{"id":7653,"date":"2023-03-28T11:48:01","date_gmt":"2023-03-28T10:48:01","guid":{"rendered":"https:\/\/www.goonerholicsforever.com\/?p=7653"},"modified":"2023-03-31T00:06:40","modified_gmt":"2023-03-30T23:06:40","slug":"an-interview-with-nigel-phillips-ast-treasurer","status":"publish","type":"post","link":"https:\/\/www.goonerholicsforever.com\/?p=7653","title":{"rendered":"An Interview with Nigel Phillips, AST Treasurer"},"content":{"rendered":"\n
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Nigel,<\/em> we are most grateful to you for sparing the time to talk to us in what we know is a very busy schedule. Firstly, could you tell us about the formation of the AST and the role that it plays in the club and your role within the Trust?<\/em><\/p>\n\n\n\n

The Trust was formed in June 2003 and was a joint initiative from AISA and the Supporters Direct, the umbrella body for all Supporters\u2019 Trusts. It currently has over 3,000 paid up members and is active in many aspects of Club life. It was originally conceived around ownership and governance matters and before the compulsory purchase of all shares by KSE in 2018, the Trust owned six shares in Arsenal. When Arsenal Fanshare was in operation it had \u00a33m of pooled funds actively buying shares in Arsenal. I have been the Treasurer of the AST since its formation along with Glyn Taylor, the Chair, also since June 2003. Campaigning against the Super League in 2021 was a key moment in the 20 years of the Trust\u2019s existence. The AST sits on the Arsenal Advisory Board formed after the Super League debacle.<\/strong><\/p>\n\n\n\n

Although we are primarily looking to focus on the financial affairs of the club it is impossible not to discuss the incredible strides the club has made this year on the field. Can I ask if this has surprised you? Is there one overriding reason for our success or is it a combination of key factors coming together? <\/em><\/p>\n\n\n\n

Yes, I am as surprised as are the odds setters and pundits if you look back at pre-season predictions for this year! The addition of two big league winners such as Jes\u00fas and Zinchenko have clearly been pivotal but over three years since his appointment this is clearly now \u201cArteta\u2019s team\u201d. He has got rid of players he didn\u2019t fancy for reasons of either attitude or ability and has been backed significantly in the transfer market over several transfer windows. After the end of season collapse last season clearly 22\/23 was a make or break time for this project.<\/strong><\/p>\n\n\n\n

Perhaps we could begin by asking <\/em>whether after three Covid-disrupted seasons of losses to 21\/22, is the club back on track to re-establishing its self-sustaining financial model? <\/em><\/p>\n\n\n\n

Five seasons out of the Champions League \u201ctrough\u201d has clearly had a massive impact on finances and outgoings have had to be pared back accordingly. The famous Josh line about having a \u201cChampions League wage bill in the Europa League\u201d was all about the need for financial sustainability. <\/strong><\/p>\n\n\n\n

Are there any vulnerabilities around the club\u2019s debt, which is rising again, although it is increasingly owed to the owner?  There does not appear to be much margin of error with the cash flow, although, again, it appears to be moving in the right direction?<\/em><\/p>\n\n\n\n

KSE refinanced the long-term stadium loans during COVID which freed up cash trapped in reserve accounts \u2013 the Partey transfer money! This \u00a3217m KSE loan needs two years notice for repayment and is at an undisclosed interest rate, believed to be base rate related plus a margin. Arsenal also owe other clubs just over \u00a3200m for stage payments on players already with the Club. This is how transfers are structured now with a certain % paid on signing and then further payments over several years. This is debt that increased massively as Arsenal have got more active in the transfer market. And we shouldn\u2019t forget the \u00a317m owed to those loyal A,B, C and D bond holders who lent the club money when first building the North Bank Stand and then when there was a cashflow shortage in funding the Emirates build. <\/strong><\/p>\n\n\n\n

It would appear that (tempting fate! ) we are certain to be back in the Champions League next season . It has been a long and painful road back but presumably this is transformational in boosting our finances? Fans, understandably tend to look at finances from the perspective of who we can buy with this extra money but in a general sense how will this level of increased revenue affect the club? <\/em><\/p>\n\n\n\n

A run deep into the latter stages of the Champions League can be worth around \u00a390-100m with very little extra costs. Such revenues clearly impact wage paying ability significantly and we all know the almost perfect correlation between wages spent and final position in the league. At present Arsenal\u2019s wage bill is the 5th<\/sup> largest in the PL. The wage gap to the \u201ctop four payers\u201d is \u00a3130-170m per season or an extra 60% \u2013 the impact of CL money!<\/strong><\/p>\n\n\n\n

Of course, we\u2019d love to know what scope we have for purchases in the summer. Are you able to hazard a guess at this? <\/em><\/p>\n\n\n\n

Arteta will be backed again in the summer window but as seen with Mudryk and Caicedo, Arsenal do appear to have limits beyond which they will not go. The average age of the squad is young and some say light in depth so CL money will definitely enable the wage bill to increase closer to the top four payers. The one thing Arsenal haven\u2019t done well recently, Iwobi excepted, is \u201csell well\u201d i.e., offload players for decent prices. This, though, is a reflection of the squad shambles when Arteta took over. <\/strong><\/p>\n\n\n\n

There is inevitably huge emphasis on Financial Fair Play and the Premier League rules affecting financial sustainability. The dramatic backdrop of the mountain of charges against Manchester City and the extraordinary financial behaviour of Chelsea in the transfer market has been (and continues to be) a massive story. We also have the potential impact that the influx of new money coming into the Premier League through new owners (some of whom are effectively nation states) has had, which makes it imperative that we have to manage the club as effectively as we can. We don\u2019t have the wiggle room of many of the clubs with whom we compete. What is the Trust\u2019s view of our management model and where do you think we may have a particular advantage over our rivals? <\/em><\/p>\n\n\n\n

This is the massive debate raging. With PL clubs owned by Abu Dhabi and Saudi Arabia and with Qatar interested in MUFC, what chance do clubs who seek to be \u201csustainable\u201d have? For this very reason Liverpool\u2019s owners are seeking fresh investment as the massive midfield rebuild appears to be beyond their financial means. When you have distant and \u201cpassive\u201d owners it is essential you have a top class executive team off the field as well as first class football related leadership. Arsenal have made several missteps in this regard but we are hopeful that the process of \u201cupgrading\u201d continues. <\/strong><\/p>\n\n\n\n

Looking more widely at revenue, where might the club find future additional sources of revenue, especially given the current outlook for sponsorship\/merchandising and broadcasting rights? We have fallen behind most of the other big clubs in growing revenue. The Emirates and Adidas deals run to 2028 and 2030 respectively, I believe, so there is not much scope for new revenue there for some time, but the PL broadcast rights run to 24\/25 so one supposes this will have to be renegotiated soon? <\/em><\/p>\n\n\n\n

Gate receipts and broadcast income pretty much speak for themselves \u2013 sell all your seats, have plenty of games on TV and do well in the cups so these are \u201con field\u201d revenues. You are right that we lag badly in the commercial \/ corporate sponsorship stakes and others continue to pull away from us. Adidas and Emirates provide about two thirds of commercial income. <\/strong><\/p>\n\n\n\n

Despite the annexation of Highbury House by Gazidis and his team a few years ago we do seem to trail our closest competitors in raising marketing revenue. Are there signs that this may be changing for the better?<\/em><\/p>\n\n\n\n

Not that I can see! The dubious and distasteful alliances with Rwanda and Socios have not been good signs of the \u201cmarketing\u201d vision of the Club! But the football performance of the last 5\/10 years has not warranted top level strategic partnerships. Hopefully the new era we hope to be entering in terms of competing and winning helps better deals flow. The catering and concession relationship at the ground with Delaware has many years to run so there is little chance of any improvement and uplift from this source of partnership income. <\/strong><\/p>\n\n\n\n

We have achieved a very significant reduction in the wage bill with the removal of some of the higher paid (and underperforming) players. This wilil inevitably be offset by the new contracts that we have awarded to some of our most important younger players. Are you confident that we are in a healthier position in terms of revenue to expenditure than we were when Arteta took the helm? <\/em><\/p>\n\n\n\n

Most definitely. I don\u2019t want to say it\u2019s all about a \u201c4th<\/sup> place trophy\u201d but when you hear Klopp describe CL qualification as \u201cimperative\u201d you get what this means to wage paying = squad quality ability.<\/strong><\/p>\n\n\n\n

Might the club be able to make the development and sale of young talent a significant line item in the accounts, following the Chelsea academy model or even the Man City warehouse model that lets them sell first teamers (e.g., Zinchenko, Sterling, Jes\u00fas) lucratively as they have replacements coming along behind. Someone at one of the data analytics firms was saying recently that more of the data analysis work at the big clubs is now directed towards recruitment than first-team performance, not just to acquire tomorrow\u2019s stars before they become stars and so can be bought for pre-star prices, but also to create a monetisable stream of youngsters to provide recurring income. Arteta has mused in the past about having ‘a squad that can sustainably be financed by itself\u2019, which suggests those conversations have been held internally.<\/em><\/p>\n\n\n\n

Arsenal currently have 28 players out on loan so maybe this is the case. Will Balogun be the first test case of a player we get under a decent term of contract, see them develop elsewhere, and then if no clear path to the first team emerges, sell them on? The Brighton model might be different as they can give young players decent Prem experience and then sell them for top fees as \u201cPrem ready\u201d. Arsenal trying that with Fabio Vieria appears less easy.<\/strong><\/p>\n\n\n\n

 And might we develop the knack of selling players for higher amounts than we have hitherto? We had lively debates last summer on the blog about the practice of selling players for peppercorn fees or virtually giving them away. Is this an area that we could improve or have football economics radically changed? <\/em><\/p>\n\n\n\n

We definitely need to improve. I mentioned Iwobi but that was more a result of the functional madness at Everton from an owner who not so long ago was \u201cjoint owner\u201d of a 29.9% stake in Arsenal. And his co-owner is now a Sanctioned Individual following the Russian invasion of Ukraine.<\/strong><\/p>\n\n\n\n

In this, what seems like a surreal situation, we have seen the perception of the Kroenkes alter radically as far as most supporters are concerned. Was the ESL debacle a watershed moment in their ownership or have they just become more \u2018savvy\u2019 in their understanding of how football is run?<\/em><\/p>\n\n\n\n

Don\u2019t forget that two years on, Arsenal are still members \/ shareholders of the ESL. The \u201cclosed\u201d nature of all major US sports means there is no sporting jeopardy or relegation as we call it! The US investors \/ owners across the board hate this and we fully expect more moves to pull up the drawbridge, ring fence revenues, keep more for the Big Boys, as this is their way. Arsenal is a financial investment for KSE, nothing more, nothing less. <\/strong><\/p>\n\n\n\n

What do you think the future (next three years) might hold for Arsenal?  Do you envisage a change in ownership? If KSE remain in charge might they adopt a multi-ownership model embraced by other clubs and would you see any changes at the Emirates in terms of capacity? <\/em><\/p>\n\n\n\n

You have seen that Josh was recently appointed as co-chair with his father so the power transition might be happening. Josh was born on cup final day in 1980 and his father will be 74 this October. KSE \/ Stan K has traditionally not been a \u201cseller of assets\u201d, more an acquirer but I am sure they are looking closely at what MUFC might fetch, despite the billion or more of stadium \/ facilities spend that is needed at that Club. There were initially hopes about how the KSE ownership of the Colorado Rapids in the MLS might positively impact on Arsenal but again there are no signs of this multi-club model being adopted at Arsenal. As for stadium expansion at Arsenal \u2013 I just can\u2019t see it for many reasons.<\/strong><\/em><\/p>\n\n\n\n

Nigel, we are enormously grateful for your insights. Can I close by asking you as an Arsenal fan what has this season meant to you and whatever happens at this season\u2019s end are you excited for the future?<\/em><\/p>\n\n\n\n

Having attended my first Arsenal match at Highbury in 1974 I have been lucky enough to have experienced some fantastic times over the last almost 50 years. I am now excited to be sharing this new dawn with my two sons who were too young to know much about the golden decade of Wenger. They have seen the years of high-class mediocrity and many 4th<\/sup> place trophies that led to the toxicity and eventual and inevitable forced removal of Wenger. The atmosphere this season has been brilliant and with such a young squad and a focused intense Arteta, I am really hopeful this upward trajectory leads to something more lasting. Football is precarious and fortunes can turn quickly but hopefully many of the essential on and off field building blocks are being slotted together to create something really special.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Nigel, we are most grateful to you for sparing the time to talk to us in what we know is a very busy schedule. Firstly, could you tell us about the formation of the AST and the role that it plays in the club and your role within the Trust? The Trust was formed in June […]<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[],"_links":{"self":[{"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=\/wp\/v2\/posts\/7653"}],"collection":[{"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7653"}],"version-history":[{"count":5,"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=\/wp\/v2\/posts\/7653\/revisions"}],"predecessor-version":[{"id":7662,"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=\/wp\/v2\/posts\/7653\/revisions\/7662"}],"wp:attachment":[{"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.goonerholicsforever.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}