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The Economic Vindication of Arsène Wenger

June 2, 2010

Arsène Wenger has had a tough time in front of the media over the last few years. Arsenal are still playing the high class, crisp passing game everyone loves (or loves to hate), but silverware has not been forthcoming. Recently the economic figures have been released, revealing that Arsenal’s turnover is exceeding Premier League records, and this in itself can be seen as a step forward.

A graphic from the Guardian

However, the harshest critics are those who completely lack perspective. The easiest way to visualise the project that Arsène Wenger and the back-room staff at Arsenal have been working on is to split it into three stages. The first stage was the moulding of the club in Arsene’s image, and the transformation of Arsenal from a good team into a successful, world class team. This was completed, with many years of silverware, and high achievements.

The Second Stage

From this point the club then required the second stage of development. This stage involved turning Arsenal into an economic powerhouse, to parallel the achievements on the football field, and maintain sustainable success for the long term.

This second stage began in 2002 with the re-branding of the club, a new logo, and the plans to build Ashburton Grove, or the Emirates. Stage two is arguably the most difficult transition for any club to undergo. There is the financial risk surrounding debt accumulation, and the requirement that success be maintained on the field.

This transition was meticulously planned, and the nature of the sustainable growth meant that the squad development would rely more on nurturing talent rather than buying in an overinflated transfer market. Moving to a new stadium is hard for many clubs, most suffering loss of form, relegations, debts, just look at  Valencia or teams such as Leicester, or even the calamitous Wembley project.

Instead of this, Arsenal have maintained a Champions League place, albeit precariously at times, over all the years of hardship, and have managed to mount title challenges in 07/08 and 09/10. Not only this but the team have reached the Champions League Final, Semi final, and Quarter finals twice, our best ever record in Europe. I will accept the arguement that players like Cesc agitating for a move could be partially a result of this transition, but how else should the club be grown? There are of course other ways of analysing the economics too.

This record may not equal silverware, but put in perspective it is an impressive achievement. Now the success is off the pitch. Arsenal capitalised on their boom years, and now play in arguably the best equipped stadium in Britain.

To top this off Arsenal’s debt is being paid off very fast, over £100 million out of roughly £350 million went in early 2010. The recent figures though are the greatest vindication of the project that is two thirds into completion. Arsenal now have a turnover of £316 million, a Premier League record, and certain qnly one of the worlds largest. Debt is not only being paid off quickly, but is sustainable, and is only 8% of the Premier League total, Man Utd and Liverpool combined represent almost 40%.

In addition wages are held at an astounding low of 32% of turnover, which is unheard of in the Premier League.

This is the second stage of Arsenal’s transformation well into completion. The club is turning into an economic powerhouse, whilst maintaining consistent (although a little unsatisfactory) performance on the pitch as a price for the painful transition. Once stage two is complete, the third and final stage is to then accelerate the club’s performance without the hindrance of debts. Arsenal can then move up a gear as one of the world’s richest, but also most sustainable clubs, with success on the football field increasing.

The three stages see Arsenal move from successful, to rich, and then to becoming very successful sustainably.

Outside Influences

Do not forget that the most difficult second phase has also come at a time when foreign investors have been loitering, in a time when clubs like Man Utd and Liverpool are saddled with debt, the strains of which finally showed this season. This type of ownership has also seen teams such as Chelsea and Man City over inflate the transfer market and create extra competition at the top of the Premier League.

Meanwhile Arsenal have been quietly building on a fantastic model, which will deliver the goods in the long term. Take a team like Liverpool, they have had arguably more success than Arsenal since 2005 – winning the Champions League in 2005 and the FA Cup 2006, compared to our FA Cup (2005), and finishing higher in the league on several occasions. The difference is, that although Liverpool have achieved a greater triumph than Arsenal ever in the Champions League, they are now mired in debt, with little money for new players, possible mass exodus mooted, no new stadium built as promised, a disappointing year in the League and Champions League, and now finishing 7th.

Arsenal may not have had hands on the Champions League trophy yet, but the club is arguably in a much better position to go on and challenge for it once again, and each year Arsenal do so they do it with improved finances, and improved young talent. Don’t forget that the new Premier League rulings on home grown players may also work to our advantage regarding youth players.

The most crucial step now is making sure that key players can keep the faith, specifically I mean Fabregas. If Cesc leaves then he is replaceable, but the blow will be massive. Never before has Wenger lost quite such a talent in his prime. The team needs to be united, and requires continuity to progress into a new era where Arsenal can dominate in competition and economically. The situation is improving year by year, but there is always pressure to balance this with results, and specifically silverware.

Interested in more detailed discussion? Our Anaylsis section covers tactics, stats, players and more.

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31 Comments
  1. Benjamin permalink
    June 2, 2010 2:39 pm

    Great article. The fact that some dont appreciate what Wenger has done for our beloved football club grates me. The kind of people insistent on short term success regardless of the long term effect on the stability of the club. How many other clubs have lived beyond their means chasing an unrealistic dream? Portsmouth etc … Look at them now. As soon as Roman’s cash poured into Chelski back when we were the unbeatables i knew we would struggle to keep up, but to have kept us as a solid consistent top four side whilst making more profit than any of our rivals is testament to Wenger. Perhaps only in a few years time will his work be truly appreciated … when the new UEFA rules come in regarding only profitable clubs being allowed to play European football. With healthy profit figures, manageable debt and a youth team stuffed full of quality nurtured by Wenger, Arsenal will be placed better than any other club to dominate English football. I only hope Arsene doesn’t heed the booboys and is there to see it and get the credit he deserves. Even if he isn’t, genuine long term fans will always appreciate what he has done for Arsenal Football Club.

  2. Randy Osae permalink
    June 2, 2010 2:56 pm

    FUCK IT!

    I would rather be in debt while we pile up trophies…like United.

    And no, don’t tell me “go support United” or “you’ve been pampered by Wenger’s success”…since those are your best comebacks.

    As a fan, I don’t get any financial profit from Arsenal (I get losses in fact), so these economical charts really can’t concern me.

    I’m not the club’s CEO for fuck’s sake. I’m a fan who pays to go watch them and I need to be rewarded with pride from them players – trophies!

    OK, if these charts of the club’s savings and profits should be meaningful to us fans too, then how about they share the money with us then?…yes, how about that?

    • james permalink
      June 2, 2010 3:19 pm

      yeah ur a fan but ur also a relatively ignorant one considering that ‘like the average Leeds fan of the recent yesteryears’, you’d be one of the first to tuck in your tail and bolt for the door when we end up with an overburdened wage commitment and get relegated/ mire in administration in 5 yrs of doing what you hope we do and spending the type of silly money to go head-to-head with the chelskis and ameriman uniteds of this world.

      a man gets pride in what he chooses to take pride in, if you prefer the ‘ephemeral’ lure of trophies over long-term stability, support chelsea or man city, they need guys like u.

    • panker permalink
      June 2, 2010 3:58 pm

      Randy Osae
      you said not to tell you… but i have to say:
      go support United…
      or CSKA London

      Wenger is Arsenal , that’s why his name is Arsene…

    • Andy Mack permalink
      June 2, 2010 4:56 pm

      Did you support Leeds previously?

      • Randy Osae permalink
        June 2, 2010 6:53 pm

        OK guys, go and eat the money with the club then.

    • Travelling permalink
      June 6, 2010 11:39 am

      *FUCK IT!

      I would rather be in debt while we pile up trophies…like United.*

      So how do you think Spuds will do next season?

      Come on guys… Definitely not everybody who are not satisfied with Wenger are scum’s supporters, I’d say many aren’t, but this one most likely is. Many gooner rightfully want trophies and want to see their hard earned money spent on players than other things, but no real gooner would care nothing about our finance and debt, and want us to be in the position of manyoo who are going steady towards nothingness in a few years time, just like Liverpool (Liverpool is still more likely to be saved by a bored rich man, mind you).

  3. adano-nairobi permalink
    June 2, 2010 2:59 pm

    Well said, I wish all arsenal fans could understand it.
    Keep up the good work.

  4. gunner17 permalink
    June 2, 2010 3:01 pm

    yeah, good article.

    it is still frustrating and inexcusable that the first team has been losing in exactly the same to to exactly the same type of opposition in each of the past 5 years.

    wenger has done a lot of good but he seems to have some major blind spots about basic simple things. our lack of height and overall weakness at the back could have been remedied very cheaply. any 6ft+ lump of a defender from the championship could have done a job for us for cheap. instead wenger brings in geriatric midgets like silvestre.

  5. gunner17 permalink
    June 2, 2010 3:07 pm

    the club should also be more careful with how they influence fans expectations with regard to transfers.

    saying at the start of every summer “we’ve got squillions and squillions to spend” and we “promise to buy two or three world class players this summer for sure” and then ending up having brought in silvestre, chamakh on a free plus a couple random 17 year olds, while systematically selling one or two of our biggest name players every year – it only goes to show that we are absolutely broke and are talikng shit.

    no wonder fans get pissed off.

    • June 2, 2010 3:26 pm

      We have made transfers worth over £10 mill each summer though. Wenger never spent big anyway.

  6. gunner17 permalink
    June 2, 2010 3:16 pm

    i’m wondering whether the club has chosen not to release major funds for new players until the entire £350m debt is paid off? in which case we’ll be downsizing, selling off our best performers every year, and promoting younger and younger kids for the next 5 years.

    that wenger keeps buying so many talented young kids even now, when there is a glut of young professionals bubbling under the (very young) first team, indicates that he expects to be managing a production line more than a football team over the next few years.

    i thought that wenger wanted this first team to grow up and challenge for trophies together. this is what he has been selling us for the past 5 years. ‘they’ll get better and win big soon enough.’ allowing fabregas to leave this year or next would show that to be a lie perpetrated on the arsenal fans.

    a lie to keep bums on seats while the club secretly has no intention of really challenging until the entire debt is wiped out.

  7. June 2, 2010 3:22 pm

    Randy – WTF?! the reason this is important is to ensure the club exist for many years and generations to come. Don’t be so damn shortsighted. Look at Leeds… Why did they end up as they did? Poor finances! You have a very poor memory and need a reality check.

  8. gunner17 permalink
    June 2, 2010 3:28 pm

    i guess what i’m getting at is that the opportunity cost of not winning trophies is now much bigger than the benefits of continuing to focus on paying off club debts.

    our remaining debts have years and years left to be paid off. our revenues even with a losing team are massive and easily big enough to pay of our remaining debts.

    wenger should plug the gaps in this team now, spend a measely £30-40m this summer, and the success of the team will take care of everything else. if he gets his investments right this summer, the natural growth and succesion within the team will ensure that we hardly have to spend a penny in future years. the club will be debt free in 5 years but spending now will mean it will be a trophy-laden 5years instead of another trophy-less 5 years.

    • sad permalink
      June 2, 2010 6:37 pm

      when did 30-40M become measly?

  9. Fred permalink
    June 2, 2010 3:42 pm

    Great article from a true Gooner. Considering what we all went through in the late 70’s and early 80’s this so-called ‘hard times’ are blessed with incredible football. Hopefully, the third stage will be coming soon when the best run club in the Premiership will have the financial muscle to compete and win the trophies. Success is not only measured in trophies and I delight in being a Gooner whether we win anything or not

    • george permalink
      June 2, 2010 4:53 pm

      Fred , i so wish i had said that.Spot on mate

    • SharkeySure permalink
      October 28, 2010 9:36 pm

      Great article….great comment Fred.

      Randy Osae – so you want trophies for yourself today, and don’t give a toss about what sort of club will be be left for kids/grandkids to support..?? Oh dear…

  10. June 2, 2010 4:02 pm

    Thanks for the link to my site in the article. Wage bills also have a massive bearing, for our study we looked only at transfer fees.

    I’m interested to see how Wenger (whom I admire greatly) will fare by continuing to field a ‘cheap’ side. My research shows that Arsenal were only challenging for the league under him when the side was a lot more expensive (and presumably, older too).

    But long-term, Arsenal are in a far healthier state than LFC or Man United. You have a stadium that is being paid off; we have £300m of debt and none of that has anything to do with a stadium (apart from a crazy £40m on design fees).

    • June 2, 2010 4:30 pm

      Yes, the team was definitely more successful in terms of trophies when the club spent more, but that is the payoff we have had to make in order to take the club forward financially. It has been painful, though in reality I think Wenger has done a good job.

      Liverpool were unlucky in the fact that you had the leveraged buyout. Debt isn’t the end of the world, it’s just the ability to maintain it and develop the club which causes problems.

      Thanks for your comment.

      • gunner17 permalink
        June 2, 2010 4:43 pm

        i wouldn’t want to be a liverpool fan because i think they’re f*cked. was istanbul worth another decade in the wilderness?

  11. Hypern0vae permalink
    June 2, 2010 5:28 pm

    Hands down the best article I’ve read in a long time – it’s just a shame that so many fans are only interested in the here and now, irrespective of the longer term effects. One day the work of Arsene and the board will be viewed as revolutionary, and all football clubs will try to replicate our business model.

    Randy Osae – try to recognise that this isn’t Football Manager – if we go for broke and rack up trophies at the expense of the longer term future of the club, then there will be no long-term future. Who do you think would then be complaining in 10 years when Arsenal are saddled with debt and forced to go into administration..? Have some perspective for crying out loud – whether we like it or not, football jsut isn’t the same game it was 20 years ago, or even 5-10 for that matter – both on the pitch and in the boardroom.

    • June 4, 2010 12:47 am

      You are right when you say that other football clubs will try and replicate our business model. How many teams have we seen who are talking about developing their youth team players further in order to reduce excessive transfer spending down the line.

  12. GoonerMaama permalink
    June 2, 2010 6:17 pm

    Wenger get Cole as wht u did for Chamakh…. Take ur time dont spend reserved funds hasty like Berbatoff or Ibramovich or shevchenko.We will support u but need one 1 GK,2 CB and 1 DM to make the team strong……
    Home of the Football — Emirates
    Home of the trophies — Arsenal

  13. Johnny permalink
    June 2, 2010 8:47 pm

    Best article i`ve read for a long time mate. I think Benjamin and Fred summed it up best in the comments section, as for Randy Osae, you are a total cunt. I`m only surprised that you are still pretending to support the Arsenal, I`d have thought you would have jumped ship a good few years ago. As a fan from the early 80`s, I feel the last few years have been reasonably sucessful and I`m quite prepared to suffer a few more trophyless years if it means my kids will see the long term benefits of our current policy. Wankers like Randy probably don`t give a fuck about things like that though.

  14. June 2, 2010 9:20 pm

    Has anyone else noted the fact that Chelsea’s turnover is actually down from last year?

  15. Kyle Douglas permalink
    June 3, 2010 7:19 pm

    Hey great article, I wish we had more Arsenal bloggers out there who actually could write something worth reading. Most of these idiots who think that we should be buying overpriced players every year need a reality check. Arsenal is the envy of every club in the world now financially speaking and once the foundations are set the trophies will follow. Arsene is like the Mozart of his time, most people just don’t get it but the genius will be revealed years later. Fortunately you spotted it early.

    Also can you write an article rebuffing some of the so called arsenal supporters on TV and radio like Ian Wright and Paul Merson who constantly talk crap about Arsenal and have no idea as to how to manage a team or club. I head Ian Wright yesterday saying he’s embarrassed by Arsenal because we wont sell out best player to Barcelona for far less than he’s worth. What an absolute dumb ass, we need to start calling out traitor’s like these every time they fill the airwaves with their anti Arsene drivel.

    Thanks for the best article I’ve read this year.

  16. James permalink
    June 4, 2010 7:23 pm

    Outstanding perspective and well articulated article. Arsene Wenger does not get enough respect and appreciation, no doubt. Winning silverware is great, but there is so much more to the business of sustainable football excellence than spending money and winning trophies.

  17. Rotimi permalink
    June 4, 2010 9:15 pm

    Greeting to all Arsenal fans all over the globe, it may look we’re not wining any trophy 4 the past 5 seoson, still we’re still one of the best club doing what people never expect 4rm us, as 4 me what we need to do nw is to add more exprence player if we can do that i bet u next ses son is going to b our sesson. Up Guners

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