Arsenal have received a cash injection through a £120million bank loan but will not be able to spend any of it on signings.
That is according to author, university lecturer and new Football Insider columnist Kieran Maguire who gave his opinion in exclusive conversation with correspondent Adam Williams after the BBC reported that the Bank of England had agreed to lend Arsenal the money.
In taking out such a loan, they are emulating Tottenham and Southampton, who have both taken out sizeable loans to offset the downturn in revenue caused by coronavirus lockdown.
Maguire explains that, while a smart business move, this loan is purely to cover pandemic-related losses and fans shouldn’t expect to see any big-money signings arrive at the Emirates off the back of it.
“The purpose of the loan is to replace lost revenue. It’s not for capital expenditure projects,” he told Football Insider.
“If Arsenal were seen to be spending that money in the transfer market then the Bank of England would be very, very unhappy.
“It is a smart move because the interest rate is very, very low. Unlike Southampton who are borrowing at 9.1%, the Arsenal loan is somewhere between 0.1% and 0.5% interest. So it’s costing them next to nothing.
“Could Stan Kroenke have lent them the money? He potentially could have done that. But he’s probably earning more sticking his money in a bank account in the States than the interest rate that Arsenal are paying.
“It’s a logical move, it’s following in footsteps of Spurs who took out a similar loan, and it broadly equates to what Arsenal will have lost in terms of matchday revenue from when lockdown occurred at the end of March 2020. I think we’re all resigned now to not seeing football until the end of the season.”
Majority shareholder Kroenke is worth $8.3billion, according to Forbes.
He purchased a 9.9% share in 2007, gradually increasing his equity until 2018 when he bought outright ownership of the club.