Arsenal: Has the Club Gone in the Right Direction?

The world has changed and with it everything else. Football has not been left behind too.

In those times of change people have been forced to make tough decisions. In the world of business, tolerance for mistakes is lower than ever, and mistakes lead to bigger consequences than ever.

Arsenal has also not been spared in terms of making tough decisions. It had to decide which path to take to secure its future and confirm itself as one of the biggest clubs in the world of football.

In order to understand the difficulty of the decision that Arsenal has had to make let me introduce you to a man that represented one of the choices.

We all know who David Dean is. He was a director of Arsenal, who currently is working on returning back to the club’s administration. An endeavour that is unlikely to materialize because of the bad relations between him and the current board.

David Dean has always been a man who cared about the club.

He is the man that supported the hiring of Arsene Wenger at the club.

In addition, he was the main promoter and one of the most ardent supporters of women’s football. The results are easily seen by everyone today. Arsenal Ladies is the best English football club in the ladies division of football at the moment. Dean’s part in this is enormous.

David Dean’s influence on Arsenal FC cannot be denied by anyone. He lasted at the club for a very long period of time—from 1983, when he bought 16.6 percent of Arsenal’s shares, to 2007, when he sold his remaining shares to Red & White Holdings, the president of which is Russian tycoon Alisher Usmanov.

It is also no secret why David Dean left the Arsenal, to be more precise, why he was sacked from the club.

It was pointed out that the main reason for his departure was that there existed “irreconcilable differences” between him and the rest of the board.

Those differences arose from the different views of how the club should continue to develop.

Before his departure, David Dean had openly supported an investment of money from outside the club, provided by the selling of the shares to an outsider. In other words, he supported a financial takeover.

What is the interesting and ironic here is that he was behind a potential takeover bid to be made by a man who now is in the club’s administration, accepted by the board—Stan Kroenke. 

The American tycoon holds 28.3 percent of Arsenal’s shares through his company Kroenke Sports Enterprises.

While on the other side of the barricade, the board of Arsenal, led by the chairman Peter Hill-Wood, vigorously opposed Mr. Dean’s views and were on the opinion that they should not sell their shares. After sacking David Dean, they even agreed a contract not to sell shares to anyone for one year—a contract that was later willingly extended.

One of the sparks that started this fire was the debt that Arsenal has sunk into. The club’s debts rose drastically after loaning £400m from the bank of Scotland to build their new stadium at Ashburton Grove. The loan deal with the bank was the least to say ingeniously made. Almost half of the debt was replaced by bonds to be repaid in the next 25 years and the interest rate of the remaining debt was fixed and remains to be 5.6 percent.

That means that the club has to pay around £20m annually to repay its loan.

In addition, the club is waiting to capitalise on the property development of Highbury Square.

With last year’s announced profit before tax of £24.5m, and the current debt lessened by more than £200m, it looks like the board have been doing a good job. But have they?

The club is in a difficult situation. Money for players of proven quality is inadequate. The club has to count on Arsene Wenger’s ingenuity to solve its problems on the field. The fans of it have no idea what to think.

Does Arsenal need more money to be competitive with the rest of the big teams in England and Europe? Do they have to trust the board?

Despite the obvious success in business, and the stable financial position that the club is in, the fans want to see results. Who can blame them? But they must understand that the path the Arsenal board have chosen for the team is a long one indeed.

They have decided to secure the long-term future of the club. A decision that is supported by the business they have led, the policy of developing young players, and the goals they have set before the club to achieve.

You may ask. What now? Should Arsenal wait more years until the next time it tastes success or does it take the shortcut—David Dean’s way?

Many teams like Chelsea, Manchester United, Liverpool, and Manchester City have already done it. Rich foreign investors have bought them instant success. Although I must say Manchester United can be an exception to this rule.

But ask yourselves this. What will happen to them in 10 years? Have they made the right choices? These are questions that are asked by the people who will really feel the consequences of the mistakes of their club’s board—the fans.

Arsenal has already made its choice. The club has embarked on its chosen path now. And the path is full of dangers, especially in a time of global recession.

But is it the right one?

What do you think? Should Arsenal take the David Dean’s path to success or should they keep their sensible way of doing business and developing the club?