In response to the somewhat uninformed offering posted on the website yesterday, here is an explanation of where Arsenal’s money goes, all £3m per game of it as well as the rest of the club’s income…

These figures are per annum –
Squad and Coaching staff wages - £100m
‘Other costs’ - £50m... amazing but apparently true (these include stadium running costs, players’ travel and hotels, other staff costs, legal outgoings, retail operation)
Repayments on stadium debt - £20m

That is £170m of cash costs

Let’s assume the football income is £200m per annum. (The much-mooted £3m per game adds up to approx £90m of this, the rest is made up of £70m from TV rights (all cash) and about £25m of commercial income (not all cash) and £15 m of retail income.) Of this about £180m is cash to spend year by year as so much commercial income (Nike, Emirates, Delaware North Catering, Club level, corporate boxes and diamond club) has been received in advance and spent on the new stadium. For example, with the Nike deal £55m was paid for the seasons 2004 – 2011 (£8m a season), but all the money was received in first 24 months. For the shirt sponsorship deal with Emirates, by doing the a deal to get most of the money upfront, Arsenal get paid £6m per season – although they have already received and spent this – until 2015, compared with current deals that are paying Chelsea £11m and Manchester United £20m a year respectively.

Remember the stadium project cost around £440m, of which the club borrowed £260m. So it used £180m of its own money (including the £80m from Granada / ITV for the 10% new shares created a few years ago).

So for the £200m of revenue, the club actually get £180m of cash. The £170m of annual spend leaves Arsene Wenger with a £10m-ish kitty each season BEFORE player sales. That is an Arshavin or a Vermaelan, but no more until players are sold.

£100m is a lot for wages and there is definitely a debate about whether the club are getting value for money or performance for that outlay.

The Highbury Square and Queensland Road developments were going to replenish the cash that had been received upfront and spent on the stadium. The last three seasons of careful husbandry were supposed to be that only but with no property windfall in sight, then where does the cash make up come from?

Player sales (such as that of Adebayor) is a quick solution, although revitalising the commercial deals will not be quick.

The choice is muddle on for the next two or three seasons and pray Wenger keeps us in the game or get the shareholders to accept facts and replace the missing property windfall and give the manager scope to get in the two or three players who will make the difference now. They also have to sort out the very expensive property debt hovering over Highbury Square or simply hand that over to the banks and walk away.

So in summary, the revenue figures look good, but the cash income less so. The debt service on the new stadium is £18m a season. When the various commercial deals were done upfront to get the stadium done, Highbury Square was to replenish the spent cash, but this last part has failed, so the squeeze continues.

Answers? A Ronaldo type deal of a star name?
A Rights Issue?
Or pray Arsene Wenger continues to deliver minimum acceptable performance

2009-10 is a make or break season. Arsene Wenger’s contract is up in two years. The manager is 60 in October.

* Figures are rounded slightly for simplification, but are relatively accurate.