Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness.
Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
Those are the wise words of Wilkins Micawber, the man himself struggled to live by the maxim and found himself in debtors prison. Ok he is fictional, and admittedly Arsenal Football Club is not one man with a propensity for overspending so why is this relevant.
In the aftermath of van Persie’s bridge burning ceremony and the open criticism of the board by Red and White Holdings questions once again were asked about the wage structure at the club. Before I go any further I want to make one thing clear, no one apart from the player, his agent and the club know what each player is earning.
This doesn’t stop a great deal of speculation, last year a list of players and their salaries was linked to by various sites as gospel, that list proclaimed Chamakh as earning £60k a week, this week the Fiorentina chairman said that Chamakh was on €3m per year which equates to £44k a week and therefore they could not afford him, okay so it is still a fair chunk of money, but in lieu of a transfer fee to be expected. Does £44k a week illustrate wreckless spending when Dzeko twiddles his thumbs on the Etihad bench whilst picking up what is believed to be a salary of £160k a week.
This is the market we are operating in, and whilst it is true that City and Chelsea distort the marketplace our players are also expecting similar salaries, and quite frankly most will not be happy on £10k a week as much as we would like to think they would stay and play for the badge.
The club have been criticised for not dealing with van Persie sooner and for allowing the wage parity between players, I know one thing, if the club had put van Persie on £150k a week contract before the start of the 10-11 season there would have been many fans scratching their heads.
Now we have increasing speculation that Barca are expressing an interest in Koscielny, we apparently have looked to sign him up to an improved deal but if he fails to sign I expect to see fans question again the initial contract and why he wasn’t signed up sooner. Again if Arsene or Ivan had announced a new contract for Koscielny after his first year just how many Gooners would be phoning TalkShite and expressing again how clueless the pair are?
One of the main criticisms of the Arsenal wage structure is that in recent years Arsene and the club have sought to narrow the gap between high and low earners and that has led to a bloated squad (paying youth players too much etc), the second criticism most often heard is that we are not paying our best players enough to keep them and selling them before or at their peak, and finally is that just one or two £30m buys would be nice (remember “we aren’t asking them to break the bank”)
In 2010-11 Arsenal made a profit of £14.76m only £2.2m of this related to football profit and the football profit would have been a loss but for some player sales (which turned a profit of £6.2m). The wage bill was £124m for all the employees at the club, I’ll assume that the player share is 90% (which leaves £12.8m to pay the other 380 employees on an average salary of £31k…this includes Arsene, coach, asst manager, scouts, the medical team, doctors, directors, sales people etc £31k might be a bit light as an average).
How would you do it different?
Taking the football loss and adding back the wages and player amortisation at the end of May 2011 when you take over the running of the team you have a budget of £142m a year to spend on wages and transfers. In addition we received £50m from the sale of Cesc and Nasri, that is your maximum extra funds to spend on transfer fees or wages…I know what you are thinking “what about that £160m everyone says is sitting in the bank can’t I have a fund to start with?” Well I’m afraid not, as a result of the property financing we have to keep £60m in the bank, our Net Current Assets (thats everything we have due to us in a year less everything due to pay in the year) is £90m, £30m of which is Property so we have to keep that money in the bank to comply with the borrowing requirements.
So there you go empty squad sheet, clear out the dead wood by giving them all free transfers and leave yourselves with the players you would want and put them on the salary you would like, just how will you balance the books and prevent them leaving to go elsewhere and at the same time saving money to spend on new transfers.
We are getting closer to the position where we can spend without fear, new commercial deals are around the corner, but in the meantime and for the next two seasons a fine balance still needs to be struck.
Getting rid of the reserves and paying the first team in competition with City is only possible in one way – Usmanov buying the club and doing what he has promised.
5 players on £200k a week = £52m
5 players on £150k a week = £39m
5 players on £100k a week = £26m
10 players on £50k a week = £26m
(let’s get one thing clear this is the kind of ridiculous money they pay, Nasri £170k a week, Adebayor £170k a week, Yaya Toure £200k a week)
Thats a total spend of £143m, £1m over my budget for a season (excluding the £50m i had to buy some talent) and I have nothing set aside for next season to buy anyone new. And players at these levels aren’t picked up on a free very often.
In addition we won’t ever have extra money from selling the best talent as we will release them when they have served their time.
If we decide this is the only route to take why do fans ask that someone else pays for it? Why don’t we want to pay it through increased ticket prices and membership?
Gooner in Exile