Arsenal’s foresight leaves others drifting backwards « Untold Arsenal: Arsenal News, supporting the club, the players and the manager

Arsenal made a profit last year, despite a drop in property sales (because we had already sold most of Highbury Square) and despite buying buy not selling players.

The operating profit (before exceptional costs, depreciation and player trading) in the football business was £45.8 million (2010 – £56.8 million).  The gains made on the commercial side were offset by an increased wage bill (a note to those people who say that we lose players because we have such a silly pay structure) – we are still near the top of the league for salaries and they are getting larger.

The loss from transfers was £14.7 million (compared with a 2010 – profit of £13.6 million) with no significant sales in the year.  Nasri and Cesc are in this year’s figures, so we’ll see them next time around).

The overall level of Group net debt (which is in effect the stadium) was reduced to £97.8 million (from £135.6 million the year before) at the balance sheet date.

In short we have a self-sustaining club which had one of its lesser years, but still made a profit.   This may be compared with last season where only four clubs made a profit, with Arsenal ahead of the rest by a mile.  And one of those profit making clubs was Birmingham whose finances are now under investigation.

So we come back to the argument about success on the field vs money.  Which comes first, the chicken or the egg.   As Mr Gazidis said, “to give the Club the best opportunity to achieve [success on the field], we must drive a virtuous circle of increased revenue, increased investment in the team and a larger engaged fan base and we must do this in a way which is self-sustaining and protects the long-term future of the Club.”

The fact that we can contemplate a future in which the debt is a controlled mortgage and reducing all the time (just like any house mortgage) shows how far we have got.  We have no huge outstanding issues, no dubious legal matters, no problems with the Financial Fair Play League.

Now compare and contrast with what has happened in Liverpool, Tottenham and Chelsea.

Liverpool’s clubs are stuck.  Liverpool have new owners, but no new ground and no chance of a new ground.  They have been spending money like mad to try and claw their way back up, not just on players but (it would appear) on buying the ref.  (See for example http://blog.emiratesstadium.info/archives/15174, not to mention the obvious issues in the game v Everton on 1 October.)

Not only is there no chance of a new ground but their ex-owners are suing them for over a billion dollars.

Just as the promised new ground at Liverpool was never built, so with Everton.  On 21 January 2009 I reported on this site that Liverpool Council had rejected Everton’s appeal against the rejection of their plan to turn their training ground into flats.

The fiasco cost Everton £10m in fees and consultants and the club then launched an incredible attack on the whole notion of having a democratically elected local council.   Presumably a fascist dictatorship was more in keeping with the style, standards and approach that apply on Merseyside.

So the £78m new ground in Kirkby never happened, even though at the time the club said the development with Tesco would not be affected by the decision on the training ground sale, although “it would probably cost the council money as they would have to put up more to pay for the new ground.”   A nice way of working with a council whose democratic right to exist you have just attacked.

Everton, and Liverpool, in short, are a masterclass in how not to get a new stadium, and redevelop your training ground.  The exact opposite of Arsenal in fact.  But there’s more…

Everton wanted to sell their old training ground and build 74 houses on the site, despite objections from local residents.   Unfortunately by the time the planning permission was turned down Everton had already moved to their new Finch Farm training complex in Halewood, and so the site is useless, and a part of the ever increasing Everton debt is due to the fiasco.

As for Liverpool this is another loss making enterprise who, despite new owners, and a splash of money in the summer, still have their long term problems with no new ground.

Liverpool could try and extending Anfield or they could try and move to a new location in Stanley Park, but the problem with the latter is their old ground isn’t worth much.  Would you want to live in that area?

And what of Tottenham and Chelsea?   Each have crumbling wrecks of a stadium and each would like to move, but both have problems.  Both are financed by overseas business operators – one from the tax havens of the Virgin Islands and the like, and the other from Russia (and in an interesting comparison with Liverpool the owner of Chelsea is currently being sued for $3 billion).

In both cases finances are unclear, although in Chelsea’s financial clout is much bigger and their aim is to win the Champs League and revel in the glory.  Tottenham’s owner’s aim is to get into the Champs League and sell.

Tottenham, as we know, have got a sort of semi-planning permission for redevelopment of WHL, and are fighting legal battles to try and get the rights to the Olympic Stadium in the east end at the same time.

What makes Tottenham’s position murky is that Boris Johnson (our mayor)  offered £17 million to Tottenham to help them build a new stadium.  Barry Hearn, chairman of the Orient said this was a bung.

Boris wanted the Tiny Totts to drop their legal actions about the east end ground and said if they did so he would vote £17m to redevelop the far end of WHL where the Tinies ground is built.

Now we all know that Tottenham High Road is a really dreadful downtrodden area which makes Holloway Road look like an upmarket part of Paris, but even so – to make the offer something that is dependent upon where the Tinies play football is bizarre.   (Not my job to tell people how to vote, but I do hope Arsenal supporters will seriously consider not voting for Boris in the next mayoral elections).

As Mr Hearne said on Talksport, “I come from the real world and I can recognise a bung when I see it.”

Orient are taking action in the High Court later this month against Newham Borough Council and the Olympic Park Legacy Committee on the grounds that West Ham are getting a “state subsidy” in taking over the Olympic Stadium.

He added: “Frankly, West Ham are getting a great deal. David Gold said, and I quote, ‘We know the stadium’s not perfect but this is a £600million stadium and we’re getting it for £30 million, so it’s too good a deal to turn down’.

“The Premier League has got rules they’ve not understood. They’re hoping we’ll go away quietly, but anyone who knows me knows that ‘quiet’ is not a word that features in my vocabulary.”

Chelsea meanwhile are not saying too much on the ground front, and look as if they are set to stay.  Or not as the case may be.  Staying is an option since even when top of the league and winning things they certainly can’t fill their current stadium for all their Euro matches, so why embarrass yourself with a bigger ground that looks even more empty?

Chelsea’s fans are currently trying to block attempts by the club to buy back the freehold for the land on which Stamford Bridge.  Chelsea Pitch Owners plc was formed in 1993 to stop the ground being sold off to become a coal depot (as it was for a while before Chelsea was created out of nothing to play there). Last week Chelsea revealed an offer to repurchase the pitch, turnstiles and land on which the stadium’s stands are constructed.

Chelsea say no dialogue is under way with developers or potential owners of alternative sites, but then Chelsea, in Russian style, don’t do dialogue.  Chelsea’s chairman, Bruce Buck, did have the grace to say that a move would be dependent on the ability to redevelop their current home.  (Although they could just let it rot, and move somewhere else.  That would leave them exposed to fines for not fulfilling the terms of their planning permission but to overcome that they could play reserve games there).

CPO is has 12,000 shareholders, who bought shares at £100 each between 1993 and 1997 to prevent the ground ever falling into the hands of property developers.   Chelsea are offering shareholders their original money back (hardly generous) and writing off an £8.5m loan initially made to the company (more generous) at a meeting on 27 October.

But the meeting is timed for  11.30am on the morning after the Carling Cup tie at Everton.  Not all those committed to the cause will be able to get back, and take another day off work.  Chelsea’s view is that the safeguards on the land are not needed now they have Roman Abramovich.  Others might argue that they are needed even more now with him, that without.

Chelsea have looked at expanding their ground or moving to Earl’s Court, Battersea Nine Elms, White City (where QPR have played) or Imperial Wharf.

In fact of these clubs: Tottenham, Chelsea, Arsenal, Liverpool, Everton, only one is sorted, and that’s Arsenal.   The perseverance and foresight of the club’s officials and the clarity of their vision is why we have a great stadium, and why the club has done so much for the area with its new housing around the ground and at Highbury.

Of course there are many who would prefer to be at Highbury and perhaps losing money, but top of the league.  OK, it is a point of view.  But as I have said before, I want my club to be there for my grandsons to enjoy, just as my father and grandfather enjoyed it before me.

From 1953 to 1970 we went without winning a major trophy, and I was there for quite a part of it.  I don’t welcome such a drought but I would still take that ahead of the models of future management that are unsustainable.