Despite title drought, Arsenal commits to prudence

In the Arsenal boardroom, maintaining a diligent financial
approach is as important as ending the team’s title drought.

Releasing the latest set of strong half-year results on Monday,
Arsenal demonstrated the financial benefits of resisting demands to
recklessly recruit players – even though it is facing an eighth
straight year without a trophy.

The American-owned club disclosed its cash reserves had risen
year-on-year to 123.4 million pounds, and that it made a net profit
of 14.9 million pounds ($23 million) in the six months to Nov. 30,
2012.

The regular profits are largely due to the annual departure of
top talent, with 42.5 million pounds ($64 million) generated in the
2012 offseason transfer window by selling players – much to the
annoyance of fans frustrated by the failure to reinvest
significantly.

It was the decision in August to sell striker Robin van Persie
to one of Arsenal’s biggest rivals, Manchester United, that
infuriated so many Gunners fans. The anger has only intensified as
Van Persie’s goals have helped United surge 12 points clear at the
top of the Premier League, while Arsenal is 21 points adrift in
fifth place.

Having been dumped out of the FA Cup and League Cup by
lower-league opposition, Arsenal’s title hopes now rest on
overturning a 3-1 deficit at Bayern Munich next month to reach the
Champions League quarterfinals.

Even in the face of widespread fan discontent, chairman Peter
Hill-Wood maintained Monday that the club wouldn’t veer from its
strategy and embark on spending sprees in the hope of winning a
first trophy since the 2005 FA Cup.

”Our ability to compete at the top of the game here and in
Europe is underpinned by our financial performance, which gives the
club strength and independence,” Hill-Wood said. ”Our desire is
to make everyone connected with Arsenal proud of the club.

”We know that comes through winning trophies but also through
the way we do things, and that will remain our constant
guide.”

That ethos has enabled Arsenal, which is owned by U.S. sports
tycoon Stan Kroenke, to take a leading role in Europe and the
Premier League in driving through cost-control regulations to
ensure clubs are self-sustaining.

”The board remains fully committed to this path and the rest of
the football world is increasingly realizing the strength of this
model,” Hill-Wood said. ”As an early proponent, we welcome the
development of Financial Fair Play rules in the Premier League, in
addition to those adopted by UEFA … and we believe the
introduction of tighter financial regulation will assist all clubs
to compete while remaining financially responsible.”

Kroenke has previously insisted that the profit isn’t being
generated to enable him to draw a dividend from the club.

The Arsenal Supporters’ Trust responded to the half-year
financial results by repeating its call for ”better investment in
the team.”

Arsenal, however, said 40.9 million pounds ($62 million) was
invested in the six months to Nov. 30 in adding players to the
squad such as Santi Cazorla and extending various contracts,
including Jack Wilshere and Theo Walcott.

The supporters’ trust has concerns that even if there was heavy
spending the right executives are not in place to ensure it is
invested wisely.

”The football decisions made on player investment, player
selection and player wage levels are not delivering a more
competitive team,” AST board member Tim Payton said. ”The AST
believes the club are financially well set to improve on the
decline of the last few seasons.

”The remaining question is whether it has the boardroom
leadership and football decision making expertise to make the money
count.”

Some fans have questioned the August 2011 investment by manager
Arsene Wenger in Andre Santos and Per Mertesacker, who have both
failed to strengthen the fragile defense.

The money available for transfers could be reduced if Arsenal
fails to qualify in May for the Champions League for a 16th
successive season. Arsene Wenger’s side is currently outside of the
four places for European club football’s premier competition.

And the latest financial results showed that turnover from
football activity had dropped 7 percent year-on-year to 106.1
million pounds ($160 million).