There may be trouble ahead

Those that have followed this column for long enough will know well that finance is not my forte. However, you don’t have to be a budding economist to understand that COVID-19 will continue to have a seismic impact on football’s fragile eco(nomic)system. Earlier this week, Arsenal announced that the majority of the playing staff had accepted a 12.5% pay cut over the next 12 months.

The negotiations have been difficult and, most concerning in my opinion, public. The first thing to say is that COVID is a ‘black swan’ event like no other and we are only just grasping the challenges it will provide for football, let alone our own lives and the global economy and, you know, people’s health.

Negotiations over personal finance are always sensitive and fractious. Nobody accepts a pay cut without an in-depth conversation. No employer will hold those conversations without some strain. Arsenal have become the guinea-pig for the prospect of player salary cuts in the Premier League, much in the way that Liverpool and Spurs were unwitting guinea-pigs for furloughing of non-playing staff.

Liverpool, Spurs and even Bournemouth found the PR inferno of furloughing too hot to handle. In Arsenal’s case, the player pay negotiations have been played out in public, which means a lot of leaking and counter-leaking has taken place. That illustrates a fundamental lack of trust between the players and what we will call, for ease, the ‘executive branch’ of the club.

Arsenal’s official statement from April 15th, prior to the pay cut being widely agreed, contained all the subtlety of a sledgehammer when it said, “Earlier this month, our executive team volunteered to waive more than a third of their earnings over the next 12 months….These are productive and ongoing conversations around how our players might support their club in an appropriate way.”

With a perhaps unconscious irony, the statement was signed off ‘Victoria Concordia Crescit’, the club’s former motto which translates roughly as ‘victory through harmony.’ The impression from afar is that the discussions have been far from harmonious. It’s a difficult, complex situation and footballers are consistently in the spotlight due to their earnings and this is, by implication, because most people think footballers don’t deserve their earnings.

Footballers are well paid because they generate lots of revenue for their clubs and associated sponsors. Of course, the difficulty at the moment is that there is no football and therefore, revenue has been obliterated overnight. However, the case remains that a club owned by a man worth in the region of $10bn has asked a section of its employees to write a cheque of roughly £25m for the business.

Reports have emerged that players are uncomfortable with the manner of the request and some even view it as a cynical way of pruning a mismanaged wage bill. The pay cut is apparently tied to performance incentives around Champions League and Europa League qualification. If some players see this as a cynical salary management exercise, I have some sympathy with that view.

The most troubling issue, for me, is that we have this information via immaculately connected journalists like David Ornstein. Leaks of this manner are a product of dissatisfaction. The public domain has been a very useful conduit for the club too, because it means players come under significant pressure to swiftly conclude a nuanced and difficult negotiation.

The fact that Mikel Arteta became an arbitrator of sorts is equally uncomfortable in my view. This adds a layer of discomfort for the players and the manager, it puts all of them in a difficult position. I have a lot of sympathy with the view that some players might have felt pressured to accept a deal they didn’t really agree with, or else were unsatisfied with the transparency of, due to the mixture of manager involvement and external PR pressure.

That would put some of the younger players in a tough spot and not just the young players. Just as a hypothesis, put yourself in the position of Lucas Torreira. You’re 24, working in a foreign country with a loose command of the language and suddenly your company and your manager are urging you to accept a pay cut via Zoom- you’re probably not in a fantastic position to negotiate the minutiae of the deal.

Later, we become aware that a couple of players have not accepted the deal citing a desire for greater transparency. The journalist that breaks the story insists he will not name the parties that have yet to agree to the deal citing their right to privacy. A few hours later, a host of other journalists are given the name of Mesut Özil.

Somebody really, really wanted Özil’s name to be in the public domain, they made absolutely sure of it. We are told that two players have yet to agree the deal, but only Özil’s name is given and the inquiries stop there. The optics of the highest paid player not agreeing to the deal are so obvious that nobody even cares about the identity of the other player. That’s plenty of carcass for this particular lion’s cage.

It’s not clear who “somebody” is, but they are determined. The problem is that we only really have Özil’s name initially and not his reasons. I gave the example of Lucas Torreira earlier as someone who might have a weak negotiating hand (I don’t know that this is the case, it’s just a hypothetical example).

Özil is a senior player with a wealth of representatives and one of the club’s longest serving players. He is in a much stronger position to ask questions- as he showed during his standoff with Unai Emery. The fact that his identity has been leaked means he is losing the “spin war” now, any agreement he subsequently comes to will be viewed harshly under the public glare.

In a recent interview on the Ornstein and Chapman podcast, Burnley full-back David Bardsley talked about how he now feels obliged to reveal his acts of charity. He said that he feels that he has to publicise small, private gestures, such as large tips for club staff at Christmas and the end of the season, that he has undertaken as routine.

More broadly, Premier League players came under huge pressure to agree a deal to give money to the NHS- a campaign gleefully leapt on by UK politicians who recognised the easy PR win of demonising footballers for their salaries. Players rushed out a statement pledging charitable donations to the health service. I doubt the practicalities of such a mass donation are close to completed, but players knew they had to placate quickly.

I don’t think it is far-fetched to say that unfair pressure has been applied to the Arsenal players via the court of public opinion and obviously I cannot comment on how transparent the club have been about where the salary saving will be reinvested. Don’t get me wrong, I am not crying any tears for the players for loss of earnings, I am sure they will be fine. I also don’t believe that the principle of taking a pay cut was the sticking point, but the finer details of the deal.

The players and Arteta, I think, want to do the right thing and they deserve to be applauded for their gesture. This is a gesture, too. They are under no obligation to bail out their employer like this, regardless of where we stand on the moral side of their earnings. These discussions are not unique to Arsenal either, even Chelsea, owned by one of the world’s richest men, is currently negotiating a 10% pay cut with its players.

My concern is that COVID is still in its very early stages. There will be further challenges and traumas ahead for football and its finances. This has been the very first stage of a process that is going to become more painful and I sense there are already signs of strain. Going forward, this might have regrettable consequences for Arsenal if a sour atmosphere persists. [I accept that I am speculating on the sourness of the atmosphere].

Players might be in disagreement among themselves, the insertion of the manager into negotiations may have strained some relationships or at least made them awkward and, from afar, the impression I have developed is that the players don’t trust the ownership any more than the fans do. There will be many more negotiations of this nature to come.

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