Monday, November 29, 2021

Report: Arsenal borrow £120m from Bank of England Covid fund

Arsenal have confirmed this afternoon that the club has taken out a £120m loan from the Bank of England under the Covid Corporate Financing Facility (CCFF) scheme.

A statement on the official website reads:

As we continue to work through the implications of the global pandemic on our finances, we can confirm today that the club has met the criteria set by the Bank of England for the Covid Corporate Financing Facility (CCFF).

As a result, we are taking a short-term £120 million loan through this facility to partially assist in managing the impacts of the revenue losses attributable to the pandemic. This is a similar approach to that taken by a wide variety of major organisations across many industries including sport, and is repayable in May 2021.

The CCFF is designed to provide short-term finance at commercial rates during the pandemic to companies that have strong investment ratings and which make significant contributions to the British economy.

The CCFF is in addition to the loan provided by our owners Kroenke, Sports & Entertainment that enabled us to refinance the debt on Emirates Stadium in August last year.

The only other Premier League club to have availed of this scheme until now are our North London rivals, who borrowed £175m under this scheme, while the FA also took the same amount.

With billionaire owners, some might wonder why KSE have not sorted this out privately or via their own sources, but the low interest rates from the government make this an attractive option to cover short-term cash flow problems.

The Guardian’s Nick Ames suggests that this will not have an impact on Mikel Arteta’s transfer business in the January window, which might simply be because there’s none planned anyway. The likelihood of any high price deals now seems extremely slim.

As ever, it’s worth looking at the financial analysis done by the Arsenal Supporters Trust, who are estimating losses of up to £200m over two years because of the ongoing impact of Covid-19 on finances.

It now seems almost certain the rest of this season will play out behind closed doors, and it’s not beyond the realms of possibility that increased infections within clubs could see the sport shut down for a period of time – although there is significant resistance to that idea from most quarters.

Depending on the roll-out and take-up of vaccines, even the start of next season could see a limited number of fans return at first, and we’re still a some way from stadiums being full, as well as ticket and match-day revenue returning.

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G-Man

Meaning we have to pay it back. Meaning the team need to perform so we can earn the money to do so. No pressure.

Tierneys tescobag

That’s how loans work

LEFT08

Ha! Billionaire Kroenke taking taxpayers’ money to run his business. The day we will see the back of this guy can’t come soon enough.

Biggles

Not a surprise, surely. Many businesses run by wealthy people have sought Govt. help. I wouldn’t hold your breath while waiting for the owner to leave though.

Auba auba laca partey

The irony is just wonderful. Big companies doing everything to avoid taxation and governments involvement in economy seek money from taxes through those same governments.

Obama Young

Kroenke is a staunch capitalist who is totally against socialism, except when he can borrow 120 million from the government at low interest. He’s pro socialism for billionaires, but totally against it for working people.

John C

When has borrowing money been socialist?

Salibaba and the Forty Thieves

While loan capital shouldn’t exist under a purely socialist or communist economy. It has definitely happened in practice as the real-world is not an absolutist one.

For example under Lenin, the Soviet Union under their “New Economic Policy” provided state loans to NEP-men (private trader) in hopes of stimulating its retail economy and local consumption.

King 14enry

Sorry, but him being a billionaire is irrelevant. It’s not like he has billions of dollars of cash sitting around. He has billions of dollars of equity tied up in his investments. The loan is to help manage cash flows (since he doesn’t have billions of liquid cash sitting around). Companies around the world, big and small, are having to find ways to fund themselves. This isn’t taxpayers money – this is the government going into debt to help our economy recover. The alternative isn’t Kroenke selling, it’s Kroenke selling assets. In our case, the assets we have are players.… Read more »

Badaab

whats your favorite flavor of boot

nikoniko

business people invest/risk where it makes economic sense. That is
why he is a billionaire and you aint

Nzini

Can’t invest in a team with your Mustafis

Andy

Indeed. It takes a special kind of cunt to take a public loan when you’re worth 10bn.

C.B.

The players’ wages are huge with no revenue coming in from home crowds. I favour them taking a cut, though I’m sure the players wouldn’t be keen and it may be impossible to achieve given the contracts the players have.

Someone will have to pay in the future and, as always, it is us the fans, one way or another.

Biggles

They have been asked to take a cut, haven’t they (or am I imagining that)? If so, I doubt they’ll take another one without protest. I think all that we can hope for is to get to the summer when several of the high earners/ low performers are off the books at the end of their contracts. That will ease things somewhat. What financial position the club will be in then is another matter. There’s little scope for increasing ticket prices though as they are, on the whole, so high now. We don’t really have any other sources of additional… Read more »

Tapps

How about winning The Europa League and getting Champions League Money next season?

Tankard Gooner

Let’s win the PL too while we’re at it…

Nainsley Aitland Miles

With Spurs, Leicester, Man Utd, AC Milan, Roma still in the Europa League, we’d be doing exceptionally well to even get to the semi’s.


John C

AC Milan, statistically the most improved team in Europe since Gazides became their boss, discuss

https://www.bbc.co.uk/sport/football/55551561

Nzini

interesting that fact

Anonymarse

Sp*rs did this and then spent a load of money didn’t they?

Homer

Yeah, but they’re total cunts owned by a criminal.

fineas

well if we are talking about criminals lets first talk about the real criminal Stan Kroenke

Salibaba and the Forty Thieves

Do expand on the criminal angle. It’s the 1st time I’m hearing this and I want to know more.

Goldfingered

We are in deep trouble if we have to get a loan to finance the cash flow.

Homer

No, really doesn’t look like it, not from this bit of news. .

Its smart financially to take out loans at ultra low interest rates. That provides capital very cheaply. All good businesses to this.

Every club is uncharted territory with the pandemic. Acting like these are anything other than wholly game-changing times and calling out the owners is nothing more than rank aftv cuntery. No offense meant. But its way too soon to panic..

Goldfingered

Agree that it’s good business to take out loans with low or no intrest but when a company have problem with cash flow it means that there’s no cash left for the day to day expenses and I understood that it is to cover cash flow from another article in the Guardian. Not to invest in the company as you usually do with loans if you have a healthy company. There’s value in Arsenal but that is tied to the facilities and players and they will become undervalued in a situation like this. That’s a huge risk but it’s the… Read more »

Bossman Bill

Gotta pay mesut off somehow

Alex

And then Aubameyang who is at 400 000 per week… Or Borges 200 000 per week for 3 years.

Coop in Dubs

Er no he isn’t.

maxcat

180 to Kronke, 120 to BOE, most likely out of Europe for next season. Just have to figure out how to blame Ozil’s contract for this…

Biggles

Hardly a surprise. Covid has hit us particularly hard because of lack of attendance at The Emirates. The loan will severely curtail the club’s ability to buy new players (without sales, anyway). Goodness knows what our next financial figures will be – we were running at a loss pre-Covid.

The only (slight) positive is that the Spuds need even more from the fund. That’s because that have a huge debt from their stadium of course and have had no time to get the crowds in. Very sad, but it doesn’t disguise the mess we’re in financially.

LEFT08

Interesting piece from the AST analysis Arseblog cites: If future revenues do not see a marked improvement through the ending of the COVID-19 crisis and the return to Champions League football then we will face a situation where it is likely the owner will have to support the club financially. The great unknown is whether this is through increased debt and the cost of any such arrangement. We will continue to ask Arsenal for more explanation of exactly how this financial position is being maintained, whether it was through loans, what the future exposure of the club is to repaying… Read more »

Begeegs

Let’s hope that this means that Kroenke sells up. Can’t see him putting anything into the club.

yen

What it says:

The likelihood of any high price deals now seems extremely slim.”

What I read:

Announce Grealish.

Francesc

Announce Todd Cantwell

Anonymarse

Cuntwell by name, cuntwell by nature

Obama Young

Announce Messi.

Zenithreptile

Announce Woderwick

Nzini

Announce Biden

Francesc

Calm your tits guys. Any owner will always choose debt over putting his own money. Well, as long as the business is capable of paying back without compromising operations related payments. Hopefully Kroenkes considers transfer spending as operational spending.

Anonymarse

My tits are always calm

Twatsloch

Mine are going absolutely wild at the prospect of some rogue exec with dodgy agent connections getting their hands on all that government loot.

John C

“The likelihood of any high price deals now seems extremely slim.”

If you follow Wengernomics orthodoxy, where players are seen as an expense not an asset, but in the real world the clubs best way to pay this off is to return to being successful on the pitch and that would require signing better players.

Twatsloch

120 million? Nothing some club exec couldn’t piss away on one or two average players in the space of a transfer window.

Comedian

“The Guardian’s Nick Ames suggests that this will not have an impact on Mikel Arteta’s transfer business in the January window, which might simply be because there’s none planned anyway.”

Hahaha

Merlin’s Panini

Oh dear. That is really worrying.

Comedian

It though looks like football will come to a halt after seeing so many players in different clubs testing positive maybe because of the new strain. But the loan might benefit the purse of the already rich where it can so happen even the low interest rate might be knocked off later.

Sunnysideup

This is prudent financial management to meet any short term cash needs, and something companies do all the time. This article should note that it’s a lending facility that offers funds for an interest rate below 1% (if you want to be more exact around 0.2% to 0.6% over the overnight indexed swap), which is an incredible deal. It also makes sense to do this with the Bank of England because arsenal probably won’t have the expertise or relationships with investment banks who would traditionally underwrite these loans, partly because football clubs tend not to be creditworthy (arsenal is an… Read more »

Tall Socks

Just think of it as two Pepes

JinichInamato

LANS!

John

Time for Lewis Hamilton to launch a bid to our club from KSE.

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