The Banter Thread

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Obviously no figures are confirmed but Liverpool have finally confirmed the Warrior deal, around 10 months after we knew about it:
http://www.liverpoolfc.tv/news/latest-news/lfc-and-warrior-announcement

And DM, while it was certainly easier than now, borrowing from the banks wasn't as straight forward or as cheap as you're suggesting. If you knew anything about the way the Emirates was financed, you'd know that the initial loans Arsenal took out were (even today) relatively expensive and it was only later in the process (when the risk of the project diminished) that they were able to refinance and secure better deals. Clubs in general were scared of borrowing large amounts in those days too; that's the reason why Liverpool didn't build the ground under David Moores.

And on the cost of our ground in 2003. It was around £80m. We had contracts in place, the club just couldn't/wouldn't secure the finance to start it.
 
From what I remembered and double checked on, while the 100mil is supposedly front loaded, IE we get more in the first years and less in the latter years is also a deal till 2021 for the stadium, and it only kicked in 2 years AFTER the deal was actually made. We secured the 357mil for the stadium(£220m) and around 100mil of upgrades to local facilities(sewage/roads/station, other crap) and can't remember if the rest was contingency or not.... or if it had a specific usage.

Anyway, we secured those loans(after already having spent over 100mil of cash already, but that was essentially paidback to Arsenal/board from the loan) in February, we made the deal with emirates in October and that deal didn't actually kick in till two years later anyway. it had ZERO effect on the financing of the stadium, and costs them $8million a year, yes, $8mil dollars is what we get over a 15 year deal.

Honestly it really is pathetic, and no, there was entirely no need to sign a deal 2 years early, and no we didn't have to go with Chelsea's just because we seeming thought we were "winning" a company off Chelsea.. Honestly it comes across like Chelsea gave up emirates because they had a WAY better deal coming, and Arsenal jumped on it as we thought we were getting some kind of great deal....... we weren't. Basically Emirates seemingly sold us as "sign now for this much and we'll leave Chelsea for you.... we promise its a better deal" we signed them Chelsea didn't care, signed a whooping Samsung deal and made us look like idiots.

Yes I was exaggerating on the ease of getting bank loans........ but not much. As said they spent over 100mil getting some of the prebuild work done already, all the plans, permission and contracts in place, and they managed to get a loan not just for the rest, but for the whole dang thing, including paying themselves back.

There wasn't really ever any risk, the deal with the banks was specifically tied to not paying a dime in interest(though it racked up) till the stadium was complete and its tied to income from the stadium. It was a VERY solid plan with, unless disaster in building like massive failure and being condemned(which insurance would cover) was always going to pay itself back, pretty easily and quickly.

They've refinanced since because, interest rates dropped through the floor and paying off some lump sums from the other property developement simply made the debt much smaller.

The emirates deal in every single way, was just a bad move, it had nothing to do with getting the stadium built, we just screwed ourselves out of, well much much more than 100million over the length of the contract.

It's basically, afaik, unheard of to sign a deal that won't start for 2 years, and had we waited two years the deals Bayern, Real, Pool, Chelsea, Utd all had in place by then we'd have had serious bargaining power at that point and gotten a MUCH better deal.
 
I'm tired and can't be bothered going around in circles and I'm not sure I can even understand half of what you're going on about. One thing though, you may have double checked but the Emirates deal was actually only worth £90m, not £100m. Not confirmed but that £90m was reported split up as follows: £48m for your shirt sponsorship (over 8 years) and £42m (over 15 years) for the stadium.
 
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IT depends on the source, most places quote £100 mil.

The deal is not good, I'm really not sure how you can claim other wise.

The refinancing of the stadium and the FULL amount required for the stadium AND every other project was secured over 6 months before the Emirates deal, so how you think construction may have been held up had we not signed it god only knows.


http://www.arabianbusiness.com/emirates-keen-renew-arsenal-sponsor-deal-341605.html

http://www.guardian.co.uk/media/2004/oct/05/business.marketingandpr

and a dozen more

The sponsorship fees, of £90 million, will significantly enhance Arsenal's commercial revenues over the contract term. The sponsorship fees, which are payable by instalments, will provide Arsenal with operational cash-flows of £72 million between 2005 and 2012 with the remaining £18 million receivable between 2013 and 2020. The present value of these sponsorship cash-flows, discounted at Arsenal's standard cost of capital and referenced against equivalent straight line cash-flows, indicates that the absolute value of the deal to Arsenal is in excess of £100 million. In addition to the sponsorship fees Arsenal can earn bonuses based on team performance in each of the seasons up to and including 2013/14.
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Its good and bad, the deal effectively works out to be 72mil for both over 7 ish years, which works out at roughly 10mil a year for both over those years, its also likely the deal being worth in excess of 100mil refers to the bonuses they expected to get..... so it basically is 100mil IF Arsenal hit certain performance targets...... which we clearly haven't :(

The deal is bad any way you look at it, asking for a bit more upfront and tying ourselves to the stadium name for 15 years when we'll be getting a tiny fee per year for 8 years, isn't good. The problem is, its bad now but the fact is we renegotiated as a bunch of teams around the very same period were getting MUCH larger deals and somehow we came up with a very low one. This was also at a time when we were at our strongest and should have been going for essentially record deals, not tiny ones. 100mil sounded impressive in press releases till you realised how long it was.

By your own figures its 6mil a year for the shirt sponsorship and the stadium deal is pathetic.... not really sure why you're somehow on the side of the argument that it isn't crap? Around the same timeframe of it starting(2006) Utd were sorting out a 14mil a year deal. When we signed in 2004 this was a team that was winning titles and a very solid champs league late stage team. Committing us long term when these kinds of deals were quite clearly moving up dramatically and fast was a bad move in every single way.

The fact is, we could have likely found another sponsor around the 10mil mark for 4 years, got a new deal when everyone else was moving to 15-25mil a year deals and probably gotten a 15mil deal maybe at that point..... and have a crapload more money than we have now. We should simply have gotten more for the shirt alone, than we got for both.

Again stadium financing was both secured LONG before this deal was done, the money didn't come in early(100mil upfront that got us building the stadium and without it we couldn't may have been worth it, this was not), and the loan interest and repayment was structured in a very specific way that we start paying back as the stadium starts generating an income.
 
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Arsenal's stadium deal and sponsor deals always struck me as 'playing it safe'. Not that's a bad thing, they've gone for deals that in the long term put them on ~solid ground. Not having to 'fuss' about or 'struggle' with future deals until they're relatively secure.

Since then certain clubs (Manchester United, Liverpool and Tottenham being the three main ones, I'll leave City out due to their 'odd' financial situation) have all signed deals that almost dwarf the deals Arsenal have gotten.
 
DM, you've misunderstood the extract you've quoted. It's not saying that if Arsenal meet certain conditions then the deal rises to £100m and beyond. It's referring to the time value of money and that because the £90m is front loaded, the true value (had it been paid in equal installments) would be worth in excess of £100m. It then goes on to say Arsenal could earn further performance related bonuses.

I'm not saying the Emirates deal is good or bad. We'll never know whether you could have secured a better deal. What I'm saying is that it can't be looked at in isolation against rival deals because of the reason why such a deal was struck.
 
BaZ87 said:
DM, you've misunderstood the extract you've quoted. It's not saying that if Arsenal meet certain conditions then the deal rises to £100m and beyond. It's referring to the time value of money and that because the £90m is front loaded, the true value (had it been paid in equal installments) would be worth in excess of £100m. It then goes on to say Arsenal could earn further performance related bonuses.

I'm not saying the Emirates deal is good or bad. We'll never know whether you could have secured a better deal. What I'm saying is that it can't be looked at in isolation against rival deals because of the reason why such a deal was struck.
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Firstly, I didn't misunderstand, I merely stated why a lot of people quote it as 100mil as it was likely it was 100mil or a bit more with bonuses. Secondly, yes, I mentioned that it essentially worked out at 10mil a year for the first 7 years(another reason why people took it at 100mil over 10 years), thirdly, it is and isn't "effectively" in excess of 100mil, its more putting a positive spin on it than being realistic.


Lastly, again you mentioned the deal being done due to securing finances...... it simply wasn't.

The nike deal and the o2 deal could well have been such deals( i can't remember exactly when they were signed and the nike deal itself wasn't too bad), that helping let the banks know that having X million coming in in the next 10 years helps them secure the finances.

But again this is unlikely, when you look at both the numbers we are making from the increased capacity(and MOST significantly from the very small portion of executive/club level seating) and you look at the predictions of where our increased income from the deal was and the fact that the repayments on the loan were based on matchday income in some way(I've ready this several places, not sure I've seen it "confirmed" but I assume if matchday income feel short of predictions repayment's may have been smaller till matchday income grew), basically the refinancing was "easy" to get because, the upside of the increased capacity was blindingly clear for all to see. As shown Arsenal's yearly income has gone through the roof, we're paying 50mil a year more in wages..... with higher profit...... with bank repayments. It really was a no brainer.


The biggest indicator the deal is bad is, the guys behind the sponsor have been quoted as saying the deal is stupidly favourable to THEM not us and they want to renew but realise it now might cost them too much. Our board is unhappy with the deal(now) and desperately want a new deal, while at the time people ignored the time and only looked at the total value and thought it was great, there has been a series of articles in the past couple years talking about how crap our deal is.
 
drunkenmaster said:
The biggest indicator the deal is bad is, the guys behind the sponsor have been quoted as saying the deal is stupidly favourable to THEM not us and they want to renew but realise it now might cost them too much. Our board is unhappy with the deal(now) and desperately want a new deal, while at the time people ignored the time and only looked at the total value and thought it was great, there has been a series of articles in the past couple years talking about how crap our deal is.
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DM, you said the following so if you didn't misunderstand the extract you quoted then you simply can't read because it doesn't say what you said. It says there are bonuses but doesn't state any figures. The £90m-£100m stuff is referring to the time value of money.
so it basically is 100mil IF Arsenal hit certain performance targets
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And you live in a dream world if you believe that Arsenal agreed to take on all those loans without any consideration of their guaranteed future income from such deals as the Emirates deals. Not only would it have been important in Arsenal's decision making, your forcast earnings would have played a huge part in the banks decision to give you the money too.
 
DM the deals aren't good, but we needed to secure the money up front and obviously that affected the amount we got. Also remember that the deals were made years ago and these deals have inflated loads since we took ours, which is making them look worse than they were
 
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