Arsenal’s Title Charge Sharpens As Financial Reality Bites
ByThanks to Barcelona, The Arsenal is now left with only one task to contend with; Chasing down the league leaders. For a squad that has been injury prone in the extreme through the season, this after a fashion, is a blessing in disguise.
Concentrating our threadbare resources exclusively on the title race betters the odds of our success. Given that Manchester United, sans Wayne Rooney, seem relatively toothless is encouragement aplenty.
Chelsea’s lead, to wit, isn’t invulnerable either. If we stick diligently to the chase, winning every game here on in, the title, with a bit of luck, could still be ours.
The way this Arsenal side have stuck to the job, I will not put it past them to pull the feat off. Yes, the odds are stiff, and the margin for error is nil; but if we keep up the grit and the graft that has characterised our game of late, anything is possible.
That’s incentive enough, I should imagine, for the side to wish to tellingly make their mark.
Elimination to Barcelona, to briefly digress, was painful. But, given the form they displayed over the two legs, odds are that virtually any team in the draw would have succumbed to Barca. Given our injury roster, and the fact that “doing a Gentile” on Messi isn’t remotely in our DNA, the outcome wasn’t really a shock.
I’m not, let me make it clear, taking comfort in excuses. I continue to hold that this Arsenal team, relative to its peers, needs to be better staffed and coached, particularly in defence, to fully realize its potential.
Investigating the rash of injuries that have become routine with this team is an urgent necessity too. Unless we sort these out, I fear, progress beyond where we now stand will prove elusive.
Next at hand, Tottenham. They’re coming off losses to Sunderland and Portsmouth, and are in a stiff contest with Manchester City to secure 4th place. The pressure, therefore, is entirely on them. Recent history to boot, suggests that pressure and Tottenham aren’t great bedfellows either.
All found, therefore, I’d favour us to collect three points if we can bring our recent endeavour levels to the game. A win will put us a point clear of United and level with Chelsea, as healthy a set of incentives as there ever were.
So here’s to three points. We’ll have team news and other relevant updates for you come Wednesday morning.
On the business side of football, recent developments merit a fresh look at the issue of debt in the game, for the consequences of the global slump are beginning to be felt in Football too.
In all, Gay calculates Spanish football’s debt to be €3.5bn. The Spanish federation still owe the players’ union €6.8m and, according to the former president of the union, Gerardo Movilla, an estimated €100m is still owed to footballers in unpaid wages.
The state loses out too; Atlético Madrid owe the tax man €15m; 50% of their transfer income is embargoed.
Manchester United’s financial advisers expect the club to miss out on at least £24m in cumulative match-day revenues over the next two years. That constitutes a decline of more than 11% ….
JP Morgan’s analysis of the club’s financial position, set out in a research document released last Friday, shows United’s 2009 match-day income of £109m to be a high-water mark. Even in its supposed “upside scenario”, in which the club progresses to the Champions League quarter-final or beyond in both years, it anticipates a drop to £98m this season and to £96m next.
The recovery from that base will be weak; to £101m the following year. Indeed, United’s own budgets predict an even bigger two-year fall of £29m, with much of the collapse attributed to the difficulties in selling executive boxes.
The document states: “Most of the impact from the economic slowdown was felt in the executive hospitality business, which we would argue is a highly discretionary expense.
Do note too, that their elimination to Bayern in the Champions League will put a further dent in their earnings and cash flow.
And, typical to Leveraged buyouts comes this summation:
Whereas they (Read: The Glazers) have taken near unfathomable millions out of their club – £344m in interest, £120m in fees and other costs, £22.9m for themselves in “management fees” and personal loans –…
Finally, in the light of the recent “rumours” regarding Martin O’Neill’s dissatisfaction, a look at Aston Villa
But you suspect, underneath it all, that Lerner has been expecting a bit more bang for his buck. And that buck has been considerable. Since paying £62 million for the club four years ago, he has invested another £179m.
Some £95m of that is in equity, with £84m in loans. He also underwrote record losses last season of £43.7m.
Consider Villa’s “progress” on the field over the same period, and draw your own conclusions.
My own view is this: Spain is but act one in suffering the consequences of this recession on a debt fuelled business model. The world, and indeed the UK especially, is still in the grip of a deflationary spiral – pretensions like Quantitative Easing being only that and little more.
JP Morgan’s analysis above, in essence, is pertinent to most Premier League clubs at least in the short term. I think things are going to get worse, much worse, before getting better both in the broader economy and in football, and clubs that are already under strain are going to be under the cosh over the next year or two.
UEFA’s debt rules come into force in 2012; but the markets, in my view, will have sorted the situation out, painfully, by then.
Randy Lerner, in a recent interview, put forward the best description of a sustainable business model:
We want to build the club on our attendances. We don’t want to pay all our TV money straight out in transfer fees and wages. We have to invest in developing Villa Park, allowing us to generate our own revenue streams.
Perfectly put, if I may, and it brought to mind a certain North London club; one, I must add, that isn’t competing for fourth place.
Here’s to three points in the Derby. My meaner friends look at it as two for the price of one: Further our own title chase while putting a dent in a rival’s lesser aspirations. But that’s just them……..
Tue 13th September 2011; 19:45, Dortmund
The Uefa Financial Fair play rules relating to debt won’t be introduced in 2012. It was agreed last month that they will not apply until 2015.
http://news.bbc.co.uk/sport1/hi/football/8546561.stm
Amos…thanks for that link.
My sense is that for some clubs though, ‘buying’ the time to sort out their house is somewhat of a red herring. It’s more likely that events will actually overtake them before that 2015 deadline to comply.
Take Liverpool for example. They’re not likely to make Champions league football next season and it’s going to really dent their finances on top of the fact that they’re already in a very precarious position.
They’re already in a slippery slope and I think that they’ll find it hard to attract the right calibre of players to catapult them back to a semblance of respectability.
If (and it’s likely that they will) Manchester City get into the Champions league, I can see them throwing money at all manner of football mercenaries in order to cement their new found status within the football elite.
The inevitably is a decline of the Liverpool brand and all that follows with it.
What do you think?
Having guided the club through some years of relative financial hardship the board and arsene will need to make some hard decisions. If they dont spend on getting new experienced players in other clubs will be closer on their heels. Money or lack of it will be the important factor in deciding where the premiership title goes next year. The balance to be achieved is strengthening the squad where most fan realise its needed and not sacrificing the club’s wage structure. Arsene needs to show tangible evidence soon that his way is the only one.
Adrian.
Good point there on the need to achieve a balance. I think if anyone has the ability to achieve such a balance then it’s Arsenal.
However, I don’t think the charge of Arsenal not being willing to bolster the squad is as black and white as it has been made to sound over the season.
A good example of what I mean was the January transfer window just past. Even if we wanted to buy a quality defender or striker to provide the necessary relief to our squad, I believe it was impossible to find someone of the right calibre who we could afford.
Players want regular football in a world cup year and its hard to see how any respectable defender of the calibre we wanted could agree to warm the bench.
With regards to strikers, it’s hard to argue that Wenger’s decision to give Bendtner a chance hasn’t paid off. Regardless of his detractors, Bendy has delivered an excellent return with goals and has worked hard and tirelessly for the team. When he hasn’t been scoring goals, he has worked very well for the team.
I think it would have been hard for any new striker to add the value that Bendy has already added.
Now that we approach the summer, I don’t think Arsenal will hesitate to build on this squad if they find the right player and that player respects Arsenal’s wage structure.
The first and most important part of building on what we have is to keep the core of this squad together and in the last year, Arsenal have nailed down 17 contracts to ensure that the players remain in place and that we can then build on this.
All in all though, it will be really harsh to suggest that this team hasn’t come on leaps and bounds and now is not the time to throw the baby out with the bath water. Now more than ever, is the time to nurture and cajole this team to reach the next level; whether it’s by adding to the squad, looking at different training tecniques or whatever the staff at London Colney feel will move the team forward.
We could also do with shipping out a section of our fickle fans. I’m sure the Chavs and Mancs are looking out for new stock.
Amos,
Thanks for keeping us updated.
As Darius has pointed out, however, clubs have only given Mr.Market more time to hunt them down.
Mr Saloner, Salut!
In any of our games against the Tiny-Totts, form usually goes out of the windows. But We just have to WIN. A draw is really not good at all. Win we must.
As for finances, I just fervently wish to see all clubs who have been embracing financial doping over the years get their comeuppance.
LRV,
Win we must indeed.
I’m not too sure about the irrelevance of the form sheet, unless we are careless enough to again throw away three goal leads. That’s not to suggest a victory is a certainty; just that if we stick to our guns in the manner we lately have, we should collect three points.
As for the consequences of financial excess, I can only point out, in sadness, that the wheels of justice may grind slowly, but they grind exceedingly fine.
The economic situation globally is perilous, Greece being but one symptom of the sickness. I think the majority are alarmingly sanguine about prospects both in football and without. I for one think real pain is on the cards, and wish football was better positioned to withstand the rigors.
Time will eventually tell, but I think UEFA’s initiative has come too late.
Just to come back on a point I missed on Adrian’s comment:
Adrian, you say:
“Arsene needs to show tangible evidence soon that his way is the only one…”
My sense is that this is a misleading expectation.
Firstly, it assumes that we’re starting from a position where trophies are being seen as the only measure of success.
I don’t subscribe to this and I think fans who think that it’s all about the trophies have to come down a notch or two.
Trophies are important yes, but they’re not the only measure of success.
Take Man United for example, or even take Barcelona who won all the trophies available last season….Man United won the title for the third time running.
In both cases, both clubs still had a questionable financial position, and they’re a very tangible indicator that winning trophies does not equate to financial stability.
Wenger has already shown more than enough tangible signs that the strategy and vision Arsenal are following is bearing fruit. I think it’s more important for us as fans to manage our own expectations as we travel this journey.
While winning trophies is important, it’s not enough to suggest that it’s the only measure of success. You have to remember that building a new stadium costs a few bob and the faster we bring down that debt, the faster we have ‘organic’ funds to invest in the football side of things. Before then, the balance that you talk about is paramount to ensure that acceptable investment is made in the squad while we continue to meet our financial obligations.
@LRV…you are a sadist my friend….I can see you have no mercy for those who have taken liberties by living beyond their means for so long.
I honestly think that there is now a visible shift in the power structure that we’ve been so used to in the English game and that Liverpool and Manure for example, are on their way down.
Saloner.
Sanguine is so apt in describing the approach taken by the establishment.
I find it amazing sometimes that the fundamental signs around us are not being read in any shape or form by those in the game.
It’s either incompetence of the highest ordor, or brazen attitudes and recklessness of the highest order – but either way, it is tragic.
I cringe when I hear hacks and pundits talk about the need for clubs to spend money and invest like it still is normal to do that. Whether it’s in relation to Chelsea on the one end of the scale or Newcastle or West Brom on the other end, there’s just this misguided notion that ‘investment’ should surely follow and it’s being preachd in a way that suggest that those talking really have no incling of the environment around them and how bad the economy really is.
Darius:
Nice post. Arsene has done an absolutely amazing job of keeping our team competitive on a tight budget. He has also built the best youth system by far in England. All credit to the boss.
I also agree that we trophies are not the only thing but they are sure important. Someone on another blog wrote that “winning begets winning”. I completely agree. This team only needs to win to build its confidence. The flip side of that is “loosing begets loosing”. I know we are not loosers by any stretch of the imagination however, we do not want 3rd place to become our expected result. Lets spend some of our money and add a few missing pieces and get the title for the next few years. We are very close but I think still need a couple more pieces to the puzzle. We may even need to “overspend” slightly to get those pieces. Winning would validate everything that the boss has done. btw ( Like you, I am not writing off our chances this year just yet.)
I loved your statement in the 7th paragraph. ” this Arsenal team, relative to its peers, needs to be better staffed and coached, particularly in defence, to fully realize its potential.” As you know from our conversations on ACLF I could not agree with you more.
Thanks again for a good post.
Bill.
Just a point of correction – today’s post is actually by Saloner, one of the other authors here on SCA. I would love to take some credit for content, but it won’t be today.
Nevertheless, I agree with the sentiments you put forward in your comment, and the key message here seems to be “balance”.
The balance to build on what we’ve achieved so far, combined with adding the necessary ingredients to take us through the last mile to fruition and to keep us at the top.
I’m confident such a balance is achievable and it doesn’t at all mean that we will bankrupt ourselves doing it.
What my point was earlier is that certainly in January, it was an impossible market even if we wanted to strengthen. The summer is always better, and if you notice with the purchases of Rosicky, Sagna, Nasri and Vermaelen – Arsenal was pretty quick in completing those transfers early in the summer break so as to give the said players time to grow into the squad.
I don’t think Arsenal is averse to improving this squad by buying outside talent, but I would suggest that they would be hesitant to break the bank or our wage structure to do it.
…And of course, I do agree that this title race ain’t over until the fat lady sings. To the best of my knowledge, they’re still undressing her for a bath,let alone gearing her up for stage.
Darius:
Sorry I should have looked at the author. I assumed it was you
Balance is needed and we can not break the bank or spend ourselves into a financial disaster. Hopefully the boss will find that correct balance and keep us financially stable yet still give us the best chance possible to win some trophies. If we keep this squad together and add some pieces at the back and maybe a GK . We may start to refill that trophy case. All credit to this team for releasing the demons that caused us to drop points to the “smaller teams” in past years. Hopefully we can figure our a way to keep that mentallity against the small teams and somehow keep our defense from melting down against the big teams and we could run away with the league.
What is yours and Saloner’s thought about Stan Kronke? Obviously I do not want him to buy the team with debt and turn us into Liverpool. However, if he sells the Rams he could probably buy the team without any debt and I do not necessarily see that as a bad thing. Do you?
Bill,
Personally I think it is still early days for a considered judgement regarding Kroenke.
That said, you are right that the primary thing to oppose and avoid is a leveraged buyout with the club in the hock for the loans, Kroenke or otherwise.
When it comes to ownership I’m biased to a relatively more distributed ownership as opposed to an inordinate majority holding by one individual or entity. Two or even three shareholders with significant stakes always leaves me more comfortable than a one man show. I fully admit, mind, that neither model is perfect in itself.
I’m always more comfortable with multiple voices forced to arrive at a quorum as opposed to relying on the good sense of one wise and benevolent owner. I, in the ultimate analysis, prefer the mutual restraint imposed by multiple interests, messy as the process itself is. I’m extremely distrustful of unitarian ownership or a unitarian majority.
So, even if Stan Kroenke buys us out with 100% equity, I’d be uneasy. But that’s me being me…..
Interesting points you make saloner.
The financial background sounds a bit frightening. Better tighten my belt another notch.
I am intrigued by your suggestion that “…this Arsenal team, relative to its peers, needs to be better staffed and coached, particularly in defence, to fully realize its potential.”
We all might agree on better staffed-just- but better coached? I’m certainly not against the idea but it’s the sort of talk that would challenge the assumption that Arsene and his staff are on top of the situation. Ditto the injury problems, as Colin Lewin has recently highlighted.
Are you talking about the defence?
Consolsbob,
My point isn’t that we are appalingly staffed and coached in defence. It is that defence is the area where improvements are most needed to take this team up another level. It is a relative question. Sure we need our frontline back to fitness and sharp too, but you get the point.
The high point of this young side’s defensive performance came in that run to the CL finals against Barcelona. I think we set a record for not conceding that still stands. We have never managed since to fully recapture that sort of solidity. So there you have it.
As for injuries, again, the point isn’t that the staff aren’t doing everything they can, or that they aren’t upto the job; but the proof of the pudding is in the eating. Season after season now we seem to suffer a rash of injuries. Once is bad luck, twice, appalling luck, but repeatedly? An explanation and a solution are urgently necessary don’t you think?
Well actually I do. I read Colin Lewins analysis and while it was clear in it’s facts, it left me unclear asto what ws being done about it.
On the coaching side, I find it hard to believe that Wenger hasn’t taken all possible steps to ensure that the defence isn’t as tight as possible. Why wouldn’t he? There are plenty of coaches at the club with excellent experience of playing in solid Arsenal teams. Does Bould have a hand in the first team, for instance?
A slow response to you but my internet went down. Another mystery.
Fair points all Consolsbob. But then again, the proof the pudding etc…….eh?
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