Talking Reds by Kevin Whitcher
Swiss Ramble is a blog written by Arsenal fan and football finance expert Kieron O’Connor, who we hope to interview for The Gooner at some point in the not too distant future. Kieron analyses the financial side of football, analysing the fiscal results and prospects of many different clubs in England and abroad in his highly respected blog. With his own team obviously close to his heart, I would say he covers the Gunners more frequently than other sides, and manages to be very objective while doing so. His post on 6 October, ‘Arsenal’s Finances – 21 Questions’ makes for sobering reading, but in this time of doom and gloom for Arsenal fans, he ends by listing his views on what Arsenal could do to improve their finances, and it is this that I will use as my inspiration for this month’s editorial.
In strictly business terms, there is still little doubt that Arsenal is a success story. The huge worry for supporters is that this side of the business is more important to Stan Kroenke than glory on the field. Naturally, there
A lot of money is actually being thrown around with abandon, and not very efficiently at that is an argument that success on the field enhances success off it, as I think Manchester United and Barcelona have proven over recent years as their profits have grown. However, in the boardroom, in contrast to some of Arsène Wenger’s football, the motto seems to be less ‘forward’ and more ‘safety first’. This has been understandable at times, given the financial risk in moving stadium, but once Arsenal were settled in their own home, and successfully renegotiated their outstanding debts on the construction costs, the only millstone around their neck was the property crash which affected the chances of selling enough of the Highbury Square apartments to clear the debt incurred on building that particular development. In one fell swoop back in September 2009, that debt was cleared with the sale of almost 150 of the flats at a knockdown rate to a real estate group.
From this point on, it should have been plain sailing and happy days. Arsenal could have speculated in the transfer market and – with judicious management decisions on which players were paid what – matched the wages being offered by other top clubs to top stars. However, the current squad now looks weak in comparison with others, while Arsenal still post profit figures in the transfer market year on year. They are unquestionably a selling club and have been for some while, the evidence is irrefutable. With an estimated £50 million plus available for new players and wages currently doing nothing but sitting in the bank gaining interest, it is a justified question to ask what is behind the obsession with parsimony that has allowed the club to decline to the level that the best anyone dare hope for is fourth place at the season’s end. This era will be remembered as the Abou Diaby years, where the club offered a generous contract renewal to a player who was quite obviously finished due to the ravages of injury, thereby having to pay him £3 million a year to live on the treatment table. Other generous contract renewals to players it was blatantly obvious were not worth persevering with has led to the situation where deadwood cannot be sold, but has to be loaned out, with the suspicion that the ‘benefiting’ clubs (and I use the term loosely) are not paying a large proportion of their wages.
What this demonstrates is that, within this policy of parsimony on the balance sheets, a lot of money is actually being thrown around with abandon, and not very efficiently at that. The idea that an egalitarian wage structure will lead to a harmonious squad of happy players that will wish to remain at the club has been exposed year on year by a continuous stream
2 onlinegooner.com of wantaways, which will continue next summer with the players who have one remaining year on their deals, including the current captain.
So we have problems, which have manifested themselves in an appalling – by Arsenal’s standards – run of results, but what are the solutions? The two issues seem to be getting more money in and utilising the money the club does have in a better way. Swiss Ramble lists nine areas of improvement, and I shall outline them briefly, although I urge Gooner readers to read his piece online in full at swissramble.blogspot.com/.
Renegotiate the main sponsorship deals now. Arsenal are haemorrhaging potential income because of historic deals that were struck when the club was desperate for cash. 2. Review the wage structure. 3. Offload under-achieving players. 4. Buy quality in January (God knows, the money is there). 5. Rebuild the famous scouting network (it sure isn’t delivering the talent it once did). 6. Kroenke could loan the club funds (and take the money back when times are better, but if things slip any further, the gap between Arsenal and the top three will simply become too great). 7. Consider a rights issue (as long as Kroenke owns 50.1 per cent of the club, it should make no difference if he does not plan to extract dividends). 8. Inject some new blood onto the board (for me there is even an argument to bring Alisher Usmanov in). 9. Review the training and medical practices (there is a view that the club is incompetent in the latter regard, and it’s hard to argue otherwise).
Swiss Ramble concludes: “Obviously, it’s not all doom and gloom at Arsenal. They have a fabulous stadium, a renowned academy, a great manager and a few top quality players. However, it does feel as if the club is at a crossroads and the decisions they take over the next few months could be very important for Arsenal’s future, both on and off the pitch.” I think he is generous in his words about Arsène Wenger, but certainly there are good things about Arsenal which we take for granted. However, the need to post profits year on year should not be an obsession. If the club spent more money and spent it more wisely, they could be competitive again. Regarding Swiss Ramble’s list of solutions, I would emphasise making changes in the approach to coaching, which would involve new personnel to just freshen things up a bit. It seems obvious the manager is not going anytime soon, but things have become a bit stale at Arsenal, which is a factor in the gradual decline we have witnessed in the team’s achievements.
I will end with apologies to Bernard Azulay, Brian Dawes, Arseblogger, Robert Exley and Phil Wall. The previous issue was the first this untrained luddite put together using InDesign layout software instead of my trusty Quark Express. That won’t mean anything to most of you, but it is something I had to do at the publisher’s request, and proved a very steep learning curve. As a consequence, Anger Management and Adventures in Arsenal Land were uncredited (to Phil and Robert respectively) whilst words were missing in the piece by Brian (on Thierry Henry) and the Arseblogger interview. The errors on Bernard Azulay’s Udinese trip report were so bad, I ran the piece properly on the onlinegooner website. I like to think my layout was in sympathy with the team’s performance at Old Trafford. However, I hold my hands up and have learned why the mistakes occurred, and am confident that there will be no repeat in the future. My sincere apologies to readers whose enjoyment of the issue was tempered by my fumblings. Sometimes, you have to make mistakes to learn. Let’s all hope that with our football team, the aberrations of recent weeks are indeed rectified and that they get it right from here on, as I will endeavour to.