It has taken 9 years and the best part of £1.1b of Abramovich’s cash but he finally has the Champions League trophy.
When Drogba scored the winning penalty I felt sick but now the bile has settled back down I’m actually quite ambivalent about Chelsea’s triumph.
Sure Chelsea parked the bus but so did Inter and I appreciate that sometimes the best team loses. I know Chelsea were “lucky” to get through against Barca courtesy of a Torres clincher who despite his lack of form since making his British transfer record move is still a quality player. Last season Arsenal may have had a similar route to the final if our last minute chance had fallen to a striker of Torres’ quality instead of Bendtner.
I’m not pleased that Chelsea won the Champions League but I’m far from devastated. They’re still 10 league titles and 4 FA cups away from being more successful than us.
The potential upside of their triumph is that Abramovich may now decide that he no longer wants to pump millions into the club. He has what he came for and he may feel that the team needs to improve far too much in order to challenge for the CL again next year and indeed make the top 4. I don’t think he will continue to spend the way he has been spending. Hopefully this is good news for Arsenal.
A while ago I mentioned the idea of maybe making a move for Drogba in the summer on a free and got a bit of stick for it as I did with my Owen suggestion. After last night maybe that idea doesn’t look so stupid now to some of you.
Chelsea over the years and City recently have proven that you can buy trophies (class is debatable) and United proved that you can compete against one of them but now that there are two money clubs winning trophies to contend with the question is how can Arsenal compete? Arsenal were clearly the better team in the league when compared with Chelsea and were clearly the better team in Europe when compared with City but how do we combine the two?
We can continue trying to do things in our self-sufficient manner and let the victories taste even sweeter when they happen or we can do what many fans believe we should do and sell our soul to a billionaire to try and buy success.
Although I prefer our current model I’d like to suggest a compromise that I believe will keep in with our self-sustaining model and still have billionaire backing.
My idea is for our two richest shareholders, Kroenke and Usmanov, to invest in the club in the form of Principle Only Zero-Coupon Bonds (it would be great if they had a cool acronym like POZCOBS or POZCO Bonds but they don’t so I’ll just call them AFC bonds for the purpose of this post).
The AFC bonds would be given to AU/SK in return for them paying off all of our debts with the idea of having a period where the focus can be on investment in the team rather than profit-for-debt. The bonds would be issued with serial maturity which, for example, means the bonds could not be redeemed all at once and the first redemption being at least 5 years from date of issue and then no more than an equal share annually for a rolling period of 25 years after that to stop stockpiling for a big payday.
Although I believe that these bonds should essentially be “Perpetual Stocks” which means they have no maturity and the lender (SK/AU) and the borrower (AFC) would agree between themselves when repayment is made but within the previously agreed rolling 25 year period.
Does this mean we’ll have blank cheques like City or Chelsea? No. It means that the money we currently pay in repayments to our current debts would essentially be frozen for 5 years allowing us to compete in the transfer market with the likes of Utd who still win things despite not being bankrolled either (though it must be said that their commercial revenue far exceeds ours). More importantly it would stop us from having to sell players to cover our losses. Although we publish profits we would actually make sizeable losses without player sales.
Refinancing our debt in this way may only see us £15-20m better off per season debt wise but the freeing-up of cash may allow us to buy ourselves out of poor commercial contracts (or be in a position to renegotiate early), cover losses made on releasing fringe players or at the very least moving them on for next to nothing and all of this could see us improve our balance sheet to the tune of approximately £26m in fringe player wages, £20m in lost kit/commercial revenue and at least £15m in stadium debt so around £60m a year. We could easily afford to use 75% of this on player sales which would give us an annual transfer kitty of £45m and leave £15m in the account to cover the losses we would make without player sales. This of course is before any additional money we would make from winning trophies and selling players we no longer need, now or in the future.
It’s no secret that to maximise the value of those [commercial contracts] you want to have success on the field and be winning trophies. To do that you need to invest now in building a winning team.
Being able to strengthen the squad like this, transform our wage structure from a Marxist one to a meritocratic one may just enable us to actually win something again.
The investment would be a one time thing but it would allow us complete control over how and when we pay the bonds back and that would mean we could compete for players that will help us compete for titles. We wouldn’t have to rely on FFP coming in and we would still be self-sustaining as our debt would be well-financed and controllable and should FFP ever actually come into play we would not be affected by it.
The beauty of this would be that we would only be paying back the AFC Bonds with increased revenue from winning things which will in turn increase our commercial clout and increase revenues further still. Should we ever have an unsuccessful season we would be able to defer bond redemption should we feel we require the money to invest in the playing squad.
This would fit in with our self-sustaining model as we would be using club generated money to cover all of our bills and advances into the transfer market as well as paying back our bonds.
I’m not a fan of the benefactor model that Chelsea and City have but I also appreciate that our self-sustaining model is currently a handicap and that we cannot completely live in the hope that the footballing governing bodies will make the game fairer despite it being my preferred option. I want Arsenal to win titles not buy them and this idea could allow that to happen. We would not be bankrolling our players and titles with billionaire investment, we would just be taking advantage of our majority shareholders, for want of a better word, love for the club through debt refinancing.
If the role of a board member is to oversee a trophyless period while making personal profits and asking fans to pay inflation-busting ticket price increases then, no, I would not want to be on the board.
If instead it is to try to deliver sustained success, to increase your personal investment in the club, to help develop the commercial position and to ensure the fans have a say in the running of the club then, yes, I think I certainly have something to contribute
I do not think that Kroenke cares too much for the club but I am certain that Usmanov does and if this model ever actually happened and Usmanov was allowed onto the board I do not see him taking up the option to cash in his bonds whereas I think that Kroenke would. In fact I believe that Kroenke would, over time, trade his shares with Usmanov in return for more bonds.
Kroenke hasn’t made £2.1b by investing his money into sports and leaving it there. Usmanov is a different kettle of fish because he truly cares about the club (or so it would seem from his interviews) and more importantly did not make his money from sports franchises so his investment would not be a purely business decision.
I don’t believe in Usmanov handing money to Wenger or the next manager every summer but I do believe that he can invest in the club in such a way that compliments our self-sustaining model and will allow us to invest heavily in the playing staff when needed without breaking the bank or asking Sugar Daddy for a hand-out.
Chelsea may have their Champions League trophy but Arsenal are the only club to have a gold trophy. Arséne recently said that he wants to see Arsenal back to the levels of the invincibles who incidentally were the ones that won the specially commissioned gold trophy and is it fate or just irony that Alisher Usmanov’s initials are the chemical symbol for gold?
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