Arsenal
THE DECLINE Pt 2 The Cause Investing Less - Profiting more?
Decline?
By Radio Free Arsenal
July 16 2012
Part II – Finding the cause: Okay I have established that decline has happened, and is, taking place in the Club’s performance, and achievement, after 2006. This may not be a decline compared to other clubs, but it is a decline from the high standards that Wenger set in 1998-2005. It is also a decline in relation to the top two clubs. There has also been continuing inability to defend in the manner of a championship team.
Now the question begs what is behind the decline? What is the cause of the problem?
There are many answers and many of them have varying degrees of merit. But one thing that could be seem as clearly bridging the two drastically different eras is the amount of investment in the team and more specifically a drastic shift in that investment from 2005 forward.
Team investment is not only a hotly debated topic around Arsenal but it’s also a bit of a mystery since the Club is never that forthcoming about these matters. That on its own is neither surprising, nor unusual as historically Arsenal Football Club has never been transparent on these matters
But information can be obtained and there is a website devoted obtaining it not only for Arsenal, but for all English Clubs at www.transferleague.co.uk; and it has diligently researched and compiled the transfer spending figures for Arsenal Football Club all the way back to the 1996-1997 season.
And what it reveals is a drastic reduction in investment in the team annually after the completion of the 2004-2005 season. The net spend decreased annually by approximately 10 million pounds per year. And the net spend is the number that matters because it takes into account money made from players sold onto other teams which of course can depending on the player weaken the team as much or more than any purchase or purchases made can strengthen it over the previous season’s team.
From 1998-2005 Arsenal’s gross transfer spend (purchases on new players) totalled approx. £136,003,000 or an average of just over (literally just) £17,000,000 per year, while gross income (revenue from players sold) totalled approx £88,109,000 or £11,013,625 annually. Meaning the net spend (money spent on players bought for Arsenal minus revenue from players sale to other clubs) over that period was approximately £47,794,000 or £5,986,325pa. In other words the club spent 6 million pounds every year, on average, investing in improving and strengthening the team in the period. A period which was historically the most competitively successful, technically, athletically and entertaining period ever for Arsenal Football Club.
The big drop
However From 2006-2012 Arsenal’s gross transfer spend totalled approximately £199,200,000 or an average of £24,900,000 per year, which would make sense as fees have been inflated across the Board. While gross income totalled -get ready folks - approx £217,820,000 or £27,227,700 annually. Meaning the net PROFIT – note that the club took in rather than paid out money all these years - over that period was approximately £18,520,000 or £2,315,000pa. See the table below:
Arsenal Total Net Transfer Spending 1998-2012
Cost of Trans Bought Income from Trans Sold Net Spend/Profit
98-05 £136,003,000 £88,109,000 £47,794,000 SP
06-12 £199,200,000 £217,820,000 £18,520,000 PR
Arsenal Net Transfer Spending Per Annum 1998-2012
Cost of Trans Bought Income from Trans Sold Net Spend/Profit
98-05 £17,000,375 £11,013,625 £5,986,325 SP
06-12 £24,900,000 £27,227,700 £2,315,000 PR
So now it gets simple, if not pleasant, the reduction in spending totals right now (more on that in a moment) from 1998-2005 to 2006-2012 is approx. £8,301,325. which is a pretty steep decline in spending any way you try to rationalize or justify it. Particularly given that it seems utterly inconsistent with the Club’s claims about how much financial firepower the manager has, or the Club can still make available.
The current numbers I have used are up to the moment and since the club have not sold any players so far this window, but recent history, as well as current news reports, make that occurrence almost certain. And that will return the expenditure to an even more drastic shift in reduced spending.
In other words right now the total figures including this summer's to-date spending understate the nature of the sum total, and the annual trend toward reduction in investment from 1998-2005 when the club spent just under 6 million pounds a year to 2006-2012 when it made a profit of about 4 million pounds per year; an anuual reduction of 10 million pounds plus in net transfer investment spending. The figures should be more accurately reflected when the full year 2012-2013 figures are compiled (Especially if the board sell either Robin Van Persie, or Theo Walcott, or even both).
And it’s also worth noting the significantly higher transfer investment figure from 1998-2005 does not include what is almost certainly the biggest transfer expenditure of all the free signing of Sol Campbell. If we were to obtain those numbers and add them in the gap between spending from 1998-2005 and 2006-now would grow that even larger.
The wages structure
The wage structure is every bit as critical if not more so in the foundation for success for a football team. Now again Arsenal do not directly or publicly address the wages paid to individual players which again on the surface seem fair enough. And actually pretty sound judgment. But actually there is some valid information available and the Club has actually made some general comments on it.
The wage structure could be at the heart of the matter but for now let’s just look at raw details. In 2004 the wage bill according to the club’s accounts reported on the Club’s official website was approx £64 million. And yet according to a variety or reports, and to Futbol Finance, a respected web source of football business data, we had two players including Thierry Henry on or over 100K per week. Again our wage bill was about 64 million pounds in total (including non-playing staff).
But since 2006 and especially from 2007onwards, the wage bill has gone up steadily, and even sharply, to £134 million this year. The wage structure not only has not matched to the wage bill, but the opposite has happened as the club have adapted a wage structure which deliberately overpays the least experienced, and competitively decorated players in the side; while deliberately underpaying the most experienced most gifted and most competitively successful players.
The result is a that while the wage bill has more than doubled the club doesn't have a single player on 100K per week and have had only one in total for one year since 2007. Where City Chelsea and United have 5-7 seven players annually spread throughout the top 100 wage earners every year, Arsenal may have 2 and are always at or near the bottom of the list. And when the club paid out half as much in 2004 it had two in the top ten or twenty on that list plus others like Vieira and Pires further down the list
We can review who set this policy and why – if fact I will address it in-depth – a bit later. But for now what cannot be disputed is that this policy undermines the Club’s ability not simply to sign better players to add to the squad to advance it competitively but makes it extremely difficult to retain the best players already in the team when they can not only leave for more silver but more silverware as well.
We know what the result of this shift in our investment has been on the pitch obviously. But what is remarkable here and again beyond argument is that that decline has happened exactly as the shift in policy has. There is no way to claim this is all mere coincidence or accident of history. The competitive decline in Arsenal Football happened exactly in concert with the shift in financial policies and priorities at Arsenal Holdings PLC.
This leaves the question to address next why exactly did this drastic shift in spending happen when - or how - it did? We will try to answer that or find a likely answer soon in the next section to be published.
End of Part 2
Part 3 to follow
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Edited 1 time(s). Last edit at 2012:07:21:20:17:47 by Padre Pio.
The problem however is in transfers where we're unable to sign the type of players we want and can't even keep our best players. If you can't spend significantly on incoming transfers to acquire your main targets and the squad can't win silverware then players feel the need to leave irrespective of what you pay them.
"A club is a union between players, supporters and directors". - Wenger.
Arsene wenger has done an absolutely masterful job within the constraints he has... Every single year, he has outperformed our spending every single year he has been manager. It is extraordinary. -Gazides.
"When we had to suffer the team is a lion because they suffer together." 4 July 2020 at Wolverhampton Wanderers
Arteta on his team's first away victory at a club above them in the Premiership since September 2015 at Leicester.
We all know diaby is a top player who at 60k a week wouldve been underpaid were it not for his injuries.
Rvp was paid 80k a week, for all i care he's only earned that money one season.
What increases our wage bill also is the number of young players at the club, but it doesnt bother me cos we need more of them to get the best. Besides some of these young players are very expensive when sold on. Merida was sold for 3m, i bet he we never paid him that much in all his time at the club.
And like i said, our position in the league is a fair rep of our wage spend, so why complain?
"A club is a union between players, supporters and directors". - Wenger.
Arsene wenger has done an absolutely masterful job within the constraints he has... Every single year, he has outperformed our spending every single year he has been manager. It is extraordinary. -Gazides.
Chamakh has proved to be a very expensive free
"When we had to suffer the team is a lion because they suffer together." 4 July 2020 at Wolverhampton Wanderers
Arteta on his team's first away victory at a club above them in the Premiership since September 2015 at Leicester.
I would put a 30mil player on 40k if he provides 40k's worth of work, the market price is how much you are willing to buyout their contract for, nothing to do with the actual quality of the player.
Theodore roosevelt - In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.
@padre, agreed that chamakh has proved to be an expensive free, but thats only with the benefit of hindsight. It was a great deal when he first arrived.
"A club is a union between players, supporters and directors". - Wenger.
Arsene wenger has done an absolutely masterful job within the constraints he has... Every single year, he has outperformed our spending every single year he has been manager. It is extraordinary. -Gazides.
"A club is a union between players, supporters and directors". - Wenger.
Arsene wenger has done an absolutely masterful job within the constraints he has... Every single year, he has outperformed our spending every single year he has been manager. It is extraordinary. -Gazides.
Quote:De Times
Stop talking rubbish karsene. Players are not pawn,
If you had 2 leftbacks and they're both on 50k and they both ran down their contracts or put in transfers requests and left the club and you're left with no leftbacks the value of a lb to you would be enormous.
Say the only LB you like was currently on 30k and it was another clubs best LB and were not willing to sell at a small price, as a club you shouldn't feel obligated to give him 90k a week because you bought him at a high price.
Chamakh left his last club on a free, if was on 40k and other clubs were offering 50k why should any club be the ones to offer 70k.
Makes no sense not paying over the odds in the market when it is an actual "market" but saying you have a business model any overpaying some employees.
What I said earlier was not directed at the club but what I would do, so I don't know about the assumptions part, I did use Arsenal as an example in this post though.
here's an old poll...
[www.thefootballnetwork.net]
Theodore roosevelt - In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.
Edited 1 time(s). Last edit at 2012:07:18:08:39:25 by karsene16.
"When we had to suffer the team is a lion because they suffer together." 4 July 2020 at Wolverhampton Wanderers
Arteta on his team's first away victory at a club above them in the Premiership since September 2015 at Leicester.
"A club is a union between players, supporters and directors". - Wenger.
Arsene wenger has done an absolutely masterful job within the constraints he has... Every single year, he has outperformed our spending every single year he has been manager. It is extraordinary. -Gazides.
1. Chelsea/Abrahmovich
2. The Emirates
3. Man City/Sheikh Mansour
All the rest in these two articles is purely based on hindsight. Arsenal is being run within it's means. At the minute that includes paying off our debts (what a strange notion).
2007-08 The debt was £450 million +
2010-11 The debt was around 100 million.
I don't have the latest figures but we can assume it's under £100 million.
So, despite media claims of the Arsenal board pocketing all the money, that over £350 million paid off our debt.
In the meantime, Wenger has kept us fairly competitive. Okay, we haven't been to the standard of 1998-2005 but we have still had semi-finals, finals & league title challenges since. The Title challenges have petered out from March onwards but we've still been involved.
Don't get me wrong, he's not perfect, he's made mistakes. The wage bill is one of those mistakes but that comes from his belief that his young guns had what it took to win silverware. He wasn't too far wrong, we only just failed.
What you are seeing now is Wenger looking to build another side, this time with more English players (Wilshere, The Ox, Gibbs) who are less likely to want to run to Spain at the first opportunity.
I know there are Arsenal fans out there who wish to see Wenger out and/or Usmanov in. But we would end up just being another Chelsea or Man City.
We are bigger than that, we are better than that. Trust in Wenger. The alternative could be very dangerous.
COME OUT COME OUT WHEREVER YOU ARE
and tell us who David Dein made sell their shares like I asked the other day
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