Nick Wiley
I originally wrote this approaching the end of the last transfer window, summer 2011, when Goonerland appeared to be having a collective meltdown. It was also the time when the debate seemed to be focused around “AW has lost the plot. We need to spend lots of many on marquee signings. The Board are asset-stripping by not buying players”.
Well here we are again, in the January window, after two poor performances away from home, preceded - I admit - by several poor games in the run-up to Xmas/New Year, Arsenal fans arguing with each other, some real nutters on Twitter threatening our own players and, of course, demands for AW to go, the Board to spend big and again statements regarding the Directors pocketing large sums…..
I am not going to try to explain away some disappointing results or analyse tactics, injuries or the squad-quality. It still seems to me that people are missing some key issues in the whole "Arsène in/Arsène out" and the "Arsenal FC not PLC" debate, and that these points have to be taken into consideration:
1. Football has always been about money - from the very start of professional football, the best players have been bought and sold by clubs seeking success. Early on, the players’ wages were capped, and there was no freedom of contract. Now they can move when, and demand what, they want and the best football assets tend to fetch the best prices. Sometimes bargains emerge, but rarely can you get real proven quality at a bargain price. The book "Winners and Losers", by Szymanski and Kuypers, researched the financial impact on football and showed a direct correlation between performance in the league and wages spent, with few exceptions. So, to all those who say financial performance off the pitch does not matter - you are factually incorrect: it does. On the pitch performance is directly linked to off-pitch success - FACT. That leads us on to the reason why we moved from Highbury and built the Emirates…….
2. Arsenal's strategy when building the Emirates was all about creating the financial muscle to compete at the very top of European football, and, to some extent, this is evidenced by our financial performance. In parallel, and in order to fund the stadium, we had to take some short-term actions - first, secure long-term and front-end-loaded sponsorship deals to balance the funding needed, and, second, move towards developing rather than buying our talent. On both, I believe we have executed well: AW’s transfer-spend pales into insignificance with the other top-six clubs, and nobody could dispute that we have developed some truly world-class players. Of course, retaining them is a separate issue. AW knew that he would have limited cash available for a while, but that, in the long term, he and the Club would be much better off, and he agreed to sacrifice the short term and not be in a position to buy ready-made world-class players. Let's remember that David Dein, the hero many fans want back, wanted us to move and ground-share at Wembley. He left because he would not support the Emirates project. Let's just consider what the atmosphere would be like at Wembley, and the impact of moving so far from N5 on our core fan-base; in my opinion, our Board and AW made the right decision.
Unfortunately, what could not be envisaged was that we would end up in an 'escalating' market, driven by debt at Man Utd and new owners with unlimited resources, at Chelski from 2003, and Man Citeh since 2008, both of which completely 'messed up' the market and led to player-wages and transfer-inflation that could not have been predicted. Real and Barça have added to this through the different TV rights arrangements within La Liga. As a direct result, rather than the Emirates revenues leading us to be a clear Number Two in the EPL, we are certainly in fourth place in wages, and probably lower than that when we consider that we have more players paid and retained under contract across all age-groups, the downside of seeking to develop and retain rather than buying 'pre-made' quality.
Given the circumstances, we have performed well overall, and secured CL football every year, and now is not the time to ditch the rational strategy we adopted. We just cannot afford to pay excessive transfer-fees, and nor can many others. A slow-down in this area is likely, as all of the other clubs without 'sugar daddies' will be forced to adopt self-sufficient strategies. This will impact wages and fees for any players other than those at the big two or three, and there are certainly more than 30 excellent players around. The reputation of Arsenal should mean that players not at the big two or three will want to play for a progressive club and manager. AW remains a big lure for players who wish to develop. Losing him now would be a huge error.
3. David Dein is not the answer to the current issues. Yes, he did help to secure and negotiate the terms of many key player-transfers, but he did not identify the talent. The lure of working with AW was critical, and we were able to compete at that stage because we had a scouting network that kept finding diamonds at a time when other teams had not invested in that activity. Now that all of the top clubs have competent scouting teams, there is less competitive advantage there. David Dein did not want to move to the Emirates, he wanted to go to Wembley and that is why he left. Having our own home in N5 remains the correct decision strategically, and we will start to see the benefits of this as the commercial team are able to unwind the pre-2006 deals that we had to do at a discount. The style of football we play, and our global reputation, now mean that we are a big draw for sponsors. Can we honestly say that we were a global club before AW, or that our style of play was admired around the world? Thought not.
4. We need our own 'sugar daddy'. Another popular argument doing the rounds is that we need someone with very deep pockets to buy us the players to win trophies. Surely a third financial super power in the EPL entering the arms race would in many respects be a race to financial ruin; it would do nothing to prevent Chelsea and Citeh outbidding us on transfers and salaries, and we would end up in the same place with a higher wage-bill. Chelsea are stuck on financial drugs, and change managers and buy players hoping to solve the issue; arguably, they succeeded early on in the Abramovich era because they had stability and some core quality from The Tinkerman's acquisitions, and then added a selection of decent buys (and several poor players) when Mourinho arrived. They could pay top dollar as they were the only EPL club prepared to pay the necessary. Look at them now. No youth-system-developed players in the first team regularly since John Terry, having to spend again and again and again, a new manager every 18 months, and look at them at the moment. I'd choose Arsenal every time (of course I would, I'm a gooner, but as a neutral it would be a no-brainer). Citeh have yet to deliver, and maybe they will this season, but will they do it over a sustained period, can they really keep all of the individuals sitting on the bench motivated? I see a constant churn of players in and out, dissatisfied with not playing, and that won't work under the FFP rules, even with teams of lawyers and silly sponsorship-deals. It may for a year or two, but, in five or ten years, I cannot see it.
5. Finally the Board are raping the Club and taking cash out, whilst we should not be putting season ticket prices up. I'll answer these in reverse. First, the ticket-price increases are disappearing into players' pockets not the Directors’. Wage inflation caused by Citeh and Chelski especially (look, Adebayor is on £180k a week) means that to keep the players we have gets more and more expensive.
Let's be sensible and distinguish between Directors and shareholders. Not all Directors are now or have been shareholders in the past. Before Usmanov and Silent Stan bought up the majority of shares, Arsenal's old board, including Dein, owned shares. They sold and made a substantial return on their original investments. Danny Fiszman sold to SK because he felt that SK would be a better owner than AU; Dein did the opposite. However, there has been no dividend paid on the share-ownership for some time, so the only return that SK and AU can hope for now is if and when they can sell their shares at a higher price to somebody with very deep pockets!
So, all of the past profits have gone into the Club and can be invested in player-transfers and salaries. Determining who to spend it on and when is of course down to AW, and his record on working the transfer-market is second to none. He is rightly reluctant to splash the cash and waste the money, especially when he knows that it will impact the costs of every other player if we break our own rules. He hopes that the market will settle down as FFP is implemented and the environment will be more rational. Surely the football bubble will not carry on for ever, and eventually TV will cap what they are prepared to invest for rights. It is TV that has driven revenues and player salaries, and it will be TV that ends up limiting salaries by not increasing rights payments beyond a level that is economically sustainable for them and their advertisers. The question is when? The current financial environment may well act as a brake sooner than we think.
So overall, money matters. Solid financial performance is important, as it directly impacts what happens on the pitch. We should all be proud and very happy that we are profitable. It is important, and stands us in good stead for the future. Spending it wisely is crucial, and we have a manager who has proved time and time again that he spends sensibly and identifies and polishes real gems. Our Club's strategy has been and remains correct, albeit there have been bumps in the road caused by external factors that we could not envisage in 2000/02, and, with FFP coming in, should still see us in the right place.
Arsenal is still a huge club, arguably bigger than ever. We all want on-pitch success, AW more than us, I suspect. Support the players, support the manager and support the Club, our club, the Arsenal. And no booing in the stadium at the weekend; please let's be fans again rather than pundits or accountants or haters.
