Are you Leeds United in disguise? The crisis at Liverpool and why Arsenal are different

It has taken me a long time but finally I have found something to like about Rafael Benítez.

When he answered the question about how he rated the ref and said, “the referee was perfect” I really did smile for the first time ever in a Benitez interview.

It reminded me of Stephen Fry’s famous schoolboy quip, after he had answered a teacher back at Uppingham School (which coincidentally is just up the road from where I live).

“Don’t try to be clever, Fry,” said the master.

“No sir, of course not sir,” said Fry.  “Exactly how stupid would you like me to be sir?”

I wonder, is there something in the FA’s voluminous rule book that says that being sarcastic about a ref qualifies as “bringing the game into disrepute.”  I can just see the lawyers having a field day with that one.

But for Liverpool that was the only bit of light relief in a period of unremitting doom.

Liverpool joined the Football League in the same year as Woolwich Arsenal (which you will know if you read the day to day football happenings of 100 years ago on   But while Woolwich Arsenal failed to win anything Liverpool had considerable success, until slipping into a long period of second division nothingness which only ended with the arrival of the modern era at the club.

But this season’s anniversaries (20 since winning the league, 25 since Heysal) shows how far away from the old days we have come.   They did, a few years ago, slip out of the top four for a year, but then got UEFA to change its own rules to allow them to carry on in the Champs League.

With an arrogance which somehow ignores the last 20 years without a title, they somehow still see themselves as a big club.

The application round for stadia to be in the England bid for the World Cup showed their attitude.  There was a genuine feeling at the club that it was nonsense for them to have bid to be a stadium.  “You can’t conceive of a World Cup in England without Liverpool being involved,” was the sentiment expressed.

The bravado hides the reality, the crisis is denied, even though it is deeper than at any time since all that stuff about football being a game of life and death.

The club clearly needs some new players but a lack of focus on a production line of youngsters coming through the youth and reserve team, and gross financial mismanagement by the owners to line their own pockets means there’s no kiddies and there’s no buying.  They are stuffed.

Fernando Torres is their striker, Gerrard is their midfield, and after that…

Benítez had to face the ignominy of being told to sell before he could buy last summer, and the same is true for January.  There is not a penny left, and the bankers want their £310m back.

Actually that shows you what a bunch of sharks RBS are.  When they renewed the loan last summer they wrote to everyone interested saying that they thought Liverpool was a secure investment and the bank were keen to support them.  What they didn’t say was, “and we want the money paid back over five years starting this year and that will just about stuff you as a club.”

Tom Hicks and George Gillett are blamed by the fans for the mess, and yes of course it is true – they took the money that should have been used for the new stadium and used it to pay for the buying of the club.  Effectively they got the club for free, and expected to be able to sell it quickly.

Now no one wants to buy – and that is the problem. Most people blame this on the economic collapse.  But I don’t think that is the whole story.  Part of the problem – a major part in fact – is the sheer arrogance of the club, an arrogance based on a long run of success under Shankly and those who followed.   That success generated a view that the club has an automatic right to play at the top level, despite years of failing to win the league.

That’s the problem – it is a club built on a totally false belief – and that is what makes it so like Leeds United and Nottingham Forest.  Big clubs, big traditions, total self-belief, utter collapse.

If Liverpool do not crawl into 4th in the league in 2010, then their revenue next year will go down dramatically, and that is when the real trouble starts, because if no one wants to buy them now, even fewer people will want to buy them next year.

Liverpool has players for sale: Dossena, Babel, Degen, Voronin.  Trouble is, no one is very impressed by them.

So, no Ramsey or Wilshere, or Vela making their way through the ranks.  No Jay Emmanuel Thomas lurking just behind.  No money to go out and buy without selling, and no one wanting to buy what you have for sale.

What’s left?

The owners could put money in, if they sell one of their other clubs.  But why?   Not because they love Liverpool or even understand football, certainly.   They would only do it if they thought they would get the money back times two.   And it is hard to see how that will happen.

Potential very rich owners will look at Chelsea and Man City and think, actually success can come but is not guaranteed.   And they will know they could end up having to deal with someone like Hughes – which is not a pleasant thought!

Thus we compare with Arsenal.  One debt, being repaid month by month on a mortgage, just like a house.  A never-ending production line of young players either produced by the club from the age of 11, or brought in their later teenage years.  A reputation that makes every youngster want to play for us.  A huge profit made on every home match.   Constant progress in the Champs League going back ten years or more.

Of course in a desperate attempt to argue, those against us will say two things…

a) You haven’t won the league for a few years

b) You haven’t won the Euro Cup at all

Both are undeniable, but neither affect our income.  The ground is still full, the Euro income is still secure, the TV money is still secure, the new ground is in place and is being paid for out of revenue.

Four vital points, and Liverpool fail on three of them.  Of course we all want to win the league and the Euro Cup, but that’s not it.  Even on the one point Liverpool can revel in – the ground is still full – they don’t actually benefit half as much as Arsenal, since each match at Anfield generates less than half the income each match at Arsenal generates.

The meltdown at Liverpool has either begun, or it is just around the corner.  Roll up, roll up, enjoy the show.

(c) Tony Attwood 2009

  • One hundred years ago Arsenal played Liverpool twice in three days.  Follow the story on the blog
  • Read about Arsenal’s endeavors 100 years ago in the book Making the Arsenal which follows Arsenal in 1910 through the diary of a Fleet Street journalist.
  • Read what Arsenal Independent Supporters Assn said about “Making the Arsenal”

28 Replies to “Are you Leeds United in disguise? The crisis at Liverpool and why Arsenal are different”

  1. was the number of empty seats at the hullgame down to the weather? legr**e was making much of the fact that there were loads of empty seats which were probably season ticket holders seats, meaning that they were probably not going to renew and thus the club was going to lose money because supporters are voting with their feet. much was made that we announced 60,000 attendance when there obviously wasnt.

  2. It was noticeable in last seasons Youth Cup Final that the Arsenal youth were light years ahead of their Liverpool counterparts. Liverpool are in dire straits, this morning they are linked with a return for Emile Heskey! A bit like our Peter Crouch moment!

  3. I noticed the empty seats also even from behind my TV. It made me wonder why the TV broadcaster showed pictures of emtpy seats even when the ball was in play at a moment.
    I have seen places like Blackburn and Bolton among others where we played and where the ground was empty in the home supporters stands. But they never zoomed in on those empty seats and saying: look there empty seats.
    Maybe they all got stuck on the Eurostar train ? 😉

  4. @Simon
    Despite the weekly amusement generated by the announcement of our attendance figures, there did seem to be a few more gaps than usual, however, rather than follow that to the illogical conclusion some others have concocted to suit their message, I think the gap may also have been down to the size of the away support, who took at least two blocks less than usual. These blocks were filled with gooners who jumped at the chance to come and see the team, and took advantage of the cheaper seats in the lower tier. Suggesting a team whose support is in rude health…

  5. Your article is another example on how great it is to be a gooner this christmas. We are as reliable as the Bank of England…. well maybe after last year this comparison is not the best….

  6. Hey Simon, let’s find something to predict gloom about, right? Considering how many gooners are on the waiting list, yours truly included, I see no problem here. Truth is, if somebody has paid a year rent on a house, he is still counted as an occupant even if he goes on a month vacation. Season ticket holders should be counted as spectators – as is being done – because if they weren’t season holders, their seats would have been put on sale and snapped up by Emirates deprived gooners like yours truly.

    Enough of the doom and gloom Simon, we’ll be alright. Aren’t we supposed to be in Liverpool’s situation now according to the “pundits” predictions?

  7. The Arsenal management make clear that they plan financially to miss out on the Champions League every four or five years. Do you think that the Liverpool board don’t make the same considerations? Is it possible or likely that Gillette and Hicks can walk away without being seriously out of pocket? If the answer to those two questions is yes then I agree it looks bad for them. We get so taken up with recent events that it’s easy to forget that Liverpool have been pretty good in the Premier League in the past few seasons I wouldn’t write them off just yet. If it weren’t for the debt Liverpool would be looking fairly healthy. I think they’ll get backed into a corner over ground sharing just as it appears that Everton will be and with a little help from the local taxpayer they may find that they get their new stadium and increased match day revenues on the cheap. That said it’s great fun seeing their chins on the floor. They looked pretty gutless after Arshavin’s goal the other day. With regard to our own finances Arsene has shown himself to be a true visionary – let’s just hope we don’t end up following ManUSA into the black hole of a leveraged buyout or being used to line the pockets of an already very rich man.

  8. “Now no one wants to buy – and that is the problem. Most people blame this on the economic collapse.”

    The problem is the economic system. How could some guys buy the club, and then borrow the money from RBS and make the club liable to pay the debt? How could RBS lend money to businessmen to buy a business they know nothing about? If you had suggested this as possible thirty years ago you would have been laughed out of court.

    How could Higgs and Gillett think they could buy a huge football club and make a profit? When Abramovich is 700 million in the hole what did they think they could do to turn a profit? The world has truly gone mad!

    Furthermore, the same nonsense has taken place at ManU. Their repayment schedule might be more stretched, but it is more onerous. Is it possible that the neoliberals have laid waste to two such huge clubs?

    We talk happily of our wonderful situation but we have no idea what will happen if one of our two big shareholders take over. There is talk today of Kroenke wanting a pre-season US tour and AW saying no. Why does Kroenke want to buy Arsenal? To maintain the status quo? Not likely. And Usmanov? What motivates him? To compete with Abramovich? Will he pass the fit and proper test? Makes me nervous.

  9. Re empty seats v Hull, and forward planning by Liverpool

    I am a season ticket holder – and I live about 90 miles north of the Ems. About 10 miles to the west of me is my mate Ian who is also a season ticket holder. Ian’s uncle lives in Brighton and is a season ticket holder. If I go by train to London for a match the train from Kettering in Northamptonshire is packed with Arsenal supporters – many with season tickets.

    I also spend some time in Cardiff with my partner, who is a season ticket holder living about 130 miles from the stadium.

    My point in all this is that on the night of the Hull match it was bitterly cold, and Northamptonshire along with much of the country was frozen. I couldn’t get my car out of my village, and the same was true across all sorts of parts of the midlands, East Anglia and the south east.

    True, people living in London could use public transport but there were two other factors…

    First it was stunningly cold, and although maybe when one is in one’s 30s that doesn’t matter much, it really begins to bite into you when you are 60 plus and when you think the game is on TV….

    Second, there was no guarantee that one might get back after the game. Trains were already being cancelled or running very late in my region by mid afternoon. Only idiots and people contracted to write a little piece in the Observer would go out in such conditions.

    The fact is that this “season ticket holders are absent in protest” story started up in the first season we were at the Ems. But even after the hand out of season tickets last season to replace those that were given up, there were still 40,000 people on the season ticket waiting list.

    I can verify the waiting list, because during my divorce in 1999 I was forced to hand back my season ticket as I had no money to pay the mortgage. In August 2001 I went on to the season ticket waiting list, and used my silver membership to keep watching the team from time to time.

    I got my season ticket back in August 2009 – eight years later. That time was reduced from 10 years because we did have the enlargement of the season ticket base during that time, with the move from Highbury to the Ems.

    So from all the evidence I have, even if people do decide that with Arsenal as the top scorers in the league they don’t want to go any more, there is another group, equal in number to all the season ticket holders put together, who are quite anxious to take up their places.

    One other little factor – on the season ticket waiting list you don’t specify where you want to sit – and when a ticket comes up you are just given the choice of about five locations. There really are not many tickets going…

    It is true that Arsenal have budgeted for an average crowd of 50,000 and not being in the Champs League every year – but that was part of the plan for the new stadium. Liverpool have no such budget, because until the takeover they were debt free and doing ok and would have been able to withstand any temporary downturn. It was the takeover, the failure to sell the club on, and the decision of RBS to ask for their money back, that has thrown everything out of line for Liverpool.

    What’s more, part of my argument in the article is that there was a real disbelief at Liverpool that anything could go wrong.

    It can’t happen to Arsenal in the same way since the debt is a controlled mortgage with known fixed rate repayments.

    Sorry, a longish reply, but I felt it was important to set the record straight.


    PS I also suggested at the end that there is more about Liverpool on the “Making the Arsenal” site. Sorry I should say that piece will go up as we approach the 100th anniversary of the two Liverpool matches after Xmas.

  10. I agree CapeGee, One of the interesting things about the laws that allow leveraged buyouts is that they are not allowed in the US. So the owners of the Liverpool, Man Utd & Villa are all Americans doing something which would be utterly illegal in their homeland.

    Genius. They must have thought it was Christmas time…

    Oh. It is. 🙂

  11. In fact, Arsenal’s financial situation is even rosier than as presented by Tony Attwood above; the cost of the Grove is now covered entirely by bonds, which a) leaves other revenue streams unaffected, and therefore free for ol’ M Le Scrooge (Wenger) to use on transfer fees, and b)resulted in a £20m reduction in the club’s debt.
    There is in fact, a healthy interest at present in said Bonds, given that after the economic mayhem of the past 12 months, they are one of the very few 100% safe investments left around!

  12. Jonny is right, the reverse buy out is illegal in most countries (USA, Canada, Fracne, Germany, Italy, Spain, …) except in UK.
    The problem is that it can only works if either the seller is undervaluing the company or if the buyer can increase the company revenu and profit.
    The problem with Football is that the opportunity to increase the revenue are limited. Attending fans do not have a bottomless pit of money, and so the increase in price become self defeating as fans do not come anymore.
    Also capping the expenditure means cutting the wage bill but often cutting the wage bill means reduce the quality of the squad. Reducing the quality of the squad has direct consequence on the success on the pitch and therefore its attraction to fans.

  13. Hello Tony,

    I am a regular reader of your blog and throughly enjoy the positive opinion you have of AFC.

    The one thing I often wonder about is whether once Kroenke, Usmanov or another billionaire obtains ownership of AFC will we be any different to Man City, L’pool, Man Utd?

    I would be interested to know if it would be possible to set AFC up as a cooperative similar to Barcelona or Bayern Munich?

    I know we would have the fun and games of elections but at least the majority would select the people in power every few years.

    I also know about the AST but they are minor equity holders in AFC and I am not aware of any proactive approach on their part to disturb the status quo as it exists currently.

    Based on your depth of knowledge of AFC, finance, business law that you display in your articles could you write an article as to whether it would be possible for cooperative ownership of AFC, the costs, the legal angle etc? With the thousands of season ticket holders and the huge number on the waiting list I would imagine we could raise a very large amount of funding to buy out the existing share holders (of course we would need their support!).

  14. Kronor will be az bad as Gillett and Hicks. I prefer than Abramovich model so going for the dat Russian. However, would prefer Status Quo. It works.

  15. There has been a major drop in the season ticket waiting list – my number dropped by about 8,000 over the summer. That still leaves over 32,000 in front of me during the worst economic period in over 70 years. I have no idea how many are behind me but I guess there are more than a few. What is missed by the media is that this will be reflected in all clubs, in fact the larger the club (by fan base) the worst the effect. What does this do to Liverpool’s and the Spud’s plans for a new stadium?

  16. Tony – 2 points I’d like to bring up.

    i) At what point does the PL have so many rich owners pumping in huge amounts of money that new money just doesn’t make a real difference?

    ii) As I’m sure you are aware Liverpool got to the final of the FA Youth Cup last summer and were comprehensively beaten by Arsenal. Where does this leave ManU, Chelsea, the Spud’s etc? All clubs with ambition and debt, or at least a considerable planned debt in the case of the Spud’s?

  17. I think some of the plastic fans from the first years, the one that only come for trophys have left. We dont miss those.
    I think also some people can no longer afford the price due to the economical crisis. Thats to bad for those people.

    What your point is about the youth cup team last year I agree with you Marc. I have seen the games live on my PC and I must say Arsenal was miles ahead of Liverpool. If we can get from that team some 4 or 5 players coming trough would be great.

  18. Walter i think sadly they still are there. they are the ones that go on and on and on and on about how we should spend as much money as possible, buy at least 8 new players this summer and this winter and they should preferable cost 20M all of them. They were green of envy when Liverpool splashed 17 and then 20 M on two players and hated Wenger for not doing the same whispering “awh wish we had Benitez at least he knows how to spend…..”
    This is among the last blogs i read now about arsenal as most of the other blogs mirrors what i haver written above. It pisses me off! sorry for rant, but it frustrates me that people are so thick.

    Well except from that i have to say, good article as usual 🙂

  19. A, I will come over next Sunday and I will kick them out myself. 😉

    I understand what you say about other blogs. This week I visited another blog and after reading the article I had to go the and check the league table because I was thinking that the FA had taken all our points away and that we would go down. For Christ’s sake, if we win our game in hand we are second only 3 points away from first place. And still so negative… So depressing

  20. Tony that’s great analysis as always. It is not that I like the demise of a club like Liverpool, but it highlights the sustainability of the AFC business model. But I can’t help, as few fans before me, but wonder what’s going to become of AFC if in fact Kroenke or Usmanov takeover rumor materializes. Are you on a wait and see mode? We will cross the mountain when we get there kind of thing? It is not that anyone of us knows what exactly happens, but it’s worth to explore the possibility, don’t you think?

  21. Another great piece, Mr. Atwood!

    A few weeks ago, I was telling a flatmate who supports Man IOU that his club had massive debts, which is why the 80 mil from Ronlado’s sale didn’t go into any new purchases. I laid it all out for him, using your freely available information. His jaw dropped, and I could see the uncertainty in his eyes.

    At Arsenal, we are not worried whether we’ll have a team in 10 years. We’re no worried about some insane debt load threatening to crush us. For years, I’ve had to endure jibes about Arsenal being insolvent, with some even saying it was Emirates who built the stadium for us! Now, I see Arsenal on a very sound financial footing and Liverpool slowly sliding towards the abyss. Part of me wants to feel sorry for them, but as my father always says, “As you make your bed…”

    There is an angle I’m wondering about. Big banks weren’t allowed to fail as their collapse would have signaled Armageddon for the entire capitalist system. Is it possible that “big” football clubs could lobby for a similar sort of bailout by the government?

  22. I noticed the same thing over here, The Law. When I discuss with MU fans they only see the trophys and the ‘you haven’t won anything in 4 years’ mantra. When I point at their financial situation they chose to ignore it or say that our debt is far bigger and that we are the one that will be going bankrupt and ‘that we haven’t won anyting in 4 years”…..
    They just close their eyes and ignore the facts.
    Well in a way it is understandable I guess… I think it got something to do with human nature. It will be a cruel awakening some day I think…. LOL (ghostly laugh)

  23. Walter, “ignoring the financial situation of one’s club” seems to be common between ManU and Chelsea fans in general. No disrespect to anyone, but most fans of Manu & Chelsea I meet are ignorant about their financial situation.

    My younger brother is a fan of ManU and he also just care about the trophies won. He used to make fun of Arsenal for not spending and for not winning any trophy for 4 seasons until I showed him some of the articles on this blog along with couple from the ManU supporter trust website. He now doesnt make fun of Arsenal and accepts that Arsenal’s Board and Arsene Wenger have done a great job with Arsenal in the last few years. I’m happy that he finally realized!!! 🙂

    On another note, have you guys read about the news that We are discussing the sponsorship deals with Emirates.. But the funny part is the reason mentioned in the articles. They say its because we want to increase our transfer budget.. I just couldnt stop laughing..

  24. On a different note, the Media is again showing its usual double standards against Arsenal.

    When most of our strikers were injured or not fully fit earlier this season, the only headline during that time was “Arsenal lack squad depth’ but even then we played with Arshavin at centre with Nasri and Eboue on the flanks. I couldnt find a single article which was positive. The same was the case when we had most of our defence injured during the final stages of last season.

    But when Chelsea lose their 3 strikers due to ACN & injuries, the headlines say “Chelsea boss Ancelotti puts faith in young duo.”. I mean where’s the “lack of squad depth” type of articles? I couldnt even find either ‘lack’ or ‘depth’ in the above article from BBC. Same is the case with ManU.

  25. From Fin Report!
    “Finally, mainly as a result of loan repayments on our Highbury Square facility, the Group’s overall net debt has decreased from £318.1 million to £297.7 million.”

    If Arsenal was brought for £300m and the new owner re mortgaged the club to pay his purchase loan of that would leave Arsenal £600m in debt. No club is immune to these pirate purchasers. The only thing that has stopped it happening to Arsenal is that it was to much in debt to make it viable. Man U and L Pool were debt free and have the biggest world wide fan base of all PL clubs and by quite a margin.

    The other is Villa’s owner being mentioned in the same breath as Man U’s. They are completely the opposite of each other. Villa have not been re mortgaged and Randy Lerner has wealth and more importantly morals that far exceed the Glazers or the Gillets for that matter.

    Good luck for the season, reckon you are closer to the title than a few experts realize.

  26. Tinker, there is one other fact. The shares in Arsenal are traded, unlike those of Villa. So they have a value, and that value of shares puts the club as being worth £900m. That is crazy I know, but if someone touches the 30% level of ownership they have to, by law, offer to buy the rest of the shares at the top price paid in the last year.

    That means they have to come up with £900m all told. And that is real money that has to be found. Now once they have done that they can indeed then start taking money out of the club – but they really have to have access to the £900m first.

    And that is what makes the takeover unlikely. Usmanov and Kronke are basically stopping each other making a takeover, and that’s fine by me.

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