Arsenal AGM 2012 report

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Arsenal’s AGM took place today. Hayley Wright was there for Arseblog News.

Having denied shareholders the right to ask un-vetted questions at the previous AGM, the Arsenal board must have been quaking in their brogues at the thought of being confronted blind by the pesky stake-holding minority on the back of two acutely abysmal performances. The renewed potential for unsolicited bile was facilitated by the AST who demanded that exposure to interrogation from the floor be reinstated as a statutory requirement. The poised minions did not disappoint as the somewhat inevitable stench of eau de hostility diffused into the atmosphere and heated exchanges ensued.

Gazidis began proceedings with the usual assertion of the board’s commitment to success, winning trophies and competing at the highest level with the top clubs, in keeping with the financial values to which we are inextricably linked. He spoke about his optimism and faith that Financial Fair Play will benefit Arsenal in the long term and perhaps more interestingly confirmed that we will have acquired the resources for tangible success within the next two years.

As questions rolled in from the floor it became apparent that Gazidis was shielding the indignant and patronising responses of Peter Hill-Wood and, more surprisingly, answering questions directed at Kroenke, continually asserting that the board as a collective makes the decisions that affect the club, not one individual.

When Silent Stan did speak, it was to explain for the second year running that he didn’t really know why he was there, despite being the majority shareholder. He then dodged a question concerning dividend payments which, worryingly, did nothing to rule out the possibility of him taking money from the club to line his own pockets. In addition to this, Stan denied he hadn’t had meetings with fan groups post takeover which led to head of the AST Tim Payton storming the mic. Payton insists that absolutely no meetings have been held between Kroenke and any fan groups since the takeover.

Arsène Wenger’s speech elucidated what everyone in the room already knew – that he views Champions League qualification as the third trophy. He also revealed – contrary to the club’s official line – that Giroud and Podolski were purchased as replacements for Robin van Persie, not as additions to the squad. His acknowledgement of fan disenchantment and call for a united front were nothing new, but his offer to meet with potentially unhappy fans at the end of the season was definitely a step into previously unchartered territory.

In summation, despite the tactic of using ultra smooth Gazidis as the mouthpiece, this was viewed as one of the most fractious AGMs of the past ten years. The board are still failing to convince shareholders that their joint investment is aligned with identical ambition.

Bullet by bullet report

Ivan Gazidis

  • Acknowledgement of the achievements of the Arsenal Ladies’ team, going through the whole season unbeaten.
  • Appreciation for the contribution of Pat Rice. 44 years with the club as player and coach.
  • Our emotions are raw after two difficult losses. AGM is the time to show perspective.
  • Our ambition is shared by everyone at this table and everyone in this room. Ambition all about football – to compete at the top of the game here and in Europe, to win trophies in a good way, that protects our values. Important to understand our off field journey. Must have foundation of viable and sustainable business on which to build.
  • Arsenal took a bold decision to build a new state of the art home that would elevate us from a leading club in Europe to a leading club in the world. Brave and ambitious. Massive leap forward had to be undertaken with fundamental Arsenal principles at its core. A path of independence and self-reliance is paramount. Must stand on our own two feet.
  • Hasn’t been easy journey. Many clubs have tried and failed to follow us. We can be proud of what we’ve done and how we’ve done it. Ten years later we are coming to the end of the stadium move.
  • Long term and affordable rates of debt. Time to take advantage of our successful position. Commercial revenue streams doing well. Tours of Asia in the past two years. Primary commercial deals that made stadium possible are coming to an end and now we need to take advantage of this opportunity.
  • We are at the forefront as Financial Fair Play comes into practice. In the next two years Arsenal will have the financial resources to compete among the leading clubs in the world.
Our financial success is relevant because it supports out football vision. The money we generate is available to our manager. Arsène makes the decisions about how it is spent. He has done brilliantly considering the spending of other clubs.
  • He has made sure that we have qualified for the CL for 15 successive seasons. Arsenal are a top ranked UEFA team. This is taken for granted. Not viewed as an achievement anymore. We have played some of the most attractive football in the world.
  • We can and will return the club to winning trophies. This is our shared ambition. We will achieve this if we stand together, if we keep to our values and if we continue to be brave. Standing together we can make Arsenal one of the leading clubs in the world and we can do it in a manner that will make all of our supporters proud.

Financial Questions

Q: Ticket prices. Massive impact high prices are having on all fans. Gazidis stressed that there would be less reliance on fans as commercial deals were renewed. Will you consider freezing prices again and commit to the reduced League Cup pricing?

IVAN: Approach not based on supply and demand. Long waiting lists. Try to achieve a responsible balance between revenue stream and what we need to do to compete as a club. Attempt to have pricing that attracts fans to games. Greater percentage of our revenue comes from our local fans. Challenge is for us to compete with the massive spending around us. Only had 2 season ticket price increases in 7 years in line with inflation.

Not kept us at pace with rising costs in the game. League Cup pricing gives chance to come to the stadium at more affordable prices. This will continue despite objections from the opposing clubs. Held season ticket prices flat once again. Spent a lot of time in consultation with supporters groups to regrade the categories of games. Groups welcomed this. Protecting the club’s revenue but also created 90,000 cheaper seats for games and a £25 starting price for many games. Affordability is something we take seriously. We have a responsible, restrained approach.

Q: I hear what you say and I don’t agree with a word of it. You’re putting profit on the balance sheet over success on the pitch. You sell our best players. Operating loss of over £16m has affected the transfer dealings. Was RVP sold to comply with UEFA fair play rules?

PHW: No. We’re compliant with FFP but money is available to strengthen squad as Arsène sees fit.

IVAN: We’re trying to run a self-reliant football club. Objective not profit, but to have success on the pitch. Player wages escalating, there’s new money from outside the game. Clubs going into bankruptcy in Europe and increasingly in England. There has to be a more sustainable environment. We lose a player like RVP, not because we want to, but have to make sure we are creating a sustainable future for ourselves. Football is heading in our direction. Confident that we will be able to retain our best players. It’s been a challenging time for us. Can’t deny that.

Q: You talk about how ambitious we are. I believe fans and board have different ambitions. Estimates by outside bodies say our uncommitted cash reserves are at £70m. Is this money really available for Wenger to use?

IVAN: We don’t talk publicly about the money we have available despite being transparent. We certainly do make the money we have available for reinvestment into the team. That doesn’t mean that we spend every penny in each transfer window. We have forward commitments, debt and future operating costs. Within constraints, all money we make is available to make a competitive team. The nature of the transfer market is lumpy.

There are v. limited no. of top clubs, competing for a very limited number of the same players. There may be issues with a player in terms of contractual obligations and fitting in with your team. You can buy someone who is available but not top quality, or wait and buy someone who your manager actually wants. Judge us over time by looking at league performance against spending. We spend the money we have and we will spend it all. Over time we have out performed that spend every single year for 15 years. Tremendous consistency. Arsène has managed our resources and kept us at the top of the game. Spending all the money isn’t the answer to all the challenges we face in the modern game.

Q: No plans for the majority owner (Stan) to take dividend payments? Board’s intention to release cash?

STAN: Tendency to direct these questions at me. This club is run through the board. These are board decisions. I am a majority shareholder. It’s clear that we have a record in sports around the world and they can look at our record with our other clubs and we’ve never put any debt on this club for acquisition. We’ve never said money isn’t available to spend. We’ve acquired our own resources. The one regret I have with Arsenal is that I didn’t get involved earlier. We have a record of reinvestment in other clubs and it’s there for everyone else to see.

IVAN: Dividends are a board decision. Board looked closely at Stan’s record of reinvestment. Stan has done everything he said he would do. He hasn’t placed debt on the club and he will help us be at the top of the game.

Q: In 2007 Arsenal commercial income £42m – same as United. United’s has rocketed since then, not ours. Not all down to poor deals on stadium naming rights and sponsorship.

IVAN: Easy to second guess deals. I don’t think we did poor deals. Tempting to think that you develop your commercial revenue by going and negotiating deals. You have to develop capability across the club. United’s is a result of investment in that club. Touring, digital capacity, CRM servicing and a wide range of different issues. We have also been investing in those capabilities. It doesn’t happen over night. Three years ago we had a very small commercial department.

Our commercial group is developing opportunities all around the world. Asia tours for example. Serious about strengthening our appeal around the world. Consistent values, important to partners. London location, together with our football performance make us very attractive. Grown commercial values again this year. Will see more growth soon.

Q: FFP – Will introduction actually create a level playing field where Arsenal will be able to compete again for best players? Or will bank rolled clubs still have the advantage?

Ivan: Optimistic about FFP in Europe. Not being driven by Platini as a UEFA plan to punish English football clubs. Driven by clubs themselves. Idea of enforcement mechanism to make clubs live within their means. Developed from small idea to something that today is unanimously supported by clubs. Comes from clubs, not UEFA – crying out for more sustainable environment in which to operate. Tremendous pressure on UEFA to enforce these regulations.

Pressure from clubs gives me optimism. UEFA are putting measures in place to start enforcing financial regulations. Convinced they are intending to take this seriously. Growing consensus within EPL itself that we need greater financial regulation. Strong movement – convinced this will happen at a domestic level. Will benefit game and Arsenal. Even if UEFA enforcement falls short, break-even principles at EPL level will still happen and enhance our position.

Q: Many supporters are from Fanshare scheme. 2,000 + fans given the chance to belong with symbolic ownership stake. Since takeover, fewer shares available. Stan, please will you hold your first meeting with Fanshare supporters? You pledged to do this. Talk about how we can work together to secure scheme’s future.

IVAN: Football club run through board. I’ve met with Fanshare board many times and I’ve kept our board informed. We are aware of liquidity issues. Stan has met with fan groups in the past. I meet regularly with our fan groups. Key issue is fan engagement. We believe in it and I commit that we will all do this. We do this more than any other major football club that I’m aware of and so will individual members of the board.

Q: Can we have a meeting that does include Stan please?

STAN: I have met with fan groups.

Tim Payton (storming the mic): Legal commitment in takeover document that you would meet with Arsenal supporters. You haven’t done that.

Applause.

STAN: I’m surprised that Tim would stand up and make that statement because I’ve met with him several times. I’ve met with several fan groups.

IVAN: Can I de-personalise this a bit? It’s not about any of the individuals. We run this club through our board of directors. The idea that one person makes the decisions for the club is not right.

Long pause.

PHW: Ok.

Laughter.

Q: If you put something in writing Stan, you are obliged to go through with it.

STAN: I guess I’m missing something because I thought I answered that.

Q: You talk about uniting and working together. Can you give us an update on the 30% shareholder who is probably not here. Are we working together and pulling in the same direction?

PHW: Red and White (Usmanov)? I don’t know. When were they last in touch?
Jeers.

IVAN: I’ve been very transparent. There are differences of opinion, but the basic thrust of what we’re doing is united and conflict is overstated.

Q: RVP didn’t believe club has the ambition that he has. It’s not just about money. Painful and humiliating. I don’t know how to explain this to my son.

Applause.

IVAN: I’m not sure if that’s a question or an expression of angst. We’re losing a bit of order now. Let’s get through the pre-submitted questions first and then open up to the floor.

Q: Your whole model is totally reliant on your approach of sustainability meeting with the FFP approach. If it doesn’t, you’re admitting to the room that we can’t compete at the top level. Every summer we lose our top players to people who are spending more money on players and wages. These clubs may not be stopped by FFP and everyone is cynical about it. If we’re unsuccessful in stopping their approach we have nothing else. One trick pony and you’ve said your skeptical about it.

IVAN: Even in a non-FFP world, I think we can complete. You assume that Man C. and Chelsea will continue to spend as they are now, forever. Made point about development of the revenues in our club. Other option is to outspend people who seemingly have limitless resources and that isn’t a great strategy either.

Q: Are we prepared to sacrifice winning EPL and CL for 20 years for principles?

IVAN: No, we aren’t, but we are advocates of FFP. Don’t monopolise the mic. I will have tea and biscuits with you afterwards.

Arsene Wenger’s address

Sorry for last night. I used to say to the players that our job is not to talk, but to produce performances, so I don’t really want to talk today.

Thanks Pat Rice.

A lot of dissatisfaction and I understand that because we want to win, but important that we don’t go overboard. If everyone is devastated when we finish 3rd in the league, I promise I won’t be here when we finish 15th in the league.

Not many teams don’t lose at all for 43 games. We finished 3rd last year in a season where we had a very difficult start. We had to be solid. One of the consequences of last year is that the club has been solid. During the season we didn’t have Wilshere and Diaby.We bought Cazorla, Podolski and Giroud because we anticiplated RVP departure. We lost 40 goals. I think our new players will be a success. Started in a very convincing, promising way. Hit the wall in the last two games in an unexplainable way.

Team attitude and focus is very good, particularly in training. Good to have players coming back. Always difficult after a defeat to look at the bigger picture. I am optimistic that we will have a good season.
Don’t want to go too much into financial discussion. My job is with the team. You can be proud when you produce the resources from which your team delivers. I wouldn’t be proud to take my wages from money that the club hasn’t produced. We produce our own players, have our own style of our play. Proud of the way we want to behave.

Important that 60-80%  of players come from our own ranks. The rest have to be top class players. When we speak about trophies, I rank them as follows: 1. EPL 2. CL. 3. Qualify CL. 4. FA Cup. 5. League Cup.

If you want to attract the best players, they don’t ask if you won the League Cup, they ask if you play in the CL. Anecdote to illustrate that club comes before individual manager success – priority to qualify for CL. 90% managers feel the same. I accept every different opinion.

The modern world creates smaller communities within bigger ones. Little communities have to learn to live together for the sake of the strength of our club. Even if we don’t agree. Must remain united for the same goals. The good of Arsenal. Sometimes we can forget that. I’m sure we can count on you for the whole season. If you’re not happy at the end of the season, I’m happy to listen to you and I’m happy to meet you. Thank you very much.

Applause.

PHW: Any other questions? Time for one or two. Are they going to be on the same subject we’ve had already?

Shouts of accusations of patronising.

Q: Arsenal Ladies don’t have as high profile stadia as European ladies. Over 5,000 saw ladies play Chelsea. Better stadia would encourage more fans.

IVAN: We invest and are more committed to women’s football than any other club in this country. We do things to a great standard for the ladies. A long term commitment. Good news: we are seeing women’s Super League getting more broadcast exposure. Sure we’ll put on another game at the Ems this season. Something we’re continuing to develop and remain committed to. This is something we can all be proud of.

Q: In event of 1,2, 3 teams going out in group stages of CL, will there still be 4 places for English clubs?

IVAN: Yes.

Q: Season ticket prices frozen. Club level prices are increasing. You do not choose to mention that. Says a lot that you do not include us. Not transparent at all. Disrespectful and treats us like we’re a cash cow.

IVAN: I acknowledge that this is a mistake. We’ve had a 2% increase. Reinvestment at club level has been dramatic. I take your point on board fully.

Q: £13.90 for fish and chips is indeed dramatic.

Laughter.

Q: What criteria used to raise CEO’s wages?

PHW: All renumeration from club is considered by renumeration committee. Ivan and Ken extremely valuable members of the club and it was committee’s considered opinion that they were fairly rewarded for an extremely good year. So that’s why we agreed to it.

Q: Clarify your commitment to Red and Silver members over individual ticket pricing for matches.

IVAN: Held season ticket prices with the exception of club level flat, with long waiting lists. Costs in the game have gone up dramatically over the last seven years. Instead of increasing all the time, we’ve tried to be responsible and balance the pressure we have to spend money on players and pressure we have to generate that revenue in responsible manner. We try to achieve a good balance since we got new stadium.

Q: Most expensive tickets in the world.

Silence.

Q: 23 clubs across Europe falling foul of FFP, excluded from European competitions this year. What about Chelsea and Man C?

IVAN: Different part of the regulations. This is not the part that enforces break-even test, it’s overdue payments where UEFA has enforced regulations.

PHW: Well, I think we’ve really had enough questions if you don’t mind. One more, otherwise we’ll be here all day.

Q: I’ve been coming to these AGMs for years and nothing really changes. Please tell me if there will be changes to the board in terms of age, gender, increasing members.

PHW: We’re all getting older. I think we’re guiding the club in the right direction. I’m not sure we’re looking at increasing the number of directors. Thank you. Ivan is prepared to stay and answer your questions. Thank you for your support and your interest in our affairs.

Disbelieving jeers. People leave.

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