Arsenal’s misty eyed welcome of FFP could backfire

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Arsenal’s transfer spend is just 1% of its operating cash flow (2007-12) – The Swiss Ramble
The Swiss Ramble has an excellent report on Arsenal’s financial health which is exceptional but he finds some worrisome signs. Arsenal’s self sustaining model is over reliant on match day receipts and player sales. More disappointing is its burgeoning wage bill and flat commercial development. The problem with this model is that match day receipts have a ceiling effect and player sales are one off propositions.
With £62 per ticket and a new generation of players who cannot command the same amounts in the transfer market, the prospects of growth are more limited. Ivan Gazidis’s team had not really worked wonders in the commercial market with revenues relatively stagnant in the last five years. The wage bill per turnover is now 61%, a steep climb from 46% a few years ago. Part of the problem is that Man City and Chelsea have skewed the wage bill so much that Arsenal is forced to compete but the club’s problem is also the “socialistic wage structure” put into place by Arsene Wenger which sees very little daylight between top and bottom tier talent in their compensation.
When you look at if from such a perspective, then the advent of financial fair play rules is of even more importance to a club like Arsenal. A proposal mooted by Arsenal and a few other clubs to ensure that the EPL follows a parallel track FFP should therefore come as no surprise. These clubs are protecting their status quo and in Arsenal’s case, a strictly adhered to FFP could silence those calling for Alisher Usmanov’s induction into the boardroom since his biggest drawing power is his unparalleled wealth and his willingness to foot the bill.
The problem with this is that Arsene Wenger while the strongest proponent of FFP is also simultaneously its weakest link. For every FFP activist, there is an equal and opposite critic pointing to Wenger as an example of why FFP is toothless and outside investment is needed to strengthen a squad. Hence the raison d’etre for clubs like Chelsea and City. What is more powerful an antidote to eight years without a title? Or a generation or two of living under the shadow of your storied neighbours?
Wenger is waging a war of attrition thinking that through these artificial controls, he will be able to wear his opponents out. As The Swiss Ramble points out, there is £50-60 million available for transfers from Arsenal’s impressive cash reserves and two prudent purchases could make all the difference, for e.g., another proven goalscorer and a commanding holding midfielder. There is much riding on being considered Europe’s elite including energizing those commercial and merchandising streams. Keeping your powder dry at the wrong time could backfire while considering FFP a magic bullet is to walk in with one hand tied to the back. There are ways of circumventing it through all sorts of creative accounting tricks and institutional chicanery.

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