Arsenal Has No Need To Panic

Arsene Wenger is perhaps the shrewdest operator in the transfer market. So when news came out about him sending potential waves of panic through Arsenal fans, I figured that some sanity should be restored.

The very first point that I would like to make is that the source of those comments, News of the World, is the most sensationalist tabloid in the UK. They thrive on releasing stories such as these to ensure that more of their "papers" are sold.

So, it was only natural that when they published such extravagant quotes from the Boss, all the blogs and websites picked up on the story and re-published it.

Secondly, Arsene Wenger is not stupid. I don't understand why he would actually come out and say things such as, "The strategy of the club is to sell every year and to buy less expensive players."

I've read a lot of what Arsene Wenger has said and that sounds nothing like him.

Isn't it odd that last week it was reported that Barcelona bid £24m for Emmanuel Adebayor, and the same figure is being floated about as a potential "surplus" which Arsenal have to create annually out of transfers to ensure that payments are made towards the fixed-interest bonds taken out over a 25-year period?

Thirdly, there is no explicit mention of the surplus coming from transfer activities. Let me quote Wenger:

"We manage at Arsenal to maintain all our football ambitions—national and European—while having to free up—for 17 more years—an annual surplus of £24m to pay for our stadium."

Now, if I multiply £24m to 17 years, I get a total of £408m to be paid over the 17 years. The interesting thing is that this figure is much more than what Arsenal actually has to pay (net) toward the fixed-interest bonds that were floated for the payment of the stadium.

Let me quote the annual financial results of Arsenal Private Limited Company (PLC) as on 31 May 2007, in relation to the debt financing:

"£260 million of bonds with long-dated maturities and a weighted average fixed interest rate of 5.3 percent were issued in the year to refinance all of the Group’s stadium-related debt, providing a significant reduction in annual debt service costs for the long term."

Arsenal were expected to make around £300m from the redevelopment of Highbury, but due to a recessionary state in the economy, that figure will be somewhat reduced, but not by much. But, it will go significantly toward the debt repayment.

If anything, our cash balances are said to have been around £74m. Although, the amount has been reduced due to the above-mentioned Highbury redevelopment project due to the state of the economy, so I'll keep it at a ballpark of £40-50m.

The amount received or paid from transfer activity will impact only the cash balances.

We've spent £5m on Aaron Ramsey and potentially £13m on Samir Nasri (which is not a straight-cash deal). So, we should have a good £10-20m to spend from our cash reserves on transfers.

So, there is absolutely no reason for Arsenal fans to pay so much attention to some hotchpotch tabloid report which mentions some vague amounts having to be retained as surpluses.

Isn't it strange how the press just throws around some numbers and make us all panic with just a single article?

But this just didn't look right to me, and I hope that with this article, I've set the record straight.

Arsenal are not a selling club and don't need to be one for the foreseeable future.