Again, small hiatus since my last writing but things are certainly looking up since that post – unbeaten in 8, RVP & Nasri are filling the whole left by Cesc’s knee and it feels like the Arsenal has turned a corner. However – this is not what I’m going to be writing about. Be prepared, this is going to be a long one that may be boring in parts, but if you stick with it you’ll see where I’m going. It cannot have escaped anyone’s attention that Man Citeh’s new owners have finally begun to properly flex their collective bankrolls and made the most ridiculous, audacious and simply jaw dropping bid for Ricardo Izecson dos Santos Leite – AKA Kaká. Quotes are anywhere from £100 to £120 Million are being lobbed around like a grenade without a pin, a deal that will see him ‘earn’ £500k a week…… This makes the cash that Abramovich threw around when building Chelski up look like pocket shrapnel in comparison and it’s made me look long and hard at the ramifications of the purchase of Citeh and what impact it could have on the Arsenal and it’s these thoughts that I’m going to share with you.
When they were bought back in the summer, Citeh became at a stroke the first football club to step up in monetary terms to the world of truly big business….. WTF cry ye, are not the likes of Arsenal, Man Yoo, Real and Barca not already big business? Well, yes; to a certain extent, but not on the scales I mean. It’s all relative; in global big business terms no football club even registers as a blip on the RADAR with regards to income or net worth, until now. Hundreds of millions of ££’s are nothing in terms of that which I speak. I’m not meaning to sound like an arrogant prick who’s talking down to you readers (although I’m sure some of you will decide I am regardless) but this statement is set in solid foundations as I understand big business very well due to my job – I work in the Semiconductor industry here in Silicon Valley in California, the industry that makes Integrated Circuits, or in layman’s terms Computer Chips. On a daily basis I work with the bigwigs of Intel, Samsung and a whole bunch of companies you’ve probably never heard of (and don’t give a toss about) that have annual turnovers in the Billions of dollars.
I’ve been in the business for a decade now and as a result my understanding of money has become warped by the sheer weight of figures that are discussed every day in the same way manner that if you worked in the porn industry then nookie becomes a bit blah. Now I don’t make anywhere near the sort of money that the people at the top end of the business make but it’s easy to become jaded on the numbers when you consider that
To build a factory making the latest computer chips that cost between $3.5 and $4 Billion (around £2.5 to £3 Billion Sterling). The money Citeh may have to pay for Kaká would just about buy you two or three of the many pieces of equipment needed to fill out these factories…..and even those sums pale into insignificance when measured against the circa £200 Billion that a company called Wal-Mart (essentially Sainsbury’s on Steroids) here in the US made in 2008. It is this that the financial community terms as big business – FORTUNE 500 companies– and all the richest football clubs in the world qualify merely as Small to Medium sized by these scales (if you don’t believe me – do the research yourself)…..
That is until last summer….
Taking the above into consideration the amount of money Sheikh Mansour bin Zayed and his pals paid for Citeh (around £200 Million) is like the average punter buying a packet of Golden Wonder’s finest Salt & Vinegar crisps (sigh, I miss those). So when you look at the £100 Million for Kaká, the shock should not really be in the money itself as sooner or later someone would have paid that for a player – in the 80’s it would have been infeasible for that any club would pay £47 million for a Frenchman – but rather the ramifications for the sport and the knock on effect of this sort of cash flooding into football. If you thought the player market was phucking nuts as it is, with players making more in a week than many people do in a year, then hold on to your hats because it’s about to reach mind numbing levels of gob smacking idiocy.
To illustrate this, allow me to create a hypothetical scenario for you that I see as a real potential situation: In this scenario let us say that this Kaká transfer goes through. Milan suddenly become around £100-120 Million richer and therefore can afford 3-5 new players priced between Nasri (£13 Mill) and Berbatoss (£30 Mill) sort of money at today’s levels, so instead of nicking players like Flamini on the cheap with a Bosman they can grab big name players big money which will knock on down through the transfer system killing many of the small clubs that don’t have any talent. To us this of course will no doubt mean Milan will then be out to destabilise Adeybayor (looks like they’ve already begun judging by some reports). This will not be the end of it, for if Citeh DO get Kaká, then you can bet your gonads that come the summer the gloves will well and truly be off: They will have proven the old adage that “every man has his price” and they’ll be able to get anyone they please – they’ll just keep adding zeros to the numbers until the player/club caves in.
If Citeh can pay £100 Million for Kaká, then how about Messi for £120 Million? Is Barca in a financial position to turn down that sort of cash? Let’s say in this scenario that Messi gets bought as well……Suddenly Barca are flooded with cash and make a move for Cesc and…… well you get the picture. Once the machine starts, no one will be safe, it will not stop….not Arsenal, not ManYoo; no club in the world will be immune…..the player market will go bloody way beyond Barking probably ending up smashing through the buffers at Upminster. Now if you think for one second I’m over exaggerating this scenario then chew on this little factoid for a minute. Sheikh Mansour bin Zayed Al Nahyan as you probably know is the brother of the ruler of Abu Dhabi, the biggest of the United Arab Emirates which has the largest bucket of Oil underneath its lands which is the last of the easily accessible oil on the planet.
Within an estimated family investment fund of $1trillion+ (£555billion) – and from what I have read/heard (it’s difficult to be accurate as solid numbers are sparse) some $300 Billion (£170 Billion) in liquidity (think petty cash) the sheer spending power available to Citeh now is really, really mind blowing. It’s very difficult to comprehend these sorts of numbers in terms that make sense to those not making six figure incomes such as the vast majority of us, so lets think of it like this; if you put £555 Billion in a bank and got only 0.5% interest Per Annum on that (bearing in mind that the interest rates on the loans to build the Emirates are 5.14%), you would earn around £5k per minute, or around £316k per hour which is roughly £7.6 Million a day or $53 Million a week in accrued interest – and that’s not including the money they make on the Oil still spurting out of the ground (something like £50-100 Million a day for the next 30-50 years depending on the value of a barrel) Seen in these terms, EVERY other club in the world became a feeder club (until someone else of this wealth level throws their hat in the ring) as of summer 2008. Abramovich and the fat Russian that owns 24% of Arsenal are mere irritants by comparison.
If you look at the wider picture of this bucket of cash that has been dumped into the support it creates instability because it’s not part of the games infrastructure. It appears not from evolution of the sport into a business; i.e. TV revenue, sponsorships or bums on seats, but by outside money that has nothing to do with it other then rich buggers exploiting the sports image. The consequence is the domino effect of this money percolating into the transfer system; now any player on the planet that can kick a ball in a straight line is now worth what we paid for Eduardo in 2007 meaning that the transfer market just became addicted to amphetamines. As a consequence of this there are only a few viable business models in a system ruled by such high levels of disposable cash: You either get your own mega rich sugar-daddy to try and compete, or you create a production line to manufacture your own players. It’s obvious that Wenger and the Board at Arsenal decided to do the latter some time ago (pretty much when Roman arrived) and I think it’s the only sensible way to go because I believe that based upon the information available it’s the only viable way to survive the lunacy to come.
Sooner or later, I believe football will get a big wake up call that will shake the fundamentals of the game. I’ve seen many that discuss the financials in the press and on the web be of a mind that Football is immune to financial turmoil; that it’s value will continuously increase indefinitely. While this is no doubt true through the effects of inflation, it usually happens at a canter and not a pedal-to-the-metal full on gallop to oblivion and I’m here to tell you that this is phucking well not the case. History is littered with pillocks that said “it’ll never happen” – well guess what, 10 years ago Technology stocks would never go down in value, erm…..until the Tech crash of 2000/01. 5 years ago house prices would never go down….getting the picture? A market is only worth what it’s customer base (i.e. punters like you and I) are prepared to pay, unless there is some outside influence such as multi-billionaires chucking their own money into the sport with ulterior motives other then running a club. In Roman’s case it was vanity, he wanted to swing his dick around on the global stage, in the case of the Sheikh it’s to show off how rich their country is.
If you hadn’t guessed, this is why the Adu Dhabi group bought Citeh in my opinion. Have you ever stopped to ask why Abu Dhabi give two shits about a football club? The answer is surprisingly simple – before they bought Citeh and Robinho had you heard of Abu Dhabi? The fact is that their wealth is built on oil, and one day in the not too distant future that oil will run out and the United Arab Emirates, of which Abu Dhabi is a part, will return to being nothing but a patch of desert again as they have no manufacturing, no exports, no economy at all other then oil. They know this and are looking to create alternate methods of wealth, one of which is becoming a major financial centre such at London, Hong Kong or New York, but in order to attract people and businesses to the region they need to make a name for themselves….What better way than to buy an average/underachieving club in the most high profile football league in the world, which is part of the most popular sport on the planet…? Fill it with the best players that money can buy and attempt to dominate the league for 3-5 years? It worked for Abramovich; count the number of column inches he got before he bought Chelski compared to now… As an advert for showing off the power of your wallet, it’s pretty phucking compelling.
However, after they’ve all showed off for a while and have most likely achieved their aim of getting Abu Dhabi international recognition they get bored that they can’t win everything all the time and will likely bugger off and leave anyone in the sport that went along for the ride in a right mess – as an example think of what would happen to Chelski if Roman said “adios and can I have my money back?”….. Chelski players have gotten used to a certain lifestyle and would abandon the club faster then rats from a sinking ship – then there’s the £750 million the club owes him to consider. This is the reason that I am steadfastly in the Le Prof, fan club. In times like these we should all be thankful for his tight-fisted and cautious nature: No, he is by no means perfect and yes he is infuriating at times with regards to his unshakeable belief in some players whom we can all see as distinctly average. However, in uncertain times, indeed; times of massive change, with economic recession on one hand and Club owners that really don’t give a shit about fiscal responsibility on the other, I would rather have Wenger than a hundred SAF/Benitez/Special One’s any day. Anyone that calls for the wild Liverpool/Man U/Chelski esque £30 million signings at Arsenal is either blind to the realities of the situation (stadium to pay off) or is simply too ignorant of how the world works to care.
I apologise wholeheartedly, to those that already understand the perils currently facing football and Arsenal in particular and I’m sorry if readers get tired of me continuously beating this financial drum and supporting AW’s policies (the subject of quite a number of my posts) but I’m struck dumb by the ignorance of some supporters that call for Wenger’s head on a plate just because of our lack of signings or lack of silverware in the last few seasons and I really want to shed light on the background of what’s going on in the world in order to explain why I and others like me have belief in the current running of AFC. It’s not like we’re in a position like the Spud’s; fighting relegation for phucks sake! Therefore I will continue to thump on this drum until those that cannot grasp the realities of the current situation understand that Wenger’s decisions are based on more then just winning silverware this season – not because he’s bonkers or chooses to stick with his players just because he’s a stubborn bugger (although he IS a stubborn bugger), but because he has to also keep one eye on this little thing called the ‘real world’ and anyone that doesn’t recognise this is simply not looking at the bigger picture….
So let the ranting commence – I’m willing to listen to anyone that has a case to make against the argument above, providing you can back it up with evidence – and by evidence I don’t mean “well Man Yoo keep buying players” because Man Yoo are in it up to their necks, whereas in comparison the Arse are only ankle deep – I know where I prefer my club to be and in a time where the football has lost it’s marbles, Wenger, even with all his negative traits, is the safest pair of hands I can think of.