Arsenal ripe for the plucking

Stability.

That’s what most Arsenal fans really care about, stability. We want to maintain our place as one of the most successful clubs in English Football and most prestigious teams in all of Europe. We want our team to compete for (and sometimes win) trophies and we want to be able to boast to our friends about the players and their conquests. More importantly, for most fans the team is also the center of our club: just as a Harley-Davidson is the center of the club that many fat, old, upper-middle class Americans form. Note that both could change slightly, Harley introduced a water cooled engine that broke the 100bhp barrier and Arsenal introduced the Emirates stadium, but the core of what the club is all about must remain unchanged: they are stable.

Stability is also a good thing for a mature business. After a period of growth and instability a good business model will find a “sweet spot” if you will and stabilize and start making profits. Inevitably, as soon as that happens someone will want a piece of the action. Any business as large, stable, and as profitable as Arsenal (the 4th most profitable team in the world) is bound to attract outside investors who want a place at the trough.

There are two types of investors who like to get into sports teams: the guys who understand sports and sports fans and want a stable, profitable, long term investment and the guys who want to get into the business because it’s flashy, they want to increase their public profile, and/or they want to turn a quick buck. The problem is that most of the people interested in Arsenal right now are of the latter. Most people who are looking at buying into the EPL are of the latter for that matter. Guys like Al-Fahim of the Abu Dhabi United Group for Development and Investment (ADUG) reveal themselves to be the latter when they make claims that they are going to buy Ronaldo in January for £135m. They have no understanding of how football is played, outside of watching some crummy internationals or seeing big clubs going after big names and assuming that that means you need a team of “galacticos” to win the big trophies.

And now I read this morning that earlier this year ADUG wanted to buy Usmanov’s shares and that Usmanov was willing to sell them, but only a portion, and only at a substantial profit. If there was ever any doubt what Usmanov’s intentions are, this revelation should clear it up; short term, quick profit. I don’t know anyone who had doubts because last year he was already asking for dividends, but you know, want to say it to be crystal clear. Usmanov could be investing in a strip mine for all he cares, Arsenal is just a vehicle for him to extract wealth. If he thought he could have turned £80m in profit like Thaksin Shinawatra did when he bought City, he would have invested in City instead of Arsenal. Sure he fired David Dein today but that was to be expected, after all Dein basically bilked the guy for £75m by promising access he couldn’t deliver and knowledge he didn’t posses. That was a business move, Usmanov isn’t interested in being a kind and gentle benefactor to Arsenal that the article above indicates, his intentions are to take over the club, strip it of its resources, and leave the waste behind for someone else to clean up.

This new group, ADUG, though is bit of a different creature. They are interested in maximizing profits as well but only as long as they can do so while raising their profile — but within reason.  Which is to say that they are acting kind of schizophrenic at the moment. One day claiming that they will make a £135m bid for Ronaldo, a £60m bid for Buffon, £100m for Kaka, £80 for Cesc, and put a Bugatti in every driveway; and the next day tempering that with reminders that the City deal isn’t fully done because the books might have been cooked. I wouldn’t be at all surprised if ADUG pulled up stakes, citing bad books, and left City fans holding a bloated sack of Robinho. Because for all ADUG’s bluster the facts are that most players, while greedy, aren’t greedy enough, at least publicly, to go to the second best club in Manchester. If City were to miraculously qualify for the Champions League, that story will change a bit, but that’s a ways off and certainly the overwhelmingly negative reaction from the world’s best players has to give City’s presumptive owners pause.

This all certainly gives me pause. Not that City isn’t getting the warm reception from players that their owners expected, but that such an egregious amount of money is potentially changing hands. For Arsenal supporters who want to see their team stay stable, it’s popular to say that the Arsenal board are in a “lockdown agreement” but all that agreement really means is that the board have the option to buy any shares before anyone else. In today’s tight credit market, it would be very difficult for any member of the board to weather a large enough offer. Even Peter Hill-Wood, the man who is most vocal about keeping the club under its current ownership scheme, admits that a large enough offer would trigger a sale. It’s not that they are greedy, rather that they only have so much resources at their disposal. And it’s not nearly as much as some oil rich Arabs.

Meanwhile, all we want is stability and in this current environment I’m afraid that’s not on the horizon.