He may not win, but Wenger is still the CEO every company dreams of

“If Arsenal don’t win a trophy this season, Arsene Wenger should go.” This is the refrain from many football fans. Enough is enough, they say. With the ‘distractions’ of the UEFA Champions League now over, if Wenger can’t get his Arsenal side past the relatively smaller teams in the FA Cup, he should leave. It is a divisive issue. What cannot be argued, however, is how strong he will leave the club should they part ways. While many top football clubs are bankrolled by the oligarchs and sheikhs, Wenger has done what top CEOs do: outperform the market, improve teams at low cost by promoting from within and stay nimble by keeping debt low. Wenger has given Arsenal the platform to be a super club and done it the hard way – whoever is in charge next season can challenge for the Champions League, and not simply participate. Football fans it seems, judge success only by the trophies teams win. Arsenal’s trophy ‘drought’ of eight years is brought up by commentators and pundits every time they mention the club but I think Arsene Wenger gave Arsenal it’s biggest trophy of all in 2006: Ashburton Grove, known today as the Emirates Stadium. While other football clubs like Bayern Munich are simply gifted massive stadiums by the local state, Arsenal had to finance it themselves and sacrificed on big money transfers until Mesut Ozil came in last summer. [caption id=“attachment_1431097” align=“alignleft” width=“380”]  Football fans it seems, judge success only by the trophies teams win. Getty Images[/caption] Wenger let his CV take the hit so the club could create a world class, long term, revenue maximising asset. Imagine trying to build a self-funded, profitable solar power business while everyone else gets state subsidies to produce inefficiently. Put bluntly, the Emirates Stadium will ensure that while other clubs flounder in insolvency and lose money hand over fist, Arsenal will be around to challenge for trophies for another century. People often criticize Wenger for not going out and signing big players. I am one of them: I still believe Wenger should have bit the bullet and brought a striker last summer. But big players need big contracts and allocating €100,000 a week to a single player for 4 years is risky. That’s why Wenger has stuck his policy and did what many great CEOs do: promote from within. By taking calculated punts on youth, Wenger can spend €5-10m each on a handful of talented (and low wage) youngsters who will come good in 3-4 years instead of locking the club into just one €30m signing. Aaron Ramsey (€6.4m), Theo Walcott (€10.5m), Alex Oxlade-Chamberlain (€13.8m) were seriously pricey for their age but they now form the crucial British core of a very promising team. Clubs like Chelsea would pay the same amount for a single youngster - and then loan him out. For every Whatsapp or Facebook in the portfolio, many investments don’t work out - €3m Abou Diaby and €1m Nicklas Bendtner come to mind. But like a good investor, he packed his portfolio with quality and cashed in on Kolo Toure (bought for €185k, sold for €18.7m – 100x return), Cesc Fabregas (bought for €3.2m and sold for €34m – 10x return), Alex Song (bought for €4m and sold for €19m – 5x return), Robin van Persie (bought for €4.5m, sold for €30.7m – 6x return) and many more. These transfers hurt Wenger’s CV too – Arsenal became a selling club and couldn’t attract or hang on to their ‘winners’. The blockbuster €50m Mesut Ozil signing is a game-changer because it shows Wenger is no longer bound by financial constraints. Part of the reason is Arsenal’s big new commercial deals: sponsorships with Puma and Emirates will bring in more than €50m in cash every year. But he’s only able to plough this cash straight into signings because the club is low on debt and interest payments that other bankrolled behemoths have to contend with. Credit must go to Ivan Gazidis and Arsenal’s commercial management team for these additional revenues – whether Wenger spends or not is another matter! Many stock pickers love low debt companies because they can adapt to market changes faster. Whoever is in charge of Arsenal next season will have a stable core of British talent and a huge corpus to bring in the world’s best. If Wenger can end the ’trophy drought’ playing great, profitable football, it’ll be his greatest achievement.