Tag: sustainability

Should Arsenal have offered £42m for Suarez – will lessons be learned?

TotalArsenal

Luis+Suarez+6kfrToVimIPm

Looking back on the season at this point at the beginning of March, one can say that there have been positive signs in terms of us being competitive with Manchester City and Chelsea, two clubs backed by enormously wealthy owners. Some say that this was a season of opportunity with management of Chelsea and both Manchester clubs in transition, but at this point it could also be said that we could have been standing in a much worse position at this juncture, not least taking into account the mood of the club after our season opening loss at home to Aston Villa. The 2013/14 season as a whole is now very much in the balance following the disappointing away loss to Stoke, but we still have a decent shot at a trophy, most likely the FA Cup, with the Premier League title still an outside shot.

Over the weekend we have had a revelation courtesy of Liverpool’s club owner, John Henry, who said this in a filmed panel discussion at the MIT Sloan Sports Analytics Conference:

“Luis Suarez is the top scorer in the English Premier League which is arguably the top soccer league in the world”

“And he had a buy-out clause – I don’t know what degree I should go into this – but he had a buy-out clause of £40million – more than 60 million (US) dollars. So Arsenal, one of our prime rivals this year … they offered £40million and one pound for him and triggered his buy-out clause.”

“But what we’ve found over the years is that contracts don’t seem to mean a lot in England – actually not in England, in world football. It doesn’t matter how long a player’s contract is, he can decide he’s leaving.”

It is very rare for us fans to know details of the ins and outs of backroom dealings, but by John Henry being so clear in his own words we now have some explicit clarity with regards to the Luis Suarez transfer saga last summer.

One can only imagine where we would be placed at this point in the season if we had pulled off the signing of Suarez. It is largely water under the bridge now but I do think the rare clarity of information we have received courtesy of John Henry enables a revisit of what likely happened from our side, as a club, in attempting to pull off the Suarez signing, but ultimately failing. The most important thing is that there are lessons to be learned, and perhaps justifiable calls for some accountability.

Obviously at some point last summer we had been tipped off about a £40m release clause in Suarez’s contract, most likely by Pere Guardiola, his agent. One would suggest timing linked with a rather suspect flurry of betting activity in Spain, reported in various media sources in early July of that summer. The fact that we were tipped off indicates that Suarez was at that time very interested in a move to Arsenal. Based on this information our club proceeded to the infamous £40m + £1 bid which we rightly expected would trigger the release clause. However, John Henry refused to cooperate and Liverpool used the media to embarrass us regarding the nature of the bid, and by doing so the suits in executive offices of our club (our executive management) were instantly rocked back onto their heels; a position from which they never recovered in regaining an upper hand.

Refusing to allow a player to proceed to negotiate personal terms with a club that has triggered a release clause is pretty unprecedented. John Henry has boasted that words in Suarez’s contract counted for little, but I take this as bluster. Liverpool would have been left wide open to pressure, be it from the PFA, the FA, UEFA, FIFA, or even a combination of these bodies because challenging the whole framework of contracts is not something that authorities can readily accept, as it would ultimately risk chaos in the professional sport as a whole, in England, and possibly globally. One has to ask, when it was clear at the time that Luis Suarez very much wanted to join Arsenal for Champions League football, why pressure, with or without legal recourse, was not exerted on LFC. I will explain why it probably was not, at least not to any significant level.

For all we know, there could have been some action behind the scenes, at least a lot of discussions amongst executive management at Arsenal as to potential strategies of how to outmaneuver Liverpool. However, this tracks back to our bid of £40m + £1. The nature of this bid was an overt admission that we had been tipped off on Suarez’s release clause, and by the letter of the law of professional football such tip offs are illegal. Although technically illegal, it is pretty widely known within the football community that players’ agents talk with clubs and divulge contract details, and such communications reside in a gray area which is largely tolerated. Murky gray area notwithstanding, there was no way that we could deny that we had been tipped off regarding Suarez’s release clause and that very likely put our executive management in a bit of a legal straightjacket.

In hindsight, although we know that any money included in a bid over and above a release clause is perhaps unnecessary money spent, if we had put in a bid of £42m there is no way that it could have been definitively proven by Liverpool that we had put in a bid for Suarez after gaining inside information. A bid of £42m in all likelihood would have secured the signing of Suarez in my humble opinion. Arsenal’s backroom were outfoxed by Liverpool’s backroom despite having a strong upper hand initially because of poor strategic thinking that allowed an opportunity to slip through our fingers. Remember Arsenal did not reveal the +£1 bid, that was John Henry and Liverpool, in a very high profile manner, i.e. they used the media to outfox us.

I wanted to share this revisiting of the Suarez transfer saga last summer, because it is very rare that fans know all the ins and outs of transfer dealings; but in this case, we have John Henry in his own words as firm evidence. The opportunity for signing Suarez has in all likelihood come and gone. While we hope that the suits in our executive offices have reflected on how they were likely outfoxed, I believe it is right for fans to have confidence that indeed lessons are being learned moving forwards. We should demand some accountability, so that improvements can be built into our overall approach, and perhaps a review and reorganisation of individual staff responsibilities. Doing so can only help, in terms of future transfer dealings.

So where should accountability lie?

Personally I do not lay any blame with Arsène Wenger. Where we fell short in the Luis Suarez saga was in poor strategic thinking, and although the football manager may play a role, responsibility for such strategic thinking should lie within a core team within the club’s executive management. If the football manager overtly oversaw the process then that is not necessarily his fault; he is an employee of the club and those higher up in the club’s structure should understand his limitations and recognise the need to assert themselves more. Ultimately in this case, I believe we have clarity that points us to our Chief Executive, i.e. Ivan Gazidis (IG). One could perhaps consider Dick Law, but IG should have been in the loop of details every step of the way. If IG wasn’t, one has to question his oversight as Chief Executive. One could perhaps consider Stan Kroenke, but I don’t believe Kroenke should be expected to know every detail; he employs IG and should trust him to perform competently with a degree of autonomy in the lofty, well paid, position of Chief Executive.

To make it clear, I am not asking for IG to be sacked. Indeed, one can point to much good that he has done for the club in enhancing commercial revenues. Perhaps what is needed is a little restructuring of our executive management with someone with ultimate responsibility for transfer dealings, at an organisational level in between IG and Dick Law. Many clubs nowadays employ a Director of Football, but I do not recommend one. I prefer a football manager to have full responsibility for players he wants to sign because he has to manage those players. A person in between IG and Dick Law wouldn’t be a Director of Football; indeed, he would be more like David Dein. Last summer we hired Chips Keswick as Chairman, as successor to Peter Hill Wood. I do not know what Chips Keswick exactly does, but perhaps we can question this hire and whether we should have brought back David Dein (or someone similar to David Dein) at that juncture. Nevertheless, there is room for IG, Chips Keswick (as successor to PHW), as well as a David Dein. This would take any ambiguity of transfer dealing oversight largely away from IG, so that he can focus largely on continuing to grow commercial revenues.

On a side note, obviously John Henry felt free to divulge details at this juncture because Liverpool are in a good position in the Premier League table, Luis Suarez appears fully satisfied there now, and they are in a good position to secure Champions League football for next season. John Henry had an up close and personal view of effectiveness of our executive management in transfer dealings last summer, outsmarting them in the process – one could argue very easily. He used the media very well in going so public with our £40m + £1 bid, perhaps with a level of faux outrage.

Ultimately, he made our executive management look like a bunch of amateurs, and in saying what he did in a filmed panel discussion at MIT over the weekend it was the equivalent of him smoking one of his cigars while enjoying how he got one over on Arsenal Football Club. We should perhaps see the glass half full and draw on this as motivation as fans to demand from the club’s executive management some transparency of lessons learned and associated adjustments, in line with my humble suggestions, or otherwise.

Iceman_10

The Special Horse Fails at the First Hurdle: Arsene v Mourinho

TotalArsenal
One little comment was enough to get the 'Special Horse' to rear its ugly head. :lol:
One little comment was enough for the ‘Special Horse’ to rear its ugly head. 😆

These days nothing makes me spring to Arsene Wenger’s defence quicker than absurd comments which call his managerial ability into question. This week, I felt compelled to defend him on a forum where people who were ostensibly Arsenal fans were criticising Arsene and various players – including name-calling – following our ‘disastrous loss’ to Manchester United (you would think from the vitriol that we had suffered a repeat of the Anfield aberration). I think that you have to accept that some people just aren’t as intelligent or considered in their opinions as others. That’s one reason I am sticking with BK.

But to see the bile spewing forth from the mouth of Jose Mourinho on Friday has really made my blood boil.

Now, I get frustrated with Wenger reasonably regularly. I admit that I was one of those calling for his head on a fairly regular basis recently, probably blinkered by my own frustration and the team’s perceived stagnation over the years since we moved to our shiny new multi-million pound home. I still find it frustrating to see the occasional inexplicable rigidity with which he approaches in-game tactics and the prickliness with which he handles the media.

This is what the Chelsea manager said (according to the BBC):

“If he is right and I am afraid of failure it is because I didn’t fail many times. Eight years without silverware, that’s failure. He’s a specialist in failure. If I do that in Chelsea, eight years, I leave and don’t come back.”

To me that smacks of a billionaire’s spoilt brat suggesting that a self-made millionaire is a failure because they don’t have the same resources at their disposal as the child.

Mourinho, after all, has never really wanted for anything managerially; at least not in the last decade, and he has no qualms about playing dreary football. He was handed a blank cheque book at Chelsea, so of course he wouldn’t have been allowed to not win anything for eight years.

Let’s contrast that with Arsene Wenger who has had stewardship of our great club for long enough that he has fielded a player in the first team who wasn’t even born when he took the reins. He may have benefited from some of Danny Fiszman’s money but it was nowhere near the level of “investment” that Roman Abramovich has made in Chelsea; in fact Abramovich has put four times as much into his hobby than some estimates of Fiszman’s overall net worth (£236m according to Wikipedia).

He has won the league three times (still more than Maureen’s current count), overseeing some breathtaking football in the process, continuing to stick to his footballing as well as his economic principles, and ensuring continued qualification for the Champions League on a shoestring, often being compelled to sell our best players, while waiting for improved sponsorship deals to kick in.

Now, who thinks Mourinho, a mercenary, would have the application (let alone the managerial nous) to pull off a feat like that? His return to the English game has seen him become even more charmless than before, in this instance repaying a compliment about the position he has got his team into (with no mention of the silver-spoon used to get it there) with vitriol. You evidently can’t buy class.

In my own failure to see the bigger picture, I often accused Wenger of myopia but now we are seeing the possibilities his prudent financial management over the years can facilitate going forward. My brother (an accountant, not a Gooner) has been telling me for years that Wenger was doing amazing things at Arsenal and I just needed to have faith, wait, and see. I have seen the light my Toffee brother preached to me for years, and even I can see now that, while it may not be this season, great things are in store.

It’s never been a more exciting time to be a Gooner.

Jozefos2013

Wenger is right to believe in our future: Sustainability is working!

TotalArsenal

Jack-Wilshere-Theo-Walcott-Arsenal-training_2902643

 Sustainability.  This has been identified as a main theme in all aspects of Arsene Wenger’s dealings with the club.  Whether it is financial sustainability, our style of play being constant or the caliber of player we are now buying, sustainability is continually highlighted.

In my opinion, Arsene is a wise manager who understands the necessity of keeping the majority of a team together over the years, while only adding a couple pieces each year, so as to not disturb chemistry and morale.  He is often accused of being a romantic, whose ideal of developing a squad that can grow together and form a dynasty will never be realized.  Unfortunately, I believe this philosophy has not been able to come to fruition the past eight years due to the immense pressure to cut costs and operate at a profit, in order to help finance the stadium debt.

Arsenal FC appear as though they are finally ready to enter a period of stability, in which key players are retained, unwanted players are released/sold, and new top quality signings are added in each transfer window if need be.

However, this new cycle would not be possible if our club was not run on the tenets of sustainability.  Being financially prudent means that we often cannot compete with other clubs for the best talent available, but that we are also not committing massive sums of money for underachieving players.  This philosophy has kept the club in line and poised to take advantage of the upcoming Financial Fair Play rules.  We’ve been operating with footballing profits for years without investment from our owner, and while the desired results have not been achieved, we’ve been consistent and produced respectably, when you consider our net spend relative to clubs like Chelsea and Manchester City.

One must also consider Arsene’s sustainability in fixating on one particular style of play.  His infatuation with free flowing, expressive football has also helped to form an identity that speaks to generations of footballers  – and supporters across the globe – and makes our club an attractive destination.

Arsene is not without his faults though.  In a way, he has handicapped our club with poor signings over the years, not replacing departing players with ones of equal or greater quality.  This has led to a few players whom cannot be offloaded due to inflated salaries who rarely, if ever, play.

On the flip side, his patience and unwavering faith in his players has also led to some pleasant surprises: Alex Song going from CB to DM to a wonderful creative B2B mid; RVP from injury-prone, bad boy to a top EPL striker; Theo from only pace and no finish to our leading goal scorer, etc.

Another aspect of sustainability where Arsene has come up short, has been our squad’s ability to stay healthy throughout a season.  Every team experiences their fair share of injuries, but this process seems to be more potent and frequent with some of Arsenal’s key players.  Squad players integral to the success of our club seem to suffer through recurring injuries or fall victim to new ones, namely Arteta, Wilshere, Diaby, Gibbs, Sagna and potentially even Podolski now.

The failure of key players to stay healthy inevitably leads to greater inconsistency and difficulty establishing chemistry with one another.  Whether it is injuries or transitioning new teammates into a squad, players take time adjusting to the varying skill sets and not all have an immediate, innate understanding of where one another will be on a given play.  The effects of unfamiliarity and inconsistent performances are then amplified through the combination of injuries and bedding new players into a side, thus negatively influencing squad sustainability.

The focus of my article is not to highlight Arsene’s shortcomings in sustainability, but to acknowledge that I am cognizant of them, and to point out his successes in the theme and what it means for our future (i.e. our transfer dealings).

If we follow the trend of AW’s most recent purchases in the past winter and summer transfer windows, there is gravitation towards established players nearing the prime of their careers.  Further, each player has been identified as skilled, team-oriented individuals who do not beleaguer the organisation in any way and strongly believe in our manager’s long-term vision/goal.

This is a stark contrast to some of his purchases in prior years, where several bought players were talented, but lacked the focus, discipline and affection or loyalty for our club (i.e. Adebayor, Nasri, Clichy, Cole, RVP etc.).

In a way, Arsene’s new purchases have reflected his ingenuity: purchase a collective group of individuals who still have room for further development and with a good head on their shoulders, in order to form a base from which higher quality talents can eventually be brought in as to complement the established group. 

My perspective is that it’s more difficult to buy top quality players and immediately integrate them into the foundation of a team, without an existing culture of stability and promise.  I believe the egos and selfishness several top players exhibit are more controllable in the aforementioned environment, as they look to impress not only the fans, but the already established group of players too.

Liverpool is a distinct example of this, where players have stayed committed to the club, despite their inability to qualify for Champions League in past years and Europa league next year.  Integral components to the team such as Gerrard, Reina, Carragher, G.Johnson, Skrtel, Leiva etc. have likely all played a role in convincing a top quality player like Suarez to stay.

So then, what can we expect (hope) to see in this coming summer transfer window? 

In my opinion, the time is ripe to add a world-class talent or burgeoning world-class talent if the funds are available.  I’m not advocating that we frivolously spend our transfer funds to purchase a ton of world-class players, as this would create imbalance within our organization. But, based on our established pillars of sustainability, it makes perfect sense to complement our foundation of skilled and team first players with a top quality talent.

As our great manager recently stated, “Everything is here to have a great future.  We have a good fan base, we have now a strong financial situation, we have good young players and a squad with a bright future with the quality of players we have.  It is just to manage it well now.”

In order for sustainability to be successful, it must resonate from the top of the organisation down to the individual daily tasks.  The owner and Board of Directors have initiated the process, by keeping their faith in Arsene and not replacing him with a different manager when Arsenal was not winning silverware.  Arsene repaid the club’s loyalty by honouring his contract, despite limited transfer funds and many top players he developed being sold, year after year.  What the club must now do to maintain the theme of sustainability is refuse to sell our top players, unless they are not 100% committed.

All the pieces are finally in place to enter a cycle of sustainability and success, and Arsenal must capitalize on their competitive advantage in FFP and stability. 

Do you, fellow Gooners, believe that our model of sustainability is the right one going forward? 

Or do you believe it is simply an excuse to compensate for the fact that we lack ambition and are unwilling to use the resources at our disposal to compete with the top clubs?

Written By: Highbury Harmony

FFP – Fundamentally Flawed Policy? Why Freedom is Best.

TotalArsenal

Emirates-Stadium-opens-©-Hufton+Crow-990x465

As many of you who may have followed my occasional warbling will have noticed, there is a common theme in which I have bemoaned the arrival of the ‘meddling’ multi-billionaires and oil rich state owned corporations into football, but also I have cast doubt on the equally meddling UEFA and EPL FFP regulations which will try to lamely control these wealthy entities.

Why do I describe these people as meddling?

Well both the multi-billionaires who now own football clubs, as well as the Arab or Eastern European state backed owners, and the state owners of clubs, do not really need to dabble in football at all, and neither do they show much personal interest or enjoyment in the sport itself, but they do clearly have their own agendas in plucking financially struggling clubs and transforming them at a stroke.

The average, and frequently penurious fan may goggle at the nine zeros  in a billion dollars, [$1,000,000,000] or 1,000, million dollars, which represents the sort of money (give or take) expended on Manchester City by Sheikh Mansour, and the very similar sums paid out for Chelsea, Manchester United and even Arsenal by the new owners.

For some of the oligarchs, football is a tasteless way of indulging themselves in a personal whimsy or fiefdom, and to play a real life version of FIFA 2012, and to show to the adoring fans how omniscient and clever they are by buying struggling clubs and injecting huge sums of money to enable them to be regenerated and start to become trophy winning giants.

For others, such as Silent Stan, it is a safe vehicle for their financial investment in a major sporting institution, in which they intend to see a rich reward in the medium to longer term.

Alternatively, for the state backed clubs, it is another way to give their countries some reflected glory from their involvement with world renowned clubs, or in the case of the state of Qatar, their purchase of PSG has underlined their credibility in ‘buying’ the World Cup venue and showing their state in a better footballing light.

To prevent the inevitable rampant distortion of the economic football environment, the powers at UEFA, closely followed by the English Premier League owner, have introduced the FFP regulations, which are purportedly to return to a financially level playing field in the European Leagues, particularly the EPL, and to stymie the runaway financial power of the mushrooming oligarch clubs.

That’s good isn’t it?

Well, not for every club, I am afraid.

Let us accept for the sake of this discussion that FFP will work, and then we can look at what the consequences will be for the different level of clubs in the PL.

UEFA decided to act on the inequalities and financial instability of many clubs throughout Europe, once it became obvious that the oligarchs and Arab states were also seriously affecting the footballing environment. They now require all clubs to introduce more discipline and rationality into their club football finances, particularly by decreasing the pressure on salaries and transfer fees, and limiting inflationary effects, by the simple expedient of requiring the clubs to compete only within their generated revenues, and to invest more in their youth teams and their club infrastructures.

Basically, they now require clubs to balance their books or break even. Simple!!

Under this concept, clubs cannot repeatedly spend more than their generated revenues, and they will be obliged to meet all their transfer and employee payment commitments and not build up unsustainable debt, or failing this they will be thrown out of European competitions.

Ok, that is a brief synopsis of the major requirements of FFP, with which we are all too familiar.

So why am I concerned that these seemingly very laudable objectives might achieve exactly the opposite of what was intended and will not result in a level financial playing field?

In large part, this whole concept has come about on the basis of shutting the stable doors after the horse has bolted. Chelsea and Man City have been transformed from also ran, financially struggling clubs who were rocketed up to become part of the prevailing elite, consisting of Arsenal and Man United, by the injection of vast sums of money from their wealthy owners.

It happened and it is not possible to turn the clock back.

The new FFP rules will still permit oligarch type owners to purchase a club such as Wigan or Sunderland, but they will not be able to pour outrageous sums of money into those clubs, and therefore they could not grow to challenge the existing elite. The same block on uncontrolled spending also applies to clubs who have already been bought by somewhat less wealthy owners, such as those at Reading or Southampton, and again they will not be able to challenge the existing elite because of this financial restriction.

Incidentally, should Usmanov manage to acquire the ownership of Arsenal, he too would be restricted as to the sums he could pour into Arsenal, subject to some magical accounting, of course.

What magical accounting you ask?

Well, this is a little digression from my theme, but there is a major difference between owner investment and owner personal loans. Loans can build up and will need to be repaid at some time – just ask the Portsmouth fans, whereas owner investment means to inject capital into the company usually by way of additional issued share capital in exchange for cash, and this can be extended to fan ownership too, as in Germany.

Anyway, so happy were Arsenal, Manyoo, Liverpool and even Spurs, with the provisions of the UEFA FFP that they sent out a joint message, on an Arsenal letter head, to all the other clubs, (which I am showing below) proposing that the Premiership should introduce their own version of FFP.

Last December, partly as a result of this letter and some arm twisting negotiations, the EPL FFP provisions were passed, much to the delight of the main proponents, and to the chagrin of clubs like Man Citeh, Fulham, Southampton, Reading etc, all of whom objected but were outvoted.
[Oddly Abramovich, against all reason, agreed the proposal – which he could have blocked].

The effect of this agreement is that all EPL clubs have to submit their financial accounts not only to UEFA for audit, but also to a Premier league appointed Investigator for certification.

OK, I can hear you say, so what?

[this is the Arsenal letter mentioned above]:

http://www.dailymail.co.uk/sport/football/article-2262027/Manchester-United-Liverpool-Arsenal-Spurs-join-forces-shackle-spending-Man-City-Chelsea.html

Here comes the rub with these FFP proposals. 

Clubs like Arsenal and Manure have the biggest stadia and the highest revenue streams, although Manyoo are really in a league all on their own, and can only benefit from linking expenditure on transfers and salaries to a percentage of turnover, which in turn means their transfer chests will, over time, become bigger and give them the greatest chance of buying the best players.

I can hear you thinking, so if Arsenal is likely to be one of the big beneficiaries of the new regime, why am I not happy with the outcome of FFP?

Well, Arsenal’s inclusion in a small group of clubs that will benefit, if as seems likely, the oligarchs and the state owned clubs are not permitted to ‘invest’ whatever monies they wanted into their clubs, is also balanced by the exclusion of the ‘lower’ clubs, such as Newcastle, Villa and West Brom etc, who will forever remain cannon fodder for the ‘elite’.

In effect, if a new oligarch happened along, as mentioned earlier, all they would be able to do is to maintain the status quo, with the elite group expanding their clubs profitability and influence, whereas  those with smaller revenues will only be able to watch them disappear into the distance.

Silent Stan must be rubbing his hands with glee that Arsenal now stand a very good chance of getting back to near the top in the medium term, which will not do his investment any harm, and I don’t suppose he will much care that it will be at the expense of our club submitting to the financial ‘power’ of Manyoo, who will, in all probability, win the Premiership every year, as they become unassailable.

There is another imperative downside to FFP, and that is the cost to all the loyal fans of clubs throughout the EPL, if these more stringent rules result in clubs failing to keep within them, or if sponsorship income dries up, or if player wages continue to increase, despite efforts to curtail them, there will be only one way to recoup additional funds, and that will be by charging fans even more for tickets to watch their teams.

As I hope I have shown you, what is a very well intentioned change in the administration of the game by using FFP to try and impose a level financial playing field, could very easily result in the exact opposite, with the establishment of a rigid regime that will prevent any clubs, except the privileged few including our own dear Arsenal, from having even the smallest chance of winning the Premiership, and making Manyoo into the sole English Galactico in the process.

I believe in freedom. 

Freedom to allow people to do what they want, within the Law, even if this means allowing all football club owners, whoever they may be, to spend as much or as little money as they want, on the clubs that they own, or to borrow what they, as businessmen, deem necessary.

A freedom, which will permit the Arsenal owners, should they wish, to stick rigidly to their policy of pursuing a self sustainable finance model.

A freedom, where perhaps eventually a small, well run club in the ‘lower’ echelons of the Premiership could emulate the success of the CL semi-finalists, Borussia Dortmund, who themselves, in 2005, accepted external short-term funding, from another wealthier club, Bayern Munich, which enabled BD to survive and prosper.

That freedom will not be permitted in the future because the whole premise of FFP is flawed and just downright wrong.

This is a simple choice – Freedom for the clubs to pursue their own rainbows, or statutory regulation forcing all clubs to strictly adhere to a straight jacket within a fundamentally unbalanced new system.

I vote for freedom – how about you?

Written by: Red Arse.

Forget about buying 5 top players – Put your trust in Arsenal’s Evolution!

TotalArsenal
Arsenal's 'Russian Dolls of Evolution'
Arsenal’s ‘Russian Dolls of Evolution’? 🙂

There is a lot of hope, or should I say expectation, in Goonerworld that Arsene/al will go all out and buy five or more top players this summer. I have heard this so many times in previous seasons, and yet, it has never happened. It will also not happen this summer; of that I am absolutely sure.

I am also hoping it won’t happen, and the reason for this is that I am sick to the teeth with ‘being in transition’ constantly. Transition sucks: teams in transition are constantly looking for cohesion, form, consistency, and they don’t win anything. And after two seasons of full-on, consecutive transitions, with a large number of players going out and coming in; what I want most is for all our key players to stay put this summer.

I don’t believe it is possible to buy success, other than winning the odd PL title or a cup. Real, sustained success, is developed and based around solid foundations. Being financially strong and powerful is definitely a prerequisite, but vision and values, long-term planning and consistency in key personnel – managers and players – are just as important. And success is built iteratively; layer by layer, and through trial and error. The best metaphor I can  think of are the ‘Russian Dolls’.

The five Russian Dolls, or expanding building layers, of developing and maintaining a successful football club:

The smallest doll – the very core of the club – is all about having a great history, a fantastic stadium and training facilities, and a loyal fan-base. Arsenal have a state-of-the-art, 60,000 seater stadium and a truly fantastic and loyal fan-base, both in the UK and the rest of the world. Without these there simply would be no football club.

The second smallest doll is about having the right people leading and governing the club, with a long-term vision and who want the very best for the club; about running the club in a financially sustainable way AND about setting ourselves high, yet realistic, targets; taking into account the strength of our opposition and the financial and economic realities of a particular period. Arsenal have been, and currently still are, good at this and we should be grateful for it.

There is of course a risk of becoming a bit too risk averse, but I will come back to this later. There is also a risk of our club being sold, at any time, to a new major shareholder who could put the long term future of our club at risk, but let’s park this for another time.

The third smallest, or middle, doll – probably the most important ‘layer’ for short to mid-term success – is about having the right team management in place; not just the manager, but also the coaches and assistants. The manager is key though, and he should be the sporting embodiment of the vision, values and style/character of the club on the pitch. Sustained success at a football club usually goes hand in  hand with consistency in team management, which does not necessarily mean the same manager is in place for a long time, as good internal and/or external succession planning can safeguard style and quality of management.

Unless a football club lives outside normal economic realities – soon to become a lot more difficult, thankfully – recruiting and retaining a top manager who remains loyal to the club is key for sustained success. MU, Everton and Arsenal are built around consistency in team management, Man City and Liverpool are now trying to do the same, and I also expect the Spuds to hold on to AVB for a long period.

The only exception currently are the Chavs, but even their owner might now opt for consistency by re-recruiting the self-loving Maureen.

Wenger has stayed loyal to us when he could have gone anywhere else, and by doing so he has helped us tremendously. Arsene has not been without fault in recent years, and it is fair to say that the club needs to be competing stronger now for silverware; and as our financial position is currently a lot more sound than it has been in recent years, Arsene is to be expected to get us now to the very top again.

The fourth smallest, or second biggest, doll is all about the quality of our squad of players. There are three sub-layers to be considered here: the (best) first-eleven team, the wider squad, and the main factor in winning silverware; a super-core of four to six players who are either world-class and/or are total on-field representatives of the values of the club.

I have argued recently that our squad is very good and I also believe that our strongest first-eleven team is close to something special; especially if they stay together for at least three more years or so. I also believe that we are starting to get a core of four to six core players together again around which we can build a super-team once more – and we could have been there now if we still had Cesc, Song and van Judas, but let’s park this as well.

It is of paramount importance to hold on to all our key players now, including Sagna, Vermaelen, Mertesacker, Szczesny: all should not be sold in order to ‘balance the books’ for new arrivals. It would set us back again as we would start another round of transition, which should be avoided at all costs.

I believe the core team of four to six players; who will make the biggest difference in our team going forward is still developing, and hopefully, between now and the start of the new season, we will have we have a strong one in place.

I reckon the core of top quality/Arsenal through-and-through players will consist of: Wilshere, Cazorla, Arteta (at least for one more season), and Sagna; and one or two of Mertesacker (if he improves his role/importance to the team further), Jenkinson, Gibbs, Koscielny (ditto to Mertesacker), Podolski, Theo and Giroud, and possibly even Ramsey or Szczesny or Ox, could further be added to the core.

And that’s why I don’t believe we need to, or even should, get 5 new top quality players this summer.

Instead, I feel that recruiting one or two ‘core-quality’ players is all it takes now: it will improve the first team as well as the core team, and yet leaves a bit of space for the above mentioned players to work themselves right into the core of the team.

Recruiting a carefully selected, quality DM and an additional attacker of real class (ideally one who can play on the wing as well as centrally); at least one of whom could join the very core of our Arsenal team, should make all the difference now.

If we get any more than that it would be, in my view, simply counterproductive.

The biggest doll, or outer ‘layer’ is all about bringing the first four dolls – layers – together and maximizing on what the club has built up; and add a bit of courage, bravado, financial entrepreneurship: taking the bulls by the horn and move forward in a decisive way.

The coming summer, Arsene and the BoD have an opportunity to make that final step forward: not, though, by blowing things up now through buying a large number of new players and balancing the books to some extent by selling some of our current first team players.

Instead, we should keep all our key players, and add two max three (top) quality players, who fit in straightaway. Spend the available money without wanting to balance the books straightaway: simply speculate to cumulate a bit and trust that the good guys always win in the end.

Arsenal have a fantastic fanbase, stadium and facilities; a great history, vision, style and values; a loyal, experienced and visionary manager, and excellent coaching staff and youth development system; and an almost great squad. Two new quality players and a bit of guts by the BoD, and Arsenal will go all the way.

Written by: TotalArsenal.

Financial Fair Play: The BIG Con?

TotalArsenal

The more reasonable minded fans have stuck with Arsenal’s financial self sustainability model, and understood the need for the financial restrictions under which Arsene Wenger has had to work in the transfer market.

They, like fans at other clubs, have done so because they have also, indirectly, placed their trust in the efficacy of UEFA’s Financial Fair Play policy, which has been drawn up to bring a level financial playing field for all the Premier League clubs, and prevent them from descending into unsustainable debt, by chancing their arm in the player transfer market, or by  paying obscenely high salaries to these self same players, and also to restrict the influence of certain mega-rich owners whose largesse in providing unlimited funds seems to know no bounds and distorts the transfer market!

There is an obvious problem with this, in that the very wealthiest clubs employ the very best accountants and lawyers and it is inevitable that they will pore over the fine print and juggle their books of account accordingly.

Now most fans will nod their heads and grudgingly admit that this is a likely scenario, but touchingly wave such concerns away because they also believe that UEFA are not fools and will have anticipated this turn of events. Really?!

In part, the reason for the fans’ mindset is that most do not understand or like accounting niceties and would much rather concentrate on keeping the quality players they already have, regardless of the salaries being paid, or search longingly through the media or online outlets for news or to marvel at the fantastical players they would really like the manager to sign up, again regardless of the transfer fee, while all the time saying “within reason, of course” while not meaning a word of it.

Let’s face it, most fans, whatever they may say publicly, really don’t give a f*ck about economic reality, except when it bites them in the ass when paying for tickets, or buying a pint or coughing up £14 for indifferent fish and chips, or when they buy yet another ‘new’ team shirt. No! What the fans want is players – and in the case of Arsenal fans they want great players, like Henry, Bergkamp and Viera were – as well as the trophies those high quality players will bring, and not, in the minds of some at least, the cheap, poor quality, also ran, trophyless failures they are expected to take to their hearts.

The fact is that this desire for quality players is intrinsically tied up with the plentiful supply of that modern evil – money. Money – players! Players – money! Don’t doubt it.

But is this all that FFP involves – is there more that is not immediately obvious?

The football world in which clubs now live, post-Abramovich,  and the other ‘big money owners’ is all about making as much money as possible by maximising their worldwide revenues, and keeping non-playing costs to a minimum, while apparently keeping a beady eye on FFP.

So what do the fans think, if at all, about the Premier League chairmen rubbing their hands while sitting around a table last week to discuss the £5billion television windfall they have negotiated for TV rights, and how they will carve it up, as well as trying to reach an agreement over the EPL’s own mini FFP charter??

Do the fans imagine that the price of their seat tickets, and the extras they work so hard to afford will be reduced? Or perhaps they imagine that the clubs will set aside some extra dosh for player wages and transfer fees to keep the fans happy?

I do not think so, my friends.

The club owners/Chairmen will have thought long and hard, for about 10 seconds, before coming to the conclusion that the most deserving recipients of this bounty is ……………….. THEM!!

But hold on, how do they ‘sell’ this wonderful notion to the fans, the players and their agents who each for their own purposes will be casting covetous eyes on this pile of extra dough and, in the case of the latter, carefully perusing their contracts?

The fans will want to throw their lot in with the players, each set of fans will demand their club pay the players more to keep them, or to duff up the continental European market to grab quality players from those Spanish and Italian clubs feeling the strain from the economic crisis engulfing them and their countries.

Well, it seems that UEFA and monsieur Platini have given the club owners the perfect mushroom to hide their private desires behind – the UEFA FFP rules, and a more modest fig leaf by the supplemental Premier League version of it! Yaay!!

The owners will wring their hands, and squirm while expressing false sympathy that if only these rules did not prohibit them from paying the players more, because of the impact on their profit margins and balance sheets, which FFP specifically forbids, they would be only too happy to pass on a chunk of the new dosh to the footballing stars, who, incidentally, just happen to be the ones the fans pay to see!! And reducing the ticket prices equates to reducing their revenues. So sad!!

This ploy might just work for the owners, if they play their cards right!

No, No, I hear you chorus, Arsenal and Manure are all for the UEFA FFP and are even pressing for a modified Premier League version, but the Chavs and City won’t go along with it, and who cares about the little clubs?

Well is that argument true?

The ‘big’ clubs, that is to say the elite clubs or their clever clog accountants, including Arsenal and Manure have calculated that they will benefit hugely by complying with the FFP rule that spending (on players) must be linked to revenues earned.

Consider the current situation;

  • A club in the Champions League receives a minimum of £30 million more than a rival who is not in the CL.
  • A club like Arsenal, who have  already moved to a 60,000 seat stadium with the additional revenues derived from that, or Manure who have developed Old Trafford into a massive 75,000 seat money generating colossus already have a huge advantage over the ‘lesser’ or smaller sized clubs.
  • The Chavs and Man Shitty have oligarchs who are willing to ‘bend’ the rules and pour private money into their pet projects, when necessary.

By complying with the FFP rules, the ‘smaller’ clubs, like Stoke or Bolton, would be ceding a permanent spot at the financial high table to Arsenal, Manure, Chelsea and Man Shitty because they will have been given a legal right to spend more than the others in the Premier League based on their huge comparative revenues.

The clubs will all say that the financial fair play rules must be introduced for the good of everyone in the Premier League and for the good of the game.

We can see that the ‘winners’ in all this are the acknowledged top 4 clubs, and their owners, so who are the losers?

The answer to that is obvious isn’t it? First it will be the smaller clubs who drop in and out of the premier League. Next will be the ‘second’ tier clubs like Everton, West Ham and all the others, who will never be able to compete with the ‘top 4’ for the very best players.

And most importantly of all, and undoubtedly the biggest losers — it’s YOU the fans, who will continue to pay the top prices for your seats and all the little ‘services’ like food and drink and club shirts.

FFP – is it all it has been made out to be? You tell me!!

Written by: Red Arse.

Although some bloggers might appear very familiar and informal with each others, please never hesitate to comment if you feel like it. Bergkampesque welcomes any contributions as long as they are made in a sensible and respectful way.

Arsenal need to cut through the cost cutting!

TotalArsenal

It is quite evident that the Arsenal transfer policy has been a really divisive issue between the fans. No one doubts the fervent desire of both sides of the divide for their team to do well and win trophies, but a sometimes ugly divide there most certainly is.

How has this come about?

Well for a start, the divide does not break down into older fans seeing things one way and the younger fans another way. Oh no – it is rather more complex than that! All older fans have normally supported the club for many, many years and have fond memories of wonderful Arsenal triumphs, including the first Double with Charlie George, George Graham and others heroes of the 1970s as well as other League, FA Cup, League Cup and yet more Doubles under Arsene Wenger. They also remember the dead, dull seasons when Arsenal were patsies and won fook all, not that they were deterred from supporting their team.

The younger fans have been fortunate that both first George Graham and then Arsene Wenger delivered trophies over a comparatively short period of time. And then it stopped. For seven long years while the new stadium was being built the Gooners went back to winning fook all.

From a certain section of the oldsters and the youngsters, up went the cry “It’s Wenger’s fault”, “It’s the tight fisted b*stards who own the club who are at fault”, “it’s intolerable that we fans are denied our bragging rights, and basking in the reflected glory of our team, and just because Wenger/The Board won’t spend some fooking money”, and so on and so on.

The other camp, also composed of a mixture of oldsters and youngsters, tried to take a more pragmatic view of events, and quickly adopted the moral high ground. Their battle cry was aimed at “the Oily Barons”, “the Billionaires and their playthings”, together with sometimes smug comments regarding “self sustainability”, and “just wait until FFP kicks in”, and so on and so forth.

Those are, baldly put, some of the things that have led to disunity among the fans, with each  side convinced they are right.

But what unites them?

Well for a start, neither group look back fondly at either the recent past or even much further back and say “Ah, I remember 1974 when we won nothing, but we had a jolly good Balance Sheet”, neither, I suspect, will anyone smile sweetly at a fellow Gunner and say, “2008 what a great year that was, we won fook all again, but my goodness we showed all the others how NOT to spend money and we produced a beautiful set of self sustaining Accounts”.

The vast majority of fans will agree that there has been an undeniable tightening of the screws, in terms of the ticket cost of attending a game, and the additional exorbitant costs of buying a pint or a plate of fish and chips. In addition to those almost unavoidable costs – you could cut out the fish and chips and buy a greasy burger instead – there are, in addition, the transport costs of getting to the ground.

So what are we to make of all this?

I am sure that Arsene and the current owners see themselves as the caretakers of something special. Something that goes right to the heart of not just the local community, but all Arsenal fans worldwide. They want to protect and nurture the heritage of a wonderful club which is steeped in history, and not just for the here and now, but also for the foreseeable future, and they do not want to ever risk the club living beyond its means and ending up in hock to the banks, or going bust like the great Scottish club, Glasgow Rangers.

So, if we are to accept the above, at least for the sake of argument, what has happened to cause the unpleasant divide between the fans and the animosity shown to the Board of Directors?

I see Arsene Wenger caught up in his commitment to the protection of the club and his loyalty to his employers who own the club. Through financial forces he has no control over, he loses key players on a regular basis to the siren call of more money, and the greater chances of winning trophies elsewhere.

However, rather than re-investing the money received from the sale of top quality players, he buys good, or adequate players who may have potential. This policy carried out over a year or two may not be a bad thing, but as it happens on a regular basis both the club, and therefore the team, are insidiously weakened.

This policy has a double whammy effect, in that even if we were we not losing our best players to our immediate competitors, and therefore boosting their trophy winning chances at our expense, but when a quality player becomes available we take a submissive approach to competing for his signature, which was crystallized in the words of Arsene, some years ago, when he said, “we wait for Man United to choose who they want to buy, then we go on the market”.

Sadly, we now have to wait for the ‘top three’ in this country, as well as the clubs owned all over Europe by other “Oily Barons”, to buy who they want, and leave us to scrap for the left-overs.

Even within the self sustainability model, there is an argument for us to spend selectively on a top name player, at whatever the current market price is, and meet the cost of the required salaries. In effect, on the Balance Sheet, we would simply be swopping our cash asset for a player asset. Non footballing companies do this all the time. They buy, with cash, to get stock which they sell at a profit. It’s called entrepreneurship!!

That leaves the question of how to plug the ‘losses’ that the club currently incurs, which at the moment it does by selling players. This can, should and must be achieved by much improved commercial deals, just like all our competitor clubs are doing.

We also have to recognize the fact that in reality these quality player acquisitions will increase our chances of winning trophies, which will then increase our fan base, which in turn will generate more sales/more profits, which will enable us to win more trophies, and so on and on in a virtuous circle.

Arsenal need to give me a call!!

Written by: Red Arse.

Arsenal: Profits or Trophies – Which is it to be?

TotalArsenal

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Written by Red Arse.

The Annual Accounts for Arsenal have been made public and I thought I would try and write a précis to show what is going on, but without the accountants’ love of a figures fest!

Some task! So, let’s get down to it.

Arsenal made a profit of £37m in the year 2011/2012, which on the face of it is very impressive. Much has been made of our self sustainability model, and these figures bear that out – right? Well, that depends on how you like your sustainability model buttered, because everything comes with a price tag in life, and footie is no different.

This huge profit increase has arisen mainly out of the massive surplus on the sale of two important and, some might say, key players, Cesc and Nasri, however contentious that may be.

I can hear some of you asking why that transfer profit has not been ploughed straight back into purchasing other equally good, if expensive, player replacements. The answer from the Board’s viewpoint is that without those sales bringing in roughly £65m, the club would not have made a profit, but would have incurred a loss of £28m, and that goes against their avowed self sustainability model, and so we go around in a bloody great circle.

Put plainly, Arsenal are punching well above their weight by finishing in the top 4 of the EPL every year, which in turn releases funds for our having qualified for the Champions League. Despite reassurances from the management to the contrary, the loss of that income would make matters very difficult, indeed, in terms of self sustainability.

The careful management of the club’s finances, which are significantly boosted by the shareholders not taking out dividends, are a credit to the club in achieving their self imposed self sustainability target, but in the cold light of day, and leaving aside the slightly unrealistic hopes of some of the more devoted fans, it seems very unlikely that this policy will result in us winning either the EPL or the Champions League trophies in the near future.

The club executives hopes in this respect are leaning heavily on the successful implementation of the European FFP rules, and the agreement of similar rules to govern the EPL clubs, which they hope will bring the big, oily spenders and benefactors to heel. ‘Chance’ and ‘fat’ spring to mind!

What is painfully obvious from the Accounts is that our overall commercial revenue streams are simply not keeping up with those of our main competitors. We recorded income of £53m in this respect, as compared with £118m for the Mancs.

This comparative revenue deficit problem has its origins in the need, at the beginning of the project, to enter into cast iron commercial deals to help fund the Emirates, at what are now seen to be calamitous rates, but was seen, rightly, at the time to be absolutely essential for its success.

To put this commercial revenue problem into proper perspective, at the present time, Bayern Munich, Barca and Real Madrid all gross around £160m and Manure approximately £118m compared with our measly £53m!!!

To begin to see the gap between us and the other clubs close we will have to wait until the end of 2013/14 when new commercial deals will hopefully come on stream. The problem with that hope is that all the above plus City and the Chavs will, no doubt, also significantly increase their commercial revenues too. Damnation!

At the moment, our biggest revenue earner comes from match day sales totalling £95m per annum which is approximately £3m per (home) match. This is the consequence of having one of the highest seat ticket costs in Europe. Any further increase in ticket costs would receive a furious backlash from fans and would be potentially counterproductive so that any further such increase is very unlikely to happen for the foreseeable future.
In addition to the above, there will be a further increase in revenue as a result of the monies flowing from our share of the new £3 billion EPL deal, but that will also be shared out with our rivals, so the gap between us and the other tops teams will remain all too large.

I can hear you say ‘enough with the figures’, but one final glimpse at overall revenues is important to show the gulf between ourselves and our competitors. Our recent ‘total’ turnover amounted to £227m, which sounds pretty good, except Real Madrid’s amounted to £433m; Barca’s to £407m; and manure’s to £331m. That is one hell of a difference!!

I have probably raised more questions than answers in this Post, but hopefully it will put some of the key financial considerations which govern Arsene Wenger and his quest to bring in new quality players into perspective.

All of us want to see trophies. Many of us do not want to see trophies at the expense of the club’s future financial stability. So perhaps financial self-sustainability, at the moment, will eventually lead to financial superiority and successful achievement of trophies in the near future!

 Once a Gooner – always a Gooner!