I thought Walter’s excellent analysis of Mike’s data table last month deserved a little more attention.
Firstly the figures show that, across the EPL as a whole, it’s no good spending big, as did the likes of Spurs and Liverpool, when others like City, Man Utd. and Chelsea are spending very big. You may end up standing still but you’re not going to progress much versus the big boys.
Secondly your chances of league success are maximised by spending very big but not relying on sales to fund that expenditure. In other words your net spend has to be huge and that is only fundable (within FFP) by relatively high stadium revenues coupled with high sponsorship monies. In the past. financial doping was the only alternative – and that is now outlawed.
Arsenal, who top this ‘value-for-money’ league are actually 70% more efficient than Newcastle (who come second) and around 4500% more efficient than either Chelsea or Man City. In an increasingly Moneyball-orientated league Arsenal are so superior to everyone else (and for Arsenal read Wenger) that they could be half as efficient as they are and still be at or near the top of this table.
Which brings us to the question – why not be less cautious and ‘buy’ more points albeit at a marginally much greater cost? And that brings us to Club policy.
According to these numbers Arsenal would have had to spend, across that ten year period, another half a billion pounds to at least match Chelsea and Man City and, who is to say, those clubs would not just upped their spend even higher to fend us off. The policy decision was obviously to keep the powder dry until circumstances changed.
Whatever anyone says about the financial statements that Arsenal release (and however they use them to predict a transfer budget) the fact is that .in order to make sense of it. you have to go step further and get an understanding of budgeting policy. The data in Mike’s table confirms that Arsenal have only used money in the transfer market that has been gained from that same source. In other words no revenue gained directly or indirectly from fans (or from the sale of property) has found its way into the transfer budget. That can’t be just a coincidence – it has to be policy.
When you think about just what a hit and miss affair the transfer market is (for everyone, not just us) it could well be viewed as a very moral policy which prevents ‘our’ money being gambled but which has it allocated only to that which the Club is contractually obliged to pay i.e. wages, mortgage etc.
Obviously, since last summer (largely after Walter’s analysis finishes) there has been a surge in sponsorship revenues and this money, ‘gambled’ on us by outsiders in the hope of getting whatever return they are seeking, looks as though it has been, at least in part, allocated to the transfer fund. This has enabled the Club to move into new territory in the market for players and still to remain profitable.
As with most changes in business practice the effects will take time to fully display themselves. It’s the same with Chelsea and Man City as they change in order to fit in with the new FFP regulations but the likelihood is that the net effect will be beneficial for Arsenal.
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