“Nearly There.” Why Gary Neville Must Be Stopped (Part Deux)


Today the Swiss Ramble and I will look at the veracity of Gary Neville’s recent statement. This one below. The fucking nerve of him:

GN Statement

Did you ever get the feeling that we Gooners have completely lost the plot???

So there was a big fuss about Gary’s debt statement among Gooners. This is a nuclear topic for us. Jeez we’re a fucked up and dysfunctional bunch, are we not? And apparently in our spare time we even watch some football.

Anyway, the most contentious part of this whole statement was…the following words. Are you ready? Here they are: “and they’re nearly there.” Wowser. So contentious was this, that Gooners completely overlooked his next statement: “Hitler had some really great ideas that I think we should consider. He is very misunderstood.” But I’ll come back to that Hitler statement later, because I’m still fucking livid with Gary Neville for the “and they’re nearly there” statement.

@angryofN5 ie Phil of the AST, did a whole blog on those 4 words. I think he said it had 40+k clicks. Fuck me. The shit that trips our switch at Arsenal, eh?!

Many others decided that because Neville was clearly so poorly informed that we should dismiss the validity of the rest of the statement. And all future statements we don’t like, I’d imagine.

Someone needs to defend Gary Neville. Ok. I’ll accept that challenge. With the help of my good mate, Swiss Ramble…

“…And They’re Nearly There.”

Let’s keep this simple. There are 3 obvious ways to be “nearly there.” One is by distance, one by time, one by degree of completion:

I had a very funny analogy thing like I do involving Alisher Usmanov and a prostitute to demonstrate all 3 of these, but I guess you can fill in the gap yourself (which apparently was something Usmanov struggled to do with that hooker. Ba Boom!)

So if any one of those is shown to be true for Gary’s statement, we can move on with our lives. Correct?

So are we nearly there with the debt? Time wise, maybe not. We will be paying the mortgage etc for the next 18 years, so there are many more payments to make.

What about degree of completion? Well, this is much more favourable to Mr. Neville. At the high water mark, the debt related to the stadium, property and bonds, drove the club’s gross debt to a peak in 2008 of 411m. And today the net debt figure according to Swiss Ramble is 99m. Can you compare Gross Debt and Net Debt? Sure you can. 411m was literally everything we owed in 2008. And today, when you take what we have in cash….well here is what the Swiss Ramble said: “Once cash balances of £154 million are deducted, net debt is now only £99 million, which is a significant reduction…from 2008.”

Debt Progression 3

Note: Origianl chart by The Swiss Ramble. Markups by P.I.M.P.

So £411m Gross —-> £99m Net

In other words, if we applied all available cash to pay off the debt, we would still be 99m short.

But the story is much, much better than that. Add together the 37m from future Property Sales + 11m from Player Sales Net (last season) + a front loaded Emirates deal + a front-loaded Puma deal + extra annual revenues of 50m(?) via primary sponsors + new secondary sponsors + 25m(?) new extra broadcast revenue.)

Basically, we’re laughing. We’re swimming in it.

There’s Only 1 Problem

Only 1 problem: the banks won’t take our money, at least not without heavy penalties. Why? Because loaning money is how they make their money. So the bad news is we have to keep paying the mortgage interest for the next 18 years, regardless.

Given that our revenues are about to jump to £300+m…the mortgage interest is about to be £13m out of our £300m revenues ie 4% of our revenue. But in 2007 it was £24m interest out of £177m revenues or 14%. This will continue to fall towards zero as our revenue grows ever higher and the interest payment decreases annually, allowing us to gently pay down the principal over time.

At £300m in revenue, 94% will be spent on the squad, the running of the club and its further development rather than debt. That percentage will increase with ballooning revenues.

In fact, don’t take my word for it. Or Swissy’s. Here’s what the AST had to say on the subject: “Debt service remains very manageable given the football revenues and is not a major factor in other spending decisions.” Word. And that statement applied to when our revenues were only at £243m!

Seeing as the bank won’t take our money early…I guess we’ll just have to spend it on players, starting this summer – supporting Neville’s point.

Revenues will continue to grow with new secondary commercial deals and further increases in broadcasting revenue. £300+m will become £400m and then £500m. I don’t know about you, but given the future ballooning of the club’s revenues through commercial deals and broadcast rights, “nearly there” feels about right.

Some said Neville was “bullshitting” on the facts and shouldn’t comment on things he didn’t know about. Yet he and the AST are in agreement. From a footballing standpoint, the debt is now but a minor factor, and will become less so as revenues balloon.

At some point this becomes all about agenda and our own internal dysfunctions as supporters. We shouldn’t malign poor old Gary because of it.

Nearly there? I think we’re there and beyond.

Hitler Had A Point

So…on to the rest of the statement, which broadly states that Arsenal has done the right things and that, if we push on, it will be a magnificent managerial performance. Well, we can’t have that, now, can we?! We don’t want people across the planet thinking extremely positive thoughts about our club based on the pronouncement of one of the top pundits in English football because that would only increase our brand value and therefore our revenues. Nope. We need to beat Gary Neville with a club so he slags us off like all the other pundits.

But Hasn’t The Club and Manager Made Lots Of Mistakes?

Now, obviously, there have been mistakes. Though many of these “mistakes” had a purpose, served that purpose but maybe outlived that purpose.

To embark on this journey and think there would not be mistakes, well, you might as well just stay home. To avoid mistakes, just do the same as everyone else. Of course, then you’ll just be like everyone else.

Thomas Edison made over 10,00 light bulbs before he got one that worked. What an absolute moron he must have been.

As soon as you decide to innovate and break the mould, you have just signed up for a bunch of mistakes and half-mistakes. Inevitable. What is essential is that you get the big things right. And that you continue to evolve.

So why even bother to innovate?  Because when you finally succeed you arrive at a place that has raised you above the others.

Socialism, High Wage Bill and Deadwood vs The Team Ethos.

Socialism, High Wage Bill and Deadwood are often thrown at Wenger. And at the same time, critics marvel at how he managed to pull off 17 CL qualifications in a row, often with “mediocre players,” limited funds, and the disruption of losing stars and top players for many the last few seasons. Perhaps we should consider the possibility it was the team “ethos” ie the socialism that enabled him to achieve the near impossible. He never struck me as either a stupid man, or a socialist. But he is obsessed by the team ethos.

Now I could mount a spirited defense of all these topics, but that’s a whole other blog. Suffice it to say that they all served a purpose at some stage but now to a greater or lesser extent have approached their sell-by date. Would you have done things differently? Yes. Would your way have “guaranteed” an unbroken run of 17 CL qualifications? Perhaps not.

Let’s let the Swiss Ramble weigh the pros against the cons: “Arsenal’s performance in regularly finishing third or fourth in the Premier League means they have  slightly outperformed expectations based on the wage bill (in recent times.)” Good enough. Whether it was despite or because of Socialism, the wage structure or his signings, Wenger still comes out ahead. And that is despite the disruptions through losing our stars in each recent year as well as a change in club ownership.

Swiss Ramble talks about many things the club got right and wrong along the way, but the one statement on the business model that sticks out like a neon sign was:

“The one big question for the Arsenal business model is what happens if they fail to qualify for the Champions League…” Swiss could have asked that question any year since we embarked on the Stadium project. It has always been job #1 for Wenger. There was only one way we were going to be able to live with the Oilies and United going forward. We needed the new stadium. And we needed to stay in the CL.

But fear not, Wenger got us to the Promised Land. Moses, Gandhi, Martin Luther King and now Arsene. It’s all up from here and we know it. And so too does Neville.

To What Do We Owe Those New Commercial Deals?

Why are the commercial contracts that we’re all geeked about coming? £150m from Emirates + £170m from Puma + loads of secondary deals based on the primary deals a la Man united. There are 4 major reasons:

  1. the success Wenger had winning silverware,
  2. the unbroken run of 17 CL qualifications – sponsors love that “guarantee”
  3. the new stadium halo effect as a center-piece – a symbol of Arsenal as a world class club
  4. the brand that Arsene and the club have developed for progressive, positive, attacking, entertaining football with a squeaky clean image.

Cha Ching x 4. If you know anything about branding, you know that this is gold to advertisers.

Let me add a 5th reason that sponsors love the Arsenal brand: Arsene Wenger – Admired and respected across Asia and beyond. Most of them think his full name is Arsenal Wenger.

Kit Deal

And from Gary’s statement, he too seems to think Wenger may deserve a little credit. “One of the most magnificent managerial performances…IF they move up now” said the greatest RB in a generation according to the greatest manager of a generation according to many. Who am I to argue?

Future revenue generation will be all about the brand. You enter a virtuous or a vicious circle. Brand leads to revenue leads to performance leads back to brand and so on. And that’s really my point in all of this

  1. It’s no longer about the debt, it’s about the brand and the revenue.
  2. If Gary Neville, best pundit in England, wants to tell the world what a great club we are, why are we telling him to shut up?
  3. Don’t bite a hand that feeds the brand.

From The World’s 50 Top Football Brands:

Top 50

This Brand shit will determine the lion’s share of future revenue growth.

Game, Set and Match To Neville

And finally here is what the Swiss Ramble said about our club, even after highlighting the many issues at our club:

“There is no doubt that the club’s record off the pitch has been superb.” Hmmm. Isn’t that what Neville said?

“NO DOUBT” and “SUPERB.” I think that cover’s Neville’s “What they (the club) have done is absolutely the right thing.”

Game, set and match to Neville. Either that, or the Swiss Ramble needs to do his homework on the club before he speaks.

Superb Off The Pitch. It’s Time To Be Superb on The Pitch

Commercially, going forward, all we need to do is copy everything that United are doing in the commercial space and go get our share. We will go from £243m to £300m to £400m in the blink of an eye. Just watch.

The last time Arsene had a proper budget, he matched SAF blow for blow. Some say Arsene is past it, that football has moved on. It’s going to be fun finding out. My money (and yours) is on Wenger.

Nearly there? Fuck it, I hope not. Don’t stop the ride, I don’t wanna get off.

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