sponsorship and the like.
Money Madness

I wonder, was part of this projection on repayment based on possible future sales of players? This would seem like speculation in anyone’s book. If this was factored in (hard to believe that this would be part of any sound business model) then it provides some form of explanation as to why revenue from sales has not been commensurate with expenditure on replacements. If this is not the case (as seems more likely) any lack of expenditure has been through choice.

Adebayor, Clichy, Fabregas, Tourre, Nasri  have all been some of the more recent sales and the money generated from those sales (and saved through wages) has clearly not been reinvested.

The question remains; what exactly is the club’s financial policy? We keep hearing about self sustainability but failure to invest is a foolish  short- term and long- term strategy when it means the product; the football club, becomes less attractive to exterior revenue sources.  

The Supporters will always remain; that’s what supporters do, but it is a cold hard reality that success on the pitch attracts more opportunities to earn. The reason I am focussing on money is because it seems to be the be all and end all as far as the likes of Gazidis, Kronke et al are concerned. This in itself would point towards them being poor business men as the clear decline of the club is counter productive to increasing income. You don’t need an economics degree to work that one out.
Money Python

It seems to me that Arsene Wenger is the perfect Manager for Arsenal Football club as run by the current regime because he is balancing those books that seem to be the most important thing to those upstairs.
What seems to have been wilfully overlooked more than been forgotten, is that yes a Football club is a business, but it’s a unique one by virtue of the fact that it is a football club. There is no point of having success in the bank account when there is no success in the league table or trophy cabinet. Something has been neglected in the swirl of financial gluttony and obsession.

A great club  is obsessed with winning it is not obsessed with book balancing.
Money Lizards

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