Today’s football supporter has more information at their fingertips than any ancestor on the terraces. The AST’s commentary offers an insight into the financial statements, as well as observations from the authors of possible implications. It is not the definitive view; simply a viewpoint. Idealism demands supporters have a say in the running of the club. Supporter representation on the board of directors is a good idea albeit the obvious danger of Animal Farm needs to be heeded. But to suggest that representation is a right is wrong. Owners of clubs do not have to listen to supporters, it is up to us to make them listen with sensible solutions or comment on key matters and that is a point I will return to later.
Is the business of Arsenal Football Club, football?
What is the business of football. My view is anything to do with football and player trading comes into that equation. Accounting Standards demand player sales be separated from the operating costs but not excluded from the final calculations. Clubs buy and sell players; it is part of the day-to-day activities of a football club; always has been, always will. That accountants treat them as assets is a by-product.
It deflects from the real issue, namely whether or not selling players is a necessary activity for financial survival. Are Arsenal a selling club, do they have to turn a profit in player dealings to survive? Not in the long term but it masks debate over which players are being sold and utilisation of funds to replace them. The players sold in recent seasons have for the most part been bought relatively cheaply and being sold on at vast profits. That has not always been the case and probably will not be in the future.
The watershed of 2014 is fast approaching and the realisation is dawning that the trumpeting of vast commercial revenues in this era is not going to be from exploitation of secondary markets, simply more money coming from renewal of existing deals. The club’s prime asset, the stadium, is tied to a certain airline beyond the turn of this decade. The question to be addressed before then is whether Ashburton Grove is too synonymous with The Emirates? Has the value been impaired by the length of the naming rights deal? It is an issue that Arsenal need to be considering now, learning the lessons from Dortmund and other Bundesliga clubs that have crossed this particular Rubicon.
The problem is that whenever the club take a step forward, those wealthier than Arsenal take greater strides. You have to look at the increases in commercial activities of bigger clubs to see that. An 8% increase in Real Madrid’s revenues dwarfs a similar level at Arsenal.
Ticket prices cannot absorb the increased cost base on their own and as is noted at the end of the AST analysis,
Reduce the ticket prices (for example more League Cup pricing, £10 Junior Gunner games to rebuild the younger fan base and no more Cat A games)
Ultimately, this is what the club must aim for. A financial base which offers more equitable pricing for tickets without impinging on the ability of the squad to compete for silverware on the pitch. It is that by which we should be judging the club’s commercial performance by.
The Wages Of Sin
The club is moving toward a less equitable pay structure as the AST acknowledged. Previously the wage bill was measured against league positions. Arsenal performed as expected; better than expected on occasion, including last season. On that basis, it can’t have Chelsea’s lucky rabbit foot which secured Champions League football.
A new measure was needed, one that tapped into the populist desire to pay high wages. It has been devised: “wage equality ratio” (WER), measuring the salary spread throughout the squad. This calculation is based on information gleaned from the club and estimates from other sources; not entirely guesswork but not far off although credible data in this area is difficult to come by. The AST believe Arsenal’s WER is 5:1. I personally feel this is a touch too low – more likely 7:1 – but we will assume here that 5:1 is right.
Actually it doesn’t matter since WER is a nonsensical measure, too abstract to be meaningful. A high WER will tell you that the spread of low and high earners is great. So what? One player earns £5k per week, another £250k. That WER is 50:1. When the rest of the squad earns £100k, the real WER is 2.5. Where is the merit in such a measurement? What is the point in this? There is none; the point is perhaps that there is no point in comparing wage bills of the different clubs. The money spent on wages does not guarantee anything.
The quality of the squad is the absolute measure and sometimes I just feel we have lost sight of that, become too obsessed with money forgetting that points mean prizes. The key is quality not (in)equality. A lack of trophies is more about potential not being realised than anything else. 2007-08s squad should have won the title or a trophy in the next two seasons; it did not. That was not about the wage bill, that was about the quality of the players.
FFP or FFS?
Does this mean that the club are right? Undoubtedly there are commercially astute and clever people working at the club but are they too reliant on the implementation of Financial Fair Play (FFP). Compliance is necessary but rich clubs will employ an army of advisers to avoid falling foul of the rules. Premier League clubs are looking at introducing a domestic version and being a party to that discussion, Arsenal passionately believe in the application. With Manchester United in favour of the regulations, the likelihood is that introduction will be expedited. The turkeys it seems, are voting for Christmas albeit wearing bulletproof vests.
This is where my cynicism comes to the fore. The clubs were presented with the notion of financial regulation and made the rules complex and riven with enough escape clauses to render them impotent. Those caught by Uefa at the moment are several rungs below Arsenal in the football food chain. The problems which Uefa has sought to eradicate do not actually affect the bigger clubs on a continuing basis. That is not to say that they won’t, they just don’t at the moment. Have Arsenal sunk their hopes into a tomorrow which won’t arrive?
Which begs the question: where does the club go if FFP fails to lead them to the Promised Land? What is Plan B? There are too many smooth operators at the club for an honest answer to be given immediately. In all likelihood, they don’t know. Are the club are backing themselves into a corner with their reliance on FFP’s implementation? The club that stood for tradition modernised and found its business model wanting; there is just a sense of everything fumbling around in the dark off the pitch. Thank God the manager has the players performing.
The club is trying to stride two worlds: football past and football future. Arsenal want to uphold their traditions but need to modernise them. It is a tricky balance to strike and at times they seem to struggle. Working within financial constraints which are lower than those of your competitors is difficult but commercially, the club are not helping themselves. Too much financial caution is as paralysing as reckless spending.
Won’t Somebody Think About The Children?
Into this arena, the supporters’ organisations come into play. The captive nature of the audience demands that an organised voice be heard by the club otherwise roughshod does not begin to describe the liberties which would be taken. But we have to pull together. Cheap shots undermine good work. Poor benchmarks lose credibility, re-entrenching views on both sides of the fence with common ground lost. But we need to support, to pull together. The review has proven that the AST don’t get everything right. They won’t do as you demand every time, they will drive you mad at times. It’s a democracy, sometimes you have to suck it and see. Sometimes you have to put the personalities to one side and take the chance that the overall aims are better achieved through a louder voice. If it takes a comment on a vile radio station to be heard, live with it. That publicity gives an outlet to broader issues, more depth that gives credibility to the points raised.
If you want to change things, if you want your voice heard, sitting on the touchline will achieve nothing; join the Arsenal Supporters Trust here and/or Arsenal Independent Supporters Association here.