These debentures pay no interest and are not due for repayment until 2143 – yes, another 123 years!
The overdraft was unused at that date but we believe will be utilised now because 2020-21 season ticket money is not coming in at the traditional time of April and May – renewal deadline is normally 1 June. In layman’s terms, KSE are paying off the stadium debt plus penalties. You can order your copy here (for UK orders) or if you are abroad, order here. We set out below the various forms of debt that Arsenal have.
Today I welcome Calvin Masterson (Follow @calvinmasterson) who joins us to take a look at Arsenal’s stadium debt from a professional point of view.As this season for Arsenal comes to an end, people start to look forward to the transfer window. 7 players Arsenal could sign to fill their creativity void. In July 2006 Arsenal Securities Plc issued £260m of “credit wrapped bonds” to financial investors. Which does make sense, but I don’t think these are moves to make us more competitive in the transfer market when it opens.
For those thinking that this sum will be going straight into Mikel Arteta’s transfer kitty, think again. KSE’s purchase of a lion’s share of the club’s stadium debt means Arsenal will have to repay Stan Kroenke’s company rather than a host of financial institutions. So this never really tallied with KSE putting money in. Also, I’ll point you in the direction of this piece by the Arsenal Supporters Trust who have plenty of expertise in these kind of matters. The cost of the Gunners' move to their new 60,000-seater Emirates Stadium impacted on the figures released today by the club's parent company, with overall net debt increased from £153.3m in 2005.
It must also be remembered that Arsenal cannot call on £36m of spare cash due to the DRSA requirements. That didn’t make a lot of sense when you take into account that within weeks they were pushing the players to take a 12.5% pay cut, something which would provide an annual saving of around £22.5m (in ballpark terms). Mikel Arteta’s press conference was due to take place last night but I sat patiently waiting for it to start and it never did. It should be stressed that this announcement does not see KSE investing INTO Arsenal.
Will they see that opportunity? So far, the pay cut – agreed in April and still the only Premier League club to have implemented such a measure (cut, not deferral), has saved around £6m. This is very welcome. Stadium Sponsorship -£5m. It has become standard when reviewing Arsenal’s financial numbers to assess the amount of the club’s cash reserves and to what extent these funds are committed to known expenditure (player wages, operating costs, money owed on player purchases, etc) and how much is left “freely available” to use for strengthening the playing squad.
Yesterday, Arsenal Securities PLC announced via the London Stock Exchange its intention to ‘Redeem Two Series of Outstanding Bonds’.
I had thought this morning’s blog would be about the build up to the North London derby. Welcome to Guest Wednesday! In Summary – the overall debt positionArsenal’s existing debt liabilities are:* £94m Stadium bonds amortising over the next nine years* £50m “Floating” stadium bonds due 2029-31* £15.4m C & D bonds due 2028* £40m Player payments due now* £80m Player payments due after one year or more£279.4m. KSE’s purchase of a lion’s share of the club’s stadium debt means Arsenal will have to repay Stan Kroenke’s company rather than a host of financial institutions.
Arsenal took out loans from various financial institutions to raise funds for the construction of their stadium and have been paying it back over the years. Mesut Ozil – The Bayern defeat was one of my darkest hours, Cazorla refuses to rule out summer exit from Arsenal, Arsenal, PSG and Atletico interested in James Rodriguez. go straight to our online store page here, Arsenal staff member tests positive for Covid - forcing closure of Hale End academy - Exclusive, Santi Cazorla: I love Arsenal - I always knew Mikel would be a great coach, Manchester City vs Arsenal PREVIEW: Mikel Arteta's Gunners capable of adding to Pep Guardiola’s problems, Thomas Partey: I want to help Arsenal win the Premier League, Find out where new Arsenal signing Thomas Partey and all Mikel Arteta's internationals are playing this week, Arsenal star Tierney to self-isolate due to COVID case in Scotland squad. Blogger for Gooner Talk. Arteta is here to stay for the long-term as Arsenal face mammoth summer rebuild, Why Arsenal’s road ahead is tough but the destination will be worth it, Mesut Ozil: A player who used to create goals, now only creates distractions, Master vs Apprentice: The most intriguing of subplots as Arsenal return against Manchester City. Influencers, especially ones who are overly-tanned.
Writer, podcaster, ace flintknapper, sluggish centre-half. The OverdraftAs at 31 May 2019, Arsenal Holdings Ltd had available a £50m overdraft with Barclays. Restructuring the existing debt to free up some funds in the short-term, and lowering the repayments to offset some of the lack of revenue. If KSE provides them with a more favourable plan, these costs will be reduced. What has had less focus is Arsenal’s overall debt position. Back when the Covid-19 crisis first struck, there were stories about how the owners were putting money into the club to help with the financial shortfall. They are doing this via a loan, so the debt … The Gunners have paid £20 million in interest and debt repayments in each of the last two years.
With most of Arsenal’s debt structured on a long-term basis and debt service costs a manageable £20m per year, the immediate pressing debt payments relate to past transfers. It is not expected to directly translate to a much bigger budget in the transfer window but will definitely have some impact on Arsenal’s ability to be ambitious in the summer. Chances are this cash will be used for that rather than Dayot Upamecano. If you wish to order with a credit card, go straight to our online store page here. We need to secure 1,000 subscribers to continue, although the original deadline of 28th March pushed back until we know what will happen with the remainder of the season and can bring out a final issue for the current campaign.The current issue of The Gooner (282) is on sale from our online store. Share the post "KSE buy out majority of Arsenal’s stadium debt to provide stability in turbulent times". While these rates may appear high in the context of current interest rates, it was deemed prudent in 2006 to fix the interest cost for the life of the debt. Player TransfersArsenal have spent over £300m gross on player transfers in the last three summers. As other teams struggle to find cash to bring in new players, or even resist bids for their best and brightest talent, the ones with some spending power could take advantage of that. One would expect the interest rate on this debt to be lower than before or at the very least, the same. The initial £500m loan was guaranteed by Stan Kroenke’s wife, Ann Walton, but it might be a case that the club will only service the new amount. _______________________________________________________________.
I don’t know what those difficulties were, but having been an extremely online person for some time now, I’m guessing it’s one of the following: Anyway, the press conference has been rescheduled for this morning, so we’ll have the manager’s thoughts on the derby, and all the other stuff, over on Arseblog News throughout the day. Shirt Sponsorship -£5m. This is the first time the Gunners have reported an operating loss since 2002. Arsenal have no income from gate receipts, they have had to provide refunds on season tickets, and a major revenue stream is gone for the time-being with no clarity as to when it will return, but operational costs of around £28m per month remain. This move by KSE also ensures that Arsenal will not have to keep £37 million in reserve and so the club will have more money to utilise in order to keep the club financially robust. Yesterday’s news gives us a bit more clarity as to what their financial input, so to speak, has been. Many transfer fees are paid on a staggered multi-year basis. But not football where the likes of Danny Rose seem to be considering a return in about 2023... (But by the way no salary cuts in the meantime.) * £50m of floating rate bonds with repayments of £14.3m due on 1 September 2029, £17.2m due on 1 September 2030 and £18.5m due on 1 September 2031. Nigel Phillips of the Arsenal Supporters Trust, Stadium – Another 11 years and it'll be paid for. Photo: Offside. Yesterday, Arsenal Securities PLC announced via the London Stock Exchange its intention to ‘Redeem Two Series of Outstanding Bonds’. As the stadium loan is probably to be refinanced over, say,30 years, the annual cashflow of stadium costs and sponsorship revenue would be:-Capital Repayment £8.7m. It looks as if the rains have stopped. Subscribe to our weekly Gooner Fanzine newsletter for all the latest news, views, and videos from the intelligent voice of Arsenal supporters since 1987. This raised £14.4m from supporters and the underwriter, the Bank of Scotland. All the links you need to listen/subscribe are below, and please feel free to share them with the person in your life who needs more podcasts in theirs. The club have had to keep just under £37 million in reserve annually as a guarantee of their financial robustness to repay their debt with interest. One would expect the interest rate on this debt to be lower than before or at the very least, the same. Answers on a postcard etc etc. Arsenal have taken a major move towards increasing their financial stability over the coming years after redeeming the fixed rate bonds that they issued when building the Emirates Stadium.. Owners Kroenke Sports and Entertainment (KSE) have provided Arsenal with a loan that allows them to pay off the remaining sum before they were due in 2029. Smiter of those that ought to be smote.
What is astonishing is that in other sports the players seem to be raring to get back playing - BBC Sport: 'Harlequins scrum-half Danny Care telling the Rugby Union Weekly podcast that the players are "desperate" to get back playing if safe to do so, and that "rugby needs to come back" given the perilous financial predicament many clubs are facing.' Arsenal posted an operating loss of £27.1 million for the year upto May 31, 2019. – The new loan will be somewhere in the region of £184m, which is the £144m which was outstanding to the bondholders (stadium debt) + £40m in penalties. It is as yet unclear how much of that Arsenal will have to service. KSE restructure stadium debt: Analysis and opportunity, this piece by the Arsenal Supporters Trust, Mikel Arteta is a real cool cat + The Mustafi conundrum, Episode 594 – Fans and Tickets and Transfers, The spotlight falls strongly on Edu and Vinai, Stan, Josh, and KSE’s litany of bad decisions. With a total stadium cost of around £430m, of which £260m was the bonds detailed above, the remaining £170m was generated as follows:* £55m Nike’s payment for the 7-year kit deal from June 2004 until June 2011* £35m Emirates Airline 15-year commercial partnership (to 2021 – since extended). The club’s cash flow has been severely impacted due to the consequences of the pandemic which include but are not limited to loss of matchday revenue. Unspecified ‘Technical difficulties’ mean it will take place this morning. Good morning, welcome to Friday. An interesting analysis.
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