By Tony Attwood
It is rather amusing, one might even say “rather droll,” that just as FFP is being dismantled by Uefa in the face of multiple legal claims, and a year after FFP in the Premier League was supposed to have been introduced (but never was), the media is celebrating the success of FFP in making 95% of the Premier League profitable.
If the fear of FFP led to this upturn, then the joyous release that Man City and Chelsea now feel from its effective abandonment by Europe (and total abandonment by the Premier League) will mean that loss making should immediately return.
If on the other hand the cause of the 2013/14 profits for PL clubs announced yesterday in the Deloite review, was not FFP, then we need only pause for a second to work out what other factors affected clubs during that season.
The answer is obvious. In 2013/4 clubs in the PL had an income of £3.26bn – about £1bn more than the second richest league: the Bundesliga. Indeed the TV income alone of the Premier League was more than the total income of the Spanish League.
The prime cause of this upturn in profit was that this was the first year of the PL’s 2013/16 TV deal for £5.5bn.
And my thought is, hell, if you can’t actually make money in the first year of one of these astronomic TV arrangements, you can never make money. What is likely to happen is that with TV and match day revenue static for both 2014/15 and 2015/16, the profits for both these seasons will show a retreat.
So total profits for 2013/14 as revealed in Deloitte’s today were £614m a 700% increase on the previous year. It won’t be like that in their next report.
The Championship clubs made an average loss of £10m, and that again while FFP regulations were still being talked up. With QPR’s legal battle with the Football League still meandering its way around various solicitor’s offices, even their FFP regs could fall in due course, which would increase losses by even more.
As it was, in 2013/14 the Championship, even with FFP, still spent more in wages than their total income. Deloitte calls the Championship’s operating losses, of £222m, a “significant issue”. I call it “rather careless”, but we each have our own way with words.
So we can expect these figures to be the high point of profit for League clubs. After that, unless a miracle happens and FFP or some other agreed restraint gets introduced, it will be back to business as usual.
Thus Arsenal still has to weather the storm of fighting two oil-funded clubs and Man U’s worldwide marketing.
So how will Arsenal survive at the top in the face of what appears to be the forthcoming collapse of FFP under a raft of legal challenges and the resultant uncontrolled spending by everyone from Man C to Bournemouth? Here are what seem to me to be the ten factors working in Arsenal’s favour.
1. Teams need balance not just top players.
Yes the oil funded clubs can afford anyone, but just buying a team of the most expensive players in the land doesn’t give you a team that can work together. Money didn’t buy Coquelin, Wilshere and Bellerin, and only modest amounts of money bought Ramsey, Santi C, Monreal etc. (While Santi’s transfer was quoted in places like Goal as being £18m, most reported the fee as closer to £15m – a bargain for the player we have seen this season. Monreal was £8m – ditto).
2. Big owners can lose interest, be shot, be deposed, be imprisoned.
I’m not wishing harm on anyone, but in the business world we all know that any operation that is dependent on one person is built on dodgy foundations. In my own tiny arena, my advertising agency was initially built around my ability to write (ok reading Untold you may not believe that, but when it comes to adverts some people think I’m fairly decent at it – especially with the luxury of a proof reader checking every word, something Untold doesn’t run to). We all realised that was a danger, so now we employ other writers to work alongside me. When it comes to being a billionaire it is difficult to find a similar backup system.
Thus I look at the owners of one or two clubs and just wonder how fascinated they still are with football. Arsenal on the other hand has stability because even if Stan Kronke breaks his word and changes a habit of a life time, and sells, we don’t need to find a person who has billions to invest as the basic model of the club – just people to buy the shares.
Those shares could go to one very rich person – or they could go to half a million individuals, it wouldn’t matter.
3. The 25 rule is still there
The reason this rule survives both in the Champions League and the Premier League is, it is so simple. Even Chelsea’s multiple loan strategy which is considered by some to be undermining the whole of football, can’t get around this – although they are making it ever harder for clubs that do seek to play with the rules to find under 21s to bolster the squad.
Arsenal, now the stadium cost burden is reduced, can put out an astonishingly strong 25. And we have the under 21s too – see below.
4. Top players demand to play in each game
That’s the problem – bring in a man for £35m and he expects to be there all the time – and if he is not playing well he still expects to be there because the problem is always someone else’s, not his. Buying big can be the start of the problem, not the end.
If Bellerin or Coquelin lose their places next season through a lack of form, they will hopefully be sensible enough to remember that it was Mr Wenger who gave them the breakthrough chance, and hard work will allow them to come back.
5. There are not that many top managers around
Players make decisions based on their reading of the game as a whole – which means not only looking at whether the pay packet is £4m a year or £5m a year, but also how the manager will manage the team. Manager reputation is important, and players know exactly which managers have it and which ones don’t. Wenger’s reputation is right at the very top.
6 The Arsenal youth system.
There’s a lot of debate within Untold as to why our two youth teams did poorly in their leagues this season – but always we come back to the point that this last season we got two top players out of our youth system and into the first team. Plus there are around five players still with the academy who we can point to as having the obvious class that is needed – although no one ever quite knows how they will develop.
Indeed our squad at the moment has a whole raft of players who have joined the club at ages from 9 to 17 (all of whom can count as players developed by our youth system). The last Chelsea player to make this breakthrough (including players who were brought in from other academies) was John Terry. The last at Man City was Micah Richards, now at the age of 26 a free agent.
As the recent article on the Arsenal History Society site showed in reviewing the Arsenal youth team of 2009, players do fall by the wayside, but we also bring youth players through at a far, far higher rate than the oil funded clubs. Which of course saves us a fortune and gives us players who tend to be loyal to Arsenal.
Indeed I have seen it argued that Chelsea’s new youth loan policy was devised in part to undermine Arsenal’s youth success. It didn’t happen though.
7. Top clubs with lots of money tend to lose sight of reality.
Real Mad and its property, Barcelona and its youth policy, Man City with its failure to meet even basic FFP rules last season – clubs like this just seem to wander off into a make-believe world, which might suit Messi and Ronaldo, but not everyone.
Just having lots of money doesn’t mean you know how to behave and how to spend it, nor does it mean that your accountants will give you good advice. If it did, it would mean that the Chelsea and Man C youth policies would have been more successful, Man City’s accountants wouldn’t have screwed their FFP so badly, and Man City would have come closer to Chelsea than they did.
Arsenal’s grip on reality, I would argue, is stronger, and therefore their long term planning is better.
8. Man U even with endless wealth didn’t win the league each year
Of course Sir F brought them stunning success, but they had world-wide marketing and vast incomes long before that, but lacked the person in charge who could turn that into victory-no-matter-what. Indeed they had the biggest income by far in the 1st division in 1973/4 when they were relegated from the first division.
Money to success can happen – as we have seen with Chelsea, but it is not automatic, nor necessarily continuous. So it is not an automatic given that Arsenal will come fourth because we are only the fourth richest club in the league.
9. We were still top four during the pre-FFP rules, and paying for the stadium.
Arsenal offer a continuity within the Champions League that only Real Madrid can rival. Arsenal offer a stadium and training facilities that only a handful of clubs can rival. This helps attracts new players. And given what the club achieved during the pre-FFP period with very limited cash, there is every reason to be hopeful that the sort of FA Cup success we have just seen, is likely to continue now the financial controls are off.
10. Our next manager will have everything in place
Arsene Wenger’s team is still buying young players – players who will not come to first team fruition while he is still at the club. Think about Maxi Romero for example.
Now compare this with the slash-and-burn technique of Ferguson in his last year at the club. Yes he won the Premier League again, but at the cost of leaving a very unbalanced squad and a team that managed to come even lower than Tottenham the following year which when you come to think of it, was quite an achievement.
Arsenal thankfully doesn’t work like that.
So, overall, FFP or no, I think we are set fair. I’d love FFP to continue, but if it doesn’t I don’t think it will be Arsenal that will slip back.
Anniversary of the day
4 June 1925: Herbert Chapman returned to England early from a tour with Huddersfield, ready for talks with Arsenal about becoming the club’s new manager.