Most of Arsenal’s success is off the pitch, these days.
James Larkin | Contributing Writer
Arsenal – The Club
Arsenal Football Club is about to finish the 2012/2013 season, barring an act of God tonight, without a trophy; it will be their eighth consecutive season maintaining this trend. There are many calls for Arsene Wenger to be fired and this is understandable. Arsenal have been selling their best players to some of the biggest clubs in the world and purchasing lesser replacements. Van Persie to Manchester United, Fabregas and Song to Barcelona and Nasri, Toure, Clichy and Adebayor to Man City are just some of the transfers which have been deemed unhelpful. With lesser replacements such as Giroud, Santosand Mertesacker the fans’ outrage is unsurprising. Over the past couple of months Arsenal have been knocked out of the Capital One Cup by League Two side Bradford City, eliminated from the FA Cup by Championship side Blackburn Rovers, and dropped outside the Champions League places in the Premiership to 5th having sustained losses to teams such as Swansea City and Norwich F.C. over the course of the season. The club is clearly in turmoil – or is it?
Arsenal – The Company
Fans of Arsenal still see themselves as supporting a club, whereas in actuality they are supporting a company. Arsenal F.C. is owned by Arsenal Holdings which is a Public Limited Company. A football club is a non-profit organisation owned by its members and its purpose is to promote and play soccer. Obviously this is a situation present in many ‘clubs’ the world over, in the modern game.
Once upon a time Arsenal was indeed a football club but now it is more comparable to a company like Microsoft or Starbucks. In companies like these the only things that really matter are profits and value of shares and by those measures Arsenal is thriving. The club just reported a half year pre-tax profit of £17.8 million and a rise in cash reserves of £8 million, from £115m to £123m. Similar profits have been seen for most of Wenger’s reign. In April 2011, Stan Kroenke became the majority shareholder of Arsenal Football Club. The price that Kroenke paid for individual shares led to an overall valuation of the club of £731 million. There has been recent interest in Arsenal football club from a Middle-Eastern consortium and it has been speculated that the consortium is willing to spend in the region of £1.5 billion to acquire Arsenal F.C. This would mean a doubling in the valuation of the club in the space of less than two years.
Arsene Wenger
If Arsene Wenger is looked at as a business manager rather than a football manager then a very different picture is painted. Since 2006, the Emirates Stadium has been home to Arsenal Football Club. The Emirates Stadium can accommodate 22,500 more people than Arsenal’s previous stadium, Highbury. The stadium’s construction was due, in no small part, to the success of Wenger. Since its completion it has more or less consistently sold out for games, this is despite the fans’ outrage at seasons without trophies and match-day tickets which are amongst the highest priced in world football. Reasons for these sell-out crowds include the entertaining style of football encouraged by Wenger.
Since his reign began he has brought Arsenal into the Champion’s League every season. With £17 million guaranteed for participation in the group stages it is clear that entry has been valuable. This does not account for sponsorship opportunities arising from Champion’s League participation, gate receipts or performance bonuses for reaching the latter rounds. Interestingly, one thing that has made Wenger a most impressive businessman in soccer is, in fact, his transfer dealings. He has consistently found young players who cost very little, improved them, and then sold them on for very large figures. He bought van Persie for £2.75 million and sold him for £22m, Fabregas was acquired on a free transfer then sold for £35 million and Alex Song was bought for a paltry £1m and sold for £15m. Over the past seven and a half seasons Arsenal has made a net profit of £17 million from player sales, excluding undisclosed fees. If this were on the portfolio of a stockbroker he would be hailed as one of the best in the business yet because Wenger is a football manager he is criticised because of these transfer dealings. In 1974 Wenger obtained a degree in economics from Strasbourg; he is clearly more of a businessman then a football man.
The Solution
Arsenal fans have several options if they would like to see a change. They could admit that they are customers and not fans and the only way they can get Mr. Kroenke to notice them is to have an effect on the club’s profit margin. This can be done by boycotting games which includes not watching the game on television, as Arsenal receive a massive amount in television revenue. Similarly, fans could also stop buying merchandise. Another solution and, in my opinion, a better solution is to stop supporting Arsenal F.C. altogether and to start supporting a club whose only interest is promoting the game of soccer rather than growing its profit margins. Who knows, your new club may bring you some silverware and bragging rights.
