Has Arsene Wenger Already Signed A New Contract?

There is a lot of speculation on this topic and a lot of contradictory information – but very few hard facts. The club leak info to selected journalists, Arsène himself makes statements then contradicts them later, and occasionally a Board member will say something in public. I view all of these as unproven and potentially made up. There are several realistic scenarios in my opinion. I accept that your view of ‘realistic’ may differ from mine, but I’ll live with that.

Scenario 1: Arsenal have not yet put a contract in front of Arsène for him to sign.

Likelihood of this being true: Low

Reasoning: Until recently the Board (ie Kroenke) were very happy with what Arsène was doing. Money was still rolling in, and CL qualification looked as likely as ever until Christmas. Therefore the Board would want Arsène to renew for a couple more years while they slowly worked on their plan of what to do when he eventually did leave or die of old age.

Previous renewals were in October 2004 (ahead of May 2005 expiry), September 2007 (ahead of May 2008) and August 2011 (ahead of May 2012). Only in 2014 did Arsène let the contract run to the end before signing another, and that was down to him – the offer was definitely there in advance.

I know things have changed now, but only very recently; last season second in the league, which Kroenke is fine with, and doing acceptably well this season until the recent collapse.

So I’m pretty sure there would have been an offer.

Scenario 2: There is a contract in front of Arsène and the decision is up to him but he hasn’t signed it yet.

Likelihood: Was quite likely, but not so likely now.

If a contract was put in front of Arsène a few months back he may well have thought that stringing it out a bit could result in a bigger salary increase. Had things still been going well, he’d probably have been right. But given that things are definitely not going well, his negotiating position has weakened. The club are leaking a lot of stories about changes to coaching set-up, director of football positions and so on, so it’s unlikely an unconditional offer is still there waiting for Arsène to take the top off his pen. Therefore we move on to:

Scenario 3: There was a contract in front of Arsène, he hadn’t signed it yet (either holding out for more money or just hadn’t decided if he wanted to stay), and the offer has since been withdrawn.

Likelihood: Quite high.

As stated above, no reason for Arsène to rush in if he thought he’d get more money by holding on, and seeing if PSG or anyone else might show an interest and start little bit bidding war. But the blue skies are gone and dark clouds have gathered. Defeat after defeat, protest after protest. Judging by all the stories from journalists that Arsenal favour, it looks like Gazidis and co have persuaded Kroenke that some change is needed in the football set up. That may or may not involve a new manager, but if it doesn’t he will have to live with some new terms and new people around him. He won’t like that, but results at present are not helping his case that he’s still the best man for the job.

Nirvana? Not any more…

Scenario 4: Arsène has already signed a new contract and the club are just waiting for an opportune time to announce it.

Likelihood: It’s another ‘was quite likely, not so likely now’.

Even a month or so ago things weren’t looking nearly so bad as they are now. If there was a contract offered – and I believe there was – then Arsène may well have signed it, with all parties thinking there’d be a good time to announce it as soon as Arsenal had won a couple of games in a row, which usually we don’t have to wait too long for.

Some people say Arsène can’t have signed a new contract already, because the club would be bound to announce this to the stock market as materially significant information. But why is it materially significant? History shows us that Arsène signing a new contract has no effect on the share price. It didn’t in 2007, it didn’t in 2011 and it didn’t in 2014. So even if theoretically it might, the club could easily argue if pulled up on it that it had never made a difference before. In theory missing out on CL qualification has an effect, as revenue could be down as much as £50m, but despite Arsenal’s humiliation to Bayern the share price is currently at an all-time high. The fact is the market for Arsenal shares is very small, very few get traded, and with two shareholders owning a total of over 97 per cent of the club, the price is not subject to usual market fluctuations. It’s far more dependent on the desires and decisions of Kroenke and Usmanov, or anyone who wants to buy one or both of them out (a passing Middle-Eastern Sheikh, for example).

Secondly, just because Arsenal are supposed to announce something to the stock market at a particular time doesn’t mean they will. They have been pretty slack in the past on corporate governance, and announcements are often delayed, for example when Kroenke had bought shares, which should be announced immediately but can take a week.

In summary, I don’t see this as a big factor in the situation.

So it seems quite likely it was offered and has been signed, but as for the ‘waiting for a good time to announce it’, that might have changed – which leads to:

Scenario 5: Arsène has already signed a new contract and now the Board (Kroenke) regret that and want to withdraw it.

Likelihood: Fairly high.

What looked a good idea in February doesn’t necessarily look so smart now. As I said in number 3, it seems certain that Kroenke has been persuaded that changes of some sort are necessary, but from the majority owner’s point of view that’s a recent development. Kroenke’s a long-term owner of his sports clubs, he won’t make knee-jerk reactions. But he must recognise that the UK model doesn’t safeguard income in the way that the big US sports do, with salary caps, no relegation and much more equal distribution of cash. So if Arsenal are to stay as one of the Big 4 (or 5, or even 6) he can’t let things drift too far. There wasn’t much threat to income back in February; now there is.

I suspect Ivan and others have been trying to find ways to make changes to how the football side of the club is run for some time, but Kroenke had no reason to agree to anything much as long as the cash kept piling up. Now income is under threat, so something must be done!

If no contract is signed, then the easiest thing is to wave Arsène goodbye on 30 May. Surely Kroenke would be persuaded that was the best option, wouldn’t he? Perhaps. Is he close enough and knowledgeable enough to see that Arsène can no longer compete with the best? Maybe…

However, if a contract is signed, then Arsène is back in the driving seat. The club want him to accept changes, and if he won’t they might end up having to sack him when he’s just renewed! That could be expensive and embarrassing. If this is true it’s no surprise they’re still talking about mutual decisions at the end of the season.

 

What is the most likely of these? I think it’s number 5: the club went too early with the contract, and now regret it. In which case two things could happen from here:

  1. things might stabilise or improve for the rest of the season and they’ll be able to bluff it out and negotiate a bit of reorganisation with Arsène, perhaps in exchange for a pay rise
  2. results go from bad to worse and they have to ‘mutually agree’ it’s time Arsène left, with a couple of years’ salary as compensation.

Any other theories I should be considering?

Twitter: @AngryOfN5

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6 thoughts on “Has Arsene Wenger Already Signed A New Contract?

  1. I like Phil’s analysis, but I can only align with him on scenarios 4 and 5 as the more likely. The contract had actually been offered to Wenger (of course as long as Wenger wants it you give him just like it was the case between Ferguson and Man U) and the Frenchman has taken (signed or whatever you like). The Board would have wanted to get a few decent results and them come out with a smile to announce. Now they are confused and afraid, because results keep on declining while the contract is in Wenger’s hands. Initially, Board may not have decided on major changes (staff and players) but now the continuing disappointing results, anger and frustration expressed via protests of the fans have forced on them to shift position. Wenger’s declaration to continue (for a year or two more) has be to be announced alongside some key changes such as the Director of Football and the promise to build a galacticos at the Emirates. Just to give something to the fans to cheer about. Let’s pray Arsenal win their next 2 EPL games and beat City in the FA semis.

    • I think you’re right – they want to be able to announce changes in the hope everyone will be pleased. Those who want Arsene are pleased he’s staying, those who don’t want him at least get new coaches, Director of Football, etc.

  2. You’ve thought out the theories pretty well, Phil. This is in addition to one of the above scenarios. I think that Arsene has lost the confidence of some of the players, and that this development has caught the board off guard. Normally, Arsenal makes a surge when the title is no longer in contention, but I don’t see them radically improving at all from here on out.

    If it’s true that the board has been surprised by this development, then it’s quite probable that they haven’t settled on a successor to Arsene. Perhaps that’s the reason for the delay … it’s simply that they don’t want to let him go without having a suitable manager lined up as a replacement.

    • Yes, the players’ attitude and performances may indeed be a bit of a surprise to the Board. In my view they haven’t settled on a successor because until very recently they wanted and expected him to stay, and as you allude they don’t want to look even more stupid if he goes and they can’t find a decent replacement.

  3. Scenario 4 and 5 can’t be true as Arsenal are a listed company. Any non disclosure of contracts being signed would mean that Arsenal are in massive massive financial breach.

    I highly doubt that any of the board memebers would allow this to happen, there’s no amount of PR that would cause that situation!

    Most likely there was a verbal contract discussed and Wenger is deciding, but Arsenal might change their mind in the summer. So it’s all up in the air.

    • There would be no ‘massive massive financial breach’. Disclosure rules are in place to prevent people taking advantage of inside knowledge to trade shares. The market for Arsenal shares is extremely illiquid and for that and other reasons Arsene signing or not signing a contract would have no effect on the share price whatsoever. No one could profit from it, so where is the breach and who would complain?
      I can tell you for a fact that previous times Arsene has renewed his contract have had no effect on the share price.

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