Arsenal Football Club are hugely proud of their impressive financial results. The club has been built on a model of self-sufficiency, and has turned itself in to one of football’s financial superpowers.
Arsenal’s supporters would rather be proud of their position in the Premier League table. Fans are excited by trophies, not turnover.
Currently, Arsenal sit fifth in the Premier League table. They have crashed out of both domestic cup competitions to lower league opposition, and are on the verge of exiting the Champions League at the hands of Bayern Munich.
The identity of Arsenal’s Champions League conquerors has a certain significance: Bayern Munich are also run on a self-sustaining model. However, unlike Arsenal, they have managed to hold on to their major stars and invest heavily in the squad.
The frustration Arsenal supporters feel about their relatively poor performances on the field is compounded by the fact that the club’s finances are flourishing.
What is most galling is that while Arsenal’s directors boast about the club’s financial health, their financial strength is in part down to the sale of star players such as Robin van Persie.
Arsenal’s latest set of financial results show they made a net profit of £22.6m from player trading. The previous year they made fully £45.8m in the transfer market.
When Arsenal first moved to Emirates Stadium, it introduced an era defined by tight purse strings. Arsenal got in to the habit of prudence and financial conservatism, and it has proved a hard habit to shake.
When introduced, this policy was a necessity. Now, it has become an albatross around their neck that inhibits their progress on the pitch. What’s more, it’s no longer required: Arsenal have cash in the bank.
At the end of November 2012, Arsenal had cash reserves of some £123.3m. It means that in the past 12 months, Arsenal’s cash balance has actually increased by several million pounds.
Arsenal’s debt is now manageable. Annual payments of around £20m a year are required to post-finance the stadium, but these are offset by the club’s impressive turnover.
Arsenal may owe £31.6m to other clubs for transfer fees, but they are owed £31.4m.
Perhaps the bigger question is whether or not Arsene Wenger has any interest in spending that kind of money. His reticence to spend seems to have shifted from a case of economics to one of ethics.
If Arsenal hold any ambitions of being a major competitive force again, he must let go of the purse strings and spend the funds that Arsenal plainly have available. The club must speculate to accumulate if they are to return to their former heights.