Friday, September 24, 2010

Arsenal are profitable...but does that matter?

The last report out of North London is that Arsenal will post a record profit of £56m...impressive. Especially when you consider clubs like Liverpool and Manchester United are dealing with massive debt concerns every season or Barcelona who had to take a 150m Euro bank loan just to survive the summer. Chelsea would be facing massive financial problems if Abramovich didn't absorb all their financial shortfalls and they still could face huge financial problems if the Russian decides to move on from the London club. The reality is sports teams are not businesses, and while profitability and intelligent business practices are helpful, they do not equate to silverware. In the book Soccernomics, there is a great analysis that sporting teams that are run "like a business" - focus on cost control, profitability, controlling expenses to name a few do not lead to success on the pitch. Football clubs tend to be a status symbol for wealthy owners who want to show off their "toy" to other absurdly wealthy owners. Therefore they are not seen as entities that fall under the business umbrella. I am sure that when Abramovich or the Glazers buys a multi-million dollar yacht he does not worry about the maintenance cost or the business reason behind such a toy. Same thing for a football club.

The bottom line...pun that while this is commendable from a business standpoint, unless Arsenal reinvest the profits into the club and unless those investments lead to silverware, Arsenal fans will not be looking for a parade through North London with the title "most profitable EPL club." Of course I am sure that the alternative is not pleasant - see Leeds United - running your team well from a business stand point is not why fans buy seats, purchase replica kits and cheer your team every week. Granted there must be a balance between financial sanity and putting a competitive squad on the pitch. However when the best headlines for your club in the past few seasons is the fact you have been run well from a business stand point is not really what fans gravitate towards.

Makes you wonder why Arsene could not shell out an extra million or two million pounds into getting Schwartzer this off season. Of course the Professor is already responding to criticism around this topic!


Anonymous said...

I'd rather we go a few trophyless seasons and be successful in the future than be $400mil in debt, win the league a few times and end up in the championship.

GFC said...

I agree, you do not want to fall victim to the Leeds United syndrome. Get to the Champions League 1/2 final and then start spending like drunken sailors. On the flip side, I feel as if Arsenal have been so tight with the purse strings since moving from Highbury because of the debt to build the new stadium was always used as a reason why they could not spend.

But what pains me is that Arsenal have remained competitive through out and I feel if they had just gone a little further when it came to spending on players they could have purchased 1 or 2 players that would have put them over the top.

Case in point - Schwartzer. Wenger refused to add 1 or 2m more pounds to his offer and got nothing. Look at what happened this weekend. Schwarzer steals a point for Fulham, Almunia fumbles away 3 points for Arsenal.

Penny wise pound foolish...

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