I was fortunate enough to attend the
Arsenal Supporters evening at The Emirates last night and heard Arsenal CEO
Ivan Gazidis talk eloquently in response to questions from supporters. I am an
Arsenal fan and share the peculiar mix of hope, confusion and frustration that
Arsenal fans have right now as we watch our team not quite win things, lose our
best players but bring joyous moments along the way.
However I am also a businessman, having
held senior executive positions in a number of major companies and am very
familiar with situations where the outside world sees the things you do in a
very different way to the way you do. As a fan I went to the meeting confused
about the clubs strategy and actions but I decided to listen as an “executive”
as well as a fan.
Ivan outlined an ambition, a project (a
phrase I normally hear associated with Chelsea or Man City) and a strategy in a
way I have not heard before. I share and discuss it below.
The ambition:
to be a top 5 club in the World (which really means Europe I guess) and to run
that club on a sustainable basis. A club that lives within its means, does not
rely on a rich benefactor and is
successful on the pitch. This ambition is not something Ivan has created; the
Board set this in the Highbury days when Arsenal and Man Utd were head to head
every season.
Like all ambitions, measuring the
achievement of it is important. Interestingly Arsenal are ranked 6th
or 7th in the EUFA coefficients. Would 5th in this
ranking mean Arsenal are a top 5 club? Even if they had not won a trophy?
Technically, maybe yes but to external commentators, fans (and I believe
Gazidis) that would not be sufficient.
This ambition has two parts; success and
sustainability. The question remains which has primacy? This is not something
Gazidis addressed but his tone and the actions of the club lead me to believe
that sustainability has priority so the club will not compromise that in the
pursuit of short term success and phrases like “efficiency of spend” trip off
the tongue.
Living within your means (hardly a
revolutionary idea in business but not how football works at the moment), means
an equal focus on increasing revenue and managing costs (again not
revolutionary in any other business). The revenue side becomes particularly
critical in a market where costs are increasing at an extraordinary rate.
Failure to generate more revenue quickly reduces your competitiveness in the
transfer market, which reduces your ability to attract and retain top talent,
which makes on pitch success less likely and reduces revenue. This is a nasty
cycle that all business will recognise and which often leads to a discussion
about the need to invest ahead of the curve.
This challenge partly explains the project. The move to The Emirates (a
huge success but now taken for granted) was intended to catapult Arsenal into
the top revenue earners. It is generating massively more revenue but the world
has changed with the introduction of foreign investment in the hundreds of
millions – pre Abramovich these kinds of sums would have been unthinkable. The
result of this though is that Arsenal’s great leap forward ended up being a
step back simply because the competition took a bigger leap forward.
This means that the move to The Emirates is
now, with hindsight, seen as simply phase 1. An equally significant leap
forward is now required as a phase 2. This phase requires an explosion on
commercial revenue through better sponsorship deals, retail growth, global
expansion etc. Interestingly this off the pitch activity is one Arsenal are
prepared to invest in but the route to success is well trodden and the sums
involved are much smaller. But how long will this take?
Which brings us to the strategy which seems to be to adopt a model that Arsenal and
Gazidis believe will be the future model for football – ie a sustainable model.
And at the heart of that is UEFA’s Financial Fair Play initiative which will,
in theory, mean all clubs have to live within their means. Gazidis is strongly
of the view that this will work, not least because it is something being
demanded by clubs rather than being imposed by UEFA. Fans and other pundits are
far more skeptical about this. Will the penalties really be imposed? Will they
really make a difference?
As an aside, my own view is that football
is in a bubble right now and like all bubbles it will burst but clubs like
Chelsea and Man City have actually created their own version of this bubble. I
don’t know whether they will suffer or benefit from a general “collapse” but I
also don’t know what happens to a club when they lose the richest benefactor in
the world. Nothing is forever.
So whether you agree or not with the
Arsenal project and strategy it is at least clear and it is being followed
through. In a business, if you don’t like a strategy you can leave or take your
custom elsewhere. As a fan that option is not available so commentary and
supporting the club is all we have open to us.
Whether it is Ivan the Terrible or The
Great Gazidis only time will tell but don’t expect a change in strategy any
time soon.
Gary Price
7 June 2012
Good article Gary. Blackburn Rovers is a case in point for where the benefactor stops funding the club and the club ends up in a downward spiral
ReplyDeleteExcellent write-up, Gary - Thanks.
ReplyDeleteI think the strategy is one to be proud of and the ambition - the top - attainable and realistic. Maybe not next season, maybe not the season after - but what we are building is a super-solid platform (our own two financial feet) to realistically strike at top honours from, for decades to come - for our children and our children's children. I think that's remarkable and innovative and very exciting indeed as a fan.
On the immediate playing side, ours is still the youngest squad in the league and it's not unreasonable to expect big improvements all across the pitch as early as next term. In maturity (decision-making, psychological stamina) and ability - but also in communication and understanding in partnerships all over the pitch from a squad that's been injected with a lot of new players.
So, in short - I think we can expect a lot of natural improvement from this squad; in-house. On top of that - you never know, we might sign a couple of new faces. We usually do! But I am with Ivan, I don't think it needs £30M players for Arsenal to mount a title challenge. The advantage we have is, of course, Arsene Wenger - who has every age group at the club playing instinctive, cohesive passing football - and City and Chelsea - just can't buy that. Hence, at full strength - we routinely have those sides camped out in their own half.
A bit of patience and AFC will win things, and win things in a fashion that - given the weighted dice of our opposition - will go down in the history books.
Thanks for the write-up. Really enjoyed it. Cheers