Ed’s note – The piece posted yesterday rounded figures a little for simplicity, but there is disagreement from one website visitor about the money available to the manager to spend, and the general financial well-being of the club. Here’s what they have to say… (and for those not totally conversant with this kind of thing c£20m is circa (or about) £20 million.)

Ok let’s just take the football revenues into consideration. Property related will actually make the figures better this financial year but on last year’s figures the total turnover was £207m. Costs were basically as stated in the article and just to expand on the £50m other costs referred to (£46m actually) some other of these costs include policing, stewarding and security, training and academy running costs and not only the retailing operation costs but the costs relating to the production of the retail sales themselves.

Repayments of the stadium debt are as stated c£20m but only c£15m is interest (Profit & Loss related) with £5m being reduction in the principal loan amount (Balance Sheet related). This differentiation is important and is my main criticism of the writer’s article, more of this later.

All up the profit figure last season EBT (Earnings Before Tax) was c£40m football related compared to £30m suggested by the writer but of this £11m taxes need to be taken into consideration. Basically the same figure then but whereas most of the Club’s business is cash, as the writer points out, there are certain prepayments made in advance. I would agree that the Nike money has been paid already but the Emirates money has been structured differently with £9m a year being paid from 2005 until 2011. Therefore whereas the writer suggests there’s a £20m shortfall in cash due to these prepayments I'd suggest it is only about £8m (£9m) maximum. It’s a little bit more complicated than that but the two deals have been structured in such a way as when the £9m Emirates payments finish in 2011 and we still have three years of the shirt deal left a new Nike contract will kick in.

Anyway whereas the writer suggests there’s a potential £10m a season available for players I'd put the figure at nearer £20m.

That’s not a great deal more but let’s not forget this is only a one year scenario. We have basically spent net zero since Jan 2004 until we bought Arshavin in January of this year and this is backed up by Usmanov’s recently commissioned Lazard report. During this time however there have been various cash injections as the writer suggests and this is where the Balance Sheet comes into consideration - which the writer never considered at all. This is very important because as well as the yearly Profit & Loss the overall performance of the business over time needs to be taken into consideration.

Let’s go forward now to the last accounts released in Nov 2008… (*btw the forecasted Earnings Before Tax should be about £50m profit this year*) cash reserves on the Balance Sheet equal £76m (with £22m being blocked as a security deposit), there’s also £179m worth of property development stock funded by c£140m of loans and in addition the bond loans are down to c£243m which is easily serviced from incremental revenues generated by the new stadium which the bond serviced and I've included this amount (£5m principal and £15m interest = £20m) above.

So although the writer of the previous article only had £10m (I had £20m remember) of additional free cash available for player investment per year he completely missed the overall financial position of the business as can be seen on the Balance Sheet which reports a very healthy c£180m worth of shareholders equity (assets less liabilities) which certainly can't be matched by any other club in the UK.

Of course there are also uncertain property deals associated with the Club which I've already mentioned that have c£140m (as at Nov 2008 less any properties sold in the interim) which is due in April 2010 but there is only a negligible chance of this being a problem at this time. Indeed the report commissioned for Arsenal by Rothschilds to reply to Usmanov’s report said there was a "putative cunning plan under negotiation right now - and even if the worst came to the worst, there should be no direct financial contagion to the club, since the providers of the property loans have no recourse to the footballing assets." Whatever the cunning plan is it's clear that the board are confident that it will have no impact with the financing of the football side of the business - which is as we have always been told completely ringfenced.

So as can be shown the Club has significant resources to call upon if necessary on its Balance Sheet and in addition the annual cash balances are growing by c£20m before transfers and over the next five years there will be additional revenue growth as EPL and CL revenues increase, a new Nike deal kicks in, in 2011 and a new competitive Emirates or shirt deal is negotiated leading up to the 2014 expiration of the current deal. And this doesn't take into consideration the substantial mostly unutilised credit facilities totalling up to £70m which we have available for general and transfer purposes if required.

There is no doubt the club can quite easily negotiate term payments as do every other club to spread the payments over a number of years if required. Indeed structuring such payments and the depreciation of the transfer fee over time is a tax efficient method of running any business with up to 30% discounts inherent through the taxation offset.

In conclusion it can be shown that Arsenal Football Club are in an extremely healthy financial position and have substantial resources to invest in players should the board and manager wish to do so. Please don't let anyone tell you any different.