We as Arsenal fans will now need a reality check. It has become clear that with the likes of Real Madrid and Barcelona keen to wrestle back the global TV rights of having the best league in the world, serious money is going to be spent this transfer window. £180 million before Ribery is bought means that as I predicted in an earlier Blog, Real Madrid will spend well in excess of 200 million. Combined with ridiculous wages and a lower tax rate. The pre-eminent position of the Premier league in global terms is under attack.
The good thing about the Premier League “product” to use the marketing lexicon, is that the competitive nature of the league and the fast paced football remains an adrenaline junkie’s fix every weekend. Despite not having the best footballing names on the planet in the league, the draw remains in terms of having the most exciting league. It is in the Premier League’s interest that the top two teams are not allowed to break away in the same way as Celtic and Glasgow Rangers in the SPL. Customers will not pay high prices to see the same results season after season.
Michel Platini our usually anti-premier league UEFA President is at a loss to express in words how this trend can be stopped. The Billionaires are running amok in the market place, and there is so much money around that there are reports that it is attracting organised crime in money laundering terms. Something has to give, but it will not be the deep pockets of Oil rich Arabs, or Trillionaires. They can continue spending until the next ice age. A few hundred million is not even loose change for the obscenely rich. There has to be more than the likes of Arsenal preaching from the moral high ground. There has to be a realisation by broadcasters, that in a global recession, football fans will not continue to spend and spend.
The demise of Setanta is the first warning that Broadcasters need to think carefully before sponsoring this orgy of mammon. Revenues can only be increased by sensitive marketing in a recession. ESPN will shortly announce which platform will host it’s Premier League package and it seems that Sky have won over it’s other rivals Virgin Media and BT Vision. The digital revolution means that in a few years the analogue signal will cease from many countries and no Free to air package will contain premium football channels. It is at this point that the jostling for position by these broadcasters and the securing of rights for several seasons will determine the winners and the losers.
Coming back to Arsenal, Martin Keown is reported today in the Daily Star as saying whilst speaking at the launch of BT Vision’s Communicating for Success TV channel,
“When you’re going after the top players sometimes it’s nice to be able to push that little bit extra for the players you need.
Liverpool have just done that with Glen Johnson, paid a little bit more than they wanted. But they had the cash available to do it. Wenger hasn’t had that luxury.
Arsenal are trying to be successful in the same league as Chelsea with all of Roman Abramovich’s millions, Manchester City, who are the wealthiest club in the world now, and Manchester United, with the biggest turnover in the world. What they’ve done to stay close to that company is nothing short of a miracle. But with an injection of cash, could they go the whole way?”
“It’s a big decision for Arsenal. We’re all watching with interest to see which one of Kroenke or Usmanov will wrestle control of the club. But this is something new because it’s about putting money in. They’ve certainly got the right man in charge if they want to spend it. They’ve got outstanding players but they need to bring in some experience.”
The Daily Star interprets this as Keown stating that the Arsenal Board should take Usmanov upon his offer. The Arsenal Board seem unlikely to do so, and for good reasons. I have said earlier this week that we should resist Usmanov’s attempt to takeover the club by increasing his influence and shareholding, however his idea for raising funds for the club is intrinsically sound. I would like the cash injection to come from ALL shareholders buying into a rights issue underwritten by the Banks NOT Usmanov.
The problem for Arsenal is that with the decline in the Estates Division, the risk mindset for Banks has changed, so they are going to be unwilling to underwrite such an enterprise. Going to Private equity groups would be worse than Usmanov, so expect the initiative to be rejected and no alternative put in it’s place. Arsenal fans must therefore consolidate their faith in the youth of this club that will in due course provide us with the World class household names worthy of the best league in the world. That is why the long term contract deals for Jack Wilshere and Aaron Ramsey are so crucial to our survival.
Real Madrid’s expenditure will soon be forgotten as they fail to sweep all aside in the Spanish league. It will take more than a trophy cabinet of names on high wages to win against competitive teams. What will Arsenal fans have to do? Well if we are not to destroy our young prospects, we must tone down our expectations and not insist on first place. If we win the league or a trophy through a committed consistent performance, then others are likely to follow. It is as much a case of when not if. We must now stop this whining and get on accept that money doesn’t grow on trees. The solution is based on a good team and good supporters.
Equally the leaders of the Board must stop whining themselves. Ivan Gazidis is right when he calls for a salary cap, but he is wrong to have it presented as an excuse for Arsenal not winning silverware. We are in a free market and the failure to attract the top players because of our reluctance to pay them highly is our problem, and we should not go bleating to the premier league. Perhaps if we didn’t over pay average squad players, then perhaps performance incentivised differential salaries would attract a better calibre of player. He told the Guardian earlier this week
“I think it is worth our while to investigate whether there are elements of the salary cap system, which they have in US NFL and baseball, which would benefit football,” he said. Clubs have a duty to provide more stability in our business models and some form of wage restraint is one element worth looking at. There are many different ways in which it could work.”
The Guardian went on to comment:
In an interview with the Guardian, Gazidis repeatedly emphasised the virtues of Arsenal’s “self-sustaining finances”, comparing that policy favourably with other clubs which rely on billionaires’ munificence. Pointing out that Premier League clubs do not make profits in general, despite record income, he said players’ wages are set to grow even more, which would further threaten clubs’ profitability.
Gazidis is part of a European clubs’ association working group considering improvements to the financial running of football, and he referred admiringly to Germany’s Bundesliga – “the only profitable league,” he said– which has tight restrictions on the debts clubs can carry, and insists they live within their means.
We pay the third highest wage bill in the league, We have not a single player transfer over £30 million, Man United have at least three such players. Ar sene Wenger politically correct egalitarian wage structure has only served the interests ofmediocre squad players without motivating the best. Sort that out first Ivan, then perhaps other clubs might support your call. In any event, any club living beyond it’s means with enormous contracts need only look at Newcastle United.
Yet bizarrely there is money being made at the Club, but those hundreds of millions are not coming into our coffers, they are being pocketed by the rich shareholders who seek to see a return on their investments. A rights issue would have meant that for once, some of these shareholders sharing some of their gains with the fans, but as I have said before, it seems that hiding behind the doctrine of self sustainability has it’s financial benefits. So calling for us to accept second best is not an admission of failure, it is merely to protect our long term interests vis a vis players and the club, which will be much better that going the Newcastle United route surely?