Play the game - profits aren't everything

Why you need a balanced management team which doesn’t agree about everything

It may come as a surprise to you that a Finance Director should be saying that profits aren’t everything.

It may make more sense if I tell you that I am a supporter of Arsenal Football Club. So for shareholders the recent announcement by Arsenal of a profit of £56m in the last year is good news. For fans however whilst it’s nice to know that we can crow at the financial imprudence of other teams and their owners, at the end of the day this profit isn’t the ultimate measure of a football club.

In a corporate world where other metrics are increasingly the norm whether they relate to corporate and social responsibility, or health and safety, or corporate governance, our ultimate measure has to be winning leagues and cups and on that measure Arsenal have fallen short for the last five seasons. Although we have a manager who has brought trophies home during his 14 year tenure, many fans are beginning to question his current approach.

What’s this got to do with a balanced management team?

Well, the problem seems to be that the manager, Arsene Wenger, is behaving like a CEO when infact he is not the CEO. As manager of the team, his responsibilities are wider than just the team but what fans want is for him to fight his corner to build the best team to win trophies. Instead, what we have is someone who prefers to talk about the club paying down debt on its stadium move a few years ago and his prudence in not overpaying for players. Despite having an  MSc in Economics what he should be doing is having heated debates with the CEO about why he needs to pay, say, £10m for a new goalkeeper.  

In any organisation, all members of the management team, should share in the overall goals of the business but they should also fight their corner for their areas; businesses need that competitive tension. With Arsenal, it is almost as if you have an Operations Director who won’t ask for more delivery capability to improve results which will ultimately lead to increased or better sustained profits. The danger becomes that the short term profitability generated today means that, after many years trophy-less, future profits (in the form of ticket sales and sponsorships etc.) are jeopardised.

Although Mr Wenger makes a big deal of all the good young talent he has nurtured, if the clubs continues to fail in winning anything then that talent could well move on to other clubs. That will probably be a profitable sideline but the core business is surely that the team that wins trophies; not acting as an academy for other clubs. That is surely not in the long term interests of fans or shareholders. 

And as a Finance Director, I like short term profit but I prefer long-term sustainable profits.