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October 2016
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The governance of Arsenal. How hard can it be?

by Tony Attwood

Remember Portsmouth FC?  Won the FA Cup in 2008, and were runners up in 2010.   Went through a lot of owners with their own unique brand of governance.  Now playing in the fourth division, after a seemingly endless series of owners did the dirty on the club.  Oh and there was Arry Redknapp too.

Then there was Wimbledon – they won the FA Cup too beating Liverpool! and like Portsmouth have spent some time in the top division.  Had a few financial difficulties, moved to Milton Keynes and now the original team is back in south London, where they have just got close to selling their Kingsmeadow ground to Chelsea.  They aim to use the money to build another stadium in Merton.

Both clubs seem to be ok financially now, from the little I know of such matters, but that is more than can be said for a team that sits above both AFC Wimbledon and Portsmouth: namely Northampton.

Sky Bet League 2 2015/16
# Team Pl W D L F A GD Pts
1 Plymouth Argyle 17 12 2 3 27 12 15 38
2 Oxford United 17 9 6 2 28 15 13 33
3 Northampton Town 17 9 4 4 27 21 6 31
4 Portsmouth 17 7 8 2 23 14 9 29
5 Accrington Stanley 17 8 5 4 26 19 7 29
6 Mansfield Town 17 7 5 5 22 14 8 26
7 Leyton Orient 17 7 5 5 27 23 4 26
8 Bristol Rovers 16 8 2 6 21 18 3 26
9 AFC Wimbledon 17 7 5 5 24 23 1 26
10 Carlisle United 17 7 5 5 29 30 -1 26

Northampton Borough Council used taxpayers money to finance a loan to Northampton Town FC for a stadium development.  The stadium hasn’t been developed and the local authority says the club owes it more than £10.25 million.   Tax officials say the club owes more than £166,000

The winding-up petition brought by HM Revenue & Customs against League Two club Northampton Town has been adjourned until 30 November. Players and staff were not paid in October.  Quite separately the council have brought an administration petition against the club, to be heard on 27 November.

All of which leads to a question about governance, going on the from the article published earlier today on Untold: Is Governance the problem at Arsenal?

Arsenal has had various forms of governance since it was formed.   For many years it was run by a committee, elected by all the members, but slowly the financial side of things got messy.  When the solid guiding spirit of Jack Humble left the club in 1907 things got really bad, and when the club’s benefactor said he’d had enough the club came within moments of ceasing totally.

They were saved by the intervention of Henry Norris who paid off all their debts (including those that were not fully disclosed at the time) and who then tried to sell the now debt-free club to the citizens of Plumstead at £1 a share.   When the locals didn’t want to know he spent much of his own fortune building Highbury, and moved the club north of the Thames.

Benefactors such as Sir Henry Norris (as he became in 1917) have thus been around since the earliest days of football, and Arsenal, being formed as a working men’s team, run and owned by the workers in the munitions factory, was very much an oddity.  Most clubs were set up and run by the wealthy.

But even today not all clubs can make it.

Bolton Wanderers have just appointed the insolvency specialist Trevor Birch as an advisor to club owner Eddie Davies, an Isle of Man multi-millionaire who has said he can’t go on bankrolling the club.  Where until 2012 there was a Premier League club there is now a Championship club currently in 23rd position with debts of £172.9 million and no way of raising more money.

Sky Bet Championship 2015/16
# Team Pl W D L F A GD Pts
11 Brentford 16 6 3 7 21 23 -2 21
12 Fulham 16 5 5 6 29 28 1 20
13 Queens Park Rangers 16 5 5 6 22 24 -2 20
14 Wolverhampton Wanderers 16 5 4 7 20 21 -1 19
15 Leeds United 16 4 7 5 16 19 -3 19
16 Blackburn Rovers 16 3 8 5 15 15 0 17
17 Preston North End 16 3 8 5 11 13 -2 17
18 Nottingham Forest 16 4 5 7 12 16 -4 17
19 Huddersfield Town 16 3 6 7 16 23 -7 15
20 Bristol City 16 3 6 7 17 26 -9 15
21 Milton Keynes Dons 16 4 2 10 14 23 -9 14
22 Charlton Athletic 16 3 4 9 14 26 -12 13
23 Bolton Wanderers 16 1 8 7 10 22 -12 11
24 Rotherham United 16 2 3 11 17 33 -16 9

And just take a look at that extract from the second tier table at the moment.  Fulham – an ex-Premier League club taking the money of  Mohamed al Fayed and now firing managers at a rate of one every couple of months.  QPR who nearly got expelled from the league because of over-spending, until so recently a Premier League team, still with the same owner, but languishing.   Leeds Utd, the team that so strongly challenged Arsenal in the early 1970s, wrecked under chairman Peter Ridsdale who took out large loans against the prospect of gate receipts from Champions League games. As Leeds had failed to qualify for the competition, there was simply not enough money coming in to repay the debt.

I’m not too sure what their fans thought of the third division, but I know what they thought of Ken Bates, and I don’t think Massimo Cellino who is currently in charge of governance is an owner who is most highly thought of at the moment.  The phrase “Doing a Leeds” slipped into the lexicon.

Down one place we have Blackburn.  The season 2011/12 was the club’s 72nd year in the top flight and they remain one of only five clubs to have won the Premier League, along with Arsenal, Chelsea, Manchester United, and Manchester City.

In November 2010 the Indian company Venky’s London Limited bought the club, sacked the overweight manager and announced they were going to win the Premier League.  “How hard can it be?” asked the Venky chair.

She found out quickly.  In December 2011 it was announced that Blackburn Rovers posted an annual pre-tax loss of £18.6m.  On 7 May 2012, the club was relegated to the Championship, where they have stumbled around ever since, often making idiots of themselves in the courts.

Then Nottingham Forest.  From 1977/8 to 1979/80 they won the Football League, the League Cup (twice) and the European Cup (twice).  By 2006 they were in the third division.

And then Charlton.  By 2004 they were challenging for a Champions League position and coming comfortably mid-table or above in the Premier League under Curbishley.  That he left was largely due to a load of fans saying that yes he had done well, but it was time for a new man to take them onto the next level – something that was beyond the most abilities of Curbishley.

By 2009 it was clear where that new level was – the third division.

And so to my point: when we talk about Governance of the club, we need, in my view, to talk about the outcome of the governance.  Despite competing with two clubs that have funding the likes of which has never been seen before, Arsenal have won two of the domestic competitions of the past two years, just as Chelsea has, just as Man City has.

When wishing for a change just remember what can happen to clubs – even big clubs – when they start trying  to grow and lose the plot.  Tottenham in the second tier as recently as 1978.  Man U were there in 1975.  Chelsea in 1989 and by 1999 Man City decided to take a look at the third tier.  Just to see what the third division was like.

Arsenal have not been out of the top tier since the first world war, and have just built the best stadium in the country using their own money.  The governance that has allowed that, must have something going for it.   Be careful what changes you wish for.

More anniversaries

19 November 1897: Tom Parker born.  He joined his local club playing his first season in the war leagues that carried on until 1919, then played with Southampton  in the Southern League and then in the newly created third division.

19 November 1927: Eddie Hapgood made his debut in a 1-1 draw against Birmingham.  He played 3 games that season but by 1929/30 was a permanent fixture in the side.See also here

The Untold Books

Woolwich Arsenal the club that changed football, is now available on Kindle at £9.99.  For more details and to buy a copy please click here or go to Amazon Kindle and search for Woolwich Arsenal.


11 comments to The governance of Arsenal. How hard can it be?

  • Robin van Bergkamp

    This article could precisely be summed up under a title along the lines that experiencing highs and lows not matching the enviable prospect of being also-rans. It fails to address the growing weight of our bank and cash balance, money we have acquired which could be used to develop and strengthen the squad so we are able to experience highs beyond the annual fourth place finish or more recently, third place devalued trophy. It seems some fans are content with being also-rans.

  • Henry Root

    Arsenal manager the transition to the Emirates exceptionally well. It was a brave decision at the time but we are hopefully over the worst of the pain and the remarkable ability of Arsene Wenger to keep Arsenal competitive is little short of miraculous. .a major club without accepting blood money or being bankrolled by an oil magnate

  • Andy Mack

    The annoying thing is that there are some real idiots that come out with comments like ‘That couldn’t happen to us’, exactly like some of the fans at Pompey, Blackburn etc, and like most of the fans at Leeds (who really were a big club in the 70s). It could have happened and still could happen if the club is taken over by stupid people. Some want change for changes sake, but change is not always for the good!

  • Notoverthehill

    I have followed both the Portsmouth and Plymouth Argyle, “great escapes” from CVA.

    One who was involved in rescuing Plymouth Argyle, did a short piece on his experience of handling an administration.

    What the writer recommends would be:

    “What will we do differently in future? Can we still make a football rescue work? We really hope so, but this is what we will do differently another time

    – At the outset we will be realistic with everyone – fans, creditors, players and staff, prospective buyers

    – we will spell out exactly what the prospects are for a rescue. The market has changed and is getting worse, we can no longer assume we can find buyers for football clubs. We also need everyone to understand what could scupper a potential purchase

    – We won’t sign any confidentiality clauses – that way we can keep fans involved and have open discussions

    – We will create a website for the administration process and keep fans informed about what is happening and allow them to discuss, ask questions and give feedback

    – There will be a short deadline for bids – probably a month. We either get the money in full for the deal – as with other administrations – or the club has to be shut down”

    Trevor Birch, was in joint charge of the Portsmouth second CVA (Company Voluntary Arrangement).

  • GoingGoingGooner

    There is just no guarantee of good governance regardless of the model. Humans being humans will do what they will. The not for profit models of Real Madrid and Barcelona have not prevented them from foul-smelling presidential elections, or tax shenanigans nor has the 50% rule in Germany stopped various club people at Bayern Muenchen from ending up in jail.

    As for Arsenal, I must say that I am luke warm on Stan Kroenke for various reasons including his connections with Walmart, however, as far as despots go he is relatively benign. If he has not given money to the club, he, too, has not taken out very much either and his conservative, stability over all ethos, is acceptable to me even if I like most would love more on the field success.

  • Robin, there have been six major trophies in the last two seasons. We have won two, Chelsea two and Man C two. That is hardly the work of also rans. It is true that the article does not address directly the issue of the amount of cash Arsenal has in the bank, but this has been addressed in many other articles. It is not possible to deal with every topic in every article. If one did the site would get very boring.

  • WalterBroeckx

    The two we won were the non-trophies Tony…. sigh… should I mention the CS? Ah no that is a never has been a trophy as long as it exists… But it does get mentioned on each club website from each team that has won it. Could someone inform all those clubs that they are bragging with a non-existing trophy.

  • Pete

    RvB – you need to be more patient and take the long view. We are certainly making progress, relatively against our competitors, but this progress is sustainable and continuing.

  • Hisham

    I would say that in the absence of a financial disaster at the corporate level and a great failure on the football field, circumspectively we have achieved a decent record of good governance at the Arsenal. We have no proof to say otherwise. Unless winning the Premier League and/or the Champions League are the only yardsticks, that is.

    My major concern going forward would be when the time comes for a change of management, i.e. the retirement of Arsene Wenger, whenever that may be. (Doubt very much there will be changes with the Shareholders in the foreseeable future). Do we have a succession plan here? I don’t see it. Have fortunes at a Club changed after the departure of a long standing Manager? Most likely, if that club up north is an example.

    Do we prepare for that in advance as most major corporations do? Is the system in the club good enough so that any decent new manager can cope and continue the upward trend? Or will we have to endure our own “Moyes moment”?

  • Fode

    Just another point Tony,
    People talking about “sleeping” cash not used to win titles, I wonder how is it worth. We are talking about 300mil at best case scenario though with dubious sources. But even let’s think about just how much did the rich club spend before winning titles sustainably? Chelsea spent a fortune between 2003 and 2005 how about Manchester City and even in a less competitive league like the French ligue 1 with all due respect how much did PSG spend to occupy the top? We are talking about a billion if you also include wages. Furthermore let’s spend the 300 millions today so we can finish higher than 3rd or 4th then when we will be able to make adjustment worth of 300 mil again? It’s funny when people think buy a defender or a DM or a ST and we win the title. You win the title because you are better than the other teams. And if you decide to win or be better than the rest by spending you have to be able to spend more than them simple math. People tend to blindly ignore the fact that it’s a lot harder to climb further when you are closer to the top. Your competitors have access to all the coaching and management ingredients you have and for our case they are way richer than us.

  • Goonermikey

    @ Hisham

    IMHO, to suggest AFC doesn’t have a succession plan is fanciful in the extreme.

    I would suggest that just because you haven’t seen one published on the back pages of unreliable tabloids does not constitute evidence of its non-existence!

    And remember we also have an honourable manager. The “club up north” was in the hands of a bully who cut and run (along with his ego) when the first signs of trouble came along leaving the club to make the best of the situation. (Whether they have, or did at the time, is another debate). Their comparative lack of success since is possibly down to a combination of Fergie leaving behind the poorest team they’ve had for years and the fact that referees are nowadays considerably less intimidated than they were when the red nosed one was in charge.