Arsenal Holdings Annual Accounts - Chelsea

On the field, we’re all concentrating on Sunday’s visit to Stamford Bridge. It’s still very early in the season but this looks like one of those moments to me – a real fork in the road. 

It will be interesting to see if we have a plan to deal with Didier Drogba. He’s become a real nemesis for us. If I never see the bloke again it’ll be too soon. I dislike intensely his diving and constant whining but he’s the real deal as far as goal-scoring centre-forwards go. I simply refuse to pay the absurd prices Chelsea charge for sub-standard accommodation – £51 lower tier and £54 upper tier in The Shed – you’re ‘avin’ a laugh! I shall be watching in the pub in Islington.
Off the field the Arsenal Holdings plc annual report and accounts dropped through my letterbox on Wednesday. Not much to add to the blog I wrote on the day the accounts were published to the PLUS market on which Arsenal Holdings shares are publicly traded. One number that was missing from those excerpts was the “other operating expenses”. These are stable, having dropped a little to £54.992 million. This is a LOT of money.
A number of shareholders have asked for this number to be broken down. The club’s response? The global figure published satisfies the requirements of both company law and the PLUS market rules. True, but how does the club expect shareholders and supporters to analyse and comment intelligently on the expenditure of this huge sum (which doesn’t include stadium and club staff, that’s in another line of the accounts) without it being broken down?
I’m not a downsizing, lean and mean fanatic. The trend of downsizing has caused a lot of damage to many, many companies. Even some of the management gurus who originally proposed the concept have ended up wholly or partially disowning the concept. Logically, if you keep on downsizing you end up at zero. I want everything at Arsenal to be done with style and class. That means spending the necessary money, not being penny wise and pound foolish. It may be that there’s a more cost-efficient way of doing some things whilst maintaining standards and quality. In the absence of the information upon which to judge, who knows?
The accounts also disclose that chief executive Ivan Gazidis drew a salary of £938,000, received a bonus of £669,000, other benefits of £111,000 and a club contribution to his pension of £100,000, a grand total of £1.818 million. Interestingly, Ken Friar also received a salary of £290,000 plus a bonus of £700,000 and other benefits of £26,000, a total of £1.016 million.
I love Ken Friar to bits. He’s Arsenal to the core, was born in Islington, started working for the club when he was a youngster just after the Second World War and been with the club for an astonishing sixty years, working his way up from office junior to club secretary then managing director. He’s also a true gentleman. You have to ask why Ken, who is 76, is still drawing a large executive salary and a bigger bonus than the chief executive now that Ivan Gazidis has got his feet firmly under the table as chief executive.
I know Ken to be a workaholic. He once rang me at 8.40am on the day after Boxing Day to talk about the planning application for the new ground in which I was involved in rallying support from Islington residents (I live in the borough just off the Holloway Road end of the Liverpool Road) and Arsenal supporters. He was already in his office at Highbury on a day when most of the country (including me) was off work with their feet up. I hope he remains a club director for many years. His insight, store of knowledge and experience of all things Arsenal and football is invaluable. I confess I wander why he’s still drawing an executive salary though.
He held the fort after the defenestration of first David Dein and then managing director Keith Edelman. The perfect safe pair of hands. We should continue to tap into his experience and value his counsel. I’m not sure it makes sense for him to be drawing a large salary and bonus however. He should be putting his feet up and enjoying his retirement, whilst remaining a valued non-executive member of the Arsenal board. I’m not an ageist. I believe people should be able to work for as long as they want. I just wonder why we need to be paying Ken as an executive when Ivan Gazidis is in the chair with his new management team. 

The other non-executive directors – Danny Fiszman, Sir Chips Keswick and Stan Kroenke draw directors’ fees of £25,000 a year. Non-executive chairman Peter Hill-Wood draws a fee of £65,000 plus other benefits of £10,000. To his credit the final non-executive director Lord Harris of Peckham waives his £25k directors’ fee. The club makes an equivalent donation to charity. Well played mate. Good on you.
Next week I’ll be doing a blog on some strategic issues I think the club needs to address off the field. Meanwhile, if you want to own your own slice of Heaven and have a say on ownership and governance issues you need only join Arsenal Fanshare, created by the Arsenal Supporters’ Trust.

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