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

[GunnaRay]

Has anyone noticed how much more fidgety AW is on the touchline these days. Blaming anything he can on everything he can. I think he knows how bad things are but is powerless to do anything about it. He's tired and out of ideas because he probably has little to work with financially. AW is a humble man and possibly wants to see out his contract because he wants to fight to the end for the fans. If you're going to blame any one, you might want to blame the board and directors! We know little about what goes on, on the inside and AFC are a very secretive club. Which doesn't help the fans i admit!!!

[THEDON]

None of this is wengers fault. the board are to blame.

[David]

Excellent article. I suspect that Wenger is on a bonus if he gets a profit for the shareholders. That is his encentive. He will therefore buy players that are cheap or unknown, develop them and sell them for big money. If the team wins anything then it is a added bonus. His aim therefore is to get into Europe and get the money as they advance. I would not like to get rid of Wenger as he is a good manager but if the above is true then change his contract. As fans we can protest but that does not help. One needs to hurt them where it hurts, profitability. Easy said then done. Small shareholders can vote with Usmanov to get him a seat on the board. The present board are a waste of space. They are only there for the money as is the American.

[clockend71]

steve1138, your quite right hill woods old man will turnning in his grave, and as for that septic tank the love of Arsenal how dose that work, he is a known man city fan, what the feck is he doing at ours.

[john lloyd]

AW`s early success with a team of three or four acknowleged French `Wonderkids` plus Graham - and Rioch`s winners, causes some to confuse his coaching skills, with abilities that he does not posess. He refuused Pires a two year contract, as he was thirty, ignoring, or unaware that people develope at different rates: Bergkamp, Sheringham, Hagi, Di Stefano and McLintock, for starters, all played into their late thirties and Christie won the 100m Olimpic Gold, at 34, He componded that error by not replacing him with one of equal value.. The greater failure was in repeating this, when he prematurely dismantled a great team with the same lack of foresight. These and other traits have led to our present unhappy situation. I anticipated this outcome, when Kronke appeared. His teams are financial models and total failures in sporting terms. Could he do to us, what now threatens the Rams? One man can arrest our impending drift into a TH type wildernss. If AW threateed to resign, Kronke would see the value of his shares plummet. No mo inflated tickrts - no more millions of shirt sales and a much reduced re-sale value of a failing club.

[PhilF]

Great post... somebody should tell those to AKB muppets on the Untold Arsenal blog. Our once great club has been turned into a cash cow for the board of directors and the fans are obviously an inconvenience. Really sad. It's not about silverware it's about maximum profits. Hardly surprising when you consider Wenger has a degree in economics.

[madgooner]

my question is, back in 2004 when our new stadium was getting built I can remember wenger saying the income from the emirates, we will be able to compete in the market for big players like man u and chelski. Its like he has been waiting for big club bankruptcy and thinking the new eufa rules will make a level playing field, man city don't seem worried about that

[The George]

Well like you all I have an life long love for The Arsenal, and like many of you I still spend my hard earned going to every game home and away like I have done since the early eighties. We have seen em come and we have seen em go, mostly at the right time, not always but mostly. What none of you should hide from is the fact that we are no longer good enough, our players are average in most areas and we only have three or four world class players in the squad, which is quite frankly a discrace. We will end up probably where we deserve to be fifth or sixth. Next seasons exscuses are pre written blaming the Europa league and playing on a Sunday etc. We are in need of fresh ideas, and certainly fresh tactics as playing one man up front at home is not football that wins leagues. We need to build a squad that is good enough to challenge on all front instead of one that cannot challenge on any front. The only constant at Arsenal is us the loyal fans, and those of us that remember Arsenal before the Premier League, before The Emirates Stadium, before the Cannon on our shirt turned round to earn more money, before we started playing away in Blue !!!!!! Are not frightened by the need to change manager and coaches when things are as stale. Boy have they been for the last six years, we even lost a cup final to Birmingham for god sake. For those of you who only know Arsenal with Mr Wenger at the helm, please dont worry we were winning things before him and no doubt we will win things again after him. He does have a recent record as he is now the longest serving Arsenal manager without winning a trophy !
Time for a change, and hopefully a manger who will realise its time to stop buying cheap players from inferior leagues around the world and then being surprised that they cant handle the English Premier League.
The split in our travelling fans is about 50/50 with regard to Mr Wengers position at the moment but come the end of the season and the discontent will be as great as it was in 1983.
E.I.E.

[Jim]

This post is quality and just goes to show that the board need to let Usmanov in and pump some of his money in to the club. I would also replace Wenger as his time at the mighty Gunners is now up.

Lets look back at the players that Wenger has actually spent Big Money on Reyes,Arshavin,Jeffers just to name a few and this would explain why the board are not giving him BIG money to spend in the Martket.

Should replace him with the Barcelona Manager as looks as though he will be leaving in the summer and he knows how to bring sucess and quality players into a football club.