How Bright Is The Future For Arsenal?

Arsenal is often complimented on the quality of its football and its amazing array of young talent. This has often produced statements such as the "the future is bright for Arsenal" and "Arsenal are building a team that will be one of the top sides for years to come."

But looking at the situation from a broader perspective, how bright really is the future of Arsenal football club.

On the pitch

Although Arsenal boasts a highly-commendable and ever emerging group of young talent, the lack of silverware within the last three years has meant an ever increasing likelihood of players exiting the club—either in search of trophies at the twilight or prime of their careers or being enticed out of the club by other highly-acclaimed clubs preying on the situation where a number of high-calibre players might be left dissatisfied.

The lack of trophies has been accounted to the shortage of "experienced" players at the Emirates Stadium. This to some extent could be true, but in making such claims the experience gained by these "kids" (as they are usually branded) is constantly being underestimated.

It is worth remembering that these current set of players have played in the finals of the Champions League during a grueling year of facing top opposition, and have constantly played with and against some of the best players in the world while maintaining the club at the top helm of the English Premier League.

What is in fact needed is that little bit of experience but more importantly consistency (i.e. the ability to maintain its players).

This is made increasingly more difficult by their current lack of trophies and the relatively low wage structure which means that other clubs will continuously attempt to entice players away with higher pay offers.

Financially

Although Arsenal (like many clubs) are in some debt, the debts are based entirely on the new stadium, and the club is thus like a house owner with a mortgage based around the value of the building. 

This debt, which is funded by Nike, ITV, and Emirates Airlines, is a totally different type of debt from that seen elsewhere, and is also made better by the fact that around one third of that debt will be repaid from the income from Highbury and other properties Arsenal purchased in order to build the new stadium.

Compared to its immediate rivals at the top of the table, it was recorded by "The Guardian" May 20, 2008 that Chelsea and Manchester United's debts are at record highs—totalling £1.5 billion.

Chelsea hid their real financial situation until recently when they finally revealed that their owner had not given them the billions to spend on players and salaries, but had just loaned the club the money. Fortunately for them the amount is interest free, and Chelsea claim they owe no financial institutions.

United, on the other hand, does have external debt owed to financial institutions, including a large sum taken on by the Glazer family when they bought the club in 2005, then loaded it on to United itself.

Coupled with the countries current financial situation—and the rising cost of players and player wages, which doesn't seemed to be affected by the credit crunch—the situation of these two clubs isn't looking too good for the future.

This justifies the decision of the Arsenal Board of Directors in constantly fighting off foreign investors and any related takeover bids for the club and potentially puts Arsenal at an advantage in the future.

Balancing act

Where the conflict lies is that revenue generated today is unavoidably linked with success on the pitch, which in turn assures the revenue of the future. This is where parties such as David Dein believe the need for foreign investment might be necessary—to put in that extra boost of cash that could be used to make the kind of radical changes that would aid Arsenal to currently compete at the top level by adjusting such factors as its wage structure.

How bright is Arsenal's future? It really depends of the balance of the decisions made on these issues.

Sources of financial information

http://www.guardian.co.uk/football/2008/may/20/premierleague.chelsea

and

http://news.bbc.co.uk/sport1/hi/football/6388041.stm