I told you that it looked like Wenger was in for Smalling (smug grin).
Despite the fact that it was reported on Goal.com when I watched Wenger’s press conference last week, he looked like a man who had something up his sleeve regarding reports that Arsenal had made a move for Chris Smalling. Sporting a Cheshire grin, last week he was pressed on the question of signing the young Englishman and would only reply that nothing is done “at the moment.”
Just today reports surfaced that Fulham accepted a Man U bid for the player but that terms have not been agreed between player and United. Wenger pounced on that in today’s presser:
It just looks like Manchester United offered more money than us but, as long as the player has not signed anywhere it is not the end of it.
When asked if Arsenal were out of the race and done bidding, the boss had these words of encouragment:
We will not come out on what we are doing exactly but as you say it has come out on television but that doesn’t mean first of all that it is true. I’m sorry for your channel (SkySports)! So, let’s see. If we have anything more to tell you, we’ll let you know.
It’s very rare for Arsene to admit that he’s after a player and his admission that Arsenal are still after the player is a sign that he’s determined to beat United to this one. Arsenal certainly have the money to bid on players and they have the pedigree of bringing youngsters in and getting them to the top, top level. Meanwhile United’s finances are looking very shaky indeed, with the club posting debts of $1,170,000,000.
Arsenal could prove the better of the two, having just won out on the Aaron Ramsey deal against United last and thus could signal a sea change in club power in the league.
Arsenal News 24/7
Too late buddy. He’s already signed for United.
January 26th, 2010 at 8:48 am
Yeah, the news does seem to sound as if it’s official. What a move up for this kid. Playing in 7th tier English football 2 years ago. Now to be playing for United. Crazy. I’m sure there’ll be others for us.
January 26th, 2010 at 8:56 am
@ArseChicago, It is. United.com announced it.
January 26th, 2010 at 9:39 am
@Tiki, Of course, United.com announced the Ramsey “signing,” too. But I will admit that it looks pretty solid, as they specifically reference personal terms being agreed to. Frankly, he may have a better chance of getting 1st team football at United in the next year or so, given that we have TV5 and that Wenger may sign Gallas for two more years. Vidic is on the way out and Rio has the dodgy back and Evans hasn’t convinced yet, so it may be a decent move for Smalling. Other than the fact, of course, that he would be playing with a pack of fannies…
January 26th, 2010 at 12:27 pm
@Tiki,
You’re probably right, but united’s website announced Ramsey iirc and I remember seeing a picture of Dudeck on Arsenal.com just before he signed for liverpool. We know how both of those ended – thank goodness in the latter case!
Those “official” websites are made by the same 2 or 3 agencies, not people who love the club, I reckon. Until he’s on TV doing the cheesy “hold the shirt up next to the manager” thing then its never nailed on in my opinion.
January 26th, 2010 at 7:05 pm
we are the most financially sound club in the prem!!!!
Fulham certainly has a motive to get the United bid story out there. Arsene needs to be prodded to up the ante and this United story could be it. United seems to be in dire financial straits, but you have to think they’ll be selling a lot this offseason to fund purchases like Smalling. Have to believe Vidic and Anderson and Nani and Berbatov will be sold. As a centre back, either situation likely gives this Smalling kid a great route to be starting in the next few years. Obviously Arsenal would be the better club for him, though.
It is a fucking disgrace that Manure are allowed to sign players with that kind of debt.
January 26th, 2010 at 8:57 am
@Danish Gooner, Finally something that I agree with you on.
Yah? We’ve got TV5!
On to the next rumour. Ryan Babel. What would be your thoughts of Arsene bringing him in? I’ve always been impressed with his pace, but then again, Theo’s got pace too. He’s definitely got a solid built and can play forward. If I’m not mistaken, Arsene was keen on him before he signed for Liverpool? Anyway, Babel may be a tad kooky twittering or tweeting or what have you, but Benitez really has been strange in his playing of Babel. Never seemed to get enough chances with the first 11 at Anfield. Frankly, I’d be mildly excited if we brought him in for 10MM pounds. It’d be a nice wake up call for Theo and could give us a nice option up front. There could be something there; Liverpool needs cash, too.
January 26th, 2010 at 9:05 am
@ArseChicago, 10 million? No thank you. There are plenty better players out there for 10 million. Frankly he ain’t worth ten. 5-6 maybe, then it’s a decent punt. Frankly he’s a slower Theo, who is less consistent than Diaby. Wenger maybe could turn him around, but not for 10 million.
January 26th, 2010 at 9:06 am
@Tiki, *and not who
January 26th, 2010 at 9:17 am
Well, Birmingham apparently had offered 8 or 9, so it’s not like 10 is well north of that. Certainly Babel has potential still, particularly if we’re to believe that Theo still has potential. 7 or 8MM was paid for Smalling’s potential today and Babel’s at least played in the EPL for a season. If Wenger buys him and puts him up front, I’d argue that Babel would give us a blend of pace and strength we don’t currently have at the forward position.
At 10MM, it’s pretty low risk. If he doesn’t pan out in 2 or 3 years, the kid’s still young and it’d be likely someone would pay us 5 or 6MM for him. Heck, that’s what some clubs wanted to pay us for Eboue this past summer allegedly.
how the fuck are united allowed to buy players it drives me mad. other clubs lower in the table have money problems are not allowed to buy anyone but united can. its frustratig that we didint grab him we need back up defenders, and a striker. were a graet team but were on the edge with injuries.
January 26th, 2010 at 12:31 pm
@tom,
United are managing their debt, Portsmouth aren’t.
It’s not unfair that *manchester united* can sign players while in debt. It might be unfair that *any* club can sign players while in debt but that’s a whole other thing, and would totally kill the transfer market outside of the clubs sponsored by very deep pockets by the way.
Which would make buying harder for those that can afford to do so, incidentally, as those debt-ridden clubs wouldn’t want to sell if they couldn’t replace the player they sold.
As an aside, why is Manchester United’s debt somehow worse than our debt on the stadium?
January 26th, 2010 at 12:47 pm
Because the Emirates-related debt is very long-term, low interest, and secured by the physical property of the stadium. Outside of the stadium debt, there’s really only the Highbury Square debt, which will probably be retired in full before the end of the year. As of now, Arsenal has 100MM pounds of cash on the balance sheet. As for United, most of that debt is only realistically secured by the cash flows of the business, which can barely cover the annual interest expense of United. The interest on Man U’s debt is more than 3x the interest on Arsenal’s. Arsenal’s in tremendous financial shape.
January 26th, 2010 at 12:57 pm
@ArseChicago,
Well yes, I know all of that.. I’m an Arsenal fan after all.
But debt is debt. Either all managed debt is ok and not a hindrance to transfer trades or no debt of any kind is ok. Man Utd’s debt is managed.
You might be astonished at the terms of their debt. God knows I am. You and I might not like the amounts and repayments (a friend from work who holds a season ticket there certainly doesn’t, either, btw) but it is structured into a framework.
If we’re talking about financial rules to limit whether or not clubs can trade, lets be realistic. If we’re just going to bash united then lets all laugh at Rio. The muppet.
January 26th, 2010 at 1:09 pm
Debt is not debt. With the Emirates loan, should a default occur, the banks can re-possess the stadium, but not do anything else really. Same as my mortgage. I can send the keys to my house to the mortgage company without recourse and say here you go. The bank can’t say, ok arsechicago, you need to sell your car and your wife and your big screen tv to pay down the rest of your mortgage. With United’s debt, a situation could arise where the banks take over ownership of the club. So some pencil pusher like me could decide it’s in the bank’s best interest to sell Rooney for 50MM pounds. Really, I’ve no idea what you’re referring to when you’re saying they’re managing their debt. They’re managing to increase their debt, mostly to retire existing debt quickly coming due. All the while, the Glazers continue to take out dividends. Without this past Ronaldo sale, the club generated a net loss. Typically that occurs when the operating profits fall short of the interest expense.
January 26th, 2010 at 3:05 pm
@ArseChicago,
Debt is not debt. With the Emirates loan, should a default occur, the banks can re-possess the stadium, but not do anything else really. Same as my mortgage. I can send the keys to my house to the mortgage company without recourse and say here you go. The bank can’t say, ok arsechicago, you need to sell your car and your wife and your big screen tv to pay down the rest of your mortgage.
Actually, I think you’ll find they can (well maybe not the wife!). They certainly can here in the UK. Consider the “negative equity” trap and the housing crisis in both our countries.
As it happens, I believe we’ve structured our debts so that the football club and the company that built the stadium are two separate corporate entities within the same group, which limits liability for situations on one side to impact the other.
So technically our debt is limited and can’t impact the playing side, true, but ethically why is our debt somehow magically better than anyone else’s? I mean the point I was replying to was essentially saying “Man U shouldn’t be allowed to buy players because they are in debt”. And lots of clubs are in debt. If no clubs with debt can trade players under some new rule then the transfer market would be paralysed.
With United’s debt, a situation could arise where the banks take over ownership of the club. So some pencil pusher like me could decide it’s in the bank’s best interest to sell Rooney for 50MM pounds.
I suspect some man u fans might regard the bank as an improvement over the glaziers. An honest villain is a cut above one who just smiles after all… And while selling Rooney for 50 mil would hardly be popular with them, if it was that or go bankrupt what do you think they’d choose? I think they’d grudgingly let Rooney go all while building a Glazier-sized gallows.
Really, I’ve no idea what you’re referring to when you’re saying they’re managing their debt. They’re managing to increase their debt, mostly to retire existing debt quickly coming due.
I don’t see what’s so difficult to understand to be honest. As ludicrous as their debt structure is, they are in control of it to some degree, compared to clubs like Crystal Palace and Portsmouth, for example who are not.
I’m not suggesting that they are an example of a financially well-run club at the moment because clearly they are not.
I’m not defending their approach to anything on the financial side of the pitch because its painfully apparent that they are struggling (selling Rooney might not be as far off as you think, at once time you couldn’t imagine them letting the little winker go to Real either right?).
I am, however, suggesting that they are managing their debt in the sense that their debtors are not about to call in the receivers.
I shall be looking on with great interest and amusement to see if it all comes crashing down for them and I shall laugh like heck at the manager if it does, though I will feel sorry for their true fans – all fans deserve better than some of the boards we end up with. They could very easily end up doing another Leeds, as could Liverpool.
But the original point after all was talk of banning clubs due to debt, and if that ever happens it will be based around a basic test of solvency. And Man Utd will pass that test.
January 26th, 2010 at 3:35 pm
To the long reply, Robm, I’m not focused on whether or not clubs should be banned from transfer dealings if they fail to satisfy certain financial metrics. Certainly this could happen at some point if it becomes clear that excessive debt is threatening the viability of the EPL’s most storied clubs. We’ll see what happens going forward.
The point I’m at least making is that Arsenal’s debt situation is without question better than United’s. Better terms, yes, but better credit statistics. Arsenal’s total debt to EBITDA is far less than United’s, fixed charge and interest coverage is far better, and Arsenal’s fixed assets, specifically the Emirates, are worth more. Old Trafford’s pretty much depreciated down to zero net book value, while the Emirates has only had a few years of depreciation. As for who owns United, the fans should hope the Glazers continue owning the club before the banks take over. If the banks take over the club and determine that they can recover a satisfactory amount of the debt outstanding by selling ALL the players, the banks will sell ALL the players. Whatever scenario renders a better outcome for the banks, they will pursue it dispassionately. I don’t care who you support, because regardless of what club you’re for, anyone with a financial background can easily see that Arsenal is in far better financial shape than United.
January 26th, 2010 at 3:40 pm
And yes, if you mean that United is managing their debt such that they can still operate, pay their players wages and pay the massive interest expense, and allow the Glazers to maintain ownership, then yes, you’re technically correct. From a less binary standpoint, ask a United supporter which club’s balance sheet they envy more.
January 26th, 2010 at 3:44 pm
@ArseChicago,
To your most recent reply…
I agree with the first paragraph. If there is a ban on unstable clubs trading then I think it would need to be at least Europe-wide or it would cause as many problems as it solves I think. The leagues in different countries are in competition with one another to attract the best players to the leagues because all the clubs in that league make more money when people want to go and see a match with star players in it.
As for the second… actually agree with that too, I’m not sure that it was ever in doubt that we were better of than Man Utd, nor why people seem to think that is what I said.
Tom’s comment at 9.07am said he didn’t understand why Man U were allowed to buy when others were not.
My reply was supposed to indicate that Portsmouth were teetering on the edge of administration and were banned from transfer activity because they hadn’t paid for their last set of transfers and owed clubs money (actually I’m sure I read that they owed us money which doesn’t seem right, weren’t all their signings from us frees or loans?). For all their many faults, Manchester United have been paying the bills. God knows how, but they have and that’s all the FA & UEFA look at right now.
Seems simple to me.
January 26th, 2010 at 4:02 pm
So we agree that debt is debt to the extent that the amounts don’t preclude the entity from putting out the open for business sign tomorrow.
What is infuriating to United fans is that this debt that’s burdening the club and surely inhibiting transfer activity and such was put on the books solely to facilitate the takeover of the equity of the club by the Glazers. Everyone’s entitled to an opinion, but if you want to get into the morality of the respective debts in question, I think you could make a case that what the Glazers have done with the debt (namely, putting it on the club’s shoulders) smells foul. Particularly when you compare it to a situation where debt is taken out to pay for a stadium. The latter’s done for the explicit purpose of ensuring the continuity of the club and the livelihoods of all stakeholders. The former employment of debt was done for the explicit benefit of one group, the Glazers, and at the same time, putting the club and its stakeholders at far greater risk than it was facing a short time ago. Can United pay its bills or even buy players? Yes. Can they do it as easily as they could do it had they Arsenal’s finances? No. Interesting subject, nevertheless. As an Arsenal fan, I dearly hope someone like Kroenke doesn’t try to buy the club via the leveraged buyout.
January 26th, 2010 at 12:58 pm
@ArseChicago, actually United can’t even pay the interest on their debt. They have one debt instrument which doesn’t require payment until 2012 and is accruing a rolling interest.
That particular debt is the reason for the latest bond issue by them.
January 26th, 2010 at 6:47 pm
@Tim, They only made a profit last season due to the sale of Ronaldo.
January 26th, 2010 at 12:49 pm
I’d say United’s managing their debt, the same way the U.S. government is. Borrow 100MM in debt to pay back 75MM in debt and use the rest to fund paying off interest expense. House of cards, unless some rich sheik buys United with all cash.
January 26th, 2010 at 12:55 pm
@RobM, That last question’s a joke, right?
In case it’s not I’ll explain this in the simplest possible terms:
United’s debt generates LOSSES in terms of interest paid while giving no future RETURN. Unless you count the Glazers as the asset, you didn’t even gain any asset in the club by generating that debt. In fact, the case could be made that had your team (don’t pretend to be a Goonah, please) purchased a huge raft of players they would at least have that to sell off as they spiral into administration. As it stands you have NOTHING to show for $1.2bn in debt. Well, except the Glazers are your owners!
Arsenal’s debt generates INCOME in terms of increased gate receipts and nearly guarantee’s a huge future RETURN. You remember Highbury with its 38,000 seats? Well, we now sell out 60,000 regularly. You can do basic math I hope?
Arsenal now have 57% more seats than we did with Highbury which means 57% more gate receipts. Which means that Emirates stadium is an ASSET.
January 26th, 2010 at 1:00 pm
If the club wanted to, it could prepay the “mortgage” of the Emirates in 5-7 years and take out an additional 16-17MM of interest expense each year. Once that debt is retired, assuming Kroenke hasn’t LBO’d this thing (which he’d have to do over the collective dead bodies of 1,000,000 gooner faithful), the club is a cash gusher.
January 26th, 2010 at 3:20 pm
@Tim,
Sorry mate.. your reply: Worst. Flame. Ever.
Of course I remember Highbury – I’ve sat in the seats often enough. I’ve not been to as many matches there as I would like but I’ve been to enough. I’ve been to league games, cup games and testimonials there.
I was there for some rough matches too. I remember sitting right behind the damn goal while mickey quinn scored a hat trick against us for coventry… possibly one of the worst days I’ve ever had watching football.
I was there when we played against Man Utd (how topical!) for David O’Leary’s testimonial. Were you? I remember schmeical playing in goal for them for the first half then up front for them in the second because he didn’t like the response he was getting from the home crowd.
Of course I know the grove seats over 60,000 – I’ve sat in the seats often enough. I go to league games, cup games and testimonials there.
I was there for the first match played there, DB10′s testimonial against Ajax. Were you? I’ve seen our “all stars” team beat an Ajax “all stars” team that included players like Cruyff and Van Basten.
I’ve had some great nights watching European football there. I’ve had fun at carling cup games watching our future stars.
Prepared to accept that I’m an Arsenal fan yet?
If you want to have an intelligent debate with me then go ahead. If you want to disagree then by all means feel free. I’m prepared to accept that I might be in the wrong (are you?). But if all you’ve got are snide claims that I can’t possibly be a gooner because I don’t agree with you then you know what… don’t bother replying.
January 26th, 2010 at 4:48 pm
@RobM,
Sorry mate.. your reply: Worst. Flame. Ever.
Said by the guy who didn’t address a single point I made.
Worst.Response.Evar.
January 26th, 2010 at 6:53 pm
@RobM, Let’s break it down simply for you (I’ve explained it before elsewhere, so the numbers are from the start of the year):
Well like Liverpool they’re in deep water financially. They have a two main debts that require re-financing, a £518,695,008 bank loan at 7.5% interest and a £175,479,008 Payment-in-Kind at 14.5% interest. The issue is that the terms state that the loan interest must be paid off before the PIK can be cleared. And at 14.5% the PIK is growing at £25+ million a year, with the total interest bill at £41.9 million for the current financial year. And on top of it all the current revenue barely pays off the interest bill. In fact they would have made a £30+ million loss last season had it not been for the sale of Ronaldo. A bond issue and the sale, then re-leasing of the the training facilities would free up enough money to pay off a significant portion of the loan debt and clear the PIK. Thus putting them on much more balanced footing, as the bonds would be at a reasonable rate of 8.5% or so. This £130 million figure is misleading. What it actually is is the resulting cash from said bond issue and sale of training grounds used pay off a significant portion of the PIK debt, which is in the Glazer’s name but [I]secured over the assets of the club[/I].
Liverpool similarly are in strife as they have three main debts, a £359,000,000 Bank loan at 10% interest, a second Bank loan of £58,200,000 at 5.5% and £2,400,000 at a Cayman Trust at 5%. The £359 million loan is largely a debt incurred as a result of the new stadium currently being planned. While the other two debts are more miscellaneous. Now the issue is that Liverpool currently does not produce enough revenue to cover its interest payments. Last financial year saw a £41 million loss, mainly due to interest payments totalling £36.5m, despite highest ever turnover at £161 million. As a result Liverpool have no money available for the purchasing of players, other than what can be raised through selling fringe members of the squad.
The main issue for both of the above clubs is the levels of interest, over huge debts.
Now compare with Arsenal’s debts. A long-term bond of £244,900,000 at a fixed rate of 5.3% (secured over the stadium), a £47,000,000 bank loan at Libor + 2-2.5% and £26,400,000 loan debentures at 2.5%. These are all manageable debts at low rates, that will be cleared in the next decade or so. Additionally the Highbury Square project generated £88,287,000 last year and there are still some 75-100 apartments still to be sold which should potentially generate £40-60 million. And the board had the foresight to create a fund which the banks are not allowed to access for interest or other payments, into which goes 70% of the value of transfer fees from sold players. And this fund is to be used for future transfer fees and contracts of new/current players.
All in all it makes me glad to support the club I do. Lucky to have a money-wise board and manager, and have a share-price and debt level that makes a takeover very unlikely. (Each share trades for £8,500 avg. price, thus £528,844,500 in equity and the £318,300,000 in debt would mean that any potential buyer would need to raise at least £100 million and then saddle the club with another £400 million in debt, which simply is not feasible for almost anyone out there as they would likely be unable to clear £700 million in debt in the foreseeable future.)
From the espn soccer transfer blog:
17.09: Sky Sports News claims Arsenal have now also had a bid accepted for Chris Smalling.
There’s no link and I couldn’t find what he’s referencing….
January 26th, 2010 at 9:44 am
@ArseChicago, Ha. Wouldn’t it be funny if this is a Ramsey MK.II
January 26th, 2010 at 9:50 am
http://blogs.soccernet.com/onthemove/archives/2010/01/latest_transfer_gossip_january_24.php
Soccernet staff are not the most reliable bunch.
By the way Tim, I know you hate goal.com, but how could you not pick up on this story….
http://www.goal.com/en-india/news/2171/premier-league/2010/01/25/1761064/big-pimpin-rapper-jay-z-i-support-arsenal
Rio Ferdinand’s been charged. Could miss the Arsenal game.
http://news.bbc.co.uk/sport2/hi/football/teams/m/man_utd/8481114.stm
The .com has removed the story they had earlier about smalling. I think that pretty much confirms hes gone to UTD
what are you talking about tom why would united not be able to buy players?have they missed payments to anyone?no, do they have outstanding balances owed to other clubs?no,are they in administration?no,so what crap you talking about…its all paper talk about the debt and how united are cripled..i doubt they are and arsenal are never gona be big time like united..why?cause the french idiot wont pay any money so your fuckd..you play great football and are awesome to watch but theres to many pussies in your team(including wenger)if we dont win the title then i hope you do as i hate the scousers and chelsea are fake..
January 26th, 2010 at 6:56 pm
@mattthered, You are a retarded United fan. Your club has no prospects and 1.2bn in debt. Have fun with that. And your manager doesn’t care about your finances either.
A few seasons time and I wonder how you’ll enjoy playing in the lower leagues, yes going into administration will do that to you.
Oh SuNap! Young Guns is reporting we’ve matched the Utd bid of 8 million. Sounds like it’s up to Smalling now.
Smalling has NOT signed for United, Fulham have accepted the bid and he has accepted personal terms. He is due to have a medical on Wednesday and could sign a contract afterwards, however, if he accepts Arsenal’s personal terms as well, he could sign for Arsenal.
Accepting terms is no obligation.
did united not have a simular deal lined up for the other serbian boy who came with that tosic guy (wateva his name is).
They have a verbal agreement with both Fulham and Snalling. (no pre contract yet) Man U want a pre-contract with both other parties, but they should just buy him and loan him back.
If he finds out Fulham have had another offer from the team he supports, he could technically pull out of Man U.
But I doubt he has the brain of John Obi Mickel.
Completely off topic and dragging it back to club debts again. It could well be that under certain definitions Man Utd are technically insolvent. Insolvency can occur when for a number of reasons, normally when a debt can not be repaid but it can also be defined as the liabilities out weighing the assets, given the amount of debt they’re under and the current slump in real estate they might actually fall into this category.
No one’s going to file for administration as long as they keep paying what they owe so it’s rather a moot point but I’ve never been one to shy away from technicalities to further an argument.
On the Smalling front (vague and obvious attempt to drag it back on topic) I think he could do well for us but I won’t be overly heart broken should he not sign. Sad though it is, my main reason for wanting him to sign is so Man Utd do a Ramsey again.
January 27th, 2010 at 9:59 am
@AndAPrayer,
One comment about Smalling I saw somewhere that I thought was a good point was that we’re all jumping up and down about him now but a few weeks ago we’d have all said “Who? No Arsene, we want a big name striker!”
I like the idea of a talented player who supposedly loves the club coming here (though if he loved the club that much would he go elsewhere in the first place?) but that’s heart ruling head. Business first – would he be ready to play in our team and make a contribution this season if he did come here?
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