There was an article i read whereby Kroenke is building a large new NFL stadium for his Rams team in the States and his business model for Arsenal would have been that he doesn't invest any more than they would generate from CL so he can concentrate his finances on the Rams stadium rebuild. It was said that when he increased his ownership share of Arsenal he could use it as an asset with the banks for taking out his loans or something to that effect. Basically, the cash reserves they have at Arsenal would show on his asset sheet, if they were still in CL then they would sustain themselves using that money he will not invest extra revenue to get that back into the CL at this time. The article also felt that if costs overran on the stadium he'd use Arsenal's revenue to plug gaps or something to that effect.
They seem to have capped their transfer budget this season at £50M; now this may be fair enough given what they have spent in the last few windows (luckily mostly on dross) but the situation they find themselves in is of their own making through just letting wenger deal with football side of things and just happily only spending to ensure top 4 rather than spending to actually challenge for the top. From a business perspective the stadium is win-win: if Arsenal fans boycott because they see the mismanagement, they will always have tourists and day-trippers to fill in the stands. You could easily see our stadium have the same win-win scenario for ENIC given our recent displays on the pitch (though Tottenham is not as accessible as N5/N7 in terms of transport so perhaps less).
Later today, i'll see if i can find the article.
Sorry, I am a bit lost. Are you criticizing Kroenke because he isn’t ploughing more of his own money into the club he owns?
It is entirely feasible that Kroenke is using the asset value of his share in Arsenal to help secure personal finance for other projects. However that wouldn’t stop Arsenal from signing players. For example when Arsenal paid £60 million for Aubamayang their cash position may reduce but the club will show the player as an asset at that same value thus not really affecting the value of the overall asset owned by Kroenke.
I'm also not sure where your facts come from about Kroenke refusing to push the boat out at Arsenal....
This from an article reviewing Arsenal's finances....
Q are Arsenal's finances in good health?
A: Arsenal's spending had already begun to exceed their means. Even before missing out on Champions League football for 2017-18, Arsenal's cash balances, after some years of substantial growth, were shrinking significantly.
The £46.3m cash deficit of 2017-18 is not something a self-sustaining club like Arsenal can afford for many years in a row. Yet the improved transfer activity of the past couple of windows and the new wage commitments both suggest a decision has been taken to push the available resources hard.
In the early part of 2017-18, sales of development properties raised £14.5m. Had they not, then the £19.7m net operating cash inflow of the first six months of the year would have been commensurately lower. There is still a stock of £8.1m worth of property on the books and if similar margins can be realised from that, then there could be upwards of £35m more to come in property sales.
But that would still not cover the absence of even one season's Champions League football.
Q. Can the club afford to miss out on the Champions League again?
A: Arsenal's estimated turnover dipped by a little less than £20m ($25.5m) to about £400m in 2017-18. Yet costs rose, cutting the £52.0m profit of 2016-17 in half to around £25m. The cash inflow will have added an estimated £10m to the overall balance.
Assuming revenues stay flat in the current season, the rising wage costs will likely wipe those profits out altogether, with additional spending on transfers, debt interest and repayments, tax and infrastructure shrinking the cash balance by a further £30m or £40m .
A figure at the upper end of that scale would eat up more than 25 percent of all the cash Arsenal have. And if that eight-figure gamble does not pay off this year with a return to the Champions League, there could be trouble ahead.
Q. What happens next?
A: Champions League riches would lead to Arsenal being self-funding again, without having to dip in to the cash reserves. But if they do not return to the competition this year, the club will recalibrate their sights.
It could mean an extended period of financial frugality, while others in England who are unconstrained by the limits of a self-sustaining model, such as Everton -- whom this week Usmanov ironically declared himself open to investing in -- Wolves or Leicester, perhaps, burst past them.
but its always the same. Thankfully there are fewer fans who bring these points up then they used to be.
