Tuesday, April 16, 2024

Arsenal take a loan for cash flow … and squad management?

Morning all.

It’s Friday, on Saturday we play Newcastle in the FA Cup, but I’ll leave any previewing of that game till tomorrow.

Let’s start this morning with news from yesterday which saw the club announce they had taken a £120m loan from the government’s Covid Corporate Financing Facility (CCFF) scheme.

The statement read:

We are taking a short-term £120 million loan through this facility to partially assist in managing the impacts of the revenue losses attributable to the pandemic. This is a similar approach to that taken by a wide variety of major organisations across many industries including sport, and is repayable in May 2021.

The CCFF is designed to provide short-term finance at commercial rates during the pandemic to companies that have strong investment ratings and which make significant contributions to the British economy.

Now, with billionaire owners, some might wonder why this isn’t something KSE themselves could finance, or at least sort out via their own financial channels. The reason is, apparently, the super-low interest rates repayable on taking a loan from this scheme, so obviously that makes it attractive. Not ‘free money’ or anything like that, but certainly ‘cheap’ (and obviously it has to repaid in a few months anyway).

The money cannot be used for transfers, so anyone thinking it’s to fund a January splurge, put away the Kleenex. This for cash flow purposes. You know, keeping the lights on, paying wages, that kind of thing. You might wonder if some of it could be used to incentivise players who no longer have much of a role at the club, if any, to depart and find somewhere new.

Is it coincidence that Mesut Ozil is being strongly linked with a move to Fenerbahce, for example? He’s not in the squad, there’s clearly no intention to register him in January, but his contract runs until June. If he stays, Arsenal are going to have to pay him anyway, so why not try and find a solution.

My crude back of a matchbook calculations make it around 25 weeks until his £350,000 a week contract expires. Assuming some of that £350,000 is based on appearances, let’s lop off £50,000 a week. That still makes £7.5m due to the player on the basis of the contract that we were happy to give him. I’ve also seen reports that he’s due a substantial ‘loyalty bonus’ at the end of his deal, and while I believe there is an amount to be paid, those kind of bonuses are usually paid over the duration of the contract so maybe it’s not quite as high as the £10m doing the rounds. Let’s call it £4m.

It’s a lot of money, and let me be clear: Arsenal gave him the contract, he is perfectly entitled to get what he’s owed, as any player is. Everyone can have their own personal opinion on the deal, how much value we’ve had for it, and all the rest, but bottom line is the club gave him that contract because we wanted to.

Moving slightly away from the financial side of it though, whether you’re an Ozil fan or not, I think most people would acknowledge the situation itself isn’t healthy. It’s no good for a player when he doesn’t play, it’s no good for a club which is paying big money to someone to turn up to training (although Arsenal have given him time off lately), and it’s no good when you’re a manager trying to build a team.

It’s not just Ozil. Sokratis can’t play. Mustafi isn’t really playing. Kolasinac wasn’t playing, but we sorted out a loan deal for him. David Luiz isn’t really playing a lot lately, and if David Luiz becomes discontented in a dressing room, the dressing room becomes a much less happy place. I’m not saying that’s actually happening, just that if you’re a manager you have a complicated job as it is. If you’re the Arsenal manager, there are extra layers of complication we all know about. And if you’re the Arsenal manager with a group of senior, experienced players who know they have no future at the club, and who become snippy and disgruntled (more disgruntled?) that could represent a real challenge on top of all the others you already face.

I know some of this is down to the Covid-19 market last summer, where it became even more difficult to shift players in the final years of their contracts. It was more attractive to stay put than go somewhere new – at least from a financial point of view. But the way we’ve dealt with player contracts, players heading towards the end of their deals, making decisions about when to sell and so on, has been absolutely terrible for years.

Raul Sanllehi made it very clear this was a problem and one we needed to sort out, but instead of doing something about it, he let Danny Welbeck and Aaron Ramsey leave for free, and saddled us with even more difficult situations to manage with some of the contracts he handed out. At some point we have to get on top of it.

The departures, whenever they happen, of Ozil, Mustafi, Luiz, Sokratis + Kolasinac will save the club in the region of £750,000 every week in wages. There are other senior players who could go this summer who would take this to well over £1m every single week. Some of that has to be reinvested, obviously. Some of it already has, but if we’re taking efforts this month to trim the squad, then I’m happy with that.

It’s not just about the financial side of it either. It’s about ensuring the squad size is optimal, creating an environment which is more conducive to togetherness/unity, and in which there’s room for the younger players – who are a big part of our future – to express themselves and take on more responsibility. The way we’ve seen Bukayo Saka and Emile Smith Rowe do it in recent weeks.

I’m not saying that anyone has been anything less than professional, but the reality is when you have a group of players who won’t play, can’t play, and don’t feel involved, it’s really unhealthy, and Arsenal as a club have to do something about it.

Right, I’ll leave it there this morning. Check out the brand new Arsecast below, in which I chat with Amy Lawrence about William Saliba, Folarin Balogun and lots more.


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