When Arsène Wenger had dinner with the Arsenal chairman Peter Hill-Wood and Danny Fiszman – the club's main money-man and key shareholder respectively – last June, there was only one item on the agenda: persuading the manager to extend his contract beyond 2008.
As part of the negotiations, Fiszman asked Wenger what would he do if he were handed, say, £100m to spend on transfers. It sounded like a promise, perhaps a carrot to dangle before him of the riches that could be delivered in return for committing himself further.
Hill-Wood yesterday relayed what happened next. "Danny said, 'What would you do if we gave you £100m to spend, Arsène?'" the chairman recalled. "He said, 'I'd give it back to you.' He has an economics degree from Strasbourg University and is lucky enough to understand the figures probably better than the board. And he doesn't want the club to go bankrupt."
Although moving to the Emirates Stadium was, as the Arsenal managing director, Keith Edelman, said yesterday, a "huge risk" and probably one that could not be pulled off in today's financial climate, there is now little chance of that happening.
Edelman also took great delight in pointing out that, despite the significant debts to be repaid on the new ground, Arsenal are no longer dependent on qualifying for the Champions League to secure their financial future. They can survive regardless.
The figures are dizzying, especially when it is factored in that the waiting list for season tickets has risen to 41,000 – it was 32,000 when Arsenal left Highbury – and that plans are seriously being made to increase the capacity of the Emirates Stadium to 100,000. There are, apparently, no architectural or building reasons, only transport ones, for it not to take place although, naturally, and despite demand, the club remain cautious as to whether it is viable.
Turnover for the 12 months to the end of May was up 46 per cent to £200.8m – £177m from the football business and the rest from property, including the sale of the nearby Drayton Park site. Importantly, this was achieved despite the revenue from broadcasting dipping by £10.5m (the season before Arsenal reached the Champions League final).
That places Arsenal ahead of Manchester United, with a turnover of £168m, and Chelsea, with £153m, and way ahead of Tottenham Hotspur on £74m, although, in fairness, all those clubs are yet to report this year's figures. United will certainly see a hike after winning the Premier League title.
The debt at Arsenal stands at £255m, of which £205m is covered by a fixed- rate note over 25 years – a bit like repaying a fixed-rate mortgage on an interest rate of 5.3 per cent – and the rest, in the form of a floating-rate note, can be paid off in one lump sum at any time. None of this takes into account the money Arsenal can make from their property portfolio which, it is hoped, will eventually reap a profit of £60m from the sale of flats and so on at the old Highbury site. Most of the flats – 91 per cent – have already been pre-sold.
Operating profits at Arsenal hit a record £51.2m, which represents a whopping rise of 274 per cent. Matchday revenues, the most secure source of income and now the biggest, equates to £3.1m per game, more than double what Arsenal made at Highbury.
The club sold 968,000 programmes and 70,000 stadium tours last season. The Emirates Stadium is, as one analyst described it yesterday, turning into a cash machine. There is a surplus of £73.9m in cash sitting in the bank.
That figure caused Wenger alarm when it was presented to him. After all, some would interpret it as some kind of transfer budget or war chest and, although it could, in theory, be used to purchase players, Arsenal were understandably attempting to play down that possibility yesterday.
"When we discussed the results at a board meeting, Arsène's only comment was, 'Can you please report Arsenal are poor?'" said Edelman, aware of the inflated prices that now might be quoted. "He is concerned if people think you have too much money, it will be more difficult to purchase players. But we have always backed the manager with every player he has bought. If he thinks the squad needs strengthening, we will back that judgement."
Indeed, Edelman was at pains to point out that Wenger, once again, did not spend the budget at his disposal this summer, making a significant surplus in the transfer market especially through the £16m sale of Thierry Henry.
However, at £89.7m a year, Arsenal do have the second-highest wage bill in the country – ahead of Manchester United at £85.4m – but behind Chelsea's eye-popping £114m.
Wenger and the board feel they have come under undue pressure, at times, to spend. "We can only run this business by allowing Arsène to run his side of the business. Developing talent is becoming more and more important," Edelman said. "There are only a small number of world-class players and most clubs don't want to let them go."
It helps to be bullish when you are top of the league and Arsenal might have come in for criticism, especially over their lack of spending on transfers, had they not started this season so promisingly. That pressure may come again. But the league position has helped the board resist the attentions of would-be buyers such as Stan Kroenke and Alisher Usmanov.
The strength of the club's business also, of course, makes it far less likely to be sold. A premium will be added by the results announced yesterday which rocketed Arsenal through the £200m turnover barrier. The only other club to have done so is Real Madrid. They once coveted Wenger as their coach. The prospect of that happening, with the state of Arsenal right now, has become remoter than ever.
Secrets of the Emirates How Arsenal use feng shui, accoustics and a very hot bath in their quest for success
* As they announced their extremely impressive results yesterday, Arsenal also offered a unique behind-the-scenes insight into their new Emirates Stadium. It proved, once again, that Arsène Wenger is a manager who frets over every detail at the club – and is also not averse to using a little traditional gamesmanship when it comes to the facilities for the opposition.
The home dressing room is extremely large and influenced by Wenger's faith in feng shui, something he developed from his time in Japan. It's built in a horse-shoe shape for good luck, with no edges or corners, while there is an acoustically springed ceiling so that the manager does not have to shout or raise his voice but can speak calmly and yet be heard by everyone.
When the dressing room was originally built it included a pillar in the middle but Wenger insisted that this was removed so as not to break up the open space. The players are seated in a certain order – goalkeeper, defenders, midfielders, strikers and then substitutes in a clockwise direction – although this is an Arsenal tradition rather than one introduced by Wenger.
In the centre of the horseshoe is the captain's changing space, something that Thierry Henry insisted upon and which William Gallas has followed, while the cushions by every peg were argued for by Freddie Ljungberg who said the bare wooden benches were too uncomfortable. Wenger agreed, but only because he said the cushions would help the players' circulation.
By the goalkeeper's berth there was a bell which was used to warn the players when it was time to go out but this used to drive Jens Lehmann so crazy – which explains a lot – that he had it moved. Interestingly, Wenger only had a tactics board installed, alongside a huge plasma screen television, this season. To the side of that is a small corridor which leads to Wenger's own office.
Next to the dressing room is a large area for physio Gary Lewin and his team. And across from that is an impressive, chrome state-of-the-art hydro-therapy pool which seats up to eight players at a time with a vibrating bench for them to sit on and water jets to help relax neck muscles. The temperature is set at 34 degrees celsius but Wenger is increasing it to 40 degrees.
The floor of the changing area – and the route the Arsenal players take to the tunnel – is rubberised. The same cannot be said of the visiting changing rooms. Although reasonably spacious, they have a normal floor which makes walking in studs that bit more treacherous, standard showers and plastic coat-hangers. The physio tables also look like relics from Highbury and the Herbert Chapman era.
Flash Guns target Real rule
Arsenal's latest turnover of £200.8m will put them second behind Real Madrid when the top 15 richest European clubs for 2006/07 are named next February. The most recent published figures (for the 2005/06 season) according to Deloitte are:
1 Real Madrid ......... £202m
2 Barcelona ......... £179.1m
3 Juventus ......... £173.7m
4 Man United ......... £167.8m
5 Milan ......... £165m
6 Chelsea ......... £152.8m
7 Internazionale ......... £142.8m
8 Bayern Munich ......... £141.5m
9 Arsenal ......... £133.0m
10 Liverpool ......... £121.7m
* Figures taken from the 2005/06 Deloitte Football Money League