The Big Crisis at Arsenal – The Kroenke Legacy Analysed

THE BIG CRISIS AT THE ARSENAL: THE KROENKE LEGACY by Terry Barry

Was Wenger leaving like Brexit?

This is an amusing quote from a piece in the Guardian in April 2018 just after the news broke that Arsene Wenger would be leaving at the end of the 2017/18 season:

“It was difficult, however, not to appreciate the cartoon in Saturday’s edition of L’Equipe showing two Arsenal supporters debating the issue and the impression it left about how strangely unsettling it is to imagine somebody new in Wenger’s touchline seat next season. One of the supporters has a can of spray paint in his hand and has scrawled the words “Wenger Come back!” in red capital letters on a brick wall. “Was it not you who was screaming: ‘Wenger Out’?” his companion asks. “Yes,” says the fan responsible for the graffiti, “but, like Brexit, I’m afraid I will regret it.”

Touché! And, yes, it is perfectly feasible that the Wenger Out fraternity might end up looking slightly foolish if the handover doesn’t go smoothly, as they often don’t, and Arsenal find the process of change far more challenging than the people who have campaigned for this moment might have anticipated.”

How prophetic I hear you say. This may seem an amusing take on the Wenger leaving saga but is there any mileage in this Brexit analogy? Can we project Brexit onto events at the Arsenal Football Club? Like Brexit – has the departure of Wenger taken us to a position in which we are worse off than when he was still here or was his long presence a veil to prevent us seeing the real culprits?

There are great similarities between the fall out following the 2016 U.K. Referendum on our membership of the EU and its coincidence over the same period with the turbulence of the last years of the Arsene Wenger era. A long association between the U.K. and the continent of Europe can be seen as mirroring the long relationship between the Arsenal FC and the Europhile Arsene Wenger. The division of our citizens into 2 camps of Leavers or Remainers mirrored the division of us Arsenal fans as being either ‘Wenger out’ or ‘Wenger in’ supporters. The acrimony between the two sides of Brexit has been highly divisive and has unleashed much social unrest, higher levels of race hatred crimes and racism in football. The antics and language used by the present Prime Minister has been culpable in this respect. I still recall with horror, the scene outside the Emirates when a crowd of about 100 men marched around shouting angrily ‘Wenger Out’ before a game – all very disturbing and in my mind – reminiscent of scenes in Germany in the 1930’s!

On the bigger stage, Brexit is still raging on dividing and defining political identities and tying our political institutions in ever tightening knots. For Brexit, the struggle is between the extremes of remaining in, or close to, the EU or following Johnson’s road to becoming a junior partner to Trumps US Administration and the freeing up of the U.K. market to big US Corporations. The result of this coming General Election will determine which path the U.K. follows – is it going to be towards Europe or Trumps USA?

Did a similar Brexit-like struggle get played out at the Arsenal between the previously all powerful, Wenger football purist dynasty and the crude and narrow business interests of the US based, Trump supporting, Kroenke family? Did the final demise of Wenger signal our transition from a football club to becoming a full-blown US owned Corporation under the sole control of Stan Kroenke and Son? Over this last decade or so, has there been a paradigm shift at the Arsenal in which we transformed from being a Wenger managed, old-school, Highbury based football club employing less than 100 people to the Kroenke, Global Corporation, resident in the tax haven of Delaware, US with a payroll of 1000 plus people.

I believe this transformation has huge implications for the Arsenal and its fans – and from what I can see, these implications do not look good for us fans!

The sacking of Wenger and the appointment of Unai Emery was supposed to heal all these divisions and unite the fans behind the new manager and the new Football Executive Committee (FEC), as Arseblog cheekily calls them. This did happen for a while but – after 18 months of characterless football infused with a profound lack of creativity, ambition, goal scoring and entertainment, allied to the inherited, Wenger later years problem of poor defending – we now find ourselves way behind our competitors for a top 4 place – patience has now worn thin and discontent has surfaced. Much like the dishonesty of Johnson’s slogan of ‘getting Brexit done’ as a solution to all our woes, the departure of Wenger has not dimmed the dissatisfaction of the fans. Discontent with Wenger has been replaced with at the very least, discontent with Emery.

How much of this is discontent is down to the identity of the manager? Could it be that the cause of our problems lies much deeper than the name of the manager? What has been the common factor throughout this long period of discontent? One answer is the identity of the owners – maybe there’s a clue in there somewhere. Once again, we are a Club in crisis but is this a new crisis or merely a continuation of the one we had before – I believe this is a continuation of the crisis that has been building up since the involvement of the Kroenkes in the affairs of the Arsenal more than a decade ago.

The Kroenke Legacy
What have the Kroenkes done for the Arsenal? We have seen what the Kroenkes have done in the States with their franchises, and this must ring alarm bells for us fans. With the buying up of all the Club shares in 2018 – having started this process 12 years earlier – the Kroenkes now have complete control over the running of the Club with fans having little or no insight into what goes on behind closed doors or having a say over how the Club is run. All this is now in the hands of the Kroenkes – father Stan and his son Josh – people who contributed $1M to the Trump election campaign. Am I alone in finding that connection worrying? The 2 Kroenkes are joined by a small group of elderly people as Board Members.

The first thing to say is that the Arsenal is a very rich football Club. According to Forbes we are now the 7th richest football club in the world – valued at £2.268M. Over the last 12 years since the Kroenkes became involved with the Arsenal, our position in the ‘global richest club league table’ has gradually slipped from 3rd position held in each of the 4 seasons 2007-11 down to 7th place in 2019 reflecting our performances on the pitch going into a similar decline but also because of the greater business acumen and investment made by our competitors. With regard to the latter, it would be difficult to be less of an investor than the Kroenkes and that shortcoming is the most obvious explanation as to why we have dropped down the richest clubs in the world league table! Nevertheless, in the 12 years that the Kroenkes have been shareholders, the value of the Club has risen from £915M to £2,268M – which is a huge growth in value.

Our Bank Balance of £300M is second only to Man U and when it comes to Fixed Assets at £760M we are second to none in the world! Our profits were up last year from £45M to £70M to place us 4th in the EPL profits league.

The one small cause for concern in the Clubs financial performance was in bringing in Revenue – we are currently positioned in 9th place in the world in terms of annual earnings but alarm bells started to ring when we learned that this last season for the first time since the 1995/96 season our Revenues fell from the previous year! In terms of annual revenues brought in, we are currently ranked 5th in the EPL, we were 3rd last year and 2nd back in 2010/11. However, a large part of the blip was down to paying off Arsene Wenger and his staff with a £17M brown envelope! And then there was the impact of the loss of not qualifying for the Champions League on Revenues.

Over the last 15 years we haven’t invested as much as our main competitors in our player squads – a handicap which Wenger overcame every year in achieving at least Champions League qualification up until the final year of his tenure. But in recent seasons we have splashed a bit of cash – we were 10th in the player investment league 15 years ago – we are now 6th. However, the influence and importance of player squad investment on competitiveness has grown as competitiveness has intensified and revenues coming in have rapidly increased in the EPL.

I’m no accountant or business adviser but it seems to me that financially we or rather the Kroenke’s are doing very well – although getting the extra Champions league money would no doubt come in handy. But looked at through a business performance lens – all this growth in Value, Revenue, Profits, and Fixed Assets etc means everything financial seems very rosy in the Kroenke garden and all this money arrives on your lap for doing nothing and not spending a penny of their own money. But despite this huge growth in Value amounting to +£100M per annum – even financially, we have lost ground to our main rivals in the EPL and elsewhere in Europe.

Dare I say it, but I suspect anyone who had access to the money to buy the Arsenal would have made the same gains. That seems to be the key attribute and it looks like a case that the more money you have, the more that you can get and make. It’s as simple as that if only it was! To conclude, on the financial front – it’s hard to give any credit to the Kroenkes for the financial results – that’s more down to being in the right place at the right time and having access to huge amounts of money from a bank and the growth in TV revenues and sponsorship deal, the investment in the Emirates Stadium and the shrewd management of Arsene Wenger – both on and off the field.

Meanwhile it’s us fans who have had to fork out huge amounts of money to watch an increasingly failing and lacklustre football team managed by a manager who has the full backing of the Board and the Football Executive Committee (FEC) – who no doubt paid themselves very well last year even though our results got worse. Its classic wealth for the few and pain for the many – if watching and supporting the Arsenal can be described as pain – perhaps frustration, disappointment or anger would be more appropriate feelings.

But what about the football – what about the management of the club – what about the decisions being made – what are the decisions and who makes them about what – what about the fans – where do we come in – what has our transition to becoming a US owned Corporation meant for all these things? In the old days it was Arsene knows best and a Board who ratified his decisions – what happens now?

Gazidis came and went after sacking Wenger and appointing Emery and now we have a triad of Directors in charge – Raul Sanllehi, Edu and Vinai Venkatasham with Huss Fahmy in charge of contracts – the FEC. As Arseblog recently pointed out the Board are now more or less redundant in this new set up and so my first questions to the Kroenke’s are – What are the Clubs main objectives and what is the Club’s strategy to achieve these objectives? In this context of our transition from a football Club to a US Corporation, and with the removal of Wenger from the picture – my obvious and major concern is what is the Clubs main priority – making money, profits and growing wealth or playing attractive football – the Arsenal way – and winning major trophies?

My fear is that for the tax dodging Kroenkes who run the show – to repeat, the people who don’t invest a penny of their own wealth in the Club despite being the third richest owners in the EPL behind Man City and Chelsea, with a family business fortune estimated at £6.4 billion – their main priority is the money one! However, in seeking out what the answers to my key questions are, the problem is that we have absolutely no idea how to access this information – because the running of the Club is now a firmly closed box – the contents of which we fans are not allowed to see or hear about – let alone be given an opportunity to influence!

The late, great Tony Benn in his final speech to Parliament argued that when confronted by a powerful leader – we should ask them 5 questions before we accept them as a leader:

What power have you got?
Where did you get it from?
In whose interests do you exercise it?
To whom are you accountable?
How can we get rid of you?

The answers to these 5 questions when addressed to the Kroenkes at the Arsenal are:

Total
The Banks
The Kroenke family bank account.
Nobody
We can’t!

For a Club with such a history and a tradition of serving the local community as well as having a much wider public following – it is just not morally acceptable for just 2 people to have such control over what should be a community asset, the Arsenal? The problem multiplies when you suspect that money and not football is the 2 people’s primary concern and the overwhelming motivation for these peoples involvement with the Arsenal.

Although we are not privy to the workings of their thinking and decision making – we get glimpses of what is really going on in the events we do see – and the evidence points to the money priority – like the Clubs policy towards one of our most talented players Ozil in freezing him out – a player who just happens to have the highest weekly salary in the Club or the late withdrawal of the offer of a more lucrative contract to another of our best players Ramsey, forcing him to seek a deal elsewhere.

Then there is the management’s treatment of the Club’s much respected Captain under the final Wenger years – Koscielny – who having suffered a near career ending injury in one of Wenger’s last games in charge and after a long lay-off because of this injury, felt his body could not stand the pressures of the EPL anymore and that he needed to step down a level, to play just once a week and return to his wife and family in his homeland in Bordeaux. It seems these arguments were not accepted by the new Arsenal management, and in the tradition of all industrial disputes between employees and their bosses, and having exhausted his pleas to be allowed to leave, he felt his only option left was to withdraw his labour. Eventually, after a very public and acrimonious, stand-off between the 2 parties, he was eventually sold for £5M instead of being allowed to leave for a token fee (as in the recent case of Monreal – £250,000) when he made his original request – something with the recent deterioration in his physical condition and his exemplary record over 9 years with Club – he felt he should have been entitled to.

There is also the treatment of Xhaka and the Club captaincy, and the acrimony around his substitution – more on this later.

These 4 players formed the backbone of the latter days Wenger team and all 4 might be seen as being on the receiving end of some unfortunate treatment by the new management at the Arsenal – I ask, who was responsible for these decisions – the owners, the FEC or the manager Emery or all 3? How would Wenger have dealt with these 4 cases? What impact did this treatment have on the players and their morale? I think these examples of management behaviour confirm a big culture change from Wenger’s time and do not reflect well on the Club.

Confronted by this closed box of management thinking at the Arsenal – it’s clearly difficult to identify the individual responsibility for decisions, but it’s reasonable to question the record of the FEC group at the Arsenal? What have Raul Sanllehi, Edu and Vinai Venkatasham along with Huss Fahmy done to improve the Club post-Wenger? We see the PR videos from Raul and Vinai setting out their ideas and statements from Josh along with the unfortunate pronouncements about noise and the Arsenal fans – but this is just talk when what we need is action. Like Emery they have only had a short time post Wenger to show their mettle and so we can only judge by what we fans hear and see but what we do hear and see does not encourage confidence in their ability to steer the Arsenal ship.

I’ve pointed to the high-profile cases of 4 individual players – it’s difficult to imagine the FEC not having an input into these 4 important cases and if they didn’t then they certainly should have been! There was an announcement that the FEC were involved in Emery’s decision to keep Ozil out of the team. A policy which as the team’s performance began to go into further decline now seems to have been dropped!

What other decisions have been made in the last couple of years?

Who was responsible for the sacking of Wenger with a year left on his contract? I know Gazidis was still here when this happened as he was along with Sanllehi and Venkatesham (and Mislintat) when Emery was appointed rather than Arteta. Why did they pick Emery rather than Arteta (my choice)? We hear stories of amazing presentations, but we will never know the real answers to these questions – unless Arsene spills all in his book which is coming out next year!

Edu is a very recent arrival and it’s too soon to fully assess his contribution but his decision to remove staff from the Academy and giving BFG a firmer hand on managing its running looked a good move. However, as recently revealed by journalist James McNicholas, there is cause for concern with Edu’s connections with big Arsenal fan, ‘super intermediary’ Kia Joorabachian who brokered the deal which controversially brought the Argentines Carlos Tevez and Mascherano to West Ham some years ago and also brokered the arrival of Edu from Brazil and David Luiz from Chelsea to the Arsenal. The early departure of Sven Mislintat from his post in charge of player recruitment and the now close links to ‘super intermediary’ Joorabachian heralds a departure from the ‘watch the player, assess his character, look at the stats’ approach to player signings – which brought in Aubameyang, Torreira and Guendouzi – to the use of ‘super agents’ to bring players to the Club – something Wenger highly disapproved of but now we seem to embrace – which gives me great cause for concern.

Conclusions

Now the FEC are giving strong backing to Emery when it’s clear, and has been clear for some time, that his methods are not working – which serves to further erode confidence in the Club’s management team. The Club is in crisis – a situation which is likely to worsen but what’s to be done about it?

The ‘WeCareDoYou’ group of Arsenal fans has written two important public letters to the Club – one over the summer and now another in which they express their dissatisfaction with how the Club is being run and identify the key points that the owners and the FEC need to address. Their criticism is directed at the whole management structure – they recently conclude:

“Following our statement in the summer, Josh Kroenke made an announcement implying that an ambitious KSE had arrived to save the day and secure the club’s future. The fact is that KSE acquired a controlling share of Arsenal in 2011 and had significant influence prior to that.

The last decade, notwithstanding the FA Cup wins, can legitimately be seen as lost years, both on and off the field, when the team has not only stagnated, but actually regressed. To date, that is the result of the ‘Kroenke legacy’.

While our away support continues to be magnificent, our home crowds are starting to deplete and this situation will be further compounded by what will soon become a toxic atmosphere, if the current turmoil and lack of true leadership at the club continues to translate into poor performances on the pitch.

We want commitment that the board recognises the issues faced by the club, and how severe these are for the future of The Arsenal. As supporters we want actual communication and measurable assurances from the board, that actions are in place to address this seemingly inexorable slide.”

I would agree with every word of this and would conclude that the problems that we see at the Arsenal are not all down to the identity of the manager or to the management structure – I believe the problems are fundamentally systemic and flow straight down from the very top right into the dressing room:

# There is a huge disconnect between the interests of the owners – which is to sit back, do very little and watch the value of the Club grow – and the interests of us fans – which is to watch good and successful football.

# Over the last 12 years there has been a complete failure by the owners to invest in the Clubs playing squad. The effects of this systemic shortcoming was papered over in the Wenger years but eventually in an increasingly competitive environment – with our competitors within the EPL and the rest of Europe putting far greater investments into their Clubs playing squads – even Wenger couldn’t prevent the inevitable impact that this had on the Clubs competiveness and arrest our gradual decline. His departure has laid bare the failure of our business management model and its outputs both in terms of the Clubs declining football competiveness, performance and results as well as the declining financial rewards relative to our main competitors in the EPL and Europe.

# With their taking full ownership of the Club – the owners now have no responsibility to involve the fans in their decision making and make little effort to show they care by taking action to give the fans a platform to voice their views on the running of the Club. There is an attitude towards the fans bordering on contempt. This situation is unsustainable and if it persists will lead to a serious backlash from the Clubs supporters. This does no good for anyone. We have already seen the warning signs of this with the Xhaka incident in which the player acted as a lightning rod for the fans frustrations with this systemic failure, and the boos directed at the manager at the end of Saturdays game against lowly Southampton.

# The manager Emery, the FEC and the players must take their fair share of the blame in all this and there is clearly a need for improvement and new blood in our management structure and playing squad but until the systemic failings at the club relating to the lack of investment and attitude towards the fans – which lay with the ownership of the Club – are allowed to persist – my belief is that little will change for the better and indeed things at the Club will become much worse. This is the Kroenke legacy.

We fans need to keep up the pressure on the owners and their management and to voice our disapproval of this systemic failure. In this respect WeCareDoYou are leading the charge and we all should get behind them and show our solidarity. We need to take all the appropriate and legitimate actions to express our disapproval and ensure that our disapproval is directed towards those who are responsible for the Clubs failings – those at the very top of the Clubs hierarchy. Wenger took the full hit for them for many years and we should not let the owners off the hook this time round.

The cause of the problems I’ve identified here are political and it follows that there solution is political – these problems have been addressed by governments in other European countries e.g. Germany where regulation has prevented this bad owner problem and there is legislation in place to maintain the majority holding of the fans share in the ownership of the club. There is no reason why this shouldn’t happen here – it’s a matter of political will and choice rather than being the natural order of things.

In this country, the Arsenal is not alone in suffering from this bad owner problem. Jeremy Corbyn – a keen life-long Arsenal fan who lives a stone’s throw from the Emirates – has expressed his feelings on this subject and was very critical of Mike Ashley on a recent visit to Newcastle. He has also expressed his liking of the German approach which entails fan ownership and control of the Clubs and is very keen to see something similar introduced to this country.

There is a General Election coming up and I have to point out that there is only one political Party that has included policies to look at the state of football and review the fit and proper person test for club owners and directors.

“In football, the professional game has become divided between the extremes of the very rich and the very poor with clubs in Bury and Bolton facing collapse. A Labour government will examine the state of the game, its governance and regulation, its ownership rules and the support and funding of the clubs that are vital to local communities. We will review the ‘fit and proper person test’ for club owners and directors and ensure that supporters’ trusts have a proper role so that the professional game is properly run for all its fans and all its clubs. A Labour government will legislate for accredited football supporters’ trusts to be able to appoint and remove at least two club directors and purchase shares when clubs change hands. We will regulate safe standing in stadiums and ensure that a proportion of the Premier League’s television rights income is spent on grassroots football facilities”

Labour Party Manifesto, November 2019 – p 53.

A vote for Labour may be our best and only hope of achieving the result we need in terms of starting the long process of getting the sort of changes we need in the way the Club is run and gaining a greater say to the fans. The alternative of a Johnson led government will mean the problem will continue to go unaddressed and will undoubtedly worsen.

My advice to all you Arsenal fans is let’s get solidly behind WeCareDoYou and more importantly, tick the right box in the voting booth on the 12th of December and give ourselves the best chance to get some real change for the better at the Arsenal. Or the Kroenke legacy will destroy our great club.

Terry Barry