Last season, Arsene Wenger mentioned that it’s his responsibility to ensure the club make a profit of between £15-£20 million each season. Something that’s hard for many fans to get their head ‘round because, at the end of the day, this is a football club, money goes into improving the squad and the club. But the Arsenal manager’s insistence on keeping to this model will undoubtedly ensure the club stay well clear of Uefa’s wrath when the new Financial Fair Play ruling is enforced.
A prudent model that takes away from the necessities on the pitch? Or is this now the path that many clubs across Europe will embrace?
There is a certain level of frustration from Arsene Wenger’s comments. The profit he talks about must be acquired through raising funds from player sales and being unable to reinvest it into the playing squad. The necessity of this comes due to the fluctuation of the property market and the club’s investment in that field. But the ambiguity of his statement raises questions as to why the club are in that position in the first place. The revenue streams are then clearly not what they should be for a club of Arsenal’s size and the team suffers on the pitch where the club have gone wrong in commercial deals.
But taking that and Arsenal’s performances to one side, it’s an admirable way of running a club. Looking to make a profit and keep the club afloat even without Uefa telling the club how they should conduct their financial matters.
What should be noted, though, is that Arsenal and their model only really receives criticism from the fans. There’s very few, if any, club owners who look to Arsenal and question their methods. Yes the playing squad suffers, but the club are well beyond the dangers of clubs like Portsmouth and Rangers. The money Arsenal owe are for investments that Uefa don’t count towards their new policy, but rather praise. The Emirates Stadium and investment in youth academies are the route Uefa want to see clubs go down.
The revenue Arsenal receives from the property development and Champions League income is what allows them to continue buying in the transfer market, with player sales helping to subsidise the final figure. At the end of the two seasons 2009/10 and 2010/11, Arsenal recorded profits of over £70 million. In that time the club received income from player sales from Emmanuel Adebayor and Kolo Toure’s moves to Manchester City, among others, while not exceeding what they received in that time. Manchester City, on the other hand, saw losses of £320 million over the same two year period. It’s a necessity for clubs like Arsenal to sell and make a significant profit from what they paid for players initially.
Unfortunately, there is a downside to this model and a need to keep a steady balancing act. Questions need to be raised about how Arsenal will function should they not receive income from the Champions League or when the Property revenue does eventually dry up. It’s important for clubs to remain successful on the pitch in order to land significant commercial deals, as well as income through final places in the league and in Europe.
But more problems arise from this as smaller clubs such as Wigan will never close the gap on clubs like Manchester United. A good and respectable model doesn’t necessarily equate to a healthy partnership with companies looking to link up with football clubs. Teams like United can resist the urge to spend big, but they’ll still out-do smaller clubs in every aspect when it comes to revenue.
There are issues, however, with certain clubs, Manchester City in particular, and their seeking of loopholes to avoid punishment from Uefa. Manchester City have linked up with a number lucrative commercial deals, but they’re all connected in some form with the owners of the club. Of course Uefa have confirmed that they’ll look into the legitimacy of these deals, but on many levels it’s not a fair playing field.
It’s not to take away from what the top European clubs have achieved in the past, nor is it right to dictate how clubs go about their financial business. What it does open up is the idea that clubs like Arsenal do represent a good model to follow.
Bayern Munich have eased their spending over the past few seasons. They’ve taken the route of only spending big every other season, while still remaining competitive. Their income from progression in the Champions League and, on a smaller scale, through player sales has allowed them to strengthen their squads significantly. also, German clubs’ investment in youth has meant that many of those clubs are on similar paths to that of Arsenal and not spending what they don’t make.
It’s a model that absolutely should be embraced. But not because it’s somehow a good idea to reduce the fun and excitement from a fans point of view of nothing in the way of big signings, but rather to avoid the dangers of clubs going into financial meltdown.
Team’s like Arsenal, and even Bundesliga Champions Borussia Dortmund, look to spend on a much smaller scale to ensure the clubs are still functioning many years in the future. They understand the dangers of investing £40 million on a player and seeing little return to subsidise the loss. Again, an admirable way of running a club that looks out for the club’s long-term future, rather than short-term and unstable success.