Same Old Arsenal: The Financial Facts That Prove The Directors Are Killing Our Club

I am writing this after our second disastrous away defeat in a row against Swansea which has placed us level on points with the mighty Newcastle. The defeat did not come as a surprise but was the result of 6 years of under-investment within our squad. I have defended Arsenal’s policies for a very long time and argued about the importance of having a club with financial stability but having reviewed the 2011 accounts and researched into our transfer spending I simply cannot defend them any more. The results suffered this season raise serious questions about the ambitions of our board of directors and what plans if any they have for the future of our great club.

The table below (downloaded from www.transferleague.co.uk) provides grim reading about our transfer policy since 2006. This league table shows the difference between the money spent on players and money received from player sales and then ranks teams in order of net spending. It comes as no surprise that Manchester City and Chelsea are the top 2 spenders in the League but for Arsenal to be bottom is a total shock. Is it any surprise that this period has seen us win no trophies? After all how can a team grow if the intention is to clearly profit from player sales rather than to simply buy the best?

	#	2006 - 2011	Purchased Gross	Sold	NET	Per Season
	1	Manchester City	£537,670,000	£100,550,000	£437,120,000	£87,424,000
	2	Chelsea	£267,100,000	£122,200,000	£144,900,000	£28,980,000
	3	Liverpool	£309,540,000	£226,330,000	£83,210,000	£16,642,000
	4	Tottenham	£238,300,000	£162,100,000	£76,200,000	£15,240,000
	5	Aston Villa	£168,800,000	£100,400,000	£68,400,000	£13,680,000
	6	Sunderland	£146,900,000	£84,225,000	£62,675,000	£12,535,000
	7	Manchester United	£217,200,000	£160,350,000	£56,850,000	£11,370,000
	8	Stoke City	£72,725,000	£16,520,000	£56,205,000	£11,241,000
	9	Fulham	£76,975,000	£30,075,000	£46,900,000	£9,380,000
	10	Bolton	£73,150,000	£34,150,000	£39,000,000	£7,800,000
	11	Wolves	£45,725,000	£9,375,000	£36,350,000	£7,270,000
	12	QPR	£25,000,000	£2,050,000	£22,950,000	£4,590,000
	13	WBA	£51,485,000	£41,360,000	£10,125,000	£2,025,000
	14	Swansea	£12,355,000	£6,860,000	£5,495,000	£1,099,000
	15	Everton	£64,750,500	£63,750,000	£1,000,500	£200,100
	16	Norwich City	£8,275,000	£9,500,000	-£1,225,000	-£245,000
	17	Wigan	£63,500,000	£70,000,000	-£6,500,000	-£1,300,000
	18	Blackburn Rovers	£36,852,000	£65,690,000	-£28,838,000	-£5,767,600
	19	Newcastle	£93,100,000	£122,450,000	-£29,350,000	-£5,870,000
	20	Arsenal	£85,150,000	£116,500,000	-£31,350,000	-£6,270,000

You are probably thinking that we have been forced to reduce our spending because of the stadium that we have had to finance. However in the 2 years to May 2011 we have generated £187.2m from property sales and the board have stated in the 2011 accounts that they expect to gain a further £79m in receipts from the sale of the flats currently being built around the stadium.

Our over prudence gets worse; the 2011 consolidated accounts also show that our total cash reserves are a staggering £52m and that’s before you account for the £17.95m in net player receipts from this summer. Our wage bill is only 55.2% of our total turnover so we are well within FIFA’s Fair Play regulations introduced this season. Our Net Assets are £267.955m and our accumulated profits are £211.197m. Although I understand and totally appreciate the requirement to balance the books but why are we hoarding cash and continually striving to earn increased profits?

The fact remains that Arsenal is a business that pretends to be a football club. Our priorities obviously lie outside of football. What is even worse is that it appears that we are budgeting for our non involvement in the Champions League. Our continual refusal to invest in the squad has made it inevitable that this season we will finish outside the top 4. Our Board’s short sightedness will cost our club dearly in the immediate future. They do not realise that without success they will alienate their number one customer – the fans.

The Board have also failed to realise a very important fact that will affect both our profitability (which they obviously care about) as well as our ability to compete as a team (which only us fans care about). At the end of the 2013/14 season our current shirt sponsorship deal expires. Unless our club starts winning trophies we will struggle to attract a large sponsor. To get an idea of the potential money involved please see below the current 3 biggest shirt sponsors in the Premiership (the figures are in millions of Euros per annum):

                                                            €m per annum

Liverpool - Standard Chartered             22.75

Manchester United - Aon Corp.              22.75

Chelsea-Samsung                                 15.70

Arsenal – Emirates                                 6.25

This season has highlighted key short comings in our team and our transfer policy. Our board represents an old mans club and clearly lacks someone with a genuine football background. Ivan Gazidis became our Chief Executive on 1 January 2009 but he comes from a law and marketing background. He replaced Keith Edelman not David Dein (he although he took over his roles) and what’s worse is that he supports Manchester City! Unless the following key questions are answered and acted upon then we will continue to fall behind in the competitive stakes:

• Who is responsible for our transfer dealings in the board room? Who does the deals within our club? When David Dein was at Arsenal he dealt with the finance on all transfers that were wanted by Arsene Wenger. There is still a clear lack of such a person within our existing Board.
• Why has Mr Usmanov been constantly denied a position on the Board? His company Red and White Holdings own almost 30% of our shareholding and he has a net worth of almost double that of Abramovich. Surely such a man can only be an asset to our club?
• In 2010 Mr Usmanov requested Arsenal to make a right issue to raise £100m specifically for player transfers. Why did we turn this down? What was the real reason rather than that given to the press? I suspect the answer is linked to my question raised above.
• We have cash, financial stability and a very reasonable wage structure. So why are we not competing at the highest level for the best players? The current transfer league suggests that we are a selling club but will the Board ever admit to this fact?
• In the summer we sold 2 world class players, Cesc Fabregas (18 assists and 9 goals) and Samir Nasri (15 goals and 5 assists). Why did we not invest in world class replacement during the summer? Why did we keep the majority of the transfer funds in the bank?
• How do we intend to compete and challenge for honours if we continue to follow a policy of hoarding cash and making profits from player sales?
• What is the genuine strategy of Arsenal? To make profits, cash and to simply qualify for the Champions League through the miracle dealings of Arsene or do we want to be the biggest club in Europe?

I am genuinely fed up of having my intelligence insulted by Arsenal’s board of directors who always talk a good game but who actions show that they value money way above becoming a great club.

@TNCHARLES

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Comments

[wengers optician]

great post- even a blind man can see that the manager requires much better eyewear, or should I be offering services to the board as well.............

The fans are being duped- this is no longer a great football club, it's soul has been ripped out in the name of commerce.

So sad.

[Dr. John Francis]

I applaud an excellent summarisation of the situation. Likewise, I do not believe we have a hope of finishing in the top four (how our sights have lowered!) with the present squad. What I see happening is supporter unrest forcing the club to bring in genuine top talent, not the mediocre or, frankly, the inept that we have imported so far, If that does not transpire, I see Arsene leaving, voluntarily or otherwise.

[Pat]

thank you
the truth is the fans really are feeling that we have been going downhill for years now this proves why

[Scott]

Where were these articles a month ago when we were winning,TNCHARLES??????
You're a bloody turncoat vulture,waiting for the slightest chance to pounce,like all the Wenger bashers.
Wenger makes mistakes....absolutely he does,but we are also having a shocking run of luck.
I just find it amazing that grubs like the author were absolutely silent a while back,but have crawled from under their rocks straight after some poor results.....how predictable.
How anyone could respect this article with its timing is beyond me.

[Mark B]

While the above table suggests that Wenger should be commended for achieving a lot on the budget, there is no escaping the fact that we could spend more. The squad is obviously lacking in certain areas.

[GunnerPete]

A great post full of the truths that Arsene and the board would deny immediately. At 69 I have 62 years of Gunner support behind me, and most of those years have been filled with similar frustration that fills me today. 50 years ago when I took my two kid brothers to Highbury for their introduction to AFC, I told them then not to expect AFC to win championships or cups on a regular basis because our board will 'NEVER' invest in players like other clubs do. I never dreampt that I would be so accurate in forecasting the nightmare senarios that have followed since then. After Billy Wright created 90% of the great 1970/1972 team and was sacked for lack of success, even though he was given little money or backing. Bertie Mee benefitted from all that work and won the double etc. witgh Billy's team and then destroyed it all by trying to be a real manager without money to spend. The sell a star to by another player started then. Bertie sold all our top players for big profits and bought in a udd and a star. AFC fell apart until George Graham rebuilt years later, but was never given the funds to do a Liverpool or Manure ie; when on top you add stars to the existing team of stars....at ARSENAL we sell our successful players to others and buy second hand second rate foreign players who no one else wants.Just look at the list that Arsene pays a fortune too in wages that no team has rushed in to buy. Bentner, Denilson, Vela, Squillaci, Almunia, Arsharvin, Djourou, Fabiansky, Diaby, they have all failed the club year in year out . Would any other top team in the world keep paying this lot...NEVER! You can add at least another 6 on loan players who are paid by AFC and will never play for our first squad like Galindo, Bortello, Lansbury, Eastmond, probably Wellington. Why?

I now really believe that my/ our hero Arsene has to step aside or insist on the return of David Dein plus Mr Usmanov. I hated the thought that we would become another Chelski or City ..just buying every trophy but that was stupid pride in a club that never fails to let its supporters down.

Now I feel that its time that these same supporters like me reduce the monetary support we have given for years and drive a revolution at the club to make these massive but necessary changes. If we do not, then we will be following the tradition of the boards of the 1950's , 60's, 80's etc and see our position and ambition reduced to just staying as sionthe longest member of the top teams to stay in the top division....

[eugene danso]

Sack Wenger, the CEO n the board; they are only interested in profit but careless about the club's position in the premiership thus cheap n useless players.

[looneygooner]

Wenger has been making mistakes for six seasons now, always the same old errors keep popping up, every season we fall apart and supporters like Scott are blind to the obvious that we are slipping down the table, the 8-2 thrashing was down to Wenger not investing in the Summer, we have been going backwards since we came to the soulless bowl. Every one can see we are no longer the team we were six seasons ago apart from the dictator Wenger and his pathetic followers the AKB. We need fresh ideas and a new manager, we will not finish in the top four and we will struggle this season again. Wenger can not take us forward anymore we were shown up against Swansea who out passed and out played us. I am sick to death of fans defending Wenger and making excuses, just like he does after every game when we lose, the worst away record in the PL, seven losses already, this is a team in decline. Time to wake up and smell the coffeee. This article is spot on i sent my st back last season after 25 years, we are customers not fans any more and you will see more fans sending back their st at the end of this season unless Wenger goes and the board wake up.

[T-H]

Very interesting, and though I do not agree with all you write, I read it with keen interest.

There is, however, one new perspective I would like for someone to add to the business.
I remember a season or two ago laughing my arse off, as Liverpool collapsed sport-wise.
Arsenal is not at the same collapse but seems to be somehow free falling in these days.
Economy is certainly a factor, but I'd like someone more knowing of the economical sides to draw comparisons between these two so-called big fours - how do they differ, how do they compare?

With kind regards
Troels-Henrik

[brian waldron]

All the supporters who are quick to come to the defence of Arsene Wenger are living in false hope. The value of any sporting entity is determined by thier sucess on the field and nothing else. Wengers policy of buying youngsters has failed dismally. One has only got to look at djourou,walcott,etc to see this. We all critisize the other clubs for spending, but they are performing while we arent. The future will remain bleak as long as Arsene is the manager.

[Scott]

Brian Waldron.....you're a genius.
How well are Leeds going nowadays after their spendathon?
Yes,it worked brilliantly for them lol.
Count our missing players,then explain how the hell we can expect to be successful.
You all choose to ignore the facts,yet ask us to respect your biased opinions.
The funny thing is Swansea played very,very well on the weekend.........why don't you geniuses explain how,considering their team cost bugger all!!!!!
Don't give me any excuses,or blame any other factors because this entire thread is based on the idea that spending is the thing holding us back!!!!!!!
Liverpool are behind us.....how much did they spend in the last few years.
Andy Carroll........one pretty solid example that shows money does NOT guarantee success,regardless of whether you "fans" believe it or not.
Oh,and Brian,if you choose to sell your arse then do so,leave the club alone.

[felix]

please,please, we are tired losing matches every now and then, how can you expect to win without spending?we love arsenal but the board and the manager are failling us.why cant they buy world class players?we need trophies or else we look for an alternative club

[Tolis Greece]

the problem all those years football-wise is we spend the same amount of money chelsea does for one player, but we instead buy 5 mediocre players. imagine all those years, with the level of our academies and scouting system, we only bought one player every year, adding to our squad, and him being worldclass. A thirty - forty million worth of player. Seven years without a trophy we would have been galacticos by now. But instead all we do is spend 50 millions for 5-6 players that next year wont even be in our squad. And this is the only way you'll never attract big names. They see they will never compete for something greater.Buy one player that makes a difference instead five that are simply just shadows inside the pitch.

[wengers optician]

Scott- you are missing the point I think. The article and the comments are not anti-Wenger, though he has played a part in the decline (Almunia, Djourou, Denilson, Squilacci etc) but the facts suggest this football club has forgotten to invest in the team to win trophies. Wenger has done fantastically well in buying players, developing them and flogging on for great profits (Silent Stan must love that) but the board are failing the manager and fans.

And for every Andy Carroll example, we could throw in Aguero, or Van Der Vaart or even a player we should've signed like Mata.

We continue to support the team and club we love- but the frustrations are simply being ignored in the face or ££££.

[kenyan gunner]

interesting article...we are all in agreement that wenger is one of the best coaches in the world..but just like every other human he can and will make mistakes.the difference is going to be in his realisation and reaction to his mistakes.i recently watched a cesc fabregas interview and he said arsene is a very loyal coach to his players...and that would sort of explain why the players mentioneed in gunner petes comment continue to stay in the team.after recently watching moneyball -the brad pitt movie...i couldnt help wondering what if wenger had the balls to not be too attached to the players would he still have diaby,arshavin,ramsey,benna,djorou,vela in his team.yes ramsey!i dont think he is upto it.point is we havent spent on quality over the last 5 years and all that is coming back to butt pulverize us.doesnt mean i support the team any less,i just want a better team that can compete at every level.and am afraid this team cant.all that said this club has been around for hundreds of years and will be for another hundred so long live arsenal but wenger needs to style up!!!!

[Arron]

Its as I thought - Wenger has been taking all the bullets on behalf of the board and they are strangling him - its NOT the manager that needs changing but a more ambitious board and someone i.e Usmanov who will release the funds to be spent

[Roy the gooner]

A very clever article, the fact remains that the board are weak in football knowledge and AW is compliant with the board, he had a dream of building a team from youth which would mature together and be loyal to the club. this has been blown out of the water with players leaving when they have reached a level of consistency and others not reaching their potential. It would seem that he still wishes to pursue this policy. It has been reported that the board are frustrated at the lack of purchases but do not have the football knowledge to advise or convince him (unlike David Dein)

AW does not become a bad coach overnight, in his words class is permanent form fluctuates but I feel that stubbornness has taken over.

I would bring in Dennis Bergkamp as his assistant as well as David Dein with immediate effect. I would question our training as players get muscle strains that keep them out for weeks on a regular basis, look at our medical staff who also on a regular basis predict the length of time out of the team incorrectly.

The present situation is not terminal but could be if the team does not produce on the field, then attendances will drop very quickly along with finances, then the current business model dies with a large stadium to finance and no more property to sell.

[Bradster]

Only reason Liverpool paid 35 for Carroll is the same reason Bolton wanted 15-20 mil for Cahill from us. As Liverpool sold Torres for a record 50 mil they knew that there's money to spend and milked it.
If there's big money sales, that team better have made their replacement deals before that or pay high prices.

It's fine to buy young talent, Wenger is good at that. My problem is the selling the experienced players and bringing in youngsters and not getting rid of the youngsters that really don't look like they are good enough.

Perhaps it would be better if Wenger leaves, no one else can find gems like he can and our team can rot. Once we hit rock bottom Arsenal will be sold as useless and not making money and rise again. Otherwise any profit is good enough for our greedy board and owner of 70% stake and nothing will change.
Remember last year, went from this team will win everything to we are in everything and second, then to top 3 and in cl and wothington cup, then to we will hold out and make fourth.

This year, this team can win the league after CL qualifiers to getting whipped and written off by Wenger, to we can hopefully make top four it's our main goal. Gee there's a boss that instill confidence in our team.

[steve1138]

Well for me we’ll only find out the truth about what happens in the Boardroom is when Arsene writes his memoirs in the years to come.
Peter Hill-Wood, the bumbling Old Eation will be shown up as the “killer” of Arsenal & for the shafting of David Dien
Stan Kroenke is in it for the money & not a love of Arsenal.
I for one never trust anybody who calls the beautiful game “soccer”

[John]

For a proper analysis of Arsenal's finances (and other clubs) I'd recommend the bog of The Swiss Rambler. An awful lot better than this flimsy article with its misguided conclusions.

[Hope]

Scott you are a disgrace to football. Pretending not to see the truth is worse off than being blind.

[Irish Gooner]

I think both sides here have a good argument although emotion & passion inevitable clouds the arguments. I myself am a Wenger fan and think back with joy at the amount of success that he has brought to this club.
He has never spent big money while at Arsenal and this approach was lauded across Europe while our scouting network was one of the best in Europe and we produced rare gems like Anelka, Viera, Petit, ect. However the quality of these gems has now lessened.

While he still unearths talents like Song, this now seems to be the exception rather than the rule and more often than not we are left a mediocre player on over-inflated wages. Unfortunately for Wenger the likes of Wilshire, Frimpong and the Oxo kid are still a few years short of become the superstars they'll undoubtedly become and we haven't got the talent to fill the gap. I'm sure in Wengers head this was to be covered by Nasri & Fab but now they've left and instead we've got Arteta (decent) & Benyoun (Better than I expected) but these two players are not of the same claibre. Our team isn't a poor team. We have ONE world class player, some very good players, some decent players and a lot squad players. Great teams have two or three world class players, generally in key positions, surrounded by a lot of very good players.

What we need to do is invest in a world class midfielder around the 23 to 26 age bracket, to help guide these players and provide experience, and a top class striker to support Van Persie but more than that we need a signing that once again signals to the world that Arsenal are a force to be reckoned with. A player of the standing of a Bergkamp (Not a Wenger signing) or a Sol Campbell. I can remember exactly where I was when I heard the news of these signings. It was more significant to me than Mother Theresa, Michael Jackson or Princess Diana passing away. These were signings that illuminated the imagination and set the heart racing with pure disbelief.

We need a new signing to ignite the belief and the imagination. The question is:
Is Arsene still the man to do that?
My heart says yes but my head says no.

[Afrika]

HAHA! Arsenal is bottom! Well, on one hand this table obviously is no measure of the success of a club - among the top 6 only one of these teams have won the EPL in the last five seasons. On the other hand, assuming Arsenal buy the least amount of talent are still among the best clubs in Europe, let alone England. Meaning if they'd be at least mid in the table they would be a much stronger team than now, so it might be a matter of "buying the right but expensive player". But I must say I don't think this table has much to do with it because we are bottom due to selling Fabregas and Nasri. The problem with Arsenal is that some few years ago Wenger started a youth project that actually worked out very well, appart from the unlucky end of last season, and then decided to sell the backbone of that project (Cesc and Samir, Clichy can be included as well) and the holes that were left were all patched up in one day by good (not excellent) players. I think he was supposed to stick with his project especially when those players enter their finest years. This year Arsenal is back to square one, fighting for a top 4 finish so they can burst onto the scene in 1 - 2 years time.

[Miles Nazelay]

foolish fickle fans. Afc are one of if not the most stable team financially. our economic model is the future of football. ofcourse we want to win cups and be successful. we have been contending for cups every year since wenger has been in charge. it is hard to find that extra umph needed to do it. also we have had some real bad luck this season with injuries. im afc for life and i hate fickle fansone week loving and cheering next weekbooing and completely negative about the whole team. go and support a team which wins the league every year if you want. leave afc to us real fans. afc 4 life in sickness and health. suck it you fools.

[in squid he trusts]

FABULOUS POST!!!!.
i agree the board appear to be hoarding money purely for profit. One point about wenger i feel strongly enough to make is this: He is not a good coach...he is a very good financial manager and one that the board would keep forever.
Wenger compared to george graham is not in the same league. The success wenger had was down to an inherited defense, ian wright dennis bergkamp and ray parlour. Wengers' reputaion?...in france allowed him to attract the some of the best players on the planet...henry pires petit vieira.His football philosophy worked perfectly for a team of matchwinners and always having the best defense in europe. Look at wengers efforts since 2005 and he hasnt been able to build a strong team, particularly defensively. He stuck with almunia and later tried to convince a million doubters that fabianski was a great keeper.
I would suggest the remaining AKB zealots just put down their wenger goggles and see the situation in the cold light of day.
We are in for more pain i am sure..but nothing like this crap can endure forever,