talkingOfArsenal.com

Some people assume that football clubs have some kind of God-given right to remain solvent under any and all circumstances. The credit crunch has seen large, historic financial institutions, some hundreds of years old, all worth many billions of pounds, vanish into thin air overnight.

Yet more such institutions have been deemed by their various host Governments to be so important, as to justify the exercising of taxpayers funding towards the saving of such institutions a priority.

Football clubs will be given no such protection, especially as they are not considered to be critical to the well being of our economy.

And yet, the level of debt that has been amassed over the years by clubs operating in the premier league is astounding - thought to be around the £2.5bn mark as at the 2006/07 season (very likely to have increased since). The vast majority of this expense has gone into transfer fees and player wages.

We have already begun to see the effects of this playing out in various ways.

For clubs such as Manchester Utd and Liverpool, player purchases appear to be coming out of debt borrowed, and income from corporate events. For Chelsea, their benefactor remains just that - a benefactor.

For the second year running, Manchester Utd, with their reported massive debt, have taken out time in the middle of a season to go off on a travelling adventure in order to generate a little extra income (last year they went to Saudi Arabia for a reported £1m).

Pre-season training for both Chelsea and Liverpool, also involved travelling to countries far flung, for the purpose of building up their international exposure and hoping it translates into sales from merchandising.

Against the size of their respective debts, I find it hard to see is how building up exposure in places such as the Far East, translates into profits from merchandise. The Far East is well known for the manufacture and sale of fake goods and unofficial replica shirts, and I don't see how the average punter on the street in those countries is going to fork out £45 for a genuine Manchester Utd or Chelsea shirt, when he or she could purchase a perfectly good (in their eyes) copy for a 10th of that price in the local currency.

The clubs that are borrowing extensively to fund player purchases and salaries, are taking a massive gamble - in the hope of 'growing' their club, and hoping that this will somehow translate into financial success at some later point. That they are doing so in such adverse financial conditions is even crazier.

Which brings me onto the Arsenal.

The Gunners are not immune to the current financial difficulties, however unfortunately for us fans (in the short term at least), this austerity of funding has translated into what could be described (incorrectly, in my book) as a lack of investment in proven world class players on the pitch.

What many football fans do not fully appreciate, is how close to the wind many football clubs are sailing. Clubs had debt before the current financial troubles, however the credit crunch will certainly have put additional tighteners on.

And even with Wenger and the Arsenal board's frugal approach to expenditure, and as an Arsenal fan myself, I do not rentirely ule out Arsenal being adversely affected (although I expect this to be highly unlikely) - for me, that is how serious the financial situation is.

Which is what makes the current state of affairs of players costing tens of millions, and demanding high wages (even excluding Man City's recent shennanigansin the transfer market) unsustainable going forward. 

Wenger, and the current Arsenal board, have adopted an entirely different approach to the other top-4 clubs - and that is to try to remain conservative in player purchases, whilst remaining competitive at the highest level. This in my opinion is a financially less-risky approach.

They have chosen promote the club through the type of exciting, flowing football that we play - it has become our brand, a moniker that is now well established.  That they're managing to achieve this on a limited budget, is nothing short of a genuine miracle.

If the current spending spree continues, I fully expect in next 5-10 years if not sooner, some major, major clubs to go into administration - we saw a similar precursor of this with Leeds United, who, even as recently as 2001 finished 4th in the English Premier League, and in in the same year advanced as far as the UEFA Champions League semi-final.  When eventually the chickens come home to roost, there may well be a few surprises as to who goes down.

Indeed, Wenger has categorically stated that he should be judged in 10-12 years time, and not now. That pronouncement got me thinking, and I am of the opinion that he feels that our judgement of him in that future, will be based on the financial footing of Arsenal FC in that time frame, rather than on any possible gains made on the 'footballistic' front (to quote a popular Wengerism).

It is widely quoted that when David Dein recruited Wenger some 12 years ago, they (including the board) shook hands on a gentlemans pact that they would strive, do everything in their power, technically (on the pitch), financially, culturally, and developmentally (youth academy) to make Arsenal FC the biggest and most admired football club in the world.

Back then, Arsenal FC had staunch local supporters, a (relatively) small but lovely stadium, just about broke even from match-day takings, and were known for being 'boring, boring, Arsenal' - indeed, a favourite chant at Highbury was "one-nil to the Arsen-nil".

Today, Arsenal FC have a sound basis to carry on towards achieving that dream - we have a worldwide fanbase, we have an internationally acknowledged brand, we have played some of the best football on the planet, we have a world-class football stadium, we run a youth football academy that is the envy of many clubs in the world, and our turn-over is now up there amongst the top-five clubs worldwide.

And if in future, the worst were to come to the worst, you could envision premier league clubs going cap in hand to the city institutions seeking financial salvation, and being laughed right back out again with quotations of past wastefulness, of lengendary player wages and transfer fees ringing in their ears. In contrast, were Wenger, known for his financial prudence, and Peter Hill-Wood, a former investment banker himself to find themselves looking for debt refinancing for Arsenal FC, I somehow think it would be a quite different proposition.

Wenger is an accepted visionary in the sport of football - very much at ease with swimming against the tide - where he goes, others follow in the coming years.

What we are witnessing before our very eyes, is a new vision, a new kind of philosophy, and it's all to do with how much you can achieve with whatever income you can generate, and not how much you can spend in order to win trophies.

And what is very important, is that Arsenal fans appreciate what he is trying to achieve - he is trying to win trophies, whilst securing the financial future of the club that he manages.

In summary, what we have are two fundamentally different philosophies currently being played out, both on the pitch and in the boardroom - on the one hand, spend clever and build a brand through the football that is played, and on the other hand splash out, hope to win trophies at any cost and gamble on recouping the massive outlays through merchandising and business operations.

I know who I would rather follow - I follow Wenger and Arsenal FC.