Player wages (again), executive cuts, and KSE

Joseph Zucker Arsenal FC


The financial realities faced by businesses are well known to all of us at this point. That they extend to football is no surprise. Like most clubs, Arsenal are going to be affected by the fact football is gone, just like that.

In recent days, the issue of player salaries and wage cuts have come to the fore. As I wrote earlier in the week, this is not a simple issue. I remain convinced that the players will take a hit, but if they remain wary of the ownership and their motivations, I wouldn’t blame them. I do recommend the latest episode of the Arsenal Vision Podcast in which they have a lively debate about this issue, and the various factors that are at play here.

I’ve seen some suggestions that we simply sack any player who doesn’t take a pay cut which is, being very kind about it, absurd. When you’re trying to deal with a crisis like this, you need to be sensible and consider all the implications, not behave in a way which makes your job of getting going again far more complicated. There are so many angles to it: the disparity in wages between high and low earners which means 12.5% for some is not much in the grand scheme of things, for others it’s more substantial; players coming to the end of their contracts, or those with an eye on a move (including ones the club themselves want to get rid of), who may just not be inclined to take any kind of a cut; the fact the club have no idea yet how big their losses might be; a sense that this is a way for KSE to address their own shortcomings when it comes to how we’ve managed our wage bill down the years; PFA advice which is telling players not to take cuts; and more.

Examples from other countries are bandied around, particularly from Spain, but that misses the nuts and bolts of how it’s working over there and the government . For more on that, Sid Lowe explains on Monday’s Second Captain’s podcast (he begins around 19’40 if you just want to skip to that), but I’m told that reports that the way the club have handled the situation didn’t go down too well with the players are spot on.

On this particular question, the club said in a statement yesterday:

Our players have been keeping very busy during this difficult period, working hard at home on both their fitness and tactical work while training is suspended. Over the past 10 days we have been in discussions with them around the potential financial challenges ahead, and how we are planning for those now. These are productive and ongoing conversations around how our players might support their club in an appropriate way. We have not and will not make any comment on this matter until these private discussions have concluded.

Here’s the thing: similar discussions must be ongoing at every other Premier League, and few at this point have announced anything definitive. For us, the issue is being played out publicly, which is unfortunate, and I understand why there’s little sympathy for millionaire footballers at a time like this. When so many are facing financial hardships through reductions, furloughing, or even job losses, it doesn’t reflect particularly well on them that there a sense they’re not willing to take a cut – particularly when fans contribute financially to the club and their salaries through season tickets, merchandise etc etc.

Again, I firmly believe they will take cuts, and are absolutely willing to do so, once they have assurances that the money in question will be used to continue to pay other staff and protect ‘regular’ jobs at the club. It cannot be a case that this is simply a way for KSE to cut the wage bill, taking advantage of a crisis to do so. If you think they wouldn’t do that, think again. It’s not just Arsenal players unhappy with how cuts/deferrals etc have been proposed, it’s true of a lot of Premier League clubs and players, so I said earlier in the week, let’s wait and see before getting the knives out for footballers who have been unfairly cast as villains almost from the start of the Covid-19 crisis.

There was, to my mind at least, a little pot-shot at the players in the statement, when reductions in executive salaries were announced:

Earlier this month, our executive team volunteered to waive more than a third of their earnings over the next 12 months.

I’d love to know how much earlier, and far be it for me to play down what is obviously a great gesture – again once that money goes to support jobs and other salaries and isn’t just a cost-saving for Stan and Josh – I think there’s something quite unnecessarily pointed about that wording. If negotiations between those running the club and the players are so delicate, why run the risk of making things more fractious?

A couple of other little bits stood out for me. That casual staff will be paid until the end of May is fantastic. That gives them a little bit of a safety net when it’s really needed. Arsenal also continue to pay all full-time employees, and that’s also a good thing – albeit the least a club owned by a billionaire should do at a time like this.

They say:

We have made it clear to them that we are not considering redundancies, and we are fully focused on protecting their well-being, jobs and salaries. All our employees are receiving their full salaries and we plan to continue this. We are not currently intending to use the Government’s furlough scheme.

‘Currently’ is interesting. In that they haven’t ruled it out completely. Depending on how long the downtime continues, don’t be surprised if that’s an issue that is revisited when the optics aren’t quite as bad as they are now. And that doesn’t just apply to Arsenal, I’m sure many clubs will be refusing to categorically say they won’t use that scheme. For some clubs, it’s probably exactly what they need because they don’t have the backing of a super-rich owner.

Arsenal’s wage bill right now is in the region of £232m per annum, of that 60% are player wages – around £140m. A 12.5% cut to that is around £17.5m – basically a half a Shkodran Mustafi in the transfer market as we once knew it. This isn’t to say players shouldn’t contribute, but in the grand scheme of things, that’s a trifling amount of money to KSE who could, if they wanted to, quite easily continue to pay everyone’s salary at the club in full for the next 12 months and beyond. Players, executives, EVERYONE.

Of the remaining 40% of the wage bill, £92m, let’s say 20% of those are the highly paid executives (an overestimation on my part I think, but let’s go with it), which would be around £18.5m. A 30% waiver from them is around £5m. Basically a Denis Suarez loan. I’m not downplaying their decision to take that cut, just putting it in some perspective. If we’re talking about how things look, imagine the positive response our owners would get if they committed to covering all salaries at the club for the next 12 months – a move which would cost them a tiny percentage of their vast fortune. If they cared about that kind of thing, of course, which they don’t.

People find it easy to take umbrage with the guys who get paid as astonishing amount of money to play football, with their clothes and their haircuts and their cars and their mansions. Fine. I understand it. I also can’t make it more clear that I think they will do their bit when it comes down to it, but we’ve been conditioned to overlook those at the very top. Those whose wealth truly is outrageous, who could easily afford to look after their employees – and whether you like to think there’s a difference between a football player and anyone else at the club, that’s exactly what they are. Employees with contracts.

Stan Kroenke is building a $5bn stadium in LA. Stan Kroenke spent $750m on a 520,000 acre ranch in Texas – then evicted people from their homes. Stan Kroenke’s net worth is estimated to be between $9bn and $11bn. And look, I get the distinction between net worth and liquid assets, between KSE and Arsenal – run as a self-sustaining business etc etc, but it just doesn’t sit right with me that there’s so much focus and ire directed towards footballers when we’re 100% owned by someone who could deal with this without feeling the slightest pinch in his enormous wallet. And don’t @ me with stuff about FFP, there are ways and means around that, not least an expected loosening of the rules during this crisis.

Anyway, that’s your lot from me this morning comrades. Back with more tomorrow and a brand new Arsecast. Until then, take it easy, and remember billionaires don’t care about you or anyone else.