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Arsenal’s financial collapse, EPL financial collapse, Man U financial collapse

by Tony Attwood, and the guy who writes Le Grove

Three linked financial matters.

First, the EPL is haemorrhaging cash on salaries.  Secondly most Arsenal season ticket holders are giving up their season tickets, and third the Glazer Gang’s other businesses have all come unstuck so they have no choice but to hang on to Man IOU because it is their only source of income.

Oh, and one of these stories might be a hoax.

Anyway, starting at the start.  Last year the EPL accumulated debt increased from £3.2bn to £3.3bn.  The total revenue of the EPL was £2bn.

Really there’s not much further to go on this.  Income £2bn.  Debts £3.3bn.  Those debts are not going to be paid off, are they?

Anyway, here’s the facts…

Wages in the EPL are now 67% of income – although considerably less in Arsenal’s case.   (Much more of this, and football will be on a par with schooling in the UK – where wages account for 80% of income across the nation’s 29,000 sch0ols).

The Championship however remains the ultimate basket case.  Although it is the third best attended league in Europe, it has a wages‑revenue ratio of 90%.  Talk about being silly!  Well!  Really!

By comparison, Germany, Spain and Italy each had turnovers of £1.3bn and France had a turnover of £0.9bn.

The EPL operating profits were £79m of which the bulk came from Arsenal.

So everything’s in a mess – including it seems Arsenal.  There is an article on Le Grove today which includes this bit…

A Grover told us yesterday that he went down from 46,000th on the waiting list to 16,000th, take note Ivan, the warning signs are there, Arsene may leave you with the legacy of no fans, add that to the thousands that are renting theirs out, you might start to see a pattern emerging. BEWARE!

Now I am sure that the facts are well-established by Le Grove’s editorial board, and they wouldn’t have printed this without clarifying the source, so we can base quite a few prognostications on this piece of info.

First, this means that last year, when the “Grover” was at number 46,000 we had a waiting list bigger than the number of seats for season tickets in the whole stadium.  46,000 waiting, 40,000 season tickets seats.  An extraordinary achievement in itself for such an unsuccessful club.

Second, it also means that although Arsenal only closed season ticket renewals on 1 June, by 9 June they knew that 30,000 of the 40,000 people with season tickets had not renewed.  (We know it can’t be a case of people on the season ticket waiting list above the “Grover” deciding not to take up the offer of a seat yet, because that service takes weeks and weeks to progress – I know, I did it a year ago.  Very few if any applicants who have reached the top of the tree will have been given the chance of saying yes or no to a seat as yet).

We can also discount people dropping off the waiting list during the year.  Having paid your £15 or whatever it is now to go on the waiting list, there’s no annual charge – you just stay there.  So clearly the 30,000 people that have moved on, to allow the Grover to go up the season ticket waiting list by 30,000 are season ticket holders.  OK some will have moved and a few, sadly, died, but the number will be tiny.   Those who do drop out, drop out when offered a seat, and realise they can’t afford it.

So, amazingly 75% of the current season ticket holders at Arsenal are not renewing. But in fact this excludes club level, diamond level, supermario level and every other level except top and bottom (they are registered and counted separately), so for those two levels the churn rate is now 80%.

This is far higher than any estimate given anywhere – 80% of Arsenal season ticket holders have given up their tickets!  It is amazing that it is not shock horror front page news in the Daily Mail, with a quote by Arshavin to the effect that he didn’t like the fans anyway.  (And it puts all those touts who swarmed around the ground last season out of business too).

It also means that my request to move my season tickets to get away from the anti-Bendtner moron who sits 2 rows behind me, will be granted despite the note from the club when I applied to the effect that the chance was remote.

And it means Arsenal are in serious trouble, because a churn rate in 2011 of even half of this year’s amazing 80% bugger-off level is going to leave the club with thousands of empty spaces all over the ground.

Which is why Lady Bracewell Smith can’t sell her shares to that man from  Nigeria, and why no one wants to put in a bid to buy the club.  The shares will be trading at 3p each when Le-Grove’s story becomes general knowledge, and of course it is my duty to ensure that everyone knows of their revelation.

So Arsenal are in real trouble, but at least I get the seats I want near the half way line (always assuming that Le Grove is right, and hasn’t been the subject of a hoax, just like everyone was over Arshavin and his income tax.  But no one would do that, would they?  No, surely not.  They must check).

However maybe we are not in as much trouble as serial basket makers, Manchester IOU whose owners, we now know, have other loss making businesses.  The reason they can’t sell Man IOU is because it is the only source of income that they have.  By paying themselves more than a banker on heat (£22.9m so far, and still going up like a chimney sweep whose just discovered that the fire has been lit beneath him) they can live their lifestyle, and that’s what they love.

As Panorama and the Guardian found, the Glazer Gang own First Allied Corporation, which owns shopping malls in America.   98.4% of the shopping malls are mortgaged.  That’s not bad in itself – the Ems is mortgaged (although as Le Grove shows us, we won’t be able to pay the mortgage in a year’s time).

But the Glazer Gang are defaulting on these mortgages and the receivers have taken over at least 15% of the centres – and 44% are on the bankers  “watchlist” with another 25% earning less money from rent than it costs to pay the mortgage.

Lots of the mortgages were taken out with our old chums and utter total crooks who should be first up against the wall when the revolution comes:  Lehman Brothers, who went bust in 2008.  These mortgages were used as collateral when  The Glazer Gang came up with £272m in cash for Man IOU. (Funny isn’t it – crooks doing deals with crooks.  You just don’t know who to trust do you?)

Panorama says the Glazers have $567m outstanding in mortgages, and the total rent they received from its tenants meant the company made $9.7m before tax last year after paying off the interest on the mortgages.  But that’s not enough to pay the $30m a year interest on the PIK loans that needs to be paid.

Thus we see that in fact the Glazers are not super whizzo financiers after all, just as they are not the Man IOU Messiahs of Football.  They are not even just a bunch of very naughty boys.  They are just fairly poor at business.

What they did was they borrowed money to buy, and they now don’t have even enough money to pay the interest on the loans.  Let’s stress that – they can’t pay the interest on the loans – we are not talking about paying off the debt.  And because they can’t pay off the interest on the loans, their properties are being repossessed.

And this is why the Glazer Gang must keep Man IOU – it is the only source of cash they have, and the only way to pay the interest on the 14.5% PIK loans of  £220million.

The PIKs will carry a 16.25% interest rate from August, and unless any payments are made these loans will spiral to £600million by 2017.

Here’s the rub: if the club is sold, the Glazer’s have no source of income.  They might want to rent my spare bedroom of course, but I am not sure they could afford it.

If the club is NOT sold they have to pay off the PIK loans – and the only way to do that, is to continue to raid Man IOU’s finances.  Sir Alex might want a player, but they have to pay the PIKs first using Man IOU funds.  Sorry Alex baby – no dosh.  But there’s some spare season tickets at Arsenal apparently.

Panorama said the Glazer Gang’s debts are more than £1.1billion – £700m with Man IOU, £388m on mortgages the shops, and £66m with the Bucs.  The Glazer Gang say they are ok with this – and of course they are.  It’s all other people’s money.

So there it is.   Everyone’s lost.  There’s just one bit of hope left on the horizon.   It is just possible that one of the three stories (EPL debt, Arsenal lose 30,000 season ticket holders in one year, Man IOU bankrupt) is a hoax.

Which one?

——————————–

Untold stories

Woolwich Arsenal

Just 15 copies of the first edition of Making the Arsenal left in stock.  It will be reprinted, but if you think first editions are good, you might want one.

38 comments to Arsenal’s financial collapse, EPL financial collapse, Man U financial collapse

  • walter

    As I am first for the moment I cannot resist it and just say….BOOOOOOM

  • walter

    Now on a more serious note. The Utd situation is like you say the Glazers depend on the income from Utd so they cannot sell it. So I think you can follow this story for some time.

    The season ticket drop out : even one person on Le Grove said that he went down from somewhere in 30.000 to 15.000 but this was his progress during the last 11 seasons. And he checked today and nothing has changed as far as he could see. But the thing is once it is said on there it becomes a fact so we will be reading this as the truth for some time also. They survive on doom. A day without doom is a bad day over there.

  • rockofgilberto

    Tony, surely a blog as respectable as Le Grove would only publish the gospel truth and would never, ever engage in baseless fearmongering just to press some silly personal agenda. Furthermore, as we all know that ManIOU is merely days away from being bought up by a conglomerate of wealthy Norwich City supporters aiming to restore them to glory, AND the Premier League is the most profitable in the world, I cannot but think that all three of the stories covered in this post are truth.

  • Josh (australia)

    Hey Tony,
    been following you and more recently Walter for a long time now, glad to know others take such an interest in football finance and write about it in such depth. You guys do such an amazing job, so much so that when i keep telling my hardcore Man IOU supporter how screwed they are i simply just link your articles straight to his facebook page, it’s nice seeing some of that arrogance and smug face beginning to dissapear as he realizes the implications of Man IOU’s debt. Simply cannot wait for Man IOU and Loserpool- YNWA (you’ll never win again)to implode and do a Leeds.

    for the record Le Grove is the s******t blog on this planet,

  • sad

    aawh! dont use so big words tony, and do not write to complicated. My head spinns! It is so much easier to read LeGrove, they make sense, they write uncomplicated and to the core.

    Reading your page it almost seems like you need a degree in Economics to understand the finances at Arsenal! When it really is clearly and easily black and white.
    Everyone knows ones Arsene goes we will do the treble every year for a decade. everyone knows that most arsenal fans hate the club, and everyone knows LeGrove is the smartest people on earth :p

  • RoyVasey

    Of the six other guys I go to the emirates with two aren’t renewing there season tickets, and this is after both tried renting them to other friends. So we can see that trend is true.

  • Al

    Ive been on the arsenal waiting list for 5yrs.
    I moved from 9 thousand n something to
    2 thousand n something last year.
    I have been consistently moving up the waiting
    list by about 7 thousand places every year

  • emve

    excellent tony,
    does that now mean that arsenal season tickets will soon be sold at tesco’s?
    on a more serious note, you might not be aware of this: while BBC and Guardian have publicised the Glazer’s-in-deep-shit story and taken lots of the credit, the research was actually done by the aptly named Andy Green (he is just lacking the gold), who writes the most excellent andersred-blog (http://andersred.blogspot.com/), which is dedicated to researching the financial malaise brought upon manure by these greedy Americans…
    oh, and boom boom
    best

  • walter

    Strange thing is that in the newspapers in Belgium there is a headline in the sports pages saying : Angry fans turn their back on Utd and in the article it is said that only 18.000 of the 56.000 season ticket holders renewed at Old Trafford.
    Dare I to suggest that he maybe forgot on which blog he was. 😉

  • Let us know Y the 30,000 is not be buy by d fans seater.

  • Richard B

    Samples of a handful are never worth much – but if we are going to bandy the about I can tell you that I know at least 15 season ticket holders personally and not one of them has cancelled. Statistics eh!

  • IvoryGoonz

    Did the Grove take into consideration that some football fans privileged buying a plane ticket to South Africa and games tickets for the World Cup instead of buying an expensive season ticket?
    This doesn’t mean they won’t buy their season ticket later on…

  • If the number you move up each year is 7000, and the number on the waiting list is, as Arsenal have said, around 45,000, then its a 7 year waiting list which is fairly good going.

    As is obvious, I was mucking about a bit in the article, but the reality is (I think) that this is what happens.

    Each year about 3,000 seats become available. This is higher than some clubs because of the high cost of seasons in the upper tier, which mean they tend to be taken by the older fans, who sadly get to the stage where they can’t make each match, and where a silver membership might be more appropriate.

    These 3,000 are offered to the waiting list, but because the waiting list is 7 years long, by the time people get to the top, they might no longer be interested, or they might have moved out of the area, of they might no longer have the financial wherewithall, or they might have passed on.

    So, and this is me putting bits and pieces together from incomplete data, you might have to offer the tickets to 7000 people to get 3000 takers. So you move up 7000 places a year.

    To be fair to the Grove article, I should have said that to move up 30,000 places in a year (which I personally don’t believe) maybe 15,000 of the current bunch of season ticket holders are leaving. That would suggest something just below 40% – not the 80% I said.

    But that is still huge, and I like other correspondents, don’t know of anyone around me, or among those with whom I meet up, who are giving up. Hardly a good sample, but if the figure were 40% or more, surely we would between us know some people who are on the way out.

  • embryo

    everyone within three rows of where i sit are renewing their season tickets???? maybe it’s just those pathetic people that decide to leave early every week that are not renewing, in which case, nice one, get the real fans back in.

  • Joe

    Hi there lads,

    Just thought I’d let ya know, I’m not sure if it was my comment you may have seen or not but I was on Le grove earlier and left a message that said in 2008/09 I was 44000 on the waiting list, 2009/10 it was 38000… and it still is! It hasn’t even been updated yet!

    I just looked on the Le Grove site to have another look at my comment and its been deleted lol!

    Not being funny though, if it dropped by 30,000 I wouldnt actually mind… to me it’d just mean I’d get my season ticket in the next couple of years while all the non believers would have given up their tickets 🙂 (unless of course some people had to give up tickets for personal reasons)

    It does bug me though, it’s like the publisher thought “Oh no I can’t have that on there it contradicts my article!”

  • 😆 talk about extracting the urine out of the bottom feeding blogs.

    when will the regulars learn they are taken for a ride daily over on the moan.

    my guess is never, a low iq makes for the best grovers.

  • walter

    Joe, don’t worry.

    If you comment on Le Grove and you don’t follow the doom message two things can happen: you can see your comment being changed to make you look a fool or they will be deleted.
    Both happened to me in the past. Now I’m being deleted most of the time on the rare occasion I drop in a line when it’s too much. I go there every now and then to have a look and always I wonder if we really have finished third from the top and not from the bottom.

    And I hope you can get your season ticket as soon as possible. Maybe all the boo boys have not renewed?

  • Le Groan is an anti-Arsenal blog where a handful of teen creeps keep repeating the same lies over and over again to support their morbid and destructive obsession.
    You’re wasting your time imho even if your deconstruction of that lie is excellent.

  • Actually Walter, I have just got it sussed. It is all the Grovers who have not renewed.

    The Ems is going to be even better next season – and it was getting quite loud this past season.

  • I read the groan when i need a good laugh.

    A proper collection of some of the dumbest football followers the internet could possibily have dredged up… and stuck into one big hole together!

    It’s all one big wind-up, just a shame some of the nicer people over there get dragged down.

  • Geezer

    I doubt any of them even have season tickets, if they are giving them up so fast, i better get my ass onto the waiting list!! Dont know about anyone else but i actually ENJOYED arsenals campaign last year, trophies or not, and you be a fool to think we are in decline. I dont understand these stupid assholes sometimes, but then again, people are strange, they are not football fans, they are fans of success, football to them is only for bragging rights.

  • Marc

    Tony – 2 years ago I moved a few hundred places on the season ticket waiting list, last year it was 7000 or 8000 this year the website has not been updated yet. Now to lose 8000 season ticket holders out of 40,000 in the worst recession for 70 years at a club with some of the most expensive prices in the world? Not that bad really. I will let you know where I end up when the list is updates but I am currently 32,704th. Of course the club could be holding me back just so I come on websites like this and make everyone think that every thing’s all right when clearly it’s not.

    PS Just found my Season Ticket Waiting list certificate I was 42,329 when I joined on the 29th October 2007. Mr Le Grove you are a PRICK!

  • Terence mcGovern

    500 comments and a combined IQ of 40…..I give you LeGrove!
    Still at least they can all get together and compare lobotomy scars eh!
    Then there is their new site sponsor….Crayola obviously identified a concentration of their target market lololololololol

    Anybody who disagrees with them has their comment deleted and any further comment recieves a ban. they are quite simply the most reactionary buch of retards on the net.
    All their articles are basically the same but their readership(I use the term loosely of course) just laps it up in chimpanzee fashion jumping up and down making as much noise as possible. they do a nice trade in tickets over there so they can pick and choose their matches whilst letting others pay the lion’s share of their season ticket price.
    Shower curtain mould has more character and intelligence than that lot have.

    They boo our players more than opposing fans do.
    Scumbags.

  • Terence mcGovern

    I appreciate the irony of calling them retards in the same sentence as I made a spelling error.
    C’est la vie

  • AaronGSi

    My view is that the choice for the Glazers within the next year, will be either sell ManIOU or sell the Tampa Bay Bucs. Due to the debts on ManIOU, it is very unlikely that they will find a buyer with equity to pay off all the debt – unless there is another rich Sheikh out there with billions in cash, or a large corporation decides to go into owning sports clubs. In fact, I’m surprised that this hasn’t happened much more already, especially as it is getting more common in Germany, with Audi, Volkswagen, and Addidas, having large stakes in clubs like Bayern and Wolfsberg etc. If Unilever can easily raise over £7bn to buy Cadbury’s, then buying a football club for a few hundred million and using it as a promotion vehicle, will be small change to some of the big multinationals. ManIOU would be a big asset to most companies due to their size and money-making ability. However it seems likely that because the Bucs debt is quite small in comparison then my bets would be on them selling this franchise in the near future. The franchise is apparently worth about $1.1bn so the Glazers would clear at least $800 on their purchase price (I think the figures were in the panorama program) – more than enough to pay off the PIK debt which is their big problem, and then put some aside to settle the bonds issue in the years to come. I would also guess that selling an NHL franchise to some other rich American would be a lot easier to accomplish than selling ManIOU with all its current debt. Of course they can also then keep raping ManIOU of money to fund their lovely lifestyles.
    As far as Le Grove is concerned, I think those blogs should be taken for what they are – a couple of guys who have supported Arsenal for a very long time, who feel the need to have to write something Arsenal related every single morning – even when there isn’t anything of substance to write about, to keep their readers happy and visiting the site. It’s a malaise that many Arsenal blogs suffer from – even the guy who writes Arseblog struggles on many days to come up with something new, and ends up writing about nothing at all. The good thing about Untold is that it covers a whole range of subjects, not just specifically Arsenal, Arsenal, Arsenal, and this must make it so much easier to keep good material coming. Untold also invites anyone who wishes to, to submit articles so this will always help keep things interesting and fresh. I say well done to Untold Arsenal, and keep up the good work. The Swiss Rambler is damn bloody good as well – proper blogging at its best.

  • Robbie J

    The people that renew their seasontickets are propbably pro Wenger. That must be good. To be pro Wenger it to understand club football. The atmosphere at the Emirates might be improved if we got rid of some boo-boys. Can’t remember the last time we had a “12th player”.

  • Ozziegooner

    You guys are lucky that you can still post on le grove (crap). I have been banned/banished, my right to post on his informative website revoked. Having been accused of being a spurs supporter and being called a c**t for pointing out the obvious to the little man, I am heart broken that you guys are allowed to post and I am not.
    I did offer to give the little man a face job but the little man declined. Thought it was safer for him to stay in his little room posting utter baseless crap.

  • Ole Gunner

    methinks you all give much too regard and ascribe too much importance to that blog.

    The notion that they can all organise and boo players, or that they constitute any kind of force that does any kind of discernible action is wrong.

    Just like Talksport, the right response to Le Grove is to ignore them because their goal is to provoke reaction, and get traffic. The other reason is because they simply haven’t got a clue.

  • Big Raddy

    Having met the owners of Le Grove, I can assure you they are highly intelligent life-long Arsenal fans. That their blog has become a refuge for the anti-Wenger lobby may well be a reflection of a growing section of the younger fans opinions.

    Despite being a long term blogger on LG, I too have become disenchanted by the level of abuse shown towards the more positive blogger, but would defend their right to create a forum for worldwide fans with Anti-Wenger agendas.

    I have always found a section of AFC fans detestable, from the North Bank hooligans who scared the crap out of me in the ’70s to the foul-mouthed boo boys who get on the back of a young player at the Emirates. The same can be said of Arsenal bloggers, there are arseholes in all walks of life.

    A fellow writer on our site (AA) has confirmed the story on LG, She has moved from 49,000 to 13,000 since the Emirates opened. As Tony says this is natural wastage.

    BTW, this is my first comment on Untold, though I read the site on a regular basis. Keep up the fine work.

  • Big R – I don’t think there’s any doubt about the fact that the writers of Le Grove are pro-Arsenal and dedicatedly so, and although I’ve not met them I have had a very civilised exchange of emails off line with one of the owners.

    I think the problem comes with the way they handle the site – the way emails are blocked even when someone is making a serious and argued point, and worse, the way emails are changed to make the writer look a fool.

    I’ll admit that this site does block emails in to us too – but at least we have a consistent and well-publicised policy on this, basically not accepting emails copied from elsewhere, and not accepting anti-Wenger pieces which are along the lines of “if you can’t see that Almunia is not good enough you are an idiot”. We’ve all read it so many times, it gets boring. Oh and we also block the emails which are from different email addresses at the same IP address and which show clear signs of being written by the same person.

    Of course they have every right to run their show, and indeed Arsenal life would be much more boring if they were not there. On this case, we’ll see what happens with the numbers – a few correspondents on this site have reported nothing like the drop in waiting list position that Le Grove states.

    My own personal view was that taking one anonymous person’s statement and using it as a basis for a warning to Mr Gazidis, and a comment about the manager, was just a bit silly.

  • Big Raddy

    Tony. Thank you for the reply.

    Far be it for me to defend LG – I have had more spats on there than I care to remember and decided there are more civilised places to blog – but it is news to me that bloggers comments are changed. From the rubbish written on the site it seems highly unlikely!

    I agree that the conclusions reached from the movement in the waiting list may well be erroneous but they are not based on one persons statement, they are based upon a common experience . A movement of 7000 places per season.

    As to the blocking of emails, we too (Arsenal Arsenal) have had to take the sad decision to protect our site, it is done with heavy heart and much discussion. LG use a different vetting process, they automatically ban the “AKB” style of writing and in a far more arbitrary way. …..

  • Ian B

    In the last 2 weeks i have registered my two sons on the waiting list. They are numbers 41,999 and 42,000. I was told the waiting for season tickets is between 6 & 8 years. If 6 years then it supports the 7,000 figures metioned above.

  • SharkeySure

    Hey Radders…..
    The changing of posts often happens on LG, well it used to, I’m hardly there these days. One of the two authors will notify readers that its happened, and make it clear why. The ‘other one’ will take great pleasure in changing someone posts as a clear abuse of ‘power’.

    There in lies the problem, that site is a complete ego trip for that author, set up only to allow him to make dubious claims that quite quickly become LG Facts.

    I liken him to the Wizard of Oz !

    And don’t even start me on some of the loons that the site attracts !!

  • Terence mcGovern

    iF HE WAS THE WIZARD OF OZ then surely Geoff would have a heart, Pedro would have some courage and the readership would have at least one brain between them?

  • munaf

    I see the financial whizzkids, scenario speculators, chess players and amateur psychologists on this page are againing spinning on the BoD and Wengers actions. The BoD and Wenger have constantly let the fans down on transfers and how the squad has been managed over the last 5 years. Until some decent players are seen at a press conference at Highbury holding up an AFC shirt, Wenger and the BoD have done nothing to prove their intent to improve the team. As for the financial plight of Manure and Lpool it has nothing to do with us nor was it caused by transfer activity. The situation was down to an old board being greedy (the Irish mafia of JP McManus and co stuffed Manure) and new US owners who are totally representative of the debt leveraged culture that counry has spawned on the rest of the world and led us all to the mess we are in. Lets stick to football. Wenger has signed a lot of dross, gave them contract extension, failed to address our key weakeness at GK, defence and DM and is tactically clueless in big games. These are all footballing issues totally in AW’s hands to fix. Stop the excuses.

  • Gooner Gal

    Haha Munaf, very thoughtproking and insightful!

    I loved this bit “Until some decent players are seen at a press conference at Highbury holding up an AFC shirt, Wenger and the BoD have done nothing to prove their intent to improve the team.”

    Brilliant stuff. I would say keep them coming – but others might disagree.

  • SharkeySure

    Terry McG…very good riposte !!!

    😉

  • 02ba

    even if there is a waiting list, the true old gooners that have been going for years are being priced out, these are true gooners that know how to support the team,
    it seems that most news season ticket holders expect to see a team like the invincibles, and then get the hump when were average