Van Persie - Behind the decision - Part two: 'Boardroom failure'

In the immediate aftermath of the van Persie decision, it was Alisher Usmanov who managed to steal the headlines.

This is because he decided to vent his frustration about losing the club’s captain through an open letter, which turned out to be a scathing attack on his peers within the Arsenal boardroom, targeting majority shareholder, Stan Kroenke and chief executive, Ivan Gazidis in particular.

A lot of fans of the club will tell you that the club’s current position is a consequence of David Dein’s exit from the club in 2007. The reason cited was “irreconcilable differences,” which was a due to his backing of Usmanov over Kroenke, a decision that the board and the majority of the fans disagreed with at the time.

Although fans have started to be allured by Usmanov and his billions, an assessment of the current board’s decisions should be conducted before making any push for a change of ownership/leadership.

Managing the switch from Highbury to Ashburton Grove

Up until the end of the 2005/6 season, their last at Highbury, Arsenal were enjoying a fair share of success. However, the finances around moving to Ashburton Grove automatically meant that they were going to struggle to compete with the other big teams.

To make the move viable a 15 year £90million naming rights and shirt sponsorship deal was agreed with Emirates Airlines. It was reported that this was front loaded to help sustain the financial performance of the club. In addition to this, ticket prices have been on a steady rise, to the extent where there are certain seats for a single match now being sold at a price of £100.

If we consider both of those facts along with the proceeds they were to receive from real estate investments, then Arsenal’s prudence should not have lasted more than a few years.

This is supported by their financial results as reflected in May 2011’s when they were reporting that the net debts were down to £97m and had a total amount of £115m cash in the bank. So it would appear that Arsenal had no excuse to avoid spending.

The board seemed to agree by making it clear at every opportunity that they would provide the funds required to meet Wenger’s needs.

Yet in 2012, the board still receives blame for a lack of spending on top players but who truly is at fault?

Transfer Policy

Since moving to the Emirates, Arsenal rank 19th in the league for net spending - averaging a profit of just less than £5m a year. While Arsenal have sold their top players to manage this figure, their rivals have continued to spend and significantly so.

However don’t let this fool you, even though the consensus is that Wenger doesn’t like to splash the cash, he has invested in a number of players in the 10-20m bracket over the past few years, with Podolski and Giroud being the most recent examples.

From a broader perspective however, there doesn’t seem to be a genuine desire from him to buy multiple top calibre players or to spend the entirety of their available capacity on strengthening a squad in need of it.

While some may justify this stance through the financial fair play rules that are to come into place, it is insufficient as a defence. Arsenal, more so than any top club in England, are in a particularly strong position for when these rules are introduced. So what is preventing the investment in players?

Wenger has always been in favour of building from within, which means investing heavily in young talent. While this has worked in the past, he now finds himself with a number of players that have proven to be not good enough for the squad. So they will need to be moved on before there is further investment.

So what seems to be the main issue is that, like many of his experienced counterparts, Arsene Wenger has full autonomy over transfers. While this should be to Arsenal’s advantage, it seems his signings have been a bit more haphazard instead.

However, the blame isn’t Wenger’s alone. In David Dein, Wenger used to have someone that would challenge him and together they formed a formidable partnership.

However, with Gazidis and Hill-Wood, he now appears to have perennial ‘yes men.’ It seems the reigns have been fully under his control, with their presence simply to be dotting the i’s and crossing the t’s when it comes to finalising deals.

The problem with investing heavily in youth

While it has been their strength in the past, Arsenal’s policy of signing and retaining young talent seems to be a real hinderance to their progress. Where the likes of Man Utd refuse to cave in to unproven young player’s demands of high wages, Arsenal have been happy to pay the likes of Oxlade-Chamberlain 20 -25k per week simply to join the club.

While Oxlade-Chamberlain seems to be coming good, players such as Vela and Denilson have not worked out.

Additionally, those that are retained after a few good seasons are then given a sizeable pay rise, which leads to situations where players such as Bendtner are earning considerably more than their talent deserves (a reported 52k p/ week).

This has left Arsenal with one of the largest wage bills in the league, without the talent to show for it.

While the retention policy is a pleasant idea, rewarding players such as Djourou for performing well in a few games (as they did last season) hinders their ability to be sold.

As a result, Arsenal find themselves in a position where they are left to either loan out these players until their contract expires, as they are unable to find a suitor to take on their pay packet in this economic climate.

Gazidis must shoulder the blame in this department. Although Arsenal have a wage structure in place, he ultimately must sign off on these pay rises. By doing so is unacceptable and their must be a much tighter control of who is entitled to a new deal.

Arsenal’s wage structure

As mentioned above, Arsenal’s wage structure has enabled players to earn sizeable amounts of money even if their talent suggests to the fans that they are undeserving of it.

By rewarding the mid-tier squad players with new deals, the pool of money available to increase the wages for their top players are limited. Furthermore, their cap on maximum salary further affects their ability to retain top talent. It has led to the losses of several key players, with Robin van Persie being the most recent example.

While in theory it seems a good idea to have such a wage structure, in practise it is archaic. This has been a major factor in Arsenal’s trophy drought as they continued to lose players as a result, with their justification being that it was for a sizeable profit.

Alternatively, their rivals have made a point of it to match the market in order to retain their most talented players. Teams such as Man Utd have benefitted from such an approach as it has helped them prolong their success on the pitch.

Given the current scenario, it is imperative that Stan Kroenke addresses this immediately, as this approach is only aiding Arsenal’s drought, and it is forcing players like van Persie out of the door.

With Walcott’s contract also up for renewal, if something is not done sooner rather than later, Arsenal could find that two of their best players from last season wanting to move on. 

Lack of strong leadership

While Arsene Wenger’s coaching ability can not be brought into question, the leadership structure around him leaves a lot to be desired. The exit of David Dein has been most evident in the decision making on ‘non-footballing’ matters.

From a sponsorship perspective, Arsenal have been impacted by their long term deals but they haven’t used the opportunity to innovate as other clubs have. Usmanov even touched on the lack of some of professionalism to Arsenal’s approach.

So it isn’t a surprise that as of September 2011, Arsenal made £70m less than Man Utd do. It doesn’t however justify this difference as Arsenal’s fan base is sufficient to make this gulf in sponsorship revenue seem insane.

Aside from that, the board’s PR skills have only made Usmanov’s position stronger.

To many people’s disgust, it was found that any further movement on RVP’s decision was pending Gazidis’ return from a two week holiday.

Not only would you hope that your Chief Executive was present for such news, but you would expect it. At such a time, a good leader would be available instantly to steer the situation to the benefit of the club.

Usmanov however, didn’t hesitate in exploiting this fact and Hill-Wood’s response to his statement was pathetic at best. If there was ever at time for ‘Silent Stan’ to talk to the media it is now. Gazidis seems to be the wrong man to be guiding the club but it is Kroenke’s silence that leaves an opportunity for both the media and the fans to speculate about the failings of the club.

All in all, while Usmanov’s statement was a strategic one, as evident by his choice to designate Wenger no blame, a lot of the messages within it rang true. If we then consider the remaining issues, there is sufficient reason for players being driven out for both financial and football related reasons. So until the club gets their act together, both on and off the pitch, players will follow RVP out of the door.

My personal suggestion to resolve the situation is not a change of ownership however.

Instead, I believe it is Gazidis’ position that must come under review. There seems to be little direction from him and a stronger chief executive could not only abolish the wage structure, but also provide a greater amount of support (which includes constructive criticism from time to time) to Wenger in order to help return the club to its glory days.

image: © wonker