Twenty years ago tonight the vote that would define the next two decades of Arsenal Football Club was passed by an overwhelming majority after a five-hour meeting at Union Chapel that brought the customary complaints around traffic and pollution but ultimately the backing of the council that four years previous had denied planning permission for Highbury to be expanded.
It was, Arsene Wenger said soon after, “the biggest decision in Arsenal’s history since the board opted to bring Herbert Chapman to the club in 1925” and as Mikel Arteta’s team fights to regain its place among the Premier League’s elite 20 years on it remains impossible to contextualise the club’s descent from the summit without that decision to swap Highbury for Ashburton Grove.
It remains a contentious talking point, with those of a kinder persuasion pointing to altered circumstances elsewhere and critics underlining the current owner's unpopular financial approach. And even now there are inconclusive answers to the big questions. Has it been worth it? What has the real financial cost been? Given the chance to revisit the decision would the then board have done anything differently?
OVERTAKEN BY EVENTS OUTSIDE THEIR CONTROL
When the club outlined its vision to move a couple of goal kicks south west of Highbury it was hard to argue against the reasoning. Arsenal had realised that they were losing ground to title rivals Manchester United when it came to matchday income and, the board argued, the ability to entertain a bigger crowd would allow them to continue staking a claim to be England’s best team.
"The new stadium will bring in well in excess of £30million extra per season," director and part-owner Danny Fiszman told reporters at the time of the Union Chapel vote, "and with interest rates the way they are, this is a good time to take out those loans. We should comfortably repay them within 15 years."
Fiszman’s projection was conservative. In the final season at Highbury Arsenal earned £44.1m in matchday revenue. In their first season at the new ground that figure rose to £90.6m and has since peaked at £133.6m in 2015/16.
Even now, with Tottenham Hotspur in their new £1bn arena, West Ham United at a similar-sized Olympic Stadium, Anfield and the City of Manchester stadium expanded and Old Trafford still the country’s biggest club stadium, the Emirates Stadium brings in the third most revenue per matchday in England and sixth overall across Europe.
At the time of conception, it was undoubtedly sound financial planning but as the stadium’s cost reached £430million in 2006, with the club writing that it was “delighted” with the “beneficial” lending terms in its accounts at the end of the first season, Arsenal’s grand plan had been overtaken by a series of events outside their control.
TRANSFER TRANSITION
Between planning permission being granted and the stadium being opened, the Premier League’s terms of engagement had changed. Roman Abramovich’s arrival at Chelsea not only ended what had effectively become a duopoly between Arsenal and United but the Russian’s cash injection sped up the proliferation of transfer fees and wage increases across the game.
While Arjen Robben was arriving at Stamford Bridge to join Petr Cech, Didier Drogba and company, across the city Arsenal were counting the pennies in the summer the stadium opened to the extent that they could not complete a landscaping project around the external perimeter, as reported by Joshua Robinson and Jonathan Clegg in The Club.
Between Abramovich’s purchase of Chelsea and Arsenal’s signing of Mesut Ozil for £42million a decade later, they spent less than £300million on transfer fees, led by Jose Antonio Reyes for a total of £17million including add ons in January 2004, and made about £290million from sales.
Chelsea, by comparison, spent just over £300million between the summer of 2003 and January 2005 with their expenditure for the decade hitting £980million. Manchester City, taken over by Abu Dhabi in 2008, spent more than £270million in two years that included the acquisition of Kolo Toure and Emmanuel Adebayor from north London.
Arsenal were going through their own change of ownership at the time, of course, with Stan Kroenke gradually building his shareholding before taking majority control in early 2011. And there was one slight difference in approach: the American has been reluctant to put his own money into squad improvements throughout.
The blame has gradually landed at the American’s feet but it must not be forgotten that Wenger absorbed much of the fanbase’s opprobrium in his latter years in charge. The Frenchman’s prudence was admirable from a sole business standpoint but that does not wash with a passionate fanbase when rivals are pulling clear courtesy of greater resources.
In retrospect that Wenger continuously kept the club in the Champions League while losing his best players and many of substandard quality coming in as replacements was a near-remarkable feat.
“Look it was not my money," he told The Athletic in a podcast interview last year. "But I treated the club like it was my money, I did not spend it because we did not have the money. It was not difficult to understand, that if you build the stadium – that at the start would cost £220million and would then cost £440million, that you would then not have the same resources. At that time, I feel like I got the club through a very difficult period. We played some great football as well.”
BROADCASTING BONANZA
Then there was the increasingly super-sized broadcasting pie which has allowed clubs to gorge more and more with last month’s confirmation of a new US deal indicating that the bubble shows no sign of bursting.
It is ultimately another example of events outside of the club’s control overwriting the logical financial planning of two decades ago. While a gradual rise in broadcasting revenue was always on the cards no one could have foreseen such sharp, exponential growth.
The most basic way of looking at it is that the distribution of TV cash has meant clubs that were unable to compete financially previously could close the gap to Arsenal, while the wealth of Manchester City and Chelsea has allowed them to pull clear.
In the first season at the Emirates Stadium, Arsenal’s £90.6million gate receipts made up 51.2% of their total revenue with TV income of £44.3million representing a quarter. In the final full season pre-Covid, 2018/19, the club made £109.2million on matchday and £210.6million from the broadcasters with commercial income worth £125.8million.
With corporate attendance taking a hit across the sport, as big companies tighten their expenses belt and consider executive boxes an unnecessary expense, there is unlikely to be much growth in matchday income. For TV, however, the opposite is true.
Fuelled by the arrival of Setanta Sports, the value of UK rights rose by £690million to £1.7billion at the end of Arsenal's first season at the stadium. The next significant jump arrived in 2013/14, with BT's emergence driving the domestic package up to a touch more than £3billion. The current rights are worth more than £5billion.
International rights, meanwhile, are almost at the same level and analysts feel that this is where future growth lies - especially if a new deal in the Asian markets follows a similar trajectory to NBC’s whopping agreement to extend their contract in the States.
DEBT REMAINS
In that Athletic interview, Wenger made the point that “the burden of the stadium is not there anymore… the income is there and now we can focus on buying experienced, strong players.” The past summer’s spending indicated the belt had been loosened a notch with no other English side committing more to new signings than the £149million on players such as Aaron Ramsdale and Ben White.
And yet one must only look at the club’s current debt, the grim sight of off-field staff being made redundant last year and the requirement to avail of a Bank of England loan facility during the pandemic’s early months to realise that the primary ambition of having an arena that provides the club with a competitive advantage over England and Europe’s elite is never going to bear fruit.
Going off documents posted on Comanpies House last year Kroenke still owes £144million to bondholders in stadium debt, making those “beneficial” lending terms that left the previous board so “delighted” in the summer of 2007 appear a tad peculair in retrospect.
Then again there was no way any of those who packed into Union Chapel twenty years ago tonight knew what was to come, that an influx of foreign investment would bring spending to a new grotesque level and broadcasters around the world possessed unlimited appetite for Premier League content.
If you were to suggest at the time to the celebrating board members that Arsenal would be in this position, the 11th most valuable club in the world but requiring a significant change in financial strategy to realistically compete for a Premier League title again, then they would have laughed. But this is the reality for supporters now: in a stadium no longer the newest and fanciest in town, watching a team that is miles off qualifying for the Champions League, never mind challenging for a title.
