Wenger can thaw economic chill with his £35m kitty

The Arsenal manager has money to burn, as do Manchester United and Chelsea – but Liverpool are in dire financial straits, writes Nick Harris
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The Independent Online

The economic climate remains icy cold in the Premier League but outbursts of expenditure can still be forecast for the January transfer window. It will be a revealing month, if only for the light it sheds on the clubs' different financial situations.

Arsenal are in good shape, with around £35m for fees and wages if Arsène Wenger chooses to spend. The Arsenal board's stated policy, as laid out on page 14 of the most recent annual report, is: "All proceeds from player sale transactions are made available to Arsène Wenger for re-investment back into the development of the team."

So Wenger has £31m left from last summer, augmented by some of the club's operating profits, and most of this overall kitty is contractually guaranteed in the fine print of Arsenal's loan agreements with their banks. Covenants designed to protect the lenders from asset-stripping make it mandatory for 70 per cent of transfer proceeds to be stored in a special account for spending on players. It is up to Wenger when to spend it.

Manchester United have a kitty of tens of millions for use at Sir Alex Ferguson's discretion. Sceptics say the £80m from selling Cristiano Ronaldo has gone to pay debts (which comprise £520m in outstanding bank loans, plus £175m of high-interest pay-in-kind loans), but United generate such huge cash flows those debts are manageable for now. United remain in talks with banks about refinancing but Ferguson has gone on record saying he has money, and he has.

At Liverpool... well not's let intrude on private grief. George Gillett and Tom Hicks are hard up, stuck with a manager too expensive to sack, and scrabbling around for loan signings. If they can offload players – Ryan Babel, Andrea Dossena, Andriy Voronin – they can buy, cheaply.

Manchester City are loaded but don't expect them to admit it because such public vulgarity is now part of Garry Cook's past. If Mark Hughes were still in charge they would be looking at pragmatic additions, but Roberto Mancini will want some of his own players in, and will get them.

At Birmingham, Carson Yeung has promised £20m-£40m for transfer fees and wages and insiders say he stands by that. The odd million or three will be found elsewhere, by Sunderland, Wolves, Aston Villa, and maybe Tottenham and Wigan. And pretty much everywhere else there is shivering, to be offset by a frantic scramble for each and any international-class player who can be persuaded to move on loan.

And then there is Chelsea, who have cash to spend if Roman Abramovich chooses, even if he is down to his last $8.5bn (£5.26bn), as Forbes most recently reported. Whether he will or not is intriguing; a barometer, perhaps, of his long-term commitment. If he spends big, then it could be a sign he's still set on his strategy, as stated in 2005, to "build the most successful football club in the world". Or it could be a sign he's going to chuck one more lump of cash in the pot to chase that elusive Champions League success.

And if he doesn't spend big, or at all, it will raise more questions about the long-term. Carlo Ancelotti maintains that he won't buy players this month, not to save money but to save upsetting the balance of his squad. But with a transfer ban almost certainly imminent because of the Gaël Kakuta case, this transfer window, more than any previously, would appear to be a time for trade.

Chelsea deny Abramovich is laying the groundwork for an exit, and when they announced on Wednesday that their plutocrat had wiped out £340m of debt, they claimed in a statement: "This demonstrates the continuing commitment from the shareholder to the group."

In fact, it doesn't necessarily demonstrate anything of the sort. Nor does the assertion by Chelsea's chairman Bruce Buck that reduction of the debt load provides "more long-term stability for the club."

Rather the debt-wiping prompts questions. Why now? Any explanation about complying with future Uefa debt regulations is a red herring: those rules are not yet framed properly, let alone imminent.

And why would a club with a truly committed billionaire owner require the "stability" of this gesture? In practical terms, it is meaningless. He has effectively said: "Yesterday I owed myself £340m, today I've guaranteed I won't ask myself for that cash back."

A cynic might argue that headlines about "Debt clearance of £340m" would trump headlines of "Chelsea's latest massive losses". And a cynic would be right because, by and large, they did.

Abramovich has spent £700m-ish on Chelsea so far for his own enjoyment, not on a project that makes business sense. The club lost "only" £44.4m in the financial year 2008-09 but that is still a massive sum, and it happened in a season when Chelsea finished just one place from the title, reached the Champions League semi-final, won the FA Cup, yet still saw a decline in income.

One cold-eyed business analysis of Abramovich's wiping of the debt could conclude he has re-imagined Chelsea not as a plaything with £340m of baggage but as a debt-free asset, more marketable as and when he wants out.

Window shoppers Who's got what – and where's they'll spend it

*Chelsea: Is Abramovich committed long-term? Could spend multi-millions, but if he doesn't despite looming transfer ban, will appear nonchalant.

*Man Utd: Sir Alex Ferguson insists the balance of the Ronaldo cash (£60m) is there if he wants it. Will spend some.

*Arsenal: Arsène Wenger has a ring-fenced kitty (£35m currently) that he's obliged to spend on fees and wages, at some stage.

*Tottenham: Might have the odd million for a Redknapp wheeler-dealer special but Harry insists he's "not looking to do anything."

*Man City: They have massive resources if needed, and Roberto Mancini will get funds.

*Aston Villa: Money will be made available (£5m plus receipts) to bolster a squad to avoid the annual post-Christmas nosedive.

*Liverpool: Broke; seeking loan players. With sales needed before buys, Rafa willing to drive most of his squad to the airport.

*Birmingham: Owner Carson Yeung publicly promised £20m-£40m for fees and wages in January. Spokesman reiterates same.

*Fulham: Roy Hodgson will get £3m maximum, but only for Hangeland-esque type bargain of two Januarys ago.

*Sunderland: Steve Bruce says he won't be "overly busy" but wants "the right players at the right price", ie, cheap. £5m or so all told.

*Everton: Nothing for fees available. "The reality is that new faces will be loans," says David Moyes.

*Stoke: Nothing unless they sell after splashing out in summer. "I'll have to fund any buys by selling," says Tony Pulis.

*Blackburn: Need to reduce the wage bill, not expand it. "I'll have to sell to buy," says Sam Allardyce.

*Burnley: Little or nothing. Owen Coyle will be in the market for loan signings, possibly from Scotland.

*Wolves: £3m, with owner Steve Morgan willing to fund a relatively small gamble on survival.

*Wigan: Roberto Martinzez thinks he's got up to £10m from summer sales but could be trying to retain men, not buy.

*West Ham: Nothing, unless Zola sells first. No takeover is likely now before the window shuts. Trying to retain players.

*Bolton: No kitty and desperate days. New manager should be relieved if he isn't forced to sell. Cahill is wanted.

*Hull: Little or nothing, like most of the bottom half. Phil Brown hopes to sign "one or two" on loan.

*Portsmouth: No cash as meltdown looms. Transfer ban in place anyway. Be lucky to avoid a fire sale.

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