Madrid show Arsenal how to spend recklessly and make it work

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Now I don’t want to get into the nitty gritty of the financial stuff because to be honest, I don’t want to bore you.

Real Madrid have announced some stunning financial figures to the world of football. After borrowing £151mill last summer to sign a whole bunch of marquee players, they have proved the doubters wrong and come back with strong profits despite the economic down turn and despite them failing to win a trophy.

Their gross revenue has increased by 8.6% to £363million (versus our £223mill), they reduced their net debt by £70million to £201million (versus our £203million) and they delivered pre tax profits of £25million (versus our £40mill).

Now, you might not think those figures are too far off ours. Well, Madrid have done this off the back of spending nearly £200million on players, plus spending another £90million this summer.

You can get all preachy about the vulgarity of what they’ve done, or you can think about it and say, isn’t that a fantastic achievement? Isn’t that the way a football club should be run?

I know it’s highly unfashionable to say such things. Many Arsenal fans on my twitter account were cooing over the potential collapse of Liverpool, saying things like,

‘Give me 4th place in the league and financial security any day of the week!’

Well, I like the idea of financial security as well, but at the same time, I’d like to think we’d never be run by a couple of chancers like Gillett and Hicks. Liverpool aren’t in debt because of player spending, nor are Manchester United. They are in debt becuase their owners couldn’t afford to buy them in the first place.

Madrid are being run by a man who has made serious amounts of money and a man who love his football. He puts the football first. After all, if he was looking for big returns, he’d probably be better off playing the stock markets. His vision is always to create the best teams for the Madrid fans. He knows with great teams come great revenues. So he went out, he bought the best on the market, he brought in a coach he thought could deliver in a season and he maximised commercial revenue streams all over the world.

Ok, they didn’t win everything like he’d hoped, but they came within a whisker of over turning Barcelona and they will no doubt be in contention again this year.

So my point about this whole Madrid circus is that whilst I’m not encouraging Arsenal to go out and do the same, I am asking them to look at what the Spaniards have done and take some notes. Spending money does not always equate to a Portsmouth / Leeds collapse.

Big players bring in a new generation of fans, they shift shirts, TV deals and improve the money sponsors are willing to pay you. They also encourage businesses to sign up for corporate boxes, they ensure the ground is always filled and in general, if managed correctly, they ensure you’ll be competing.

Arsenal sacrificed a season because we didn’t want to pay £4million for Mark Schwarzer in June. I’ve had countless Arsenal fans tell me he wasn’t worth the money. What sort of attitude is that to take? Since when did our fans start counting the pennies like that? They’d rather go a season with a keeper we know isn’t good enough than spend an extra £2million on solving the problem for 3 years?

We’ve been programmed to be prudent with our dreams. When we moved into the stadium it was so we could compete with Manchester United and the biggest clubs in Europe. People say Chelsea changed that… well, again, I disagree, have we come anywhere near matching United’s spending power pre-Abramovich? Not at all… we’ve moved over to the Emirates and we’re risking a season on £2million.

Does that smack of a club who want to be the biggest in the world?

Arsenal need to stop thinking about breaking pretax profit records and remember what a football club is all about at this level. If you sign the right players, all the commercial stuff will follow. Football is about signing the best players, taking a few risks and competing for as many trophies as possible. Under Arsene Wenger, I feel we’ve lost our way over the last few years and the coach, for some reason, has become addicted to the transfer surplus.

People talk about Arsenal class all the time. I don’t see what’s classy about our policy. We charge fans outrageous sums of money, we brag about the amazing profits we make off the back of that, then we don’t reinvest that money back into the squad. We talk about financial prudence and how we do things the right way, then we go around Europe exploiting loop holes and steal clubs young players before they get the chance to make any decent money out of their investment.

Where is the class in that?

Arsene, Gazidis and the board should start thinking about how they can improve the squad this season instead of looking at the next money making caper that comes at the expense of the fans. We’ve taken a huge risk again this season by buying up expensive tickets few of them could afford… I think the club should have matched that investment by signing a Pepe Reina type goalkeeper. It’s time for the board to give the fans something back, time to show us the point of moving stadium, time to act like a big club and announce our intentions on the world stage.

Madrid have proved that spending money can work commercially… though I wouldn’t expect us to match their spending or the risks they took, I do think there could be a middle ground where we at least spend the money we generate on something other than giving young players pay rises based on performances they haven’t given yet.

Come on Arsenal, loosen those purse strings!

802 Responses to “Madrid show Arsenal how to spend recklessly and make it work”

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  1. GunnerDan

    I will not take any explanations that we made a bid in the last 24 hours and did not succeed as a seriuos explanation for a club that is serious about getting what is needed. The club had the whole summer negotiating a deal for a keeper and some say they tried in the last hours cunts!!
    I f we are a serious club we need to get the players needed and sometimes pay for them a bit. I do not mean like Madrid spending without using your brain but me like loads of AFC fans see that we need a new GK and cover for Song. Go and get it we have the cash!!!

  2. OPG

    So Squallici will get his first start luckily it’s at home and Bolton don’t have much pace upfront but they do have some tricky Wingers so he can’t get dragged out of position too much.

    The weekend fixtures look pretty unexciting only Everton vs United stands out.

  3. Richard

    Madrid are the biggest side in world football, the most well known side in the world and the most successful, they have a brand that is already established. It’s not just the names if we signed the players they did we wouldn’t shift half the shirts they did. It takes time to build a brand as strong as Madrid. United are the only side close to them marketing wise. Sure success is needed to do this and you could argue signing MS would change that but countless times on sites like this when we were chasing him people would say he is no better than Almunia, so why would we pay 4million for that? But because we didn’t sign him now he was the answer.
    Deals happen on the last day and for those who say it’s hard to do, look down the road where they signed a player 10mill cheaper because it was a last day deal, there is plenty of time on the last day if you know what you want, if sides won’t sell then nothing you can do to change that. Look at Barca with Cesc, unless you pay over the odds you don’t get big names (cesc realistically isn’t worth 50million what we wanted, no player is)

  4. pantsR2long

    Rooney’s been dropped for the Everton vs ManU game so now that’s not even worth watching 🙁 I was really looking forward to the Everton faithfuls really giving it to Rooney and seeing how he would react.

  5. Pedro

    Bloody hell, you go to bed…Kwik Fit goes mad and HB starts quoting latin…

    Oh yeah, I’m up at 725 on a Saturday…

    Where is Geoff? Tardy as usual…

  6. pantsR2long

    Morning to all European grovers.

    I wouldn’t be surprised one bit if we find out today or the next that the extent of Vermealen’s injury is worse than previously thought, in fact I almost expect it to happen.

  7. Pedro

    pantsR2long, I wouldn’t be surprised either.

    He was played constantly last season despite being exhausted… it always catches up with you.

    That puts us in a very nasty situation if true…

  8. Geoff

    Damien, Man U actually house 74,000 plus, but they charge less than half what Arsenal do you dope, we get charged more than any other fan in world football, google that before you start opening your mouth.

    But then if you ever went, you would know that, I love the way that all these armchair fans that don’t spend their money tell us how right the club are spending fuck all.

  9. jacob

    Pedro…

    Sorry but I somehow missed all the posts you addressed to me. I was at work yesterday and having to reply as best as I could… I wasn’t being rude or ignoring you on purpose… I shall try to answer your points.

    1. When I said that “the Stadium is hardly paid for” in my initial post I was incorrect. I should have said that there’s still a significant debt relating to the stadium development on our books. But a significant debt is still a debt and, this being England, that debt will have to be repaid one way or another. Having said that you were quite correct to pull me on the phrase I used…

    2. You ask how I know that we can’t add a £30M player to our team? The answer is simple enough… a £30m player will command wages far in excess of what we’re paying now and if we raise that new player’s pay significantly it is inevitable that the other players will demand parity…and why shouldn’t they? Arshavin took a pay cut to play for us, remember? The problem with some of you is that you have no notion of how a team is built. There’s this naive presumption that managing Arsenal is all a bit of an easy computer game. It ain’t.

    3. Finally I want to deal with your claim that people are mis-reading the article when they say that the writer wants Arsenal to take unacceptable risks. Where to start? First of of all is the naiveté of taking Madrid’s figures at face value. I’m sorry but anyone who knows anything at all about Spanish football knows that the accounts are manipulated for political reasons… check out Barca’s latest report! To take them at face value and then use it to criticise Arsenal for their approach is gauche at best and utterly misguided at worst.

    Then there’s the article itself… in it the writer compares Arsenal’s way of doing things unfavourably with Real’s… what you don’t tell us in any real way is how much bigger you’d like our budget to be and how effective your proposed increase will make us. The reason this is important is the fact that there are clubs who have outspent Wenger in the Transfer market by a factor of 3, 4 or even 5 who have still not won the league or qualified consistently for the Champions’ league… neither do their teams contain superior players. Spurs have outspent us massively, Newcastle have outspent us massively, where are they if not behind us.
    Aston Villa under Doug Ellis was always criticised by their fans for a lack of ambition so Randy Lerner came in and seriously splashed the cash with a good manager and they barely moved, why do you think that is? How much have Liverpool spent and where are they? It takes Man City type money to make a dent in the premiership as it is… So those of us who say that you have to be asking for reckless spending cannot be wrong, after all the headline to article implies as much…. Unless you believe that a little bit more money will get you players that are significantly better than Diaby, Nasir, Wilshere or even Denilson . Now how naive is that?

    The simple point remains this… Arsenal are not Real. That you can even begin to compare our budget and theirs is actually down to the decisions the board and Wenger have made… decisions you appear to neither appreciate for their foresight nor their courage. Wenger has been and continues to be a blessing to Arsenal football club no matter what ungrateful fans and bloggers might say or write (and no matter how many witless internet warriors call me a AKB… as if they know ANYTHING). One day we will look back at all this carping from all these ungrateful fans and marvel at the stupidity of it all. Of that I’m sure.

  10. Geoff

    Jacob, don’t talk rubbish, we lost Gallas, Silvestre, Eduardo and Campbell amongst others what the fuck do you think their wages came to, what utter nonsense.

  11. jacob

    Geoff…

    What’s your point? That we should pay one person what we paid 4 players? You think that Arshavin and Cesc and Song and Sagna will just say fair enough this guy is earning twice what I do? Do calm down mate.

  12. Geoff

    No my point is that we could pay one person what we paid any of those, you are the naive one if you think we couldn’t, Gallas alone was on £80k plus.

  13. StelsArsenalElysium

    Oh and for the record, I do read the financial s, I own shares, do you?

    Didn’t think so.

    What a post brother!!!!!! Man wish I could say the same

  14. StelsArsenalElysium

    They say “They say a lot” to steal a pulp fiction line… Willie will be wearing the spuds arm band 2nite

  15. Geoff

    Stels I do despair sometimes when people start lecturing me about money and Arsenal from 12,000 miles away.

    It’s very easy to believe in the management of the club when you don’t spend £5k a year on tickets.

    When Arsenal lose my week is ruined, I’m sure when Damien watches us lose, he watches the cricket or Kangeroo trapping or something.

    I know there are a lot of passionate Aussie fans out there and I love them, but he isn’t, he’s a know it all.

  16. jacob

    Sorry Geoff but you’re not making any sense. My point is that Arsenal cannot afford a 30m signing plus wages. None of the players you listed was worth 30m… and even Gallas refused to take a pay cut. So my point stands. TBH I have no idea what you are on about but such is life on the Interwebs..

  17. Amos

    Don’t Chamakh, Squillaci and Koscielny get wages then? What about those who renewed contracts and/or promoted to the first team squad. Even with the departure of Gallas, Silvestre, Eduardo and Campbell you can bet that our wage bill will be higher this season that it was last season.

  18. Amos

    It’s not true to say that we couldn’t afford a £30m signing and pay the wages though. No team pays the £30m up front – it would be paid over the contract term i.e £6m a year of 5 years. There aren’t may teams that can ‘afford’ to pay higher wages than we can – Chelsea and Man City do though it’s a moot point as to whether they can afford to do it. Real probably can, while the current broadcasting rights remain in place and Barca couldn’t even afford to pay their players on time in June and had to arrange a loan to pay them at all. In any event Cesc is a £30m player and we’re paying his wages.

  19. jacob

    Amos…

    whether you spread the payments or pay a lump sum it is still money that you have budget for and a player worth 30m will command at least Cesc’s wages which are not insignificant.

    The thing is that we have a wage structure that the players accept and that makes sense. Cesc is not only our best player but he has played the most games at all levels for the club… a new player who has done nothing of note for the club being on Cesc’s pay will definitely cause the wage structure to be revised upwards as other players and Cesc too will legitimately ask for their pay into brought into line. The issue isn’t just the act of paying all that money for one player but it’s knock on effects… look at Joe Cole and Chelsea.

    Finally… cesc may well be worth 30m or even more but we didn’t pay that for him… in fact we paid next to nothing.

  20. Amos

    I take your point Jacob but the fact that we are able to pay Cesc wages even though they aren’t insignificant just proves that we are able to budget for the wages of such a player. You couldn’t have a whole team on that basis but the reality is that Arsenal are one of the few clubs that could afford to do it. I don’t think the club would do it mind – but not particularly for budgetary reasons – I honestly think they’d be able to cope with that if they really felt that it presented genuine value. They wouldn’t be likely to do it simply because it’s rarely good value. Any look at the big buys over quite a few seasons now would show that at least 50% if not more haven’t been full value for money – though some of course have. If we get it wrong just once it could cripple our ability to make other more fundamental team changes for quiet a few seasons after.

  21. Mark Modi

    Comparing Arsenal and Real Madrid just like comparing a school run by private institution and goverment. None of us know what exactly happen in the board room for both club and how the money is spend and generate. All of us just assume.

    What the difference between Real Madrid and Arsenal? Real spend, spend, spend and spend and still won nothing and not even almost winning something. They even cannot beat Arsenal.

    Even though Arsenal didn’t spend that much, at least Arsenal almost won something. I guess if Arsene spend million of pounds and still won nothing like Real did, all of you will surely call his head because he spend all our hard earn money but not winning anything.

    The last time Real Madrid win is under Capello, the coach English hates so much and also the Ream Madrid fans. How much he spend on new players that season? Capello was sacked because they didn’t like his brand of football. Since then Real Madrid haven’t won anything.

    My advice here is, stop comparing Arsenal to other club. They are no better than ours. Give this club stand up alone without external help (like Arsenal), we can kiss Real Madrid, Barcelona, Milan,Inter and Chelsea bye bye from Champion league.

  22. Surferosa

    This whole Jay-Z thing is nonsense tbh. His estimated net worth is $150m. Thats peanuts- if he invested everything in Arsenal, he could afford to buy about 10% of the club. Even with leveraged-backed debt- its just not credible.

  23. Uk

    @gary
    In the last 10yrs madrid has won 2champions league titles(00,02) 4 spanish leagues (01,03,07,08) they’ve been pipped to it in the last 2years by a barca which has spent almost as much as they have. I’m surprised you don’t know this
    My point? Spending has also made madrid competitive trophywise
    &for those who say they are the government’s club, well I don’t think the government likes to throw away money, I think the government considers the club a worthy investment financially & aesthetically, I mean if I were the government I would definitely not mind supporting barca or madrid they are national treasures