The Leman Gooner
1. Sporting and Financial Success
When asked once, Arsene Wenger responded that qualifying for the Champions League is a sports honour that should, at least in his hierarchy, take precedence over winning the FA Cup or the League Cup. In part, he was right. Qualifying for the Champions League is definitely a success, if the latter is defined in financial terms. A club like AFC, that almost never reaches the final stages of the Champions League, can enjoy some very tangible direct benefits, and can also profit from some less tangible indirect perks. The money received from UEFA, the better contracts signed with sponsors, the TV rights, merchandise sold, as well as gate-money qualify as direct benefits. Playing in this illustrious competition also makes the club a pole of attraction for football players, and especially their agents eager to do business when they smell money.
This is not to suggest that there is necessarily a disjoint between financial and sporting success. On the contrary. qualifying for the Champions League is the prerequisite to winning it, the ultimate sporting success. Nevertheless, my example of AFC above is meant to suggest that financial success can also exist irrespective of sporting success. Note that, thanks to UEFA policies, playing in a championship like England with (some) teams that (usually) go past the group stage increases the chances of accessing the Champions League (4 clubs participate each year), and thus, also increases the likelihood of financial success. Profit seeking investors can legitimately be attracted to clubs that routinely qualify to this competition.
Financial success is alas, not synonymous to sporting success. For sporting success means one thing: lift the cup, be it the Premiership title, the Champions League, the FA Cup, or the League Cup.
AFC has enjoyed in the twenty years of Wenger a huge financial success, and moderate sporting success as well. Let me start with the latter.
Under Wenger, AFC has won the Premiership 3 times, and the FA Cup 6 times. All in all since its establishment the club has won the Premiership (or its equivalent) 13 times, roughly one time every ten years. Wining it 3 times in 20 years under Wenger is above the prior mean, but not the best ratio the club has enjoyed. Chapman won it twice in the ‘30s in just nine years at the helm, whereas George Graham, our unforgettable “Stroller”, won it twice in just eight years. So Wenger is the third winningest coach if we factor in time at the helm.
And then of course, resources matter. In the Graham years, AFC could not outbid Blackburn and lure Chris Sutton from Carrow Road to Highbury. In the Wenger years, AFC has been transformed to a club with almost unlimited resources, and certainly the most expensive tickets in the Premiership enjoying a very healthy margin (over 25%) over the second placed Manchester United when it comes to price of individual tickets. The point is some AFC managers with less resources enjoyed more sporting success. This is at least what statistics, and not impressionistic accounts tell us. So what has gone wrong?
Leicester’s success was welcome to football fans, but one should not lose sight of the fact that in the twenty five years or so of Premiership, all but one time it is clubs with financial muscle (the wealthiest or one of the top four wealthiest) that has won it. AFC definitely has financial muscle. So why not use it? AFC fans, we have been told two stories: we are a self-sustained club that does not rely on sugar daddies, that makes its own money, and spends it accordingly. The implication is that others cheat, a point that I will explain later. The second story, intimately linked to the first, is that we lost a few years because we had to pay for the Emirates stadium. And of course, every now and then we keep hearing about values etc. I will take each point in turn.
2. AFC has no Sugar Daddy
We can spend what we make, and nothing more tells us Arsene Wenger, Ivan Gazidis, and the AFC nomenclature. This is true. Actually, this is true for all clubs participating in UEFA competitions. This is the very essence of Financial Fair Play (FFP), the leading UEFA statute. When several clubs were at the brink of collapse (and some beyond that), UEFA enacted statute, which defined income and requested from clubs under its aegis not to overspend it. Overspending leads to financial and sporting sanctions, and any visitor of the UEFA webpage can have in front of him/her the full list.
Clubs thus, engaging in transfers pay the market price keeping in mind that they cannot overspend their income. This is true for AFC, as is true for everybody.
2.1 Market Prices
Market prices are the meeting point of supply and demand. If AFC offers £8 million for Cristiano Ronaldo, and Manchester United offers £12 million for the same player, Ronaldo will go to the latter. Same true for Smalling, and so many other players we have spotted in time, but ended up elsewhere. Market prices might look exorbitant, but one needs a benchmark to decide on that. If AFC can get a talent similar to Ronaldo for less than £12 million, all the better. Usually, however, the price is a reliable mechanism of transmission of information about the football value of the player as well. In today’s world, where we are inundated with information, it is difficult to outsmart the market.
In theory nonetheless, a club has an alternative. Either it pays the market price, and gets the talent it wishes, or it looks for other options (e.g., because of asymmetric information, it might have scouts in clubs where others do not have and profit from lack of competition; or it has great trainers and produces home grown talent). One does not exclude the other. FC Barcelona for example, has spent millions in developing La Masia (the centre for its youth), but this has not stopped it from spending £75 million to buy Luis Suarez from Liverpool FC.
In short, paying the market price is function of financial muscle. Those who can afford it, go for it. Those who cannot, stay out. In Europe, unlike the US regulation of sport, we have no mechanisms of addressing equality of competitive conditions. In fact, one of the criticisms voiced against FFP is that rich clubs become richer and the gap between them and poor clubs grow. AFC definitely belongs to the rich clubs’ club. According to Deloitte, with a revenue of over 435 million euros, AFC was the 7th wealthiest club in Europe last year, and third only to Manchester United (519 million), and Manchester City (463 million) in England. And yet clubs with less financial prowess, like Chelsea for example, can pip us to the signature of Eden Hazard, a player we would all have loved to see at the Emirates, Gary Cahill, and so many more in the past. Why do we refuse to pay the market price?
I will go through the responses that Wenger and the AFC management has provided us over the years: the money is crazy; at AFC we make our stars; we had to pay for the stadium. I will attempt to reject all of them, before I offer my explanation: the current management enjoys the current return on investment (ROI).
2.2 Market Prices are Crazy
I have half responded to this point. Market prices are just that: market prices. One might have a moral issue with a football player making £250,000 per week, when top scientists at the NASA labs make a fraction of that, or when doctors without borders risk their lives for nothing in the most unwelcoming places on earth. And yes, there are examples (US) where salaries have been capped in order to promote equality of competitive conditions. But this is not the world where AFC is called to compete. And this is not a fight we can fight alone.
So, AFC has to put up and pay top dollar, or look elsewhere for inspiration. In fact, we did look elsewhere as I explain in what follows and failed miserably.
2.3 AFC Home Grown Talent
Who are our emerging youngsters? The last one who graduated from our youth system is Alex Iwobi. The jury is still out on him, but look at the rest of the team. Gibbs and Wilshere are AFC products, but none of the two is a regular first eleven player. Theo and the Ox joined us when they were very young, and again neither is a regular first teamer. So we are left with Bellerin, who did half his apprenticeship in FC Barcelona to be proud of our youth system. Is all this investment in youth worth it after all?
Take a look at the leaders of our youth teams from Jerome to Jay Emmanuel Thomas, from Chucks Aneke to Benik Afobe, and see where they are now. The numbers tell a story, and the story is our youth system is not productive. Why then continue to invest massively in it? Either we sit down, analyze what we have been doing wrong, and try to address it, or we scrap it altogether. We have so far done none of the two.
I have often wondered myself what would have happened if Stu Taylor for example, was given an extended run (like Denilson was, undeservedly so in my view). Counterfactual history though, is close to nonsense. The fact of the matter is that so far we have not been able to rely to our youth system to supply first eleven players. I recall the justified bitterness of Charlie Nicholas in one Sky Sports show when he almost shouted “how come AFC does not have a youth central defender to field?” And yet, as much as I understand his frustration, the fact of the matter is we produced no more Keowns.
A side remark here seems appropriate. Our scouting system is not better. Yes, we had some original success in the Wenger years with Vieira, Petit, Henry, Anelka. And we should be grateful for these moments. But after missing out on Zlatan and Ronaldo, we also missed out on Bale who would have come jumping to the Emirates, and to various French players that ended up at Newcastle United and elsewhere.
The alternatives to paying the market price have not worked. This is the long and the short of it.
