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Sports Analysis

Arsenal Football Club – Model or Mess?

When we think about, or analyse, or question Arsenal’sfinances, the phrase most often used is their ‘financial model’, something to be lauded, praised and preached about, held up as a shining example of success  in the modern world of football ‘sugar daddies’. Most recently, as part of their promotion of their new financial fair play policies, UEFA have highlighted Arsenal and their business strategies as the way forward. General secretary Gianni Infantino praised them saying "Ten years ago Arsenal reported less income than Chelsea, Liverpool and Newcastle. Now it is more than those clubs and in 2009 more than double Newcastle's. This shows what is possible with good management and careful investment."

It is fair to say that their model has been somewhat successful. Off the field, that is, considering the last time they were league champions was in 2004, their most recent trophy an FA Cup final triumph over Manchester United in 2005. Having moved to the Emirates stadium in 2006 in an attempt to increase income from tickets, they’ve been averaging around £300 million in income each year. The club has made commendable inroads into debt over the Emirates, have made substantial profit in buying and selling players and generally managed well for a club without a billionaire owner pumping in the profits, despite a wage bill of around £130 million, one of the highest in the League. The club also has substantial property based assets, debt free, generating income from their sales. In the transfer market, Arsène Wenger has been very stringent, selling big and buying small, preferring to opt for younger players that can be developed into stars, in the same way he brought in then 21 year old winger Thierry Henry from Juventus and remoulded him into one of the best centre forwards our generation has seen. Younger players such as Maroune Chamakh, Samir Nasri and Jack Wilshere have all been brought through at little expense or none at all. Although ticket prices have had to be raised, the club seems to be tipping along nicely, managing well.

The key word here is ‘seems’. And financially, that is.

The term ‘financial model’ just papers over cracks beginning to come to light in past months and years. Arsenal are a dying club. The 5-2 result over Spurs at the weekend is only the shock to the club’s heart, reviving them for a time, but underneath, the condition still remains. Their property assets, while worth around £40 million, have decreased in value as the property bubble burst and overall revenue dropped by £124 million to £256 million the previous year. Commercial revenue is falling as the club fails to find new ventures and ticket sales are also dwindling. On the football side, things aren’t much better. Contrary to the belief of many, there is no formal wage structure at Arsenal, merely an idea in Arsène Wenger’s head as to how players should be paid. Thierry Henry was paid the highest at the club, taking home £100,000 each week before he left for Barcelona. Since then, no other Arsenal player has reached the same heights. Perhaps an issue in luring top players then? But the biggest problem isn’t relatively low wages. Arguing that players are only getting £60,000 or £70,000 each week is laughable. No, the biggest problem here is that Wenger believes in wage parity or equilibrium throughout the club. Perhaps this is a laudable stance with respect to keeping a level dressing room, with no one player paid a fortune while the others look on. However, it also means Arsenal is paying big sums for ordinary players. Striker Nicklas Bendtner was earning around £52,000a week. Can anyone imagine Sir Alex Ferguson even signing such an average player, let alone paying him far above his worth?

Coupled with this is their problematic transfer history, also littered with ordinary players. Smaller signings with future potential may have been good for Arsenal’s books but for their trophy cabinet and trophy hungry supporters they have, essentially, been a disaster. Andrei Arshavin has flopped and has now departed on loan to Zenit St Petersburg. Moroccan forward Marouane Chamakh has been a big disappointment. Samir Nasri might have stayed had Wenger dusted off his checkbook and winger Theo Walcott has rarely lived up to his much hyped potential but still remains, despite showing only rare flashes of talent. Last summer Wenger commented, “Imagine the worst situation, that we lose Fabregas and Nasri. You cannot convince people that you are ambitious after that.” Of course we know now that Arsenal did indeed lose two of their best players. Fans might have been mollified with a few top class signings but instead the usual routine of moderate spending was employed and instead they found themselves welcoming Yossi Benayoun and Mikel Arteta. Money is there for the spending, even if it’s not in the same region as City or United, and one great signing would be worth three average acquisitions.

Success in football is measured not in the boardroom and on the books, but out on the field, and the simple fact is money now equals success. Barcelona employ a string of high profile graduates from their youth academy but have still spent millions on shaping their team over the past number of years. They and Arsenalare not too dissimilar in many ways, ideology wise, and Arsenal have been often compared favourably to their Spanish counterparts with respect to the style of football they play and their emphasis on youth and academy. The reason Barcelona have stormed ahead, however, besides the acquisition of such talents as Messi, Xavi and Iniesta, is large income and thus the potential to spend large. They needn’t even look too far afield for an example of this. Back home in the Premier League, Chelsea experienced a huge influx of funds from Russian oligarch Roman Abramovich. They may not have won the Holy Grail that is the Champions League just yet, and with the current slump a longer wait may indeed be in store, but they have a reasonable haul of FA Cup triumphs and League titles to boast about. Manchester City have yet to be truly tested but remain promising contenders for future titles.

With regard to financial fair play, Arsenal, with their apparently admirable financial model, has nothing to gain, really. After all, teams such as Manchester United, Real Madrid and Barcelona are all still posting massive profits thanks to massive revenues from new sponsorship deals and commercial ventures Arsenal, who are locked into longterm kit, shirt sponsorship and stadium naming rights deal, can only dream about. Even those European clubs who are showing massive losses(Chelsea and Manchester City spring easily to mind) have had the impact of financial fair play softened, with allowances for losses of €45 million over the first three years of its implementation. Those who have big backers behind their clubs, an Abramovich, or a wealthy oil Sheikh, for example, will be left alone as long as their owners inject funds into the club, easing such losses.

 So, despite being a promising test in financial restraint, it would appear that the model as employed by Arsenal has indeed failed. A simple glance at other teams andleagues around the world shows that a mix of promising academy graduates and big money buys is the way forward. Reports are filtering through concerning the promise of a £100 million transfer kitty for the French manager. How he spends it will tell us a lot about whether Arsenal are ready to rejoin the big boys.Will he change his ways and fork out for the expensive players? Or will he beforever thinking about the financial side and spend sparsely, buying a few bargain buys here and there who may or may not turn out to be flops, and squirrel the remainder away for a rainy day? Spend it wisely Arsène, spend it wisely.

Conor Forrest
February 29th 2012, The Sports Arena
Barca and La Cantera – Producing World Stars

 The festive playing period and beyond hasn’t exactly been a bed of roses for Roberto Mancini or Manchester City. Injuries, coupled with suspensions and players departing for the African Cup of Nations have taken their toll. Over the last two months, City have only managed eleven wins out of nineteen games in all competitions and suffered five losses, including being dumped out of the FA Cup by rivals Manchester United and the League Cup at the hands of Liverpool. City rivals Manchester United are, despite not playing the best football of their recent history, only two points behind them.

That is not to diminish their remarkable overhaul. Since their takeover by Sheikh Mansour, the Blues have gone from strength to strength, aided, of course, by large pits of cash. Clearly, Manchester City have been effectively trying to buy success, much like Chelsea attempted, and succeeded to some level, several years ago. But, as a team, they still haven’t fully gelled together. They are, make no mistake, a very good team, after all there is eleven superstars playing together on the pitch much of the time. But they still don’t look like a complete side. There are missing something, that elusive quality, the togetherness that holds champions together. Perhaps that is something to be expected from a team of players drawn to the club by the lure of the green.

Recently, Frederik Veseli, United’s newest defender who recently crossed the Manchester divide has hit back at his old club. City, he says, have changed their priorities, away from nurturing young talent like himself, in pursuit of trophies and glory. “These days, Manchester City are chasing titles and major trophies,” explained Veseli's agent Adam Bouskouchi. “It is difficult for them to have faith in youth because they obviously feel experience is the best way for them to get where they want to go.”

Manchester City want success, badly, and as soon as they can possibly get their hands on it. However, pouring money at your problem until you win a trophy is not always the best solution. Real Madrid can attest to this. Undeniably they are one of the world’s most successful clubs, with nine European Cups and 31 La Liga titles. The era of the famed Galacticos ended effectively in 2006. It’s now been four years since the team won La Liga, hampered in their efforts by rivals Barcelona. Before last year’s final, 1993 had been the last time they claimed the Copa del Rey cup. And as for the Champion’s League, it has been ten years since Los Blancos achieved the ultimate in European success. This despite enlisting the expensive services of José Mourinho, Cristiano Ronaldo, Kaka, Karim Benzema and a host of other players and managers over the past number of years. Sometimes, developing great players from within the club is the answer, spending time crafting a solid side, costing the team less money and often bringing with it that most rare of qualities in football today – loyalty.

Perhaps the benchmark for such youth development in the world of football at present is Barcelona’s La Masia, one of Spain and the world’s top youth academies or La Cantera as academies in the country are known, basically a production line of football’s best players. Talented kids as young as eight or nine come here to play seven aside, and learn the Catalonian method of playing football. Out of the three nominees for last year’s Ballon D’Or, two (Lionel Messi and Xavi Hernándes) are graduates of La Cantera. So too are Pepe Reina, Liverpool’s goalkeeper, midfielder Mikel Arteta who recently joined Arsenal and, of course, ex-Arsenal and current Barcelona star, Cesc Fabregas. From the team that steamrolled Manchester United during the 2011 Champions League Final, eight of the starting eleven came from that school of football – Victor Valdes, Carlos Puyol, Gerard Pique, Sergio Busquets, Xavi Hernándes, Andrés Iniesta, Pedro and, of course, Messi. So too, did Pep Guardiola and his team of advisors.

The key to La Cantera’s success is its consistency. While at other clubs, players are taught according to the vision of the youth coach but at Barcelona, all of the teams play the same way, the vision of the club never changes, from oldest to youngest. Though coaches change, the style of play taught at the academy remains constant and unchanging, and has done since Pep Gaurdiola himself was there as a teenager. The idea is simple - keep the ball until the opposition make a mistake, says Albert Puig, technical director at the academy. The mantra at La Cantera is ‘receive, pass, offer.’ Thirty years of such footballing indoctrination has also impacted on the Spanish game at a national level; youth and senior teams are all dotted with Barcelona players,including the team which won the World Cup in 2010. Barcelona still spend a great deal of money – around €700 million over the last ten years. Then again, they take the lion’s share of sponsorship payments in Spain, and can well afford to.

Manchester City, then, would do well to examine La Cantera,and learn from their success. They are indeed planning on developing a huge training academy for the purposes of nurturing young talent. This, however, is still quite a while away. Unfortunately, those behind the steering wheel cannot afford to wait the same time as Barcelona have done for success and they continue to plough in money at the top while failing to really secure the foundations. Many teams at the top of the Premier League might surely breathe a sigh of relief.

Conor Forrest
March 8th 2012, The Sports Arena
The Curious Case of Carlos Tevez

So the CarlosTevez affair continues to rumble along nicely. First a quick recap.

August 2006 –Sky Sports reports that Tevez is refusing to play for his club, Corinthians. At the end of August, it is confirmed that both he and Javier Mascherano have beensigned for English club, West Ham United. In November, he leaves the ground early after being substituted. Shortly after, he throws a tantrum during a league match with Sheffield United. He helps West Ham avoid relegation, scoring the only goal in the last game against Manchester United. Despite being under contract until 2010, Tevez seals a £20 million move to the Manchester club.

2007-2009 -Tevez becomes an important player for the Red Devils, scoring in each of their campaigns, including the first goal during the Champions League Final penalty shoot-out. In May 2009, Tevez voices his dissatisfaction at having not been offered a permanent contract, saying his Manchester career will finish that summer. Despite United agreeing to meet the fee of over £25 million, and a five year contract which would have made him one of United’s highest paid players,his advisors inform Manchester United that he no longer wishes to play for the club.

July 2009 –Reports rule out a move to Liverpool for the wantaway striker, because of the implications for a Manchester United player moving to their bitter rivals. Despite this, Tevez signs a five year contract with close rivals, Manchester City, becoming the first player to move between the two clubs since Terry Cooke in 1999. Once again, he becomes an important club player, breaking his own goalscoring records and receiving two club awards.

December 2010 –Four months after being made club captain, he hands in a transfer request, citing both family reasons and a breakdown in relations with certain club officials. A senior City official described his reasons as ‘ludicrous and nonsensical.’ Tevez swiftly withdraws the request following talks, this time reaffirming ‘absolute commitment to the club.’

September 2011 –Tevez refuses to come off the bench in a Champions League game against Bayern Munich. Tevez offers a weak excuse, calling it a misunderstanding while receiving widespread condemnation from commentators and pundits worldwide. Mancini suspends the player for two weeks while an investigation is carried out. Following discussions with the clubs owner, Sheikh Mansour, Tevez is placed on gardening leave, instructed to stay away from the training ground, despite retaining his salary.

And all the while, his career has been tainted by his long standing arrangement with Media Sports Investments, who own his rights, and, more specifically, his representative, Kia Joorabchian, who appears to be pulling a great many strings behind the scenes. Fast forward to the end of 2011, and reports are claiming meetings between AC Milan and Joorabchian, seeking a loan move for Tevez during the January transfer window, with the possibility of a full time deal. The question here is, why would Milan want to take on the burden of such a player?

With Tevez, many things are clear. Firstly, there are concerns over Joorabchian and Media Sports Investments, who, it would appear, have an agenda of a monetary nature. Secondly, Carlos Tevez is a person and player to whom loyalty is a concept unknown. Tevez may kiss the club badge on his shirt, and proclaim the fans to be the best in the world, but when he gets sick of his club, no contract, fans or certainly any semblance of loyalty will hold him back from getting away. Thirdly,Tevez has a blatant disregard for rules. This has never been as clear as during his time playing for City. There is no need to go into the happenings pitchside during the game against Bayern Munich. Not to mention his repeated insistence on flying home to Argentina against his manager, his employers, wishes.

So think to yourselves, AC Milan. Is this player really worth the hassle, not to mentionthe €8 million loan cost and a further €18 million if you choose to buy him? Sure, he might score you some goals, and help you advance towards being genuine contenders for Champions League glory. But ask yourselves this – how can you be certain he’ll be there at the end of the summer? Sure, he may sign a contract, but ol’ Carlos has wiggled his way out of more contracts than you’ve won Champions Leagues. 

A rap on the knuckles for Mr. Tevez is not enough. If there was any justice in the world, Tevez would be stripped of any salary, and banned from playing football, for a minimum of five years. Perhaps then he would gain a sense of perspective. Highly unlikely, but worth a shot. Failing that, Manchester City should refuse to either loan or sell him off. Instead, they should play him the required 10% of matches, so he cannot break his contract under the Bosman ruling. Then, he should be left to rot until his contract expires in 2014.

It is getting to the stage where the football world is sick to death of hearing about the ungrateful and undeserving footballer. If FIFA won’t step in, then we are begging you Tevez. Please go away. And don’t come back.

Conor Forrest
March 16th 2012, Irish News Review
UEFA Fair Play Rules Attempt to Rein In Big Spenders

One of the highlights of the winter transfer window in 2011 was certainly Fernando Torres’shock £50 million transfer from Liverpool to Chelsea, then a new record for a British player, and making him the 5th most expensive transfer in association football’s history, alongside such esteemed figures as Zinedine Zidane and Luis Figo. That particular window, along with the £50 million dropped for Torres, a further £170 million was spent during the month, bringing fresh faces into the Premier League for the remainder of the campaign. Fastforward to 2012, and the number drops quite considerably. The big name of this year’s winter window was French striker, Djibril Cisse, who signed for newly promoted Queen’s Park Rangers. Overall, around £60 million was spent this time around, though it may have been more, had want away Manchester City striker Carlos Tevez finally managed to escape. Perhaps a predictable slide, bearing in mind the belt tightening in the industry across the world, and perhaps, to a lesser extent, the new fair play rules introduced by governing body UEFA.

UEFA are going about the implementation of their new rules quite seriously, and with considerable reason. During the 2009/10 season, UEFA’s annual audit of Europe’s top division clubs showed a net loss of €1.6 billion. Debts were even higher, at a staggering €8.4 billion. Salaries, unsurprisingly, make up a large percentage of these outgoings. Many top clubs are spending more than their entire income on salaries alone. Manchester City, in particular, have recorded losses of £121 million in their second year of ownership under Sheikh Mansour.

"There was a great risk of crisis, of the bubble bursting," Gianni Infantino, UEFA’s general-secretary said. "You can see from the losses and the debts that the situation is not that healthy and we cannot go on like this. We had to do something, and financial fair play is the way we have designed it."

The sanctions for flouting these new rules are designed to be prohibitive. From 2013/14, clubs accused of being in breach of rules will face a semi-independent panel. The punishments will depend on the seriousness of the offence; a reprimand, fine, a deduction of points in UEFA’s competitions up to, at the severest end of the scale, a ban from the Champions/Europa League.

A level playing field and a more stable system are the main aims of these new financial directives. But their impact may be even more important, for the longevity and survival of clubs and the game. Investment is sometimes frightened off by the obscene wages and inflated prices offered for top players. It stands to reason that if such prices, such wages, were reduced somewhat, then smaller clubs might entice investment, truly interested owners, who will develop youth programmes and invest in the local community too, not some rich billionaire who views his new purchase as a plaything, something to throw large sums of money at once in a while. Clubs will not be risking huge yearly losses and will continue to thrive and to grow.

"These rules are not excluding new investors," said Jean-Marie Aulas, president of Olympique Lyonnais. "But I believe that new investors can come into the market attracted by rules that mean there is a stop to losses and debts. It's a very good condition for an investor to come to knowing he can't lose more than a certain amount."
Of course, fairness for clubs across the board is very hard to ensure. Teams are allowed a €45 million loss over the first three years of its implementation, €30 million after that. While larger clubs may be able to absorb such losses without major issues, smaller clubs could never cope. Those top clubs will also be able to breach regulations without penalty for the first three years to allow them to settle into the new system. So, they essentially have six years to plan how to bring in expensive players without breaching regulations. On the other end, directors from smaller clubs may be tempted, with such a large debt allowance, to gamble on large expenditure in an effort to reach the top four or the Champions League, which could have devastating financial implications.

As with many rules, unfortunately, there is a little exception. At the very beginning of their roughly 86 page publication, Article 4 states – ‘The UEFA administration may grant an exception to the provisions set out in part II within the limits set out in Annex I.’ The status of football within the club’s territory will be taken into consideration, as will the average attendance, income from television and sponsorship, potential for revenue and their support from local, regional and national authorities. It seems like these rules were written for Europe’s elite clubs. Teams like Barcelona and Real Madrid appear to be a perfect fit.

Some things never change.

Conor Forrest
March 18th 2012, The Sports Arena
Sports Analysis
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Sports Analysis

Variety of sports articles, published & unpublished from August 2011.

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