AW's 20 years with us. Your assessment?

[World's End Stella]

Well, given that we didn't spend a great deal of money on players, and given that we regularly sold our best players, and given that this led to the club now being in a sound financial condition, I'd say you're probably incorrect.

How do you know we didn't spend money on players because Wenger believed in the young players he had purchased and he didn't want to limit their opportunities? Or perhaps because he thought the market was temporarily inflated by Chelsea and City and that with FFP coming it might be wise to hold off?

Regularly sold our best players, because of the financial constraints of the stadium? I don't think we sold Fabrergas and Nasri because we had to financially, I think we sold them because they wanted to leave a team that wasn't winning trophies and they wanted to increase their salaries. But neither of us really know, do we?

[Sir C]

How do you know we didn't spend money on players because Wenger believed in the young players he had purchased and he didn't want to limit their opportunities? Or perhaps because he thought the market was temporarily inflated by Chelsea and City and that with FFP coming it might be wise to hold off?

Regularly sold our best players, because of the financial constraints of the stadium? I don't think we sold Fabrergas and Nasri because we had to financially, I think we sold them because they wanted to leave a team that wasn't winning trophies and they wanted to increase their salaries. But neither of us really know, do we?

Well, we know that by not spending a great deal of money, and that by cashing in on our best players, we have ended up in this situation, with a healthy financial position. If we had spent lots of money and hadn't sold our best players, we wouldn't be in this healthy financial position.

I can quite see how this complicated financial stuff is confusing, but look at it this way. If you have two pennies, and you spend them on sweets, tomorrow you will have no pennies but, and this is the crucial part, if you don't spend the two pennies, tomorrow you will have two pennies. And we currently have the two pennies.

Do you see?

[Burney]

Well, we know that by not spending a great deal of money, and that by cashing in on our best players, we have ended up in this situation, with a healthy financial position. If we had spent lots of money and hadn't sold our best players, we wouldn't be in this healthy financial position.

I can quite see how this complicated financial stuff is confusing, but look at it this way. If you have two pennies, and you spend them on sweets, tomorrow you will have no pennies but, and this is the crucial part, if you don't spend the two pennies, tomorrow you will have two pennies. And we currently have the two pennies.

Do you see?

It is humbling to see two fine financial brains such as yourself and WES hammering this sort of thing out, I must say. All over my head, of course.

[Sir C]

It is humbling to see two fine financial brains such as yourself and WES hammering this sort of thing out, I must say. All over my head, of course.

It is complicated, isn't it? I suspect counting must be different in Canada, because WES appears to believe that if you spend money, you still have it.

[SWv2]

Well, we know that by not spending a great deal of money, and that by cashing in on our best players, we have ended up in this situation, with a healthy financial position. If we had spent lots of money and hadn't sold our best players, we wouldn't be in this healthy financial position.

I can quite see how this complicated financial stuff is confusing, but look at it this way. If you have two pennies, and you spend them on sweets, tomorrow you will have no pennies but, and this is the crucial part, if you don't spend the two pennies, tomorrow you will have two pennies. And we currently have the two pennies.

Do you see?

I am not sure how this confectionery analogy works in this respect.

For example during the perceived by some lean years, if we had 2 pennies and deliberately chose not to spend the 2 pennies then perhaps that may have been a factor in reduced success which in turn did result in certain players leaving as Wes has alluded to.

If we never had the two pennies, which surely is what you and your sort claim, then the analogy is irrelevant.

An important factor to remember in this debate is that no person has ever suggested or championed reckless spending beyond our means (may as well say this now before some fool comes out with the inevitable line about the next or new Leeds …). The counter argument or belief to the one which you hold is that we had money but simply for reasons known to none of us simply chose not to spend it. As indeed is the 100% right of the club and manager.

[Sir C]

I am not sure how this confectionery analogy works in this respect.

For example during the perceived by some lean years, if we had 2 pennies and deliberately chose not to spend the 2 pennies then perhaps that may have been a factor in reduced success which in turn did result in certain players leaving as Wes has alluded to.

If we never had the two pennies, which surely is what you and your sort claim, then the analogy is irrelevant.

An important factor to remember in this debate is that no person has ever suggested or championed reckless spending beyond our means (may as well say this now before some fool comes out with the inevitable line about the next or new Leeds …). The counter argument or belief to the one which you hold is that we had money but simply for reasons known to none of us simply chose not to spend it. As indeed is the 100% right of the club and manager.

You have no idea what level of spending would have constituted 'reckless' spending during the period in question; we rely on the directors of the business to make those decisions, with their attendent legal requirement to act in the best interests of the company. I rather think they were better informed than you as to the degree of spending which was in the best interests of the club. They may have been more cautious than you would prefer, but, you know, they're in charge.

[Burney]

You have no idea what level of spending would have constituted 'reckless' spending during the period in question; we rely on the directors of the business to make those decisions, with their attendent legal requirement to act in the best interests of the company. I rather think they were better informed than you as to the degree of spending which was in the best interests of the club. They may have been more cautious than you would prefer, but, you know, they're in charge.

Surely where this sort of financial analysis of football clubs breaks down is in the fact that almost uniquely in business, big football clubs do not purchase their most significant capital assets (i.e. top-class, proven players) with a view to achieving a financial return on investment? Such returns sometimes occur, of course, but usually most 'top, top' players are purchased at a significant loss. Indeed, the more successful they are on the pitch and the longer they stay with you, the more of a loss they become, since you recoup less money (or none) through resale.

This means that, in order for such business to stay in the black and not be reliant on player sales for player purchases, it must constantly retain a significant cash reserve to allow for the possibility of further such loss-making investments. Given which, not spending that cash reserve simply because it's there would seem to me to be responsible thing to do, wouldn't it? The fact that there may be 'money to spend' is not a sensible argument for it being spent. Thus, any argument about what 'financial constraints' we did or didn't have has to factor in the necessity of holding onto cash to give one flexibility and security against an uncertain future, surely?

[Sir C]

Surely where this sort of financial analysis of football clubs breaks down is in the fact that almost uniquely in business, big football clubs do not purchase their most significant capital assets (i.e. top-class, proven players) with a view to achieving a financial return on investment? Such returns sometimes occur, of course, but usually most 'top, top' players are purchased at a significant loss. Indeed, the more successful they are on the pitch and the longer they stay with you, the more of a loss they become, since you recoup less money (or none) through resale.

This means that, in order for such business to stay in the black and not be reliant on player sales for player purchases, it must constantly retain a significant cash reserve to allow for the possibility of further such loss-making investments. Given which, not spending that cash reserve simply because it's there would seem to me to be responsible thing to do, wouldn't it? The fact that there may be 'money to spend' is not a sensible argument for it being spent. Thus, any argument about what 'financial constraints' we did or didn't have has to factor in the necessity of holding onto cash to give one flexibility and security against an uncertain future, surely?

This seems to me clear and apparent. Our friends in the banking industry seem untroubled by caution, however. Which is odd really, post 2008. You'd think they'd have learnt something.

[World's End Stella]

Surely where this sort of financial analysis of football clubs breaks down is in the fact that almost uniquely in business, big football clubs do not purchase their most significant capital assets (i.e. top-class, proven players) with a view to achieving a financial return on investment? Such returns sometimes occur, of course, but usually most 'top, top' players are purchased at a significant loss. Indeed, the more successful they are on the pitch and the longer they stay with you, the more of a loss they become, since you recoup less money (or none) through resale.

This means that, in order for such business to stay in the black and not be reliant on player sales for player purchases, it must constantly retain a significant cash reserve to allow for the possibility of further such loss-making investments. Given which, not spending that cash reserve simply because it's there would seem to me to be responsible thing to do, wouldn't it? The fact that there may be 'money to spend' is not a sensible argument for it being spent. Thus, any argument about what 'financial constraints' we did or didn't have has to factor in the necessity of holding onto cash to give one flexibility and security against an uncertain future, surely?

Partly correct, partly not. I haulage firm will purchase a truck and then might amortise the cost over a 5 year period at which point it will be replaced using cash reserves which the corporation planned for as part of its cashflow analysis. Arsenal will account for and pay for players in the exact same way. The truck is an investment which allows the firm to make money, in the same way that a top class player might attract additional commercial revenue to the club or increase the likelihood of a payout in the CL or PL (something else Charles neglected to consider in his analysis).

And the question isn't whether it is sensible to spend the money you have or not, it is whether we had the money in the first place. Some people believe that we had to sell players in order to maintain a high cash balance and that this is entirely down to the costs of funding the stadium. The financial records of the club, and no small amount of common sense, indicate this isn't true.

[Burney]

Partly correct, partly not. I haulage firm will purchase a truck and then might amortise the cost over a 5 year period at which point it will be replaced using cash reserves which the corporation planned for as part of its cashflow analysis. Arsenal will account for and pay for players in the exact same way. The truck is an investment which allows the firm to make money, in the same way that a top class player might attract additional commercial revenue to the club or increase the likelihood of a payout in the CL or PL (something else Charles neglected to consider in his analysis).

And the question isn't whether it is sensible to spend the money you have or not, it is whether we had the money in the first place. Some people believe that we had to sell players in order to maintain a high cash balance and that this is entirely down to the costs of funding the stadium. The financial records of the club, and no small amount of common sense, indicate this isn't true.

No, I'm sorry, but saying 'we had the money' is not the point. You only 'have the money' if you consider it feasible to spend it within the terms of the model of financial prudence under which you operate. Personally, I don't for a moment believe we needed to sell our top players in order to maintain a cash balance, but I also believe that that was the case in no small part because we were prudent in not spending what cash reserves we had.