They seem to think they’re better than Arsenal, despite all evidence to the contrary.
This is a blog post inspired by Gary Neville’s comments on Sunday. But first, come with me on a journey through time and space . . .
Arsenal’s history has been rewritten this year. Firstly, and in a good way, by people like Andy Kelly and Mark Andrews, who have done the best research ever into Arsenal’s early years, digging out nuggets of important information that the club’s official historians have never found. Look them up if you’re at all interested. Secondly, and not in a good way, history has been rewritten by a number of people in the club who have put out misleading statements on the financial position that Arsenal is in.
In the Arsène era at least, the Board position has always been: “There is money there to spend if the manager wants to spend it.” This is true up to a point, though obviously it has always depended on how much he wants to spend. (Even at Man City it would depend how much the manager wanted to spend.) And largely the manager has chosen to spend on higher wages rather than higher transfer fees.
This went alongside statement two: “The stadium money/debt is ringfenced – it won’t affect the football operation.” This lie was blown out of the water by the collapse in property prices – not the Board’s or manager’s fault, of course, but in truth nothing was ringfenced. Money comes in, money goes out; the two need to be balanced. They just expected that the property profit would be so big that it was a risk-free statement. Sadly not.
Arsène has until recently not commented much on spending, preferring to back the Board by indicating he doesn’t really like spending and not contradicting their ‘money is available’ statements – some cynical people say this is because he gets £7m+ a year and has a cushy job where he doesn’t need to win trophies. I would not presume.
Arsène has said in the fairly recent past (last 2-3 years) that the stadium debt, currently being repaid at around £19m a year (£6m capital and £13m interest), has hampered him/Arsenal, because they start every year having to make that money before making the next pound that they can actually spend – unlike other clubs who can spend everything they make. This is a dodgy statement in itself, because one club – Man Utd – pays far more in interest and repayments, not to mention ‘management fees’, and yet has finished above Arsenal almost every year for the last decade. Nevertheless, it’s an admission that nothing was ever ringfenced, because of course Arsenal DO need to make that money and put it aside. It could also be construed as saying, “I’m doing a tough job here – look how well I’m doing compared to all those big spenders, what with me hampered by this stadium debt.”
Still on recent statements, the Board, usually in the shape of Ivan Gazidis, have in recent years been saying, “Wait till 2014 – everything will be great by 2014. We can compete then. FFP is coming.” And also the kit manufacturer and kit sponsor deals would be up for renewal at long last. Ivan has also had a fantastic bonus with the fact that the new TV deals – which he knew nothing about when he started banging on about 2014 – will also come in at the same time, improving the whole Premier League’s financial position. (I won’t bother with the joke about him getting a fantastic bonus of three quarters of a million on his already large salary.)
Then the updated Emirates shirt and stadium sponsor deal was announced with a big fanfare. This starts in 2014 and is worth up to £30m a year, but an unspecified amount of advance funds are apparently available in summer 2013 if needed.
And even more recently Arsène has made statements designed to suggest that he couldn’t really spend money before, but now he can. This is misdirection at best, if not an outright lie. There was plenty of money to spend last summer and he chose not to. The word on the underground grapevine was that many at the club were tearing their hair out that more wasn’t spent, knowing the flak they’d get after selling RvP. What Stan Kroenke was doing with his hair is not recorded.
Then the Puma kit deal was revealed by John Cross, and although still unconfirmed by the club, it has added fuel to the ‘we can spend now’ fire.
Now, if you add all these things together, make a few assumptions and not pay too much attention to the published accounts, you get the situation that seems to have occurred: suddenly all kinds of reputable media outlets, not to mention bloggers and tweeters of varying reputational status, have followed this logic:
- Arsenal couldn’t spend before – it must be true because Arsène said so (or at least hinted – I wasn’t paying full attention to the actual words)
- They couldn’t spend because of the stadium debt – Arsène definitely mentioned that
- Now the Board and manager both say they can spend
- They must have paid off their debts
- This summer will be different to previous ones, because there’s no excuse now – because they’ve paid off their debts!
- And there’s some extra money coming in from sponsors, but they’ve paid off their debts!
And suddenly everyone is going round saying that Arsenal have paid off their debts. This story could even have been started by someone like Robbie Savage, who is dimmer than a 3-watt bulb and would no doubt have misunderstood what he was told. But if he repeats it on air and other pundits pick up on it, it quickly becomes ‘the truth’.
Let me just also throw in that there are always statements about spending when it’s season ticket renewal time; that’s a given. What usually happens is that we then sell our captain. Ironically we could probably do that this year and there wouldn’t be much fuss.
Back to the finances:
In many ways, with FFP, TV deals, Emirates sponsorship, Puma rumours, Arsenal now have run out of reasons not to spend in the minds of every pundit out there. And so after 900-odd words, we get to Gary Neville, who said this:
“They [Arsenal] have built a football stadium, they’re paying off their debt and they’re nearly there.
If they move up now it will look like one of the most magnificent managerial performances if you look back in history.
Half the Arsenal fans are annoyed because they think they should be doing more and should be doing better, but of all the madness and debt that surrounds football, what they have done is absolutely the right thing.
What they need to do now, having nearly paid off their debt, is they need to go now. I think he knows, Arsène Wenger, that moment is now.”
To be fair to Neville, this is all off the cuff comment, not carefully crafted writing, so I’m not going to criticise exactly how he’s worded things, though some of it is ambiguous (eg “they need to go now” I assume means “they need to go and spend now”; presumably “absolutely the right thing” just means not doing a Leeds or Pompey, as opposed to signing Gervinho for £11m and Santos for £6m).
However, he’s categorically wrong about debt. I tweeted on Sunday that Neville should really check on the debt situation before commenting, and again last night when a copy of his whole statement was tweeted. This led to a long and involved Twitter discussion that went on through half the night (UK time), long after I was in bed (thanks John Pickford for continuing to make relevant points). Here’s a very small extract.
The overall gist was this:
Unconditional Arsène lovers and eternal optimists: “Gary just meant the debt is manageable, don’t be pedantic. He’s just saying we’re in a great position to push on, and the only reason we’ve been stuck in third or fourth is financial constraints on the manager.”
People who may or may not support Arsène, but definitely don’t like bullshit: “A) Yes – and may I stress most importantly – Arsenal are now in a good position to push on, spend and compete. We agree. But – B) debt position has been steady for years; the current repayment schedule was set in place by Keith Edelman and it’s no more or less onerous than last year or the year before; C) debt is not nearly paid off; there is £246m of it and it won’t be paid off till 2031, and that’s just the stadium not the bonds; D) there was money to spend last year as well – we ended the summer transfer window with about £70m of spare cash, and most of it sat there all through January; E) the figure for spare cash is not idle speculation, it comes from analysing the accounts, which is done independently by qualified accountants in the AST and the equally qualified Swiss Ramble. They reach similar conclusions and in personal discussions between AST Board members and the club, the club confirm many of the figures.
Let me summarise: The unconditional Arsène lovers are taking Gary Neville’s words to mean ‘Arsène knows’, and thus those of us with an allergy to bullshit should stop being picky about actual facts of the debt, because the important thing is we’re heading in the right direction. The anti-bullshitters say, yes, we’re in a good position and heading in the right direction – but financially we were last year as well. And if we ignore the mistakes of the past then we are condemned to repeat them. So perhaps don’t believe whatever anyone at Arsenal or in the media tells you without thinking about it.
I’m not a mad swivel-eyed ‘Arsene out’ extremist, nor a great lover of finishing third or fourth in the table with an empty trophy cabinet. But I am against re-writing facts of history to suit the agenda of people supporting a particular view. So if anyone repeats the crap about Arsenal’s debt being nearly or actually paid off, refer them here.
Glad to have cleared that up.
This is a question people have asked me when I’m cautious about accepting Mr Usmanov as owner of Arsenal. Stan is useless, they say. Usmanov is bound to be better. Look what Abramovich has done for Chelsea.
Yes. The problem here is that we don’t know what Usmanov would do until he is put in a position where he can do it. Until then it’s all talk. As I highlighted a few blog posts ago, Usmanov has talked about his vision, but not actually promised anything. Bear in mind also that at the moment there is a certain balance because Kroenke is restricted in what he can do by virtue of the fact he has less than 75 per cent of the total number of shares. If he sells to Usmanov, the Uzbek will have about 97 per cent of the shares; he will be able to do exactly what he wants.
So here’s a very brief random list off the top of my head of how Usmanov could be worse as an owner than Kroenke. Stan has not done (and in some cases can’t do) any of these:
1. Usmanov could start taking money out of the club by way of dividends or management fees (as at Man Utd)
2. He could sack the manager and install any idiot – Harry Redknapp, Mark Hughes (other clubs have seen fit to employ these no-hopers) – or he could just pick the team himself (Abramovich sometimes seems to be halfway to this).
3. He could sack the Board and install any bunch of idiots – Dennis Wise, Ken Bates – both of whom have had boardroom jobs – Piers Morgan . . .
4. He could pile debt onto the club (also as the Glazers did at Man U).
5. He could sell the freehold to the stadium to one of his own companies and rent it back (other clubs have done the same).
6. Ditto the training ground.
7. He could raise ticket prices 20 per cent a year, or any amount he likes (Man City have raised prices a lot, to try and boost the balance sheet ahead of FFP).
8. He could force the remaining small shareholders, including Fanshare, to sell their shares to him, take the club private and reduce accountability to fans from minimal to absolute zero (Abramovich again, and others).
9. He could change the home kit to white shirts and blue shorts and the away kit to blue shirts and white shorts, or whatever combination he likes (Cardiff’s owners have changed the colours).
Some of these, or variations of them, are far less likely than others, but they are all perfectly possible.
You may say, “Why should he do any of these? He’s a fan.” Well he says he is, and from information I have he has certainly attended more matches this season than Stan Kroenke, both home and away. But so what? Everyone on the Board, and the ex-members like David Dein, claims to be a fan, but it hasn’t stopped them selling their shares for profit to themselves and no benefit to Arsenal, even Peter Hill-Wood, whose family have led Arsenal from the Boardroom for about half its existence.
I take any claims of fandom with a large pinch of salt, particularly as Red & White have put out communications saying ‘we’ are Arsenal supporters, while Usmanov’s 50-50 partner in Red & White, Farhad Moshiri, is known to be a Man Utd fan. So I don’t know who they’re talking about with this ‘we’.
The fact is we don’t know how Usmanov would behave as Arsenal owner. Maybe he’d be fantastic; maybe we’d win trophies every year and pay peanuts for season tickets. Maybe. But could he be worse than Stan Kroenke? Oh yes.
Follow me on Twitter: @AngryOfN5
Every couple of weeks the Arsenal website gives an update on how many shares the major shareholders in the club have. They’re required to do this under Premier League rules. The rules are actually a bit vague, as they don’t say under what circumstances exactly changes must be reported, but Arsenal seem to take it upon themselves to put an update out approximately every two weeks.
Now an increase of two shares for R&W may seem irrelevant, but what it means is that with one more single share R&W will have achieved their target of 30% of the total equity of Arsenal Holdings PLC (they now have precisely 29.9998392722246%). Why do they want 30%? Well, their reasons may have changed since they set that target, as on the face of it there is no more benefit from having 30% that having 29%, or indeed 25.01% or 49.99%.
Once R&W breached 25% they could block any change that required 75% of the vote, but without getting to 50%+1 they’ll get no more power unless Stan Kroenke chooses to give it to them. So far there is no sign of that.
Prior to last summer, when the Premier League re-wrote their rules governing this, it may have been possible for R&W to insist on full access to all Arsenal’s finances once they reached 30%, but that no longer applies. There is no compulsion for Usmanov to make a full bid for Arsenal at 30% because there is already a majority shareholder in place, and 30% does not entitle anyone to a seat on the Board.
So why bother? Well, that’s what we wait to find out. I think R&W have deliberately held off going over 30% during the season so as not to be accused of distracting anyone from the job in hand. I think as soon as the season is over, we’ll see that Mr Usmanov will rustle up an extra share or two and perhaps become a bit more vocal about the whole situation.
Of course he may already be in dialogue with Kroenke anyway – if Kroenke is even the slightest bit interested in dialogue – and I have heard from one source that a deal for Kroenke to sell this summer has been agreed for some months. However, that would seem to make it a bit pointless for R&W to keep buying odd shares in the meantime, so I have my doubts.
It looks certain there will be changes behind the scenes at Arsenal this summer anyway, as Peter Hill-Wood is rumoured to be standing down due to deteriorating health. Stan Kroenke may feel it’s time to put more of his people closer to the running of the club. Unless he’s selling it. I could tie myself in knots with different theories about who is likely to do what, but I think it will be an interesting summer.
We know now how Kroenke likes to operate his clubs: minimal interference and let them pay for themselves as long as they are in some measure competitive, or at least not losing money. We don’t know how Usmanov would operate as sole owner of Arsenal. Personally I have my doubts that everything would be as rosy as some seem to think.
Managers like to be beside the pitch because they can then be seen to be ‘managing’. Which translates in most cases as stalking the touchline – or as close as the technical area will let them get – and haranguing the fourth official, with perhaps some anguished gestures when one of their players, say Gervinho, misses another open goal. I often wonder how they manage to get so close to the fourth official to harangue him, actually, given that he isn’t in the technical area with them, and they’re not supposed to come out. Maybe it’s like a shot putt circle – you’re allowed out of the back without breaking the rules.
Either way, the side of the pitch is not the best place to watch a match from, so it’s a mystery to me why all managers insist on watching from there. The place where managers sit is called ‘the dugout’, and for many years it was literally dug out, being slightly below ground level. This idea was thought up in the 1930s by a mad Scotsman called Donald Colman, a coach at Aberdeen. He wanted to study how his players used their feet, so built a place where he could watch the match at feet height. Amazingly, other people seemed to think this was a good idea, and within a few years virtually every club had a dugout. It wasn’t until the new wave of stadium building in the 1990s that the manager’s seat largely returned to ground level, and at the same time managers were allowed to stand up and patrol their newfangled technical area.
Actually, by the strict wording of the poorly written Premier League rules, managers are not allowed to stand in the middle of their technical area, only at the edge. But either way, although this gives a better view of the game than the subterranean dugout, it’s still a useless way to watch. Pitch level is the best place for judging offside, but that’s about it. If it was really good for watching then lower tier seats would be more expensive than upper tier, TV cameras would all be at ground level (and not just the ones Wayne Rooney uses to swear into), and the press box would also be much lower down.
The reason the press box and the cameras are high up is because PEOPLE WANT TO SEE WHAT’S GOING ON, and the TV audience would soon be switching off in droves if the main cameras were four feet off the ground instead of 40. You really can’t get a good view from pitchside, so managers should stop embarrassing themselves by leaping around and shouting at the fourth official and just go and sit upstairs. They’ll get a far better idea of how the game is really going.
I recall that George Graham actually had a period where he used to spend the first half in the Directors’ Box at Highbury, occasionally phoning down instructions to Theo Foley, then come down to the dugout after half time. Which is at least half sensible. Also, since Steve McLaren became the ‘wally with the brolly’, no manager dares carry an umbrella, and only Tony Pulis tries the baseball cap look, so sitting upstairs would prevent a lot of managerial coughs and colds over a season.
Follow me on Twitter:@AngryOfN5
Like me, you may have been under the impression that Arsenal could lose a fair bit off the wage bill this summer, but looking at it I don’t think that’s the case. Here’s a list of the current contract end dates I’m aware of for the first teamers. Those I would consider surplus to requirements – ie we could lose them and it wouldn’t make a blind bit of difference to the team – are marked in grey.
You could argue that Gervinho is not surplus to requirements as he sometimes plays, but I’d argue that if you watch him play he’s generally surplus to requirements. There are others I would lose quite happily if they were replaced, because I think they could be improved on without too much trouble, but I was just looking at where we could save without affecting anything else.
Diaby is a good player, who if fully fit would be useful. However, I’ve given up on him. It ain’t going to happen.
A proportion of the loanees’ wages will be being paid, but the problem is that no one wants to buy them until the contract actually runs out, as that would mean matching their ridiculous current wages. So despite the likes of Bendtner being laughably valued at about £7m on transfermarkt, we won’t get a penny for him. Ditto all other surplus players, and as happened with Almunia. He just hung around like a bad smell until his contract expired, then found his true level in the Championship.
Lucky we’re getting all that extra sponsorship and TV money coming in soon, because the wage bill is still only going in one direction, and our habit of raking in £25m each year to sell a star player seems to have reached a natural end.
Well, the previous (guest) post about Stan Kroenke stirred up some debate, leading among other things to me being accused on Twitter (not for the first time) of ‘having an agenda’ – whatever that actually means. I was told it means I’m anti-Kroenke. For the record, I have opinions on different things, and also some principles. The opinions sometimes change in the light of new information. I like to think the principles stay largely the same. I don’t have an ‘agenda’ regarding Arsenal, nor anything else as far as I’m aware, but I do have opinions about how I would like to see Arsenal run by its owners, hence I have opinions about Mr ES Kroenke, not all of which are favourable. He’s a long way from the worst owner Arsenal could have, but that doesn’t mean there’s no room for improvement.
However, today’s subject is the other major Arsenal shareholder, Mr AB Usmanov. Alisher Usmanov is seen by many fans as Arsenal’s potential saviour. There is a view that if he took control we’d be back in the big time because he would make almost unlimited funds available to be spent on the team.
In truth there might be some problems with this – unlimited spending is going to become more difficult under FFP anyway, and you also need a manager who is prepared to splash cash around like Madonna in an orphanage. In case anyone hasn’t noticed, Arsenal’s manager – who Red & White and Usmanov wholeheartedly and repeatedly support – doesn’t spend all the money available now, never mind if he was given a billion to spend.
But that’s not my point today. My point is this: What has Alisher Usmanov promised to spend? And actually the answer is, as far as I can make out, bugger all. I wouldn’t necessarily believe him anyway, but the fact is he talks a lot without making concrete promises. I posed this question on Twitter the other day and was sent a link to his open letter from last year as ‘evidence’ of his promises.
The closest thing to a promise of spending in the whole letter is this:
“So what is Red & White’s vision for the club? It is simple. A debt free club with a big enough war chest to buy top talent players who can hit the ground running and who can complement the club’s long tradition of developing young players and homegrown talent.”
Well what a coincidence! This is exactly my vision too. In the words of Keggy Keegle, I would love it – love it! But I’m not promising to pay for it, and if you read it carefully neither is Mr Usmanov. It’s just his vision. That’s all it is.
So I throw the challenge out again: What is Alisher Usmanov actually promising to pay for at Arsenal? Answers on a blog comment or tweet to @AngryOfN5.
As you’ll have gathered at the top, I’m no big fan of Stan Kroenke either, and I do support Red & White having some Board representation at Arsenal just to shake things up a bit. But I’d like to see actual promises in legally binding language too. I’m like that.