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.