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Arsenal Finances and What the Board May be Doing

Discussion in 'Arsenal' started by ToledoTrumpton, Mar 22, 2013.

  1. ToledoTrumpton

    ToledoTrumpton Well-Known Member

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    I know a lot of you are convinced that the Board at Arsenal are mentally unstable, even if opinion is divided on Wenger's mental state.

    That said, I think I may have an insight to what is going on and the possible plan, based on how you would run a normal company that has nothing to do with football. Now, again, I know a lot of you believe that football clubs shouldn't be run like another kind of business and that rich owners should be obliged to pump their own money into clubs in order to make them competitive, but you have to accept that whatever the reason, this just isn't the case at Arsenal.

    So, if we assume a normal business, then buying a new team is very similar to retooling a factory. You need a project to replace the aging or obsolete machinery and you need an operational model to operate the new equipment. Based on the project plan and the operational model you can forecast the cost of the project and estimate what income you will need (using the new equipment) in order to break even.

    Now the important thing is that you can't start that project until you can meet the full cost of the project, without incurring debt, that will jeapordise the new operational model, or until you know you can at least break even under that model.

    Money spent maintaining the old equipment is largely wasted, so that is kept to a minimum, while you are building up the funding for the new system.

    So all I am saying is, don't be surprised if you see what the press will describe as a total change of personality from Arsenal, in the next year or so. You will probably told that this is some kind of admission that the Club board has been a failure and that Wenger got it wrong.

    I don't think so myself. My own view is that they have an operating model that they have stuck with for the last 10 years. They financed that, they planned for that, and sane heads would say that given the stadium debt, results have been pretty good. With a bit more luck, Arsenal might have won more, but on the whole, not too bad.

    Now the time has come to retool, and move to a better operational model that suits the club's improving finances, but that isn't going to start until the entire forecasted capital cost is in place, and the new operational model can be profitable.

    For some this is going to denote a big change of approach at Arsenal. For me, it will just be more of the same sound business management we have enjoyed over the last 15 years.
     
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  2. PINKIE

    PINKIE Wurzel Gummidge

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    I think that's a pretty good analogy. The board made this plan ten years ago when they were planning to build a new stadium. With that came the need to secure some longish term commercial deals, that we're not that lucrative, but that maintained their business plan. Also came the need to have a different approach in the transfer market, developing young players and selling out most valuable ones.

    Nobody could have envisaged just how skewed the market would become with the mega bucks pumped in by City and Chelsea and the housing slump was also difficult to predict, but overall, whilst my personal opinion is that the board have been too cautious at times and have also put their own interests first at times, especially over the Kronke / Dein / Usmanov affairs. Overall they have done a pretty decent job of turning our club into one that can now not only exist using a self sufficient model, but one that looks like it has the teeth to take the next step up and buy some top quality players.

    Sack Wenger ? Sack the board ? Spend all of the surplus ? These were some of the cries we heard over the last few years. All of them would have simply plunged us into a crisis which could have taken decades to get out of in my opinion.
     
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  3. EmirAleks

    EmirAleks Well-Known Member

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    Quite a long way to say that we need to buy players. My prediction is we will certainly invest this summer. I expect another 10 ml striker to replace Chamakh, a new backup 3 ml keeper to replace Man none and/or Fabisnski, another young defender as a replacement to Djourou/Squillaci. Probably another 4-5 ml. And I hope Sagna signs.
     
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  4. lazarus20000

    lazarus20000 Well-Known Member

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    The season is almost over and we will see just how much Arsenal will invest into the squad for next season. Talk is cheap, put your money where your mouth is.
     
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  5. I am Gooner

    I am Gooner Member

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    A piece of advice - don't go into business

    Any well run business would not depend on needing all of the equipment being replaced at the same time, but would be better being built in a modular way so any part of the machinery could be replaced at any time. This would keep costs more consistent and mean that if you have a breakdown of one part you can replace that part without having to replace everything. It would also allow you replace any parts which are slowing down or reducing the overall process/efficiency and make increases to productivity an profits step by step rather than having to wait. You are not then limited by the slowest part of the process but can continually build and improve your processes. If it all had to be done in one go you would probably be out of business and obsolete before you'd saved enough for to replace everything, in fact you would be far better off going into debt to keep your business up to date and competitive with your competitors. As they say - if you're not going forwards you are going backwards. I also disagree with the statement that you cant start the project until you have all of the money in place. You would have plans in place for all of the money and contingency plans , but by no means need to have all of the money in place at the start of a project that would probably take years.

    In the same way a well run club would keep a well established team with regular minor changes rather than a wholesale change of the team which would mean the new team would need time to gel and would suffer in the meantime. Its fairly easy to slot one or two players into an established team, but too many new players and you lose the understanding and unity within the team which has to be built up again.

    I know that seems like a negative assessment of the OPs opinion, but I have over 20 years experience in business including negotiating contracts worth £1/2billion a year, procurement of parts and machinery in manufacturing companies and working for multi billion pound companies.
     
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  6. The Bonstar Wandit

    The Bonstar Wandit Well-Known Member

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    As Sanka would say, "that's a hell of a place to be coming from!"
     
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  7. PINKIE

    PINKIE Wurzel Gummidge

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    Cool Runnings <ok>
     
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  8. ToledoTrumpton

    ToledoTrumpton Well-Known Member

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    Gooner, it depends on the business. My example was so vague and so generalized I'm rather impressed that you contrived to masterbate your own ego to the extent you did. Time to clean up mate.

    Just read what you have written and you will see that you have made a lot of vast assuptions about what I wrote to contrive your disagreement.
     
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  9. I am Gooner

    I am Gooner Member

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    I have answered based on the information available in your post based on what it says and think my answer is justified and defendable. I am answering from a position of relevant experience that would apply to any business other than possibly very small one man enterprises. You have imo shown a poor understanding of business and whereas I have given reasons for my disagreeing with you in the limited space available you have resorted to immature insults. If you want to trade insults maybe you should change your name to ToledoTrumptuplittletwat, it would be more appropriate.

    Could you also provide something to back up why you are such an expert at business please, I would like to know your justification for your claims of knowing how to run a business which is comparable to the multi billion pound business of football (and yes size does matter when it comes to how you run a business)
     
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  10. ToledoTrumpton

    ToledoTrumpton Well-Known Member

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    You seem tave taken what I have said, and expanded it or mis-stated it and then found fault with the result.

    For example, you say "If it all had to be done in one go you would probably be out of business and obsolete before you'd saved enough for to replace everything."

    I never said that everything had to be replaced, why the **** would I say that? You somehow took what I wrote to mean that everything had to be replaced and then forund fault with it!

    That is a known as a straw man argument, and it is relies on your audience (ie the forum) being too stupid to notice that you have mis-stated my opinion.

    Similarly, you wrote, "I also disagree with the statement that you cant start the project until you have all of the money in place". Again I did not say that. My actual statement was, "you can't start that project until you can meet the full cost of the project, without incurring debt, that will jeapordise the new operational model, or until you know you can at least break even under that model."

    Again this is a straw man argument you think we will all be too stupid to notice.

    This is all designed to derail the thread, and stop people writing about it. I don't appreciate your tactics and I really think that this is the kind of post that should get you banned.
     
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  11. PINKIE

    PINKIE Wurzel Gummidge

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    Nobody is getting banned, but it would be nice to have this debate without the insults <ok>

    I think the Litmus test for this board and their vision will come this summer, on the back of the assurances that they have made about the club being in a position to spend and strengthen; we'll see what they do. As I've mentioned I think they have been too cautious at times and to be honest the club has been fortunate to qualify for the CL the last couple of seasons.

    I think there's a lot of expectation for the club to make some very deliberate intentions to compete with Utd, City and Chelsea this summer.
     
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  12. Arsegun

    Arsegun Well-Known Member

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    My next door neighbour is taking his dog out to do his business right now. It should be left outside imo.
     
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  13. The Bonstar Wandit

    The Bonstar Wandit Well-Known Member

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    Totally agree PISKIE.
    The time for talking is over. Now is the time...for Arsenal to shine ;)

    IF they spend well, AND this defensive solidarity continues, AND they make Top4 this season, AND it seems clear that Wenger has learnt, then I would not be averse to him continuing as Manager.
     
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  14. ToledoTrumpton

    ToledoTrumpton Well-Known Member

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    Piskie, I am not really up on my social media, being an old fart, but I think this kind of straw man argument is one of the tactics popularly called trolling these days. I am now understanding why trolling is so despised , it really is infuriating when someone does it to you. Anyway, apologies for the insults, but I can't stand it when people use these kind of tactics in a simple debate.
     
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  15. PINKIE

    PINKIE Wurzel Gummidge

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    Despite some of the silly accusations made at me over the years, Wenger apologist, Rose tinted, Blinker brigade etc. I've always been very clear about what I think this club needs to do, which is strengthen in some key areas and stop selling our best players. I've gone along with the boards' plan because I see the bigger picture about the financing of our stadium, being prudent in the transfer market and not plunging the club into unmanagable debt. Although there are things I would have done differently, I don't think anybody can really argue that they have taken us up to the next step in the history of the club, to a place where we have the framework in place to challenge the very best clubs.

    BUT, the proof is of course in the pudding. We're now at a point in time where we need to see some decisive action in order that we don't get left behind City, Utd and Chelsea and not overtaken by the Spuds or Everton. It's okay having a good framework and an intelligent plan, but we need to start seeing the fruits of our labours over the last 8 years.
     
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  16. The Bonstar Wandit

    The Bonstar Wandit Well-Known Member

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    Exactly. My issue with the board is their old fashioned style. They haven't been aggressive enough with regards to sponsorship deals, and they've been very much on the back foot with regard to other new forms of income.

    Likewise, Wenger hasn't recruited particularly well and seems inflexible and unwilling to change or delegate at all.

    If these things change I'll be happy, but there MUST be tangible progress. An incredibly strong finish to the season is needed for me. At present I'm unconvinced, and still want to see Wenger leave in summer.
     
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  17. PINKIE

    PINKIE Wurzel Gummidge

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    I agree that the board can be quite old fashioned in their approach, I would call it over cautious.

    I wasn't particularly impressed with the way PHW first booted out David Dein over Kronke to then go and fully embrace him a few months later. I think the board were acting in their own interests over the share lock down too, they were scared that Usmanov might get a decisive share and destablise their power base, when a 5%-10% sale share could have raised around £50m - £60m for transfers.

    That said, I don't think our commercial deals were that bad given the circumstances. We needed to tie ourselves into these deals at the time, for the duration in order to finance the stadium. So our bargaining power was nowhere near as good as it is now. I think the deals were pragmatic ones, rather than big money spinners. But we are now in a position where our commercial revenue should increase as we renegotiate new deals. I also like the tours in places like China and Indonesia, I think they will increase commercial revenue too, so overall I think the club are doing okay there.

    Wenger, for me is still one of the best coaches in Europe, ask any club if they'd want him and other than perhaps Utd, they'd all say yes. So the accusations of him 'losing the plot' etc are wide of the mark. He's not perfect, and he frustrates me at times, with team selection, formation and substitutions, but he is still a top quality manager. I've said it for years now, but it's because of Wenger, not despite him that we have managed to qualify for the CL every season during the last difficult 8 years. Had we had sacked him like some were calling for, then I think we would already have fallen out of the top 4.
     
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  18. Grizzly

    Grizzly Active Member

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    Interesting debate.
    Of course buying big names will only happen if the manager believes his squad needs strengthening.
    AW's stubborness over recent years has contributed to our lack of success IMO, now I do think Summer 2013 is a major crossroads for the club given the noises made this season about having money to spend and the fact that since Summer 2011 we have bought 13 new players, it's fair to say that around half of these signings are not up to/have not made the grade, so if the warchest is opened up will AW finally accept that a large number of his recent acquisitions have been mistakes ?
    It'll be an interesting Summer, personally those in here that think we'll spend £75m and bring in 4 world class players I think will be disappointed....
     
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  19. I am Gooner

    I am Gooner Member

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    Before I get back to the debate in question I just want to say I am not trolling and completely stand by my previous comments. The fact I think the original post was fundamentally flawed (but accept it may just be my interpretation of the wording used) and tried to give some justification for this reasoning was responded to with personal insults and personal attack by someone who is not prepared to give any information to back up why they consider themselves knowledgeable on the subject. That's what I think of as trolling, but Im prepared to forgive and move on without trying to get them banned. In fact I will even apologise for any offence I have caused by responding to what was written even though I still think my response was completely justified. At the end of the day we are Arsenal supporters on this board and want the best for the club, but wont always agree on what that is.

    Now back to the debate. One of the things I think badly damages us was getting rid of David Dein which someone mentioned. He had a reputation of being a brilliant negotiator and got what he wanted most of the time. That included transfer negotiations where the evidence shows he got top players to agree to sign for us and in dealing with the FA, etc. Once we lost him we lost the ability to persuade players to join us and as he was one of the best in the game I doubt we will ever get anyone quite that good again. This is likely to have had a major impact on the players we have signed since and how many times over the last few years have we heard that we were unable to close transfers before the end of transfer windows? I cant help but think Dein would have got the job done.

    Until this is addressed I think we will struggle to sign top players and add to this the wage cap of reportedly less than half what the top clubs are paying their star players and our recent lack of trophies makes it even harder. While I agree with the principles of the board, I think its time they accepted that things have changed in football and in the real world you have to change to keep up with your competitors or you will be left behind in any business.
     
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  20. PINKIE

    PINKIE Wurzel Gummidge

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    Agreed <ok>

    Also, I think the club deserve some credit for NOT going down the sugar daddy route. Our competitors might be ahead of us, but at what cost ? City, Chelsea and to an extent Utd have spent obscene amounts of money to get their success. I would much rather we earned it, than bought it.
     
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