Does Arsenal need more money?

At the moment I’m writing this Ade is an Arsenal player. But the time you read it he might not be.

Let’s assume for a mo that he goes. In another summer all the anti-Wenger people would be out shouting “Arsenal are a selling club”.

Except that Villa lost Barry, Manchester lost Ronaldo and KGB Fulham might even lose Terry while all sorts of people seem to be ready to jump ship at Liverpool. Seems we’re all selling clubs now.

Then there’s the fact that we don’t like Ade anymore. Just like when Cole went (although not quite so much).

Which just goes to show how much emotion affects the way we see our club and the world of football around it. And that of course is how it should be.

Except that there are some things when maybe we ought to be a bit more grounded in facts. Like economics for example.

Trouble is, economics is that most mystical of sciences. Every year we get a budget, the Chancellor waves that funny little bag of his which contains his sandwiches, and every year the government gets it wrong and have to correct it the following year. And if the government can’t get their sums right, how can we expect a football club to do so? Especially as its main “property” are a bunch of footballers who can lose form, get injured, or just lack motivation.

You may well have seen Robert Peston (BBC’s Business Editor) report on Arsenal economics comparing the financial analysis of Lazard Brothers for Ms Usmanov with the analysis by Rothschild on behalf of the board. Two different sides, two different views.

One interesting difference between the two analysis is what was included. The Arsenal analysis included within its review the attitude of people within the club – including Arsene Wenger – while the Usmanov report worked only on financial issues. Was it right to include Wenger? I’d say yes, because the motivation and belief of the people doing the deals is a fundamental factor influencing the success or failure of those deals. Besides he’s got a degree in economics.

So in short, your view of football is based on whatever assumptions you make. Here’s a few examples:

Football never makes money for anyone – it just brings status. That was the view that held sway for years and years. Until that awfully nice Mr Bates made a fortune selling what used to be known as Chelsea, and David Dein sold his shares in Arsenal for quadrillions. Suddenly thought patterns changed.

Manchester IOU and Liverpool I can be sold at any time There will always be a buyer and there will never be any problem in raising more loans. That one is just starting to crack.

With unlimited money one can guarantee victory in any competition one wishes to name. (KGB in Fulham, Manchester Arab). The KGB have proven that wrong.

That when a top club comes up for sale people will want to buy it
Now look at Newcastle Zebras – as it has become clear than none of the Zebra players has a clause reducing his salary upon relegation, so no one wants to play. Interestingly this is the self-same problem that scuppered Leeds.

Big clubs don’t go into a tailspin. I refer m’learned mates to Leeds and Nottm Forest. And although Southampton are not big in the same sense, they were in the top division for a long old time before heading further and further down.

Selling to some big time operators will bring your club up the leagues. Well not at QPR. Notts County owners who GAVE AWAY their club to an unknown company certainly hope so. I’m not sure.

Usmanov’s men assumed that Arsenal’s earnings will drop by around a third next year because they will have to give all their players a 14% pay rise to counter the tax rise. They also say that because the sale of the properties is going so slowly, they will run into trouble trying to get a loan to cover that problem.

The Arsenal analysis is interesting because it says that even if the assumptions of the Usmanov side are true (which it doesn’t accept) the £150m Usmanov’s share issue would raise would hardly help – saving just £5m a year.

They admit the Highbury flats are a problem, because property is just not selling at the moment, but again they say that they have other ways to deal with this. And anyway if in a terrible scenario Arsenal defaulted on the Highbury loan, the developers would not be able to seize Arsenal money, or the Emirates, or a couple of players. Arsenal FC is owned by a different company from Highbury.

But then comes the killer. The Arsenal report asked the Lord Wenger if he was actually having a problem because he doesn’t have enough money to buy and pay the team he wanted. He said no.

So will Arsenal be hampered by a lack of funds because their player salaries are about to escalate? Yes, if everything else stays the same. But for years clubs have got round this issue by using off-shore trusts to pay players. The government recently closed one loop-hole – what do you bet me that another one is not as I write, opening up?

In fact to make the Usmanov claim work, you have to assume that for the first time ever, the government has got the better of the accountants who work for the corporations. That’s one hell of an assumption. You also have to assume that the Lord Wenger was telling porkies to Usmanov’s men. And you have to assume that the people who drew up the Highbury contract forgot to isolate Arsenal FC from the debts incurred during development. Three big assumptions.

And of course there could be something else not included here. Many writers say that the Black Death caused the end of Feudalism, so maybe Swine Flu will cause the end of capitalism – in which case it is all irrelevant. Maybe Liverpool or Manchester will implode. Maybe Mr Abramovich will be arrested. Maybe dark energy which affects the universe and reverses gravity (don’t laugh – that is real – read New Scientist each week if you don’t believe me) will be tamed, we’ll have anti-gravity cars and oil will become worthless and Manchester Arab will go bust.

So it is all assumption, and how you see the world. Lots of Arsenal players thought losing Flamini was the end. WC Milan didn’t really share that view, only played him when others were injured, and are apparently willing to sell him. It all depends on your perspective.

The only thing I can predict with certainty is that most of my predictions will prove to be wrong.

If you would like to comment here for the first time, or if you include a link in your piece, please write Ref money at the top, so I know your comment is not a cut and paste from another site. If you have been, thanks for reading.

(c) Tony Attwood 2009

32 Replies to “Does Arsenal need more money?”

  1. As you more or less say, Tony, economics is mostly just “pissing in the wind”- “10 economists= 10 different answers”. These reports are normally very much slanted in the direction the commissioner requires.

    In my view these are dangerous times for all football clubs, in debt or not, well run or not.

    The game has been distorted so much by KGB F, Real Mad, & now Man Arab that it will not be possible to compete in a legitimately sensible economic fashion, particularly as a high %age of supporters of all clubs have dramatically unreasonable expectations, thinking money just “grows on trees”.

    In the lower divisions clubs like Bournemouth & Luton get 30 point deductions for the crime of going bust, when all they are trying to do is survive.

  2. Thoughtful stuff again Tony.

    Just quickly, on the subject of Flamini, I understand why Arsene is not interested in signing him (Arsene has proven to never be one to go back) but isn’t it quite extraordinary that not one of the clubs throwing their money around seems to be remotely interested in him?

    I find it rather remarkable.

  3. Did I like Flamini? Yes and no – on the plus side he was a tireless worker, covering more ground per game than any other Arsenal player. He did on balance prove a better foil to Fabregas than Denilson. I was disappointed that Flamini left but I understood why Wenger did not want to acquiesce to his demands.

    I never thought, on the basis of one good season, that he was the be all and end all, however it is easy to argue he has not been given much of a chance at Milan. Given that defensive midfielders are rare as hen’s balls I am amazed not one club seems to have made an approach for his services.

  4. According to certain reports, which may not be true, that I have just read Wenger is pulling out of the Chamakh deal because Bordeaux want Silvestre and Wenger doesn’t want to lose him. This has to be a joke surely? If not words fail me. Amusing that those that criticized Adebayors detractors in the past are now slating the player thereby admitting that the Adebayor bashers were right all along

  5. I hear Chamakh has a release clause at around 7m £ or Euro , so if thats the case how does the silvestre factor account for anything other than reducing the fee?

  6. Now Mason, me old sparring partner, here’s a funny thing. I see lots of these stories every day. So for example I hear that we are going to re-sign Hleb, that Milan have offered us Flamini back, and that we are going to sell Clichy.

    But you see I don’t actually publish these stories, either here or on anyone else’s site, because they are too silly to be reproduced.

    I dont mind you mentioning them here – of course not – but what bemuses me is why you give such meandering gibberish any credibility. I mean, I can tell you that Pat Rice has said that he is going to retire in one year’s time, and as a result Cesc has says he will leave at the same time, because although he always gives public thanks to Wenger, it is actually Pat who holds it all together.

    Is that more or less likely than the story you posted. My source is not given – and nor is yours.

    Or why don’t we go back to the Arshavin story – he’s off to Spain because of the tax. Or Cesc to Real Mad? Or Mr Usmanov is going to ask his chums out east to bomb the Emirates if they don’t accede to his demands. Or six Arsenal players are secretly members of the BNP?

    Come on, Mason. Tell me. Why do you give these stories credibility?

    Is it to make us all feel nervous? Do you want me to tear up my season tickets? Should I use the site that proclaims that it supports the Lord Wenger in all he does, to attack him?

    Or is there some deeper meaning… a secret plot to overthrow civilisation as we know it? A plan to bring back the Vikings? A pact with the Celts to get their own back on 1000 years of Anglo Saxon tyranny?

    Or is it that you don’t like your seat in the Ems? It can’t be that you can’t get to the Ems, because your IP address suggests you are at Lloyds. Unless you are routing through a bot-net which has taken over Lloyds. Ah, now, maybe that’s it. The end of capitalism through the overthrow of Lloyds…..

    [[Enter various men in white coats who remove blogger amidst screams of ‘You have to let me out on Saturday – I’ve got two tickets for Barnet’.]]

    Still Mason, I must admit, I do repeat some of your comments to fellow Gooners, and my how we laugh.

  7. i dont think anyone is slagging ade who wasnt before. those that did slag him still are, those that didnt, are waiting for a deal to be done or not. we had the same scenario last year.

    if he does go, at least he has done it properly unlike cole who couldnt wait to get his greedy little hands on the russians roubles. good luck to him if he goes, and even more if he stays.

    although if we get 20/25 mil for him, will we spend it, or ala fergie will we not be able to.

    i had to laugh at owens very defensive interview he gave the other day when he was unveiled -ha- at manu. admitting that he played crap last year. he was very uncomfortable under the gaze and questions of the press.

    and then the hipocrisy of sir redface himself when he said that the transfer market was out of control. surely he has been hoisted on his own petard. although i am sure this was just his way of saving face after the board told him he couldnt spend. i mean c’mon, he sells aguably the best player in the world for a huge amount of lolly and then gets owen on a free. are the cracks beginning to show? i hope so.

    city are still trying the abramovich experiment, and one season in, they still have loads of work to do. i doubt hughes’ ability to carry it off personally, and even if he gets john terry and ade he still has a long hill to climb.

  8. Oh Masonnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn

    I am shocked. I am astonished. I am sooooooooooo upset.

    I took you off this site before under a different guise because you were copying and pasting, and now, thanks to the wonderful eagle eyes of my friends around the world, we find that your last post was….



    I am shocked. Bemused. Annoyed. Amazed. Astounded.

    You copied your last post from Alexandr_Orlov on Team Talk.

    No wonder it was gibberish.

    Now if it were anyone else I would of course remove them at once and ban them. But you, you are…. what’s the word?

    Tell me friends. Should we throw Mason to the wolves, or let him play in the bushes, watching while the big boys and girls use long words?

  9. is that lloyds the insurance people? arent the insurance people like the bank people responsible for the global financial crisis that is crippling the global economy.

    if all insurance people and bank people behave like and are as intellectually challenged as mason, its no feckin wonder we are in the mess we’re in.

    i would love to read some positive input from you mason. regardless of topic, just something positive.

  10. Maybe it’s LLoyds Banking Group plc.

    Mason,my friends in the city think the shares can’t get much lower,do you think they maybe a long term investment. I maybe tempted.On second thoughts don’t answer that.

  11. If we had £13m to spend before Adebayor sale and another £25 from his sale, £38-£40m would be available.
    I reckon he needs only one decent striker – as we have Bar Tender, Eduardo, van Persie and Vela, with Arshavin and Walcott potential stand-ins
    We would need one more quality defender
    Midfield is overpowering – Thomas Sicky will be back, Fabregas, Arshavin, Nasri with Diaby/Ramsey/Wilshire knocking on the door
    Guess we need a combative midfield player but apart from that we are not really too short
    It is a mental attitude problem which the likes of Ade and Billy Gallas create

    Anyway good thing is that with all this talk of JT moving to Eastlands, Kolo Hyper-active Toure might stay!

  12. in insurance or banking, the average person on the street would expect the employees to have a certain grasp of business and common sense.

    it appears that mason grasps neither.

    unfortunately with dark matter, in order to measure it, you have to destroy it, so harnessing it could make us all go bust.

  13. Sorry Tony you can’t play with them you can’t insult them – it’s like putting out fire with petrol. You can only ignore them. They are the scourge of the net.

  14. Mason, you have more aliases than Klaus Barbie.

    Your Grace, I suggest we allow Mason to carry on with his stream of lunacy – it amuses me greatly watching him trying to talk through his arse and fit both feet into his mouth simultaneously.

  15. Hey Tony,

    Nice site. Thoughtful. Saw your post earlier on CQN and thought I’d lob one back your way.

    It is not at all surprising that the report commissioned by Usmanov supports his proposals, while the one commissioned by the board backs the club’s current strategy. Both use largely the same set of data, and use them to create a different set of arguements. Nothing new or even mildly controversial there. Likelihood is that both reports are equally valid and equally weak.

    What surpised me was the suggestion made that Arsenal, over an undefined period mind, operates a break even policy on player trading. Up here Celtic’s historic (last 9 years) net spend is a touch under £5M per year, good enough to win most SPL titles and generate respectability on Europe, but unable to break through into the QFs and better in the Champions League, as Wenger does consistently.

    While we must recognise that the Arsenal players are paid considerably better than those at Celtic, and are doubtless better on average, it is clear that Wenger is the European master of player management. I imagine this is little consolation for the fans as Arsenal creep ever further away from the top spot each year, but adopting a longer term view, as Arsenal have done very well, can only place you in a strong position when the madness of Manchester and Liverpool is finally exposed.

    Question is, of course; Do the fans have the same patience as the board, as we await the (we trust) inevitable re-ordering of business models.

    While Arsenal’s debt is largely tied in to the capital project that is the Stadium development, the debts at Man U and Liverpool, and other clubs, are of an entirely different nature.

    Arsenal’s debt will be diminished as the project nears completion (fingers crossed). Debt at the other clubs is increasing as their operations fail to deliver the cash to service the interest charges.

    Witness Ronaldo’s transfer. The largest single piece of business in the history of the game results in the club’s debt – also the largest in the history of the game – being serviced for all of 12 months.

    Further, where in previous times such a fee would grease the football merry-go-round, the money from Real for Ronaldo goes straight OUT of the game. There is no net benefit to football in allowing Man Utd and others like them to trade so far beyond their means.

    At least at Chelsea and Man City it’s new money being brought into football, allbeit that these clubs will inevitably revert to their historic mediocrity once the sugar daddy sours.

    What hope a commitment any time soon from the EPL to a sustainable business model?

    Ramble. Ramble. Sorry, bit longer than I expected, and no doubt old hat on this board, but there you have it.



  16. Jonny Neale; actually thats not really the case now is it..
    tony i knew the face seemed familiar hmmm

  17. Tony deserves more consideration for his excellent article, than he has got.

    “Question is, of course; Do the fans have the same patience as the board”

    Yes indeed that is the question. Goods points, on topic, at last from a different neck of the woods.

    Hope you drop in again, Battered B.

  18. Nice post Tony…

    Arsenal doesnt need any more money. We have a good squad right now even without Ade & I’m confident that we’ll be Champions this season for the simple fact that We’ve kept the team together unlike the last 4 seasons after the Unbeaten season.. Moreover, our main rivals have weakened compared to last season. So lets get behind Wenger and the boys for the season ahead.

    Excellent comment from TBB. It really does seems the Banks have finally woken up.. And the recent comments from SAF proves that. His comment that the transfer market is inflated right now is because He doesnt have funds to buy a player. Wasnt it just last year that ManU bought Berbatov for 30m pounds and also Rooney & Ferdinand for the same price few years back.. If the market wasnt inflated then, why is it inflated now?? The actual inflation of the market started back then when Arsene said Players were bought for a lot more than the actual. And it is proved right again. And I wonder why the unbeaten run was chosen as the GGM01 instead of Wenger joining Arsenal. if it wasnt for the GGM04, we wouldnt have had the GGM01 and a secure future and the beautiful football we have seen over the last decade..

    In Arsene We Trust.

  19. Excellent post TBB. One small point I have to pick you up on is the idea that “Arsenal creep ever further away from the top spot each year” – this is a myth that is danger of becoming truth through repetition –

    08/09 72 points 4th
    07/08 83 points 3rd
    06/07 68 points 4th (Liverpool third place through goal difference)
    05/06 67 points 4th
    04/05 83 points 2nd

    I don’t see much pattern there to suggest we are getting further away each year, though I would concede that the arrival of Moneybags Chelsea caused waves at the top of the Prem.

    It still seems obvious to me that Arsenal should have won in 07/08 and would have but for a wave of freak injuries in the run-in. Fergie said as much at the time.

  20. Another day, another excellent article, Tony. One of the few constants in my world is the pleasure I get from your blog. Quite insightful, thank you Tony, keep up the stellar work.

  21. I am going to defend the red nose one here guys. He’s been called a hypocrite on the basis he spends loads then attacks the transfer market. The players that he has bought with a large wad of cash have been all worldclass with the exception of one (Veron). And the player he sold for 80m? Who wouldnt? I know Le Boss would.
    I think what Taggart is trying to say, is the price of the Pretty Good players(and i will put Adebayor in this Catogorie) are over priced. The Likes of Glen Johnson, a good player but he is not worth 17m. Hangeland has a price tag on for 20m, Cahill of Bolton Wanderers has a suposedly price tag of 20m. Frank Ribery (Although World Class) had a Quote for over 50m (depending on what paper you read) because of the fact the Mancs got a farebit in there sky rocket from GetReal Madrid. Plus its not as If Manure go out and buy 4 players for 30m a year is it? Its 1 a year then a few cheap buys here and there.

    Im probably gonna get slaughted by you lot for this. But hay ho.

  22. Tony, I think it best to leave Mason for now. I suspect he is only doing it to divert people’s attention from the topic. Let’s not fall for that ploy.

    Back to the point, ManIOU have at least in a way admited that they can no longer maintain their spending spree. LiverInsolvent are battling with a “to-admit or not-to-admit” syndrome. They have at least slowed to crawling pace. The KGB-Fuls have adopted a walking pace, albeit they are being treated with quite a dose of their own medicine a-la-JT.

    Economics is quite interesting. It has in the past proved the most intellectual brains wrong and the hitherto thought-to-be-minnows right. We all shall see quite soon.

    What baffles me is why Usmanov is so hell bent on Arsenal. If it has been made clear that we value majority ownership, as we do, and you really want to own a new toy (club), Why not go buy Newcastle? Simples, Uh!

  23. Tony – Nice piece, well thought out as always. What fans have got to face is that no one, and I mean no one can compete financially with Man City at the moment but this does not mean the end of the world, certainly not at the moment anyway. The players Man City have bought so far are either not that good or have a history of trouble making. Does anyone think that Hughes is really capable of managing that team (even if they sigh Terry) to PL title win? As I said on another site the other day it will end in one of three ways in my opinion i) Man City finish outside of the UEFA cup places and Hughes is sacked ii) Man City finish in the UEFA cup places and Hughes is sacked iii) Hughes is sacked by Christmas and another manager and another round of spending kicks off in Jan. Man City could become a threat but it is still at least a season away.

    On top of that why does everyone assume that Man City would take our CL spot? If Man do not strengthen further as they have claimed I can see us out scoring ManU comfortably – Rooney 15 league goals, Berbatov 10 – 15 league goals, Owen 10 – 15 league goals (I’m being really generous there, Valencia will not score anywhere near the number of goals that Ronaldo got, Scholes not the player he was, ditto for Giggs. They have a couple of young players who look decent but so do we and do we not have the strike force, even without replacing Adebayor match their strike tally? Our midfield goal potential now supersedes ManU’s by some distance.

    There is no reason to panic yet.

  24. On the imcome tax subject. Will that not affect all clubs? Possibly ManU and Liverpool more than us.

  25. usmanov wants a club that is already a brand. so he can exploit it to the fullest. he doesnt want to put in the hard work and build a club into a brand like the arsenal management have.

    buying the flats at highbury would at least give the board a bit of cofidence in him as a long term player.

  26. pig – Usmanov putting a gun in his mouth and pulling the trigger would make him a lot more popular as well.

  27. laughing my a** off over the mason thing. i just breathed fire at one of my students for copying herself without citing – even that in my book is plagiarism, girl. mason are you a girl? i don’t know and i’m not sexist so don’t take it as an insult. after all i’m just laughing at an alias, rotf.

    back to money matter. i feel hopelessly powerless to discuss Arsenal’s or any other team’s money matter. i’m just longing for the season to start. besides having good faith that the board know what they’re doing and that they’re giving Arsene the independence he deserves (both from ownership politics and from fans, particularly from fans), i really don’t know what else to hope for.

    independence of the technical staff from money and politics problems is vital. let me not repeat money issue again because Tony already said it. but independence from fans-vs.-owners politics are equally important. just look where new castle zebras ended up: the manager is right in the middle of the storm between fans and an unwanted owners. the sad part of that story is that many fans, by good intention, recruited themselves for a battle that eventually spelled their own team’s downfall. Arsene and SAF live longest in the league because their employers consented not only to leave them completely accountable for technical matters but also because they are immune from fans’ (and media’s) shenanigans.

    in this perspective i consider the masons more corrupted than spurs fans. the latter try to beat us on the pitch (really, without Arsenal they wouldn’t know who to hate); the former, due to sheer myopia, try to destroy us from the root.

  28. @ Faron at 4:56 pm
    “I am going to defend the red nose one here guys. He’s been called a hypocrite on the basis he spends loads then attacks the transfer market. The players that he has bought with a large wad of cash have been all worldclass… …the price of the Pretty Good players … are over priced.”

    Paying more and more for top players lifts the price of the less good players. And vice versa. It’s just like the housing market.

  29. This is how I see it. If we are lucky enough to have a fairly injury free season, we are good for the league and I’d also put it at a fairly decent chance of meeting Real Madloans in the champs league and embarrassing them. That being said. I hope Man city can actually oust one of Man U or LPool coz which would expose their skewed policies.

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