The Lead

Amy Lawrence as written a kind of personal, open-letter thing to Arsenal’s American majority shareholder Stan Kroenke this morning over at Fox Soccer. She writes:

This week Arsenal are expected to announce another set of rock solid financial results. Whoopee! But the trouble is, results on the field are worryingly shaky.

Mr. Kroenke, your Arsenal are in a pickle. The team is struggling in a way it never has before under this manager, Arsene Wenger. Wenger has enjoyed considerable success in the past, but the pressure has really cranked up. This is his worst-ever Premier League points haul at this stage of a season. The team’s 1-0 defeat to Blackburn at the weekend means they have been dumped out of both cups to lower league teams for the first time in decades. There is little reason for optimism in the Champions League against a Bayern Munich side which looks far superior. The regular end of season sale of the best players to rivals has taken its toll.

We all know the supposed ‘Arsenal Model.’ It’s practically a running gag now in football circles, up there with the old joke about how Wenger’s team tries to walk the ball in the net and is perpetually in love with short corners.

It goes (very) roughly like this: Arsene Wenger is an economist first, and a football manager second. The club refuses to spend at the same rate as its rivals in the Premier League, because they would rather turn a profit than win trophies. Fans are suffering, but the continued trophy-less years have yet to make a dent in the team’s commercial revenues or their gate receipts. Kroenke and Wenger are keen to ride the club’s intrinsic popularity for as long as they can, and fans are willing to pay some of the highest ticket prices in the land for the privilege, at least for now.

I’m often told that football is first and foremost a business. Why? Because of the exorbitant prices charged for shirts, tickets, and satellite TV packages. Because of the astronomical amounts club spend in the transfer market and on player wages. Because once in a while, clubs go into administration for failing to pay their bills, usually to the tax man. Because clubs borrow money to spend, just like real companies. Because the ‘product’ of all this spending is ostensibly more table points, which means more TV revenue for Champions League qualification, more Premier League sharing money, more popularity, which therefore means more commercial revenue, i.e. more money.
See? A business.

So why then aren’t Arsenal fans currently over the moon? Despite a few close shaves, they’ve qualified regularly for the Champions League. Their revenues are robust. The club is in rude financial health in comparison with most other Premier League clubs. If football is a business, then Arsenal are winning.

Except football is not a business. Football involves money, of course, and clubs need to earn a revenue to compete. But the end goal of most businesses is to turn a profit for their owners/investors. The end goal of football is to win at the football. Football sure looks, acts, and sounds like a business; indeed, everything is measured in pounds and euros. Yet football ultimately has to be played on a pitch, eventually; it stubbornly remains a sport.

The lesson here, Arsenal naysayers, is not limited to North London. Imagine ‘winning trophies’ as a business product, like computers or cheese doodles. In a business, that product would come with a defined cost of production, and a related set price in the market. Yet in football, clubs spend a lot of money with only a vague guarantee they will win anything. It’s like spending $500 to produce Mac Book Pro, only to come out with a secondhand Dell on the other end of the production line.

Moreover, businesses are able to set a price for their product to recoup the cost of production and earn a profit. But “winning” doesn’t come with a set price. Sure, there are Premier League title bonuses and Champions League TV rights moneys, but these are drops in the bucket compared with commercial revenue and gate sales. In theory at least, more people will like your club and buy more things, but this isn’t a one-for-one relationship. Sometimes a single trophy isn’t enough to make your club popular, Blackburn Rovers.

Football however does work as a business if its product is a brand—an identity, a lifestyle. Sometimes a trophy is needed once in a while to increase the brand’s value, but often with historically popular clubs, it isn’t needed at all. Other clubs could win all the trophies in the world but still fail to earn worldwide acclaim, enough to offset the debt incurred by transfer spending and player wages.

This doesn’t mean Arsenal should spend all they can to win, but it also doesn’t mean their current status quo—smooth sailing profitability—is so great either. But the lesson here is that if winning is the ultimate purpose of playing football, it will forever remain a sport, not a business.

England

Ben Arfa training with Newcastle again.

United unsure over severity of Jones’ ankle injury.

Schweini aware of Arsenal’s midfield threat Whilshere.

Arsenal’s chairman supportive of Wenger despite poor season.

Italy

Icardi says he will represent Argentina, not Italy.

Conte wins award for coach of the year.

La Liga

Celta Vigo welcome new coach after sacking Herrera.

Mascherano says playing for Barcelona has humbled him.

Germany

Lewandowski to appeal red card today.

BVB‘s general manager doubtful Lewandowski will stay with the club.

Heynckes may not retire after all, future still in doubt.

Bit and Bobs

FIFA approves goal-line technology for 2014 World Cup.

Ronaldinho’s cheeky assist.

Thanks to Alima Hotakie for compiling today’s links.

Comments (7)

  1. >FIFA approves goal-line technology for 2014 World Cup.

    Finally, Sepp & Co have stumbled into the 21st century.

  2. Arsenal 0-5 Bayern.

    • you don’t know the pattern. Arsenal will bend over backwards to blow it against a minnow and then come out and destroy a team they have no right beating.

      Arse 3 Bayern 1

  3. 100% agree, Richard. I highly doubt many football fans will care about their club’s finances (unless they’re flirting with bankruptcy) as long as they win. That’s what fans ultimately want, that’s success.

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