The Robin Van Persie Saga: Why It's All About Money, Part 3

If Robin van Persie's ill-conceived statement posted on his personal website on Wednesday, with its appeal to "vision" and "direction" stirred up the pot at Arsenal, shattering the hoped-for calm at the club this summer, Alisher Usmanov's follow-up letter the next day turned up the screw of tension a notch or two higher and threatened to unleash chaos at the club.

Whatever Usmanov's intentions were (and they may not be far from wanting to tap into the frustration of fans by taking advantage of the Van Persie statement), one thing is sure: the letter was ill-timed and ill-advised.

There is, of course, the sense by which one could say that sustained pressure is a sure way to engender change.

True.

But given the manner of Van Persie's statement and its impact on everyone associated with Arsenal, I do not believe Usmanov's move has helped the situation.

Robin van Persie is pretty sure of his own "vision" for Arsenal. Julian Finney/Getty Images.

What seems to emerge is a man trying to capitalize on a bad and difficult situation to advance his own cause, to consolidate his position in the battle for the Arsenal soul.

It is well known that despite owning close to 30 percent stakes at Arsenal, Usmanov has been refused a seat on the board, a situation that has left him not a little frustrated.

As I mentioned in the second part of this series, the letter contains four fundamental points, the first of which seeks to assure the board and the Arsenal fans that he is a friend to Arsenal, not a foe.

The second point insinuates that current board members, or at any rate immediate past members, aren't there (or have not been there) for the benefit of the club but for their own gain.

He cites the sale of shares to Stan Kroenke, a huge windfall for a number of the members, as evidence. (See my reaction to this in the second part of the series.)

The third point condemns as ineffective Arsenal self-sustaining model. For Usmanov, it is an outdated model in the face of the superior purchasing power of Arsenal's competitors. 

He states:

Mr Kroenke was sold a vision by the board at the time that the club could be successful without further investment, so he is pursing a similar policy which is to run the club without any investment and to avoid and dilution of his equity, a good part of which was funded by a loan from Deutsche Bank AG to KSE, UK, Inc. at the time of the mandatory offer. The status of that loan and whether it is still outstanding has not been clarified by Mr Kroenke.

He then concludes that:

As a consequence of this policy, which is dressed up as prudent financial planning, it is down to our manager, and not the shareholders, to have to deal with the club's tight finances, carry the burden of repaying the stadium debt by selling his best players and having to continue to find cheap replacement. All of that, naturally, comes at the expense of performance on the pitch.

This policy is leading to the loss of our best players, often to our main competitors, and even causes the players themselves to question their future at the club and the club's ambitions. The situation with our captain and outstanding performer from last season Robin van Persie sums this up.

Seeking attention: Mr. Usmanov. Oli Scarff/Getty Images.

This, naturally, sounds like music in the ears of frustrated fans who want to see Arsenal shrug off her inability in the last seven years to win titles. The statement sides with Van Persie, whose inevitable loss, as he implies, is the result of the board's ineffective and outdated model.

Fundamental to this complaint is the issue of the stadium, the financing of which Mr. Usmanov condemns.

What the reader needs to be reminded of is that it is a project that has been widely praised as successful by many. The loan taken at the time to build the stadium is considered a pittance today.

Many clubs would give anything to score the same success. Most considered that loan a manageable debt, and so it has turned out to be.

Arsenal have paid off almost all of it. As of May last year, it stood at £98 million sans cash in hand. The rest of it is to be spread out across two decades, as I recall.

However, Usmanov asks why the shareholders shouldn't put down their own cash and pay off the remaining debt, freeing Arsenal as a result to use any revenue generated to buy and pay players.

David Conn of The Guardian writes:

The club has always set itself against that, arguing it is unnecessary because the debts owed from building the stadium are not punitive (net debt last year was £98m, the club paid £15m interest) and there are penalties for repaying it early. Gazidis argues any other funding from outside would leave the club unsustainable.

Peter Hill-Wood, Arsenal's chairman, concurs:

It's simple to say we should put some money in, but it doesn't make any sense. We can't pay off the debt without huge penalties, and putting money in for any other reason doesn't make any sense at all.

The above, incidentally, is the fourth point of Usmanov's letter. The point of difference between Usmanov's recommendation and Gazidis' and Hill-Wood's rejection of it is where exactly the advantage lies for Arsenal, the club.

It is more profitable or advantageous for the club to have the remaining debt paid off in one stroke, or more in following the current plan and model? 

I do not know the answer since I do not know how huge the penalty of paying the debt early would be vis-à-vis what it'll cost Arsenal eventually according to the current plan.

If Gazidis is worth his salt as a business administrator and Hill-Wood likewise as club chairman, one would think they've taken all of this into consideration and surmised that it is more beneficial for the club to follow the current plan.

Besides, doesn't Usmanov's plan merely shift the debt to another location, namely the shareholders who contribute their own money?

One argument for this latter scenario would be that in this case, Arsenal wouldn't be paying any more interest on the loan, freeing (as Usmanov says) any generated monies for the purchase of players.

Again, the difference lies in what Hill-Wood calls “huge penalties" and how that impacts Arsenal's immediate and future financial status.

The Emirates Stadium. Getty Images.

In any tense situation, amidst the pressure and the fear, it is always advisable that a person pauses and takes some deep breaths. It affords calm and focuses the mind, enabling the proper functioning of the intellect.

The problem, as I see it, isn't that the building of the Arsenal stadium was done wrongly. That isn't true, as has been attested to both by the press and outside observers. Neither is it that the self-sustaining model is wrong.

In fact, without this model, the so-called fifth richest club would exist in the realm of dreams only. Pure and simple, it is the stadium that has given Arsenal its value. (I shall elaborate on this in the next part of the series.)

The model has made Arsenal a viable company and has insured its competitiveness both in England and in Europe.

Some recently have cited Everton as more ambitious than Arsenal since it has been willing (often times it seems) to spend more on a single player than Arsenal has been.

This is similar to statements made deep within last season when the team was experiencing difficulty, to wit: Newcastle and Liverpool are more ambitious clubs than Arsenal (more successful they claimed), even Tottenham Hotspur.

I should say I was stumped since I couldn't understand the reasoning behind this, short of the fact that at the time all these clubs had a good chance at finishing in the top four on the Premiership table.

The fact is, these clubs have outspent Arsenal in the last decade and yet, Arsenal have had more consistent success.

The point here isn't that a top-four finish should be the absolute yardstick for Arsenal, no. It is rather that many of the examples some fans appeal to are laughable and often altogether silly.

Everton, for example, have spent more money than Arsenal in the last 10 years, and who, but the mad person, would say that Everton have been more successful than Arsenal, or that we should look to Everton as an example of how ambitious a club should be?

If it isn't clear, the point is, it isn't often the amount you spend that guarantees you success, were it so, Liverpool would have won the league, or at least finished above Arsenal last season and even the season before last.

Money, of course, helps win titles, but if Manchester United hadn't thrown away the title that was practically theirs with the finish line in sight, the almost one billion pounds that Manchester City have spent in two years wouldn't have availed them anything, not as far as the Premier League title is concerned.

Joy and delight are currently AWOL at Arsenal. Getty Images.

To conclude, I will say Mr. Usmanov's letter borders on the disingenuous.  For example he writes:

So what is Red & White's vision for the club? It is simple. A debt-free club, with a big enough war chest to buy top players who can hit the ground running and who can compliment the club's long tradition of developing young players and homegrown talent. Together they can help the club win the most prestigious trophies - because it is the trophies which are the crowning achievement for everybody at the club.

The trophies are also key to the commercial success of the club - they increase the value of the players, the value of the brand, attract the best sponsors and maximise the value of our commercial contracts which should in turn mean that the club does not have to squeeze any more income from hard pressed fans.

We also believe in the transparency that a stock market listing brings so we are committed to the club remaining listed on the stock exchange and to greater fan involvement both through share ownership and also board representation for the fans.

When you ask him how exactly is Arsenal going to be debt-free? He'd tell you through individual intervention (the board members or the shareholders, that is), where cash (their cash) is injected into the club to pay off the current debt.

Who, then, becomes responsible for this new cash (plus, the "huge penalties" Hill-Wood refers to)? Wouldn't this be the Glazer-Manchester United situation? Or at any rate, wouldn't that be the Chelsea, PSG and the Manchester City model?

For unless someone is willing to cough up this cash without any liability to the club (a free bonanza, that is) how exactly is Arsenal going to be debt-free according to Usmanov's recommendation?

He could, of course, be referring to the paying off of the debt being a long-time investment without the hope for immediate returns.

But then, how would this be different (except in the fact that, indeed, Arsenal could then immediately become more viable in the transfer market) from the investment of the board members he indicts, whose forebears had done exactly this a long time ago?

In the long run, current investors would recall their investment, in a situation not different than what Mr. Usmanov insinuates as corrupt.

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In part four, I will examine the issue of why board members sold to Stan Kroenke as opposed to Alisher Usmanov and the idea that this wasn’t done even-handedly.