There has been a very interesting post on the official Arsenal website this morning announcing that the club have applied for and secured a short-term 120 million GB pounds loan from the Bank of England.
The fund was set up by the government to help British companies to get through the Covid crisis and to offset the consequences of a cash-flow crisis due to therestrictions placed on the economy. Obviously Arsenal have suffered drastically through the lack of matchday revenue due to crowds not being allowed in the stadiums and related income streams.
Club to receive Bank of England COVID loan
As we continue to work through the implications of the global pandemic on our finances, we can confirm today that the club has met the criteria set by the Bank of England for the Covid Corporate Financing Facility (CCFF).As a result, we are taking a short-term £120 million loan through this facility to partially assist in managing the impact 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 loan is only short-term and I imagine that Arsenal and the government are hoping that the vaccine will be in widespread use by then and the crowds could return to the Emirates and contribute to repaying the loan.
Obviously I have no idea if these funds could give any boost to Mikel Arteta’s transfer kitty, but the fact that the club is reducing the size of the bloated squad, and reducing the wage bill (even more in June) means there will easily be more funds available to repay the loan in the summer.
We just all have to hope that the world doesn’t receive any more setbacks in the war against Covid-19 and we can start getting back to the ‘new normal’ by then.
Fingers crossed!
<h3><em>READ MORE: <a href=”https://www.caughtoffside.com/2021/01/07/photo-done-deal-arsenal-officially-confirm-their-first-january-signing-and-give-a-major-hint-over-his-initial-status/” target=”_blank” rel=”nofollow noopener noreferrer”>Photo: Done deal – Arsenal officially confirm their first January signing and give a major hint over his initial status</a></em></h3>
This fund might not be used for transfers, this is just to overcome the cashflow issue. That is from financial point.
From a strategic point of view this will make life of Ozil hard. This could be the ultimate PR stunt.
Some reliable sources are saying that the overall losses of the 20/21 season could exceed £200 million. Obviously much of this loss is due to loss of match day and other revenue streams as a result of Covid. Arsenal’s players wage bill is around £150 million a year with big outlays for Party and Willian and big increase for Aubameyang. So although Kroenke has recently injected £36 million is seems to me that this new loan is needed just to keep the Club running at the same debt level until we are out of lockdown and things return to near normal. This new loan must be payed back by May so anyone who believes this will be used for transfers will be disappointed. It should be noted our CEO is a chartered management accountant and if he does not get this right he should resign.
This was actually announced yesterday – unlike JA to be behind developments. It was also announced that it would be used ENTIRELY for day to day running costs, thus ruling out its use for incoming transfers. Spuds have previously already borrowed a larger still amount and this will become more and more common surely!
If is does nothing else but remind some fans that money is far shorter -all across the Prem, maybe City apart – than many unworldly wise fans seem to imagine, then it may, just may, bring some sense of reality back into the demands for crazy money to be spent.
When money is short, day to day running costs become far more paramount than trying to foolishly spend your way out of trouble.
As this will certainly mean far more chances for our cluster of talented younger players than it otherwise would have done, it will prove a blessing in disguise, in my view.
But we need patience and as most of us know, PATIENCE is precisely what certain younger regulars on JA LACK, BIGTIME!
Looking further ahead, as I am prone to doing, it just MAY put further pressure on our “much loved” owner to offload “the club of his heart, that he is so passionately and emotionally involved in”, to someone who might even love it more than he does.
If anyone, which I much doubt, does not understand the word irony, you have just read it in this post!
Jon, I agree with all your comments. What I would say is that Kroenke is probably looking further ahead as well. As you are surely aware, the stadium is the jewel in the crown. I can envisage, in the not to distant future, his introduction of American Football at the Emirates. It is not that far fetched, because after money his real love is that game.
Why the hell are Arsenal getting a bank loan when they have rich owners? Surely they can borrow money from Stan and pay back with less interest if they have to?
Man City’s owners have always been the sponsor of the club and have basically has an open cheque book. They sponsor the club with their money. Will we see any other teams going to the bank for a loan or just Arsenal?
RAY, YOU ARE WAY BEHIND! SEVERAL OTHER CLUBS HAVE ALREADY DONE THIS , NOT SURRISING IN THIS PANDEMIC EITHER. If only club finance was as simple as you appear to think. But it isn’t!
But Jon, you haven’t answered GunnnerRay’s question have you?
Why should our British Government be bailing out any billionaires portfolio, especially a foreign owner, when we have our own small, medium and individual businesses struggling here?
Hasn’t kronkie’s fortune grown during the pandemic?
KEN IT SHOULD NOT NEED ANSWERING. AND IN ANOTHER THREAD TODAY I LAID OUT IN FULL DETAIL THE ANSWER TO THE QUESTION I HAD NOT THEN EVEN BEEN ASKED.
I anticipate questions from brighter fans and as for the duller ones, well…..!
And as even you, amazingly, appear not to know, it was the BANK OF ENGLAND, WHICH IS NOT THE GOVERNMENT.
I am not defending Kroenke either, as you SHOULD know very well KEN. Sometimes you do surprise me!
I am surprised that your insulting and bullying manner is allowed by Admins, jon fox? You really do need to be a little more human, jon!
The spuds borrowed 175m back in June, GunneRay.
I read a while back that we make 3m each home game – that’s a lot of money to be losing…on top of all the extortionate wages! It all adds up.
Has to be paid back in May… should manage it 😅 Adidas sponsor money comes in each season? Plus they’ll be relying on s/t money and shipping out as many players as possible, otherwise there won’t be a great deal for the summer window??
Ray, it is usual business practice to borrow, especially at 0.5%, rather than use your own cash. As Jon says, other clubs have taken advantage of the COVID loans scheme. The money is for the operational losses and nothing to do with possible recruitment.
Afcs financial decisions are to the outsider a mystery at times and my guess on this one is that they have simply taken a goverment loan like spurs have that is on offer to offset covid19 losses and is basically a no brainer with Afc to get money on a deal thats a win win situation.
What annoys me is that they are financially so smart in some ways yet give unbelievable amounts of money to players like Ozil,Willian etc with no guarantee they will perform.
Ozil has clearly highlighted this with his performances and discipline since signing the infamous £350,000 a week contract.
Stan, Do you not agree that any large business will be making constant financial decisons that will come as a surprise to most people, UNLESS they are themselves well skilled in how high finance works.
Few Gooners will have ever been in a position to even EXPECT to understand large scale financial decisions, so you are far from alone.
We need to also separate Kroenkes own KSE decisions, for his own benefit, from the ones made, “supposedly” for the club, such as GAZIDIS, WHO HAVE MADE SO MANY RASH AND AMATEUR FINANCIAL COCK UPS IN RECENT YEARS. SANLLEHI TOO BTW.
I’m sure other smart clubs will find very creative means to take advantage of these loans to boost their transfer kitty and gain advantage over other teams. The key is finding ways to operate within the rules.