- The great problem with football is that now it is all about accounts
- Are Arsenal really chasing all the players that the media suggest
By Tony Attwood
If you take time to read the correspondence this site gets you may well have noted a very well-argued piece from “Nitram” following my article arguing that football is all about accounts these days.
The point was put in response, “Football clubs are trying to live beyond their means. It’s as simple as that,” and that is beyond doubt true. But it raises a question: why are the mega-rich doing this? Investing in football clubs is very risky, so why bother?
Or we might ask, what is Stan Kroenke up to? If we look at Wikipedia as a guide, their summary says he owns nine sports clubs (eight if you consider Arsenal FC and Arsenal WFC as one club), eleven “real estate” operations which includes Emirates Stadium, Arsenal Training Centre and Highbury Square (which is the old Arsenal stadium now redeveloped as a set of apartments).and three media companies.
Everything we can see in this regard is a very professional, highly polished operation which invests money with the object of making significant profits. But not just in the sports on which it is centred.
So where football is involved it is involved as the heart of a bigger story. To see one approach to this take a look at the development of Fulham’s new stand growing out over the Thames. (For more on that there was an article recently in the Telegraph which included the tell-tale line, “Fulham not alone in introducing enhanced hospitality areas but an entire stand is now likely out of reach to anyone other than the very rich.”)
That development is only partially open but the literature for the site includes (among much else) the statement that “there will be two Michelin star restaurants on site.”
So thinking of football as we know it doesn’t give us a clue as to what is going on. Which is that very wealthy owners are building extensions to their sports “franchises” aimed at the very wealthy.
Indeed I got a tiny preview of this recently, as I mentioned in a piece here recently, where having arrived unseasonably early for a game I found myself in conversation with some very affable and interesting American supporters who seemingly quite often fly to London for a few days including taking in an Arsenal game. Now many people would quite reasonably baulk at the cost of my front row upper tier East stand season ticket, and I see it as the one real luxury of my life, but to fly the Atlantic for a home game….???
The fact is that owners are buying clubs to have something to offer such people and in response to the situation they are developing properties around the grounds “where people can live, work, shop, dine, drink and play” as the Telegraph puts it.
Kroenke’s company moved St Louis Rams to an ultra-modern stadium costing $5bn, with a 70,000+ capacity SoFi Stadium complex, complete with multiple retailers. It is nothing remotely like the Arsenal stadium.
Elsewhere he has the 298-acre Hollywood Park site with “an artificial lake, a 6,000-seat theatre and space for millions of square feet of offices, hotels, shops, restaurants and apartments. The NFL Network has moved next to the stadium in fast-gentrifying Inglewood and luxury apartments are ready to rent.”
Now if we think back to the failed attempt by Abramovich to move Chelsea to a new ground, that included laying waste to a large part of the land in the area and building far more than a new ground for the club, we start to get the picture. This was a development on a massive scale – although in that case as it turned out a little too massive for current residents and the local council.
In effect by taking on Arsenal, which had already moved, I think the Kroenke family were getting a feeling for how things worked in the UK. It might have persuaded the family to stick to other countries or it may have shown them that here the approach has to be slightly different.
As a clue to how it is going spare a moment to look at this from Architects Journal on a building project of the Kroenkes which has just got the go ahead with land close by the stadium, which the Kroenkes have acquired.
“Islington Council has approved a CZWG-designed 284-room student accommodation block for Arsenal Football Club, close to its Emirates Stadium
“The 12-storey building at 45 Hornsey Road in north London was approved at a meeting of the Islington Council planning committee last week (22 May).
“The scheme for Ashburton Trading, a subsidiary of Arsenal FC, will provide a mix of 281 studio rooms and cluster flats, of which 35 per cent will be affordable.”
So why do the rich buy football clubs? Maybe because they like sport. But also because they see a future in which sport is more than season ticket holders like me driving from Northamtonshire to north London, meeting my mates for a pint and a meal in the Swimmer, walking to the ground, watching the match and then driving home again.
That suits me, but doesn’t make the club owners anything more than the cost of my season ticket. So they are looking far to the future with projects that would involve people far richer than me driving to my London flat (owned by the club), parking in a reserved parking space (owned by the club) eating in classy restaurants (owned by the club), or maybe staying overnight in a classy hotel (owned by the club) and returning home the next day. Maybe using a chauffer (owned by the club).
And that is what this is all about.
PS If you really want to see how all this works, just take a look at this
I don’t have the numbers of the cost of buying Arsenal the Kroenkes had to come up with
Let’s say it is 3 billion for example. and I am excluding all later money coming into the club.
Any person investing 3 billion in basic securities would at least get 2 or 3 % a year – I am absolutely pessimistic there, but please, humour me.
That means it would bring them, with doing nothing, 90 million in interests.
Did Arsenal ever make that kind of money since they bought it ? I doubt it.
Hoewever they bought with it quite a big chunck of real estate. And they use the Arsenal brand, one of the better known and loved football brands accross the globe to make profit on the brand and use any assets (real estate..) the club owns.
Makes sense to me, but as Tony pointed out. They don’t need us supporters…they need fans flying in from al over the globe and spending their money on anything Arsenal related.
This is an entertainment industry now, as it has been in the US for a long time. Not some whitewashing City or Newcastle style, not some ego trip, nor a money-laundering operation. Pure financial calculation. And it makes Arsenal FC a center piece of their strategy, the jewel. They have to, they will take care of it. So as an Arsenal supporter, I’d rather positive about where we will go.
I’d rather be on this side of the equation then on the ego or whitewashing side.
I hope their plans are to continue to invest in the squad. They’ve allowed Edu/Arteta to spend significantly these past seasons. the result has been exciting football and competitiveness on the pitch. The Kroenkes’ teams in America have won championships and and they use that as part of the development sell. It’s symbiotic. As a football fan and AFC supporter I realise the money in sport grows every year. The Kroenkes are competing in this climate. AFC built the new stadium for the match day revenues. That was part of the self-sustaining model but Mr Wenger, et al, didn’t factor the exploding TV revenue. Without the debt of the stadium project, they would have been doing quite nicely financially and perhaps on the pitch as well. Today the Kroenkes are doing exactly that.
Chris
As far as I can see there is nothing wrong with expanding your business portfolio around a brand, in this case Arsenal FC. As pointed out by your good self this is something altogether different to using a club for whitewashing and money laundering.
But building your portfolio cannot mean you can simply bankroll the ‘club’ or the ‘team’ infinitely, simply in order to increase the brand names profile, for reasons I mentioned elsewhere. As I said, simply pumping unlimited amounts of money into the team simply in order to guarantee success, inflates the economics of the sport to an unsustainably high level, and will lead to increased, not decreased inequality between the haves and the have nots in the league, and will ultimately lead to more and more teams going out of business.
I’m not against investment in the team, what I am against is unlimited, unearned investment . For example, if we are close to the limits of FFP and cannot buy without selling then so be it. We cannot, indeed should not, surpass these limits. If we want to increase how much we can spend on players we need to do two things. Firstly, we need to win things. A champions League would do for a start. This would improve our Worldwide profile enormously, which feeds directly in to point two, which is that we need to improve our Worldwide marketing, which I feel has not been as good as it should. That’s just a feeling I get anyway.
goonersince72
“AFC built the new stadium for the match day revenues. That was part of the self-sustaining model but Mr Wenger, et al, didn’t factor the exploding TV revenue. Without the debt of the stadium project, they would have been doing quite nicely financially and perhaps on the pitch as well. Today the Kroenkes are doing exactly that.”
It wasn’t only the increased TV money that was not factored in, but even more importantly the arrival of Abramovic and the Mansours. Whether anyone was to blame for not foreseeing that I’m sure I don’t know, but it certainly hit us hard. And don’t forget a third factor was the financial crash that affected when we received the money from the many building projects that were earmarked to help with our financial commitments.
It was a perfect storm and it took a genius of Wengers magnitude to steer us through on a 10 year net zero spend on players, and it is largely thanks to him that we are where we are now.
A lesser man may of jumped ship. A lesser club may of done a Leeds.
I for one will be forever grateful to Wenger for steering us through the roughest of times.
@Nitram,
my comment was by no means meant to signify FFP should not be respected.
Just a statement I trust the organisation and its owners to try their best so that the club keeps on playing a role on the world stage.
And keeps on giving us games to remember. Trophies will come. I am sure about it.
Chris
“my comment was by no means meant to signify FFP should not be respected.”
Sorry my fault, I wasn’t trying to imply you were.
“Just a statement I trust the organisation and its owners to try their best so that the club keeps on playing a role on the world stage.
And keeps on giving us games to remember. Trophies will come. I am sure about it”.
I couldn’t agree more. As I said to goonersince72, I had very few issues with how we were run during the austerity years. It was just an unfortunate set of circumstances that led to us suffering more than we should of on the back of building the Emirates. A perfect storm I called it.
But even through those hard times we played some of the best football I have ever seen, and we scored some of the best goals I have seen. Wilshere, Girouds Scorpion, Ramseys Volley in Europe. I had the joy of watching Ozil and Sanchez. I loved Theo. All still wonderful memories
I’ve supported Arsenal long enough to know what not winning trophies is like. It’s just part and parcel of being a fan and it never really upset me.
What did was our own fans and ex players turning on the players, the manager and the club. I hated that. I still find it hard to forgive.
Wind up merchant right here!!
https://www.msn.com/en-gb/sport/football/man-city-expulsion-whatabout-liverpool-arsenal-and-the-other-17-premier-league-cheats/ar-BB1kFPcM?ocid=entnewsntp&pc=DCTS&cvid=c4721921a9604e7b97607c9d56a2dd71&ei=57
Ben
Hmm. I cant really figure out quite what he’s up to, but in the end I think he’s actually taking the p!$$ out of Man City.
I mean how can anyone seriously compare Man City’s 115 charges to Arteta over celebrating?
Other comparisons are equally stupid.
I may be wrong of course but I think he’s actually calling out the Man City fans who will point at any misdemeanour at every club, real or otherwise, big or small, simply in order to justify what’s been going on there?
Kind of ‘yes your honour, I killed him, but don’t tell me you’ve never parked on a double yellow? See, you’re no different to me”
As I say, I may be wrong.
@Nitram,
I read the piece and he is just being sarcastic/funny.
I quote as an example :
Brighton – Farming talent
We refuse to believe a club can have such an outstanding hit-rate on young talent without having done something egregious. Backhanders to Argentinian diplomats, doping the waters of Paraguay, something like that.
Nothing more…except maybe, exposing some of the hypocrisy the PL is…
Nitram,
The billionaires were a huge factor. Thanks for refreshing my memory! But now we have our very own billionaire, lol.
Ben,
I think football365 publish one of those satirical articles every Thursday. I quite enjoy them.
Having paid our dues which may not always been just , but duly demanded , any and whatever falls from the tree will be thankfully received . As long as all the money being made is aboveboard , and within FFP rules , I hope that we continue to progress , and build with untainted monies .
If someone can afford the luxury being offered , who are we to complain ?
Let us see what the long term brings us . Am hoping for success !
Up the Gunners !