Date: 26th July 2008 at 10:56am
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I guess you can be sure that it is a pretty arid news climate when you reference a distorted piece of red top tabloid rubbish and then distort it yourself to justify a piece with a grandiose title claiming that the big picture is sobering. Somehow that is what Myles Palmer managed to convince himself was a good idea when he asserted that Arsenal had to generate £24m from player sales each year to pay for the stadium. Maybe the sobering process hadn`t got underway when he penned that piece. Especially as even the NOTW article he referenced had made no such claim.

In trying to climb out of a hole of his own making he ignores the first rule of holes – when in one stop digging. Apologising for his first error Palmer produces a second piece which uses an amusing ‘back of cigarette pack` financial analysis to conclude little of any use whatsoever. In the process he rounds figures up or down by the odd £10m or so as though they were petty cash. The problem with analysing company accounts is that, like many sets of statistical data, you can steer some conclusions in the direction that you want it to go. That`s why due diligence in corporate mergers and takeovers can be such a lengthy and costly business.

In the end Palmer`s ‘get out of jail` review concluded that Arsenal had to be careful and not increase their overall wage bill unless revenues increased. That`s not an earth shaking conclusion and one that Wenger some time ago announced when he declared that, as in any business, you cannot afford not to adhere to your budgets. His other conclusion was that some of the sponsorship deals struck in some cases 3 or 4 years ago which provided important up front funds to support the stadium project may, with the benefit of hindsight, not have been the best we could have achieved. That`s possibly true – many things look different in hindsight than they do when you have a complicated financial structuring process funding the stadium to wrestle with. Especially when you are looking back some years later. These deals can only be properly understood in context and only when you do take in the ‘big picture` which despite his claim Palmer has failed to do.

By contrast the Arsenal Supporters` Trust carried out a more forensic examination of the interim accounts to November 2007 in April of this year. They concluded that not only did we appear to have paid Henry something like a £10m signing on fee for his new contract but that we had the potential to spend some £25m on transfers and players wages. A different conclusion then but again any independent analysis is only dependent on the information in the accounts. The AST though did a pretty good job of genuine independent analysis and interpretation unlike others.

Arsenals financial picture is likely to be affected by the property slump. Though the Highbury Square development is pretty secure there maybe some units that will take longer to shift but on the grand scale this itself is not a major problem. A bigger difficulty could be the Queensland Road development for which the club has had their original plans rejected. It may now take some time longer to get the returns from this project than they had anticipated but even this shouldn`t affect the big picture. The bottom line is that the new stadium is generating more revenue than it consumes. We are much further ahead in financial terms than if we had stayed at Highbury. That`s all we need to bother with.

You see what doing without proper football does for us! Would anyone have been as concerned in Chapmans day of the costs and financing of building new stands and marble halls? Now we end up looking into all sorts of corners that are of little real concern to the average supporter who just wants to see some brilliant football and our club totally crush all before them as they achieve world footballing domination. An Arsenal XI are playing Crawley this afternoon. It`s a start!

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