- How Arsenal are changing: new team, new directors, new belief
- What five games tells us about who is going to win the league this season
By Tony Attwood
Prelude: Untold also publsihes the Arsenal History website where we are currently tracking the fact that Arsenal has become the first ever club to play in the top division for 100 consecutive seasons. You can read the latest article here or you can follow the series from the start at our article on Arsenal’s election.
Having spent much of my lifetime working in business, I have come across many a person who, on looking for a job in our financial department, would say, “I could double your profits immediately, no worries.”
Typically, such people would not tell me what they would do, but phrases like “it’s not difficult if you know your way around it,” would abound. In my early days in business, I stupidly trusted some of these people and always found that what they did either didn’t work or was downright illegal
Such people seriously believed that either they had an insight no one else had ever had, or else no one would check their work and they’d get away with fiddling the books. But their plans were at least nonsensical (if not downright illegal). Yet they wandered on from job to job….
And as far as I can see, such chancers are widespread in the world of professional football, convincing desperate chairmen that they get the club to the top of the league without infringing Profit and Sustainability Rules (previously known as Financial Fair Play).
These rules aim to stop clubs running up massive transfer debts which they then can’t pay off. For such debts, of course, not only wreck the finances of the buying club, but also the selling clubs who have just sold their top player, and used the money promised over the next four years to buy other players.
What brought the system into disrepute is the fact that clubs pay for players over a period of four or five years, often with only a modest down payment. So clubs can buy a £70m player without actually having the money. What they bank on is that this player will either grow in value and they’ll be able to sell him on again, or he will be so good that the club will rise up the league, win something, get into Europe, earn more money, and ultimately sell the player for about the amount they paid for him.
In short, the player makes the club a profit through the combined return of bigger crowds, prize money, more TV revenue because of greater exposure, and finally, a sell-on fee.
Except that time and time again, this doesn’t work. Either the player turns out to be not that good, or the player gets injured and the injury insurance isn’t enough to pay off the debt, or the rest of football thinks the value of the player is far too high and won’t buy him at such a price. So the extra revenue from success on the pitch, increased TV exposure, and then from selling the player rarely works out. But clubs keep on believing it will next time because… they have no alternative strategy.
Eventually, of course, the crowds rebel and in desperation the club owners sack the manager and pay him off, only to find that the next manager says, “Player X is the biggest load of zzzz I have ever seen – take whatever you can get for him, I don’t want him. The player goes for a fraction of the infloated fee they paid in the first place.
If you want an example, think of Unai Emery spending £72m on Nicolas Pépé and then releasing him on a free. Amazingly, Emery has a job with Aston Villa (currently 16th in the Premier League). Why would any club take a manager who insisted Pépé was worth £72m?
But managers spend fortunes, it doesn’t work, and they move on. Of course, for ManC, it doesn’t matter; their owners own much of the world’s oil supply and threaten to bring down the whole Premier League if anyone challenges them. Chelsea put their players on eight-year contracts, and sold their women’s team to another company they owned. A clever trick, but one now made illegal.
In all areas of business, there are people who will come along and tell company directors that they are doing it all wrong, and this person could make the company mega profitable. As a chairman of a plc, at first I would listen, while thinking, “this won’t work.” And fortunately, I had an excellent accountant who had seen it all before. and who told me “business is full of people who claim they know it all, but know nothing.”
Sadly, in football, such is the desire for success, and such is the belief that it can be achieved by buying the right player, club directors still believe such people, and their clubs sink into the sand. I suspect, at the very least, half a dozen PL clubs are in a desperate financial mess of their own making.
Curiously, it was Arsenal and the English taxpayers who saved West Ham. Arsenal gave them £100m for Rice, and we, the taxpayers, paid for their stadium and then gave it to WHAM for nothing.
Arsenal do make losses, but they made a fortune from getting to the Champions League semi-finals, and that and the revenue from showing games in the USA should see the club safe. Manchester City are also clear when it comes to PSR – that is not the issue for them. It is 115 charges against them for the way they do their accounting. The case is still there. We wait. We wait.
