Kieran Maguire: Arsenal finances ‘erratic and volatile’ amid £70m document reveal
The finances of any football club are “erratic and volatile” – and that is why Arsenal have chosen to improve cash flows by renewing a £70million credit facility.
That is the view of finance guru Kieran Maguire, speaking exclusively to Football Insider about the Gunners’ agreement with Barclays.
Arsenal filed a submission with Companies House on 23 December registering the renewal of a previous arrangement with the UK lender.
The credit facility is essentially a £70m overdraft that the North Londoners can draw from for any reason they see fit.
Maguire claims that if Arsenal do dip into the overdraft, it will likely be for operational costs and not activity in the January transfer window.
“The nature of football is that the money coming in tends to be quite erratic and volatile,” he told Football Insider’s Adam Williams.
“Season ticket sales are concentrated around April and May. The biggest payments from broadcasters come in the summer months. Sponsors will probably pay a couple of times per year.
“The outgoings tend to be more level. Your biggest cost is going to be wages. Your monthly payroll has to be dealt with on a month-by-month basis.
“With this in mind, Arsenal are renewing their credit facility. This is very much an overdraft style of deal. It makes a lot of sense. They only have to use it as and when necessary.
“In the other months when the club is cash rich, they don’t have the burden of a loan at the same time as having cash in the bank.
“This is not a war chest for transfers as such fans many believe. But it is a logical arrangement for any business that operates in a volatile cash flow industry.“
In other news, pundit backs Premier League rule change after Arsenal latest.