Arsènal

by Alex Fynn

  With Arsenal pursuing a number of different options, now including Finsbury Park, Spencer, having become even more convinced that his idea was viable – despite initially been told by the board not to be ridiculous, it was a built-up area – eventually persuaded them to allow him to present his proposal. The thrust of his presentation was that “Arsenal should move to Arsenal”, 500 yards down the road. As Spencer later reflected, “If the planning rules had been strictly enforced, the site would never have been selected as it was a designated industrial site [prohibiting leisure development].” But he knew that Islington Council were desperate to keep the club in the borough and the fact that they owned 80 per cent of the site might just make the pipe dream a reality.

  With Arsenal only interested in finding a new home, Spencer had to alert them to the necessity of incorporating regeneration as a fundamental plank in the project if they were ever going to get permission for an inner London stadium. It took a while for a meeting of minds. He eventually convinced them that “they were being taken for a walk in the park” regarding their preferred site of Finsbury Park (a contact of Spencer’s at the Government Office For London told him, “they’re crazy if they think they’re going to build a football stadium in a park”). What Spencer brought to the party was the power of his argument as a committed supporter and his expertise as a property developer. He persuaded the board that he was a pragmatist who practised the art of the possible. Long after the Emirates was up and running, acting Managing Director Ken Friar was finally able to generously give Spencer his due. “We wouldn’t have been able to do it [re-locate to Ashburton Grove] without his foresight. It was under our noses and we couldn’t see it. Not only did he find it for us but he spent the next few years putting it together.”

  Having settled on Ashburton Grove, a scheduled opening date within four years – August 2004 – was announced, which was hopelessly optimistic given the unchartered territory that had to be navigated in the planning and construction of a 60,000 capacity football stadium in an inner London borough, not to mention the relocation of the waste transfer station.

  As progress proceeded apace, Danny Fiszman was intrigued to learn how Spencer was proving so adroit in acquiring the necessary land from the small businesses on the site. He persuaded Spencer to take him to one of his meetings. As they got out of Spencer’s car, Fiszman said to him, “Antony, haven’t you forgotten something?” meaning his briefcase containing the necessary offer documents. “Oh yes,” said Spencer, and went to the boot of his car and took out a baseball bat. Fiszman blanched, remembering only the previous week that Spencer had given him a dvd of The Sopranos. Spencer laughed, put the bat – which belonged to his baseball-playing son and just happened to be in his car that morning – back, retrieved his briefcase and they went to their appointment. Afterwards, recalling the reaction of the vendor, who said, “It’s not every day somebody comes in to buy your property surrounded by two stinking rubbish dumps with rats running round everywhere. You’d [the Arsenal duo] better sit down and have a cup of tea.” Spencer told Fiszman that his modus operandi was polite perseverance. No force necessary.

  Unfortunately by this time Danny Fiszman’s relationship with David Dein was not so cordial. Fiszman had bought into the club in 1992 when Dein, in need of investment in his commodity company, had sought a sympathetic purchaser for a significant chunk of his 42 per cent holding who would agree to voting with him on key decisions. As the decade progressed, Dein required further funds to plough into an ultimately fruitless and highly costly legal attempt to recover a bad debt related to his non-Arsenal business. Effectively, Fiszman became a cash machine for the vice-chairman, as he purchased outright more and more of the shares he held jointly with Dein. Most significantly, control of a block of shares transferred in 1996 enabled Fiszman to overtake Dein as Arsenal’s largest shareholder. In December 1999, Dein sold what remained of the jointly held shares to Fiszman, leaving Dein with a 16.2 per cent stake (compared with Fizman’s 28 per cent).

  Then the pair fell out. The specific reason why the two men argued remains the subject of speculation to this day, even to chairman Hill-Wood, who maintains, “I don’t know [why they fell out]. I’d be very interested. Danny has never said anything to me about it. He’s very discreet.” When it was put to Dein that money issues might be the cause of his relationship with Fiszman breaking down, he dismissed the notion. Certainly there is a case for believing they may have disagreed about the stadium issue to such an extent that their previously harmonious state could never be repaired. It was the biggest decision the club had ever made. And Fiszman gaining the support of the other directors for Ashburton Grove was something Dein may have taken as a personal affront.

  With the new stadium and its concomitant commercial and financial ramifications prioritised, David Dein’s remit became confined to the playing staff (which over the years, whatever his other specific responsibilities, had always been his primary concern). With only a supporting role on the main project, to make matters worse for Dein, Keith Edelman was drafted in as managing director to replace Ken Friar. With choppy waters ahead, the club needed a harsh dose of financial reality and Edelman fitted the bill perfectly. In name, Edelman may have been succeeding Friar, but he effectively became Arsenal’s first full-time chief executive. He was the antithesis of Dein, far more businessman than football man. Maybe so, but contracts with builders and bankers rather than the football authorities were now the order of the day.

  In December 2001, the green light for the venture was given by Islington Council. Looking back, Peter Hill-Wood describes turning the dream into reality as “an amazing feat. We had a lot of people criticise the local planners and the council and all that. We had a lot of support from Islington and there were people there who had the vision to see that this was a regeneration scheme that was going to be of great benefit to Islington. We did it for the sake of Arsenal but you’ve got to weigh that up with the benefits that you contribute locally otherwise you’re not going to get consent.” The board had finally embraced Antony Spencer’s regeneration vision. As part of the agreement the area had to be revitalised with 2,500 new residential units, a waste transfer station to replace the one previously sitting where the new stadium’s pitch is now as well as bridges and walkways to facilitate the flow of pedestrian traffic on matchdays. Arsenal had to acquire the land at no little cost, relocate over 50 existing businesses that had to – in some cases unwillingly – make way for the development. As football stadium expert Simon Inglis commented, “For all the team’s prowess on the pitch, 20 years ago the idea of Arsenal taking the lead role in the regeneration of Islington would have seemed absurd. And yet it is now claimed that the club has become in effect the largest private residential developer in the borough. It is an extraordinary turnaround.” The actual building cost of the stadium, by the appointed contractor Sir Robert McAlpine, was £225 million – a figure dwarfed by a total bill of over £430 million. Just how many Thierry Henrys would that sort of money buy?

  Actually, about eight and half at the peak of his powers, if Chelsea’s enquiries for him during his Arsenal career are to be taken at face value, prompting the observation from Dein that “the Russians have parked their tanks on our lawn and are firing £50 notes at us.” As one of the approaches came at half-time during an Arsenal – Chelsea match in late 2004, Dein mentioned it to Danny Fiszman, who said, “Tell them to f*** off!” “I have,” responded Dein. At another time, Dein reportedly began a meeting with Chelsea’s hierarchy by walking into the room announcing, “Thierry Henry’s not for sale.” It was the kind of attitude that endeared him to the supporters, although he was speaking on behalf of a board who might not always have shared his view, depending on the size of the offer, as the financial constraints of Ashburton Grove began to envelop everything and everyone.

  The board were looking beyond a time when Arsène Wenger, or indeed any of them, would still be around. The manager had been able to spend substantially in the summers
of 2000 and 2001 and the purchases he made then would set him up for a time when the purse strings were tightened: Arsenal would go on to win five major trophies in four seasons between 2002 and 2005, with salaries rather than transfers the predominant expense. In making their decision to go ahead with Ashburton Grove the board were prepared to risk the present for the future, but walked a financial tightrope in order to do it, emboldened by a manager who told them he could, if necessary, make do, mend and still bring them success. Hill-Wood pays tribute to Wenger’s realism about the financial circumstances in which he was operating, confirming, “He has always been very happy with it [his budget]. He’s never come to us and said, ‘I want to buy X, he’s going to cost us £50 million’, because he understands the figures well enough to know that we can’t afford £50 million.”

  At one point it looked as if the board were going to have to stump up a lot more if the new stadium project was not going to be stymied. One particular piece of land on the east side of the Caledonian Road turned out to be an essential piece of the jigsaw. Its acquisition from a supermarket chain (who had initially intended to build a huge store, but were beset with planning difficulties of their own), reached an impasse. They were prepared to sell but their price was high, and they weren’t budging. Whilst Arsenal’s trio of Fiszman, Edelman and Friar took stock of their position, there were rumours that there were other parties about to enter the fray. So to ensure they were not gazumped the Arsenal board had to act quickly, pay up and pay the full price.

  Demolition work began in 2002. However, while this process was comparatively straightforward, in April 2003 tools were downed as the club, overwhelmed by legal and planning obstacles, faced a cash-flow problem. McAlpine had to redeploy workers with no indication as to when they might be able to return. A revised timetable had already been put in place anticipating a completion date of August 2005, but now that was postponed once again to the start of the 2006/07 season. Later Hill-Wood admitted, “We weren’t cash positive at Highbury for some years. We weren’t actually generating cash and businesses survive on cash-flow.” There were a lot of boardroom man hours put in to salvage the plans, and the relevant trio of directors pressed on, but the ramifications were felt down the line as the club, in the words of the chairman, “muddled through financially”.

  Negotiations to award Dennis Bergkamp a one-year contract were dragged out endlessly by the club, to the frustration of both the player and his agent. When it was later suggested to Arsène Wenger that there were faults on both sides, he was candid enough to exonerate the player. “Dennis Bergkamp was always, I must say, faultless. He was always strongly determined to stay and made big sacrifices (a significant drop in salary) in order to do so. But when a player goes from 34 to 35 you don’t know if he will make the whole season. It [the problem] was on the club side. We didn’t know how far we could go financially because we didn’t know how many games he would play.” Wenger then added his own mea culpa: “I must say he [Bergkamp] has produced much more this season [2003/04] than physical tests would have told you. And that’s all credit to him.” And there were other economies that must have been difficult for Wenger to swallow. The pre-season training camp in Austria involved travelling with a budget airline (although that would have been academic to the non-flying Dutchman). It was as well that the French stars who were in the process of renegotiating contract extensions could not make the trip due to their participation for Les Bleus in the Confederations Cup. The ignominy might have had them electing to ply their trade elsewhere.

  What irony then that, from such a makeshift position, Wenger achieved his finest ever league season despite, after initial encouragement, being refused any of his earmarked reinforcements. Perhaps he didn’t think he would have to make such sacrifices. In February 2004, he revealed his frustration when questioned about the state of play.

  “There’s an English expression – fool’s errand – where they send you somewhere and they already know that you can’t find the answer,” it was put to Wenger. “Last summer David Dein went and had a look at [José Antonio] Reyes and Harry Kewell and also [Cristiano] Ronaldo. But you didn’t have any money even though the chairman [had] said that the building of the new stadium wouldn’t deprive you of money.”

  “Last year, the situation was a little bit different,” replied Wenger. “We had not completed the financing of the stadium so we had to be cautious. We wanted to go step by step, complete the signing of the stadium and then plan the future because we can improve, can prepare the team for 2006 and get the income in the future years, so we didn’t want to go into any risky situation before we had done that.”

  “You’re very loyal, but I would put it a different way,” continued his questioner. “Would you say that, at a certain time, the directors – excluding yourself and David Dein – prioritised the stadium over the team, and they felt that you would make bricks out of straw.”

  “Well I believe that the club was at the moment of history where you have to go a step further if you want to become one of the biggest clubs in the world,” Wenger responded. “You can always argue how much or not how much but if you want to go a step further, considering the potential of the club, a new stadium was needed. Even if in the short term you had to be more cautious with the team . . . what the board thought is that we had already a good team and that with the good work going on we could improve it because we have good youngsters.”

  “Did they know that or did you tell them that?”

  “I told them that we had good youngsters,” said Wenger, “and that we could still compete at the top level this season [2003/04]. And it motivated the team as well because they knew – ‘Come on, we have to be up for it’ – because everybody bought and we didn’t buy, so maybe it gave us a little bit more awareness that we had to dig deep and everybody pull together.”

  “You made a virtue out of a necessity.”

  “Yes, exactly, because I feel always that the team was still very young and that it could improve.”

  In the summer of 2003 Ronaldo joined Manchester United after impressing Alex Ferguson in a pre-season friendly with his then club Sporting Lisbon, whilst Kewell left Leeds for Liverpool. Reyes eventually joined Arsenal the following January from Sevilla, although his transfer fee would be paid in instalments. Dein described the situation as “like being in a boxing ring with one hand tied behind my back”. He would emerge from board meetings around this time “with my eyeballs rolling” and was in no doubt that Arsène Wenger shared his frustration.

  CHAPTER EIGHT

  BUDDY, CAN YOU SPARE ME £260m?

  How does an organisation with a turnover of £91 million, posting pre-tax losses of more than £22 million, raise £357 million? Answer: with three men – Danny Fiszman, Ken Friar and Keith Edelman – working like dogs, putting in some very long days and nights, to convince a group of banks to share the risk. When tools were downed and the Ashburton Grove site closed in 2003, Danny Fiszman (as he later revealed to a group of concerned fans) would wake up in the mornings with his bedsheets soaked in sweat. And if in 2008 chairman Peter Hill-Wood admitted “If we had our time again we would not have been so ambitious,” (implying that he felt the club could have spent less extrava gantly on fixtures and fittings), how low must everyone have felt in the dark ages of the cash-flow crisis of five years before? Showing remarkable fortitude, for the oppressed trio it was back to the drawing board to try to negotiate the obstacles that had halted their plans.

  At the time, Leeds United were giving Premier League clubs a bad name as they vaingloriously chased the dream of becoming a European superpower. The heady taste of a run to a Champions League semi-final in 2001was so coercive that they went on a spending spree on players’ wages and transfers which eventually took them out of the Premiership and into administration. Without their own continued Champions League involvement Arsenal might have been tempted to go down the same road, putting themselves even further in hock whilst attempting to build a new home. “Many b
anks wouldn’t look at funding because Leeds had just got into financial trouble,” Edelman confirmed. “The banking market wasn’t very excited at the prospect of building a new stadium.”

  At least, though, the club were able to raise some funds on their own. In 2000, a new share issue brought media group Granada (now ITV) into the fold with a 9.99% stake and as equal partners in Arsenal Broadband, a joint venture formed to exploit new media rights. In return, the club received £77 million in two stages: £47 million when the deal was struck, and a further £30 million due when planning approval for the new stadium was granted. “Organisationally, we’ve moved from a club to a business,” Edelman later observed, an unwitting indictment on the ancien régime when Dein was pulling the strings. “When I joined in 2000, we had no money at all. Arsenal had put in over £150 million of equity [into the new stadium budget], so we had to do some very large transactions. The Granada deal was the cornerstone [facilitating other long-term agreements].” True, but did the club have to cede so much decision-making to another company who now controlled a large measure of their broadcasting and merchandising rights?

  In 2004, a kit deal worth £55 million over seven years was struck with Nike. Crucially, the entire amount was paid upfront. Two years earlier, Nike had handed over five times as much for a 13-year agreement with Manchester United. Further, the existing shirt sponsorship deal with mobile phone operator O2 was markedly inferior to the sums both Manchester United and Chelsea received from their sponsors. In the intervening period, the football industry had not only expanded substantially, but Arsenal had shown that they were capable of matching United on the field. Yet the need for a cash injection not only forced them to sell themselves short, they undermined the long-term value of their business and handed an immediate significant competitive advantage to their chief rivals. Unlike Arsenal, Manchester United were able to invest their Nike income on the team.