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How Gunners missed the target

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The Emirates stadium. Photo: Reuters

The Emirates stadium. Photo: Reuters

REUTERS

The Emirates stadium. Photo: Reuters

Come June it will be seven years since Arsenal's former chief executive, Ivan Gazidis, declared that a new financial era would allow them "to compete at a level like a club such as Bayern Munich", which is exactly the rhetoric that fans want to hear, and those in charge feel an obligation to utter.

Over three days and two European games in London in the past week, it was made painfully clear to all parties that Bayern are still Bayern, and by recent standards Arsenal are still Arsenal when it comes to the European elite.

Although in 2013, as Arsenal emerged from the long-term commercial deals that had helped finance the Emirates Stadium and were due a considerable uplift on renegotiation, the aim of a self-sustaining English European giant that spent what it earned was plausible.

Across Europe, it was assumed financial fair play was taking a grip, an assessment that might have to be revisited given the recent UEFA charges for Manchester City. But back then Gazidis was clear that it would not be FFP which dictated Arsenal's future - his optimism, he stated the previous November, "had nothing to do with FFP" and more to do with the commercial opportunities opening up for his club.

He could see a place for an English club - one not the unique money-machine that is Manchester United, or one benefiting from a petro-dollar ownership - who could operate within their means like Bayern and still establish themselves as a force. A force both financially and in terms of performance in the Premier League and Champions League. Unfortunately for Arsenal, it was Liverpool, rather than them, who were to become England's Bayern.

Instead, Arsenal have gone from being the club worrying about how they might compensate for their Champions League financial shortfall in their three years of exile from the competition to the club worrying about their Europa League shortfall. Defeat by Olympiacos on Thursday, and elimination in the last 32, meant they were looking at a £15m deficit in earnings from last season's run to the final that earned them £40m.

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Arsenal's former chief executive Ivan Gazidis. Photo: Claudio Villa/Getty Images

Arsenal's former chief executive Ivan Gazidis. Photo: Claudio Villa/Getty Images

Getty Images

Arsenal's former chief executive Ivan Gazidis. Photo: Claudio Villa/Getty Images

That total of £40m is just £1 short of the infamous offer in 2013 for Liverpool's Luis Suarez that would follow Gazidis's upbeat financial forecast for Arsenal's future. In the 2013 Deloitte Money League, Arsenal sat two places behind Bayern in sixth with an annual revenue that was just less than €80m short of the €368m total of the German club.

Between 2014 and 2017, Arsenal's revenue did leap from €284.3m to €468.5m but on the pitch they fell at the Champions League first knockout round for seven consecutive years.

In the same period, Bayern's financial supremacy, just outside Spain's big two and United, was reinforced, admittedly helped by their skewed domestic advantage in the Bundesliga. In the Deloitte analysis for this year, Bayern remain fourth, where they were seven years ago, with a turnover of €660.1m, and the gap to Arsenal, now down five places to 11th, is even greater than it was in 2013.

Bayern generate almost a third more revenue than the English club whom they eliminated three times in five years from the Champions League and, to be blunt, Arsenal feel less like Bayern than ever.

The Arsenal decline of the past 15 years is an interconnected phenomenon driven in large part by the bad decisions that begin with the long, painful flaming-out of the Arsene Wenger years, selling the right players and keeping the wrong ones. It starts with a stadium built with the right intentions, but which delivered Arsenal from a position at the top of the English game to one of mediocrity. That itself is connected to the changing nature of ownership, both the inexhaustible wealth of other clubs, and the contribution of the Kroenke family at Arsenal.

Inert during the Wenger decline, little better after, neither Stan nor son Josh has proven to be the shrewd strategist they would have you believe they are.

Where were Liverpool in June 2013, when Gazidis was dreaming big? They finished seventh in the Premier League that season, three places behind Arsenal and one behind Everton. They had also been eliminated from the Europa League in the round of 32. Their squad included the likes of Oussama Assaidi and Fabio Borini. Their stadium was outdated. They generated just €233m in turnover, almost €60m behind Arsenal.

Liverpool also had American owners who were eager to live within their means while not placing limitations on what was possible. Within six years they became European champions, now Premier League champions-elect, and with an annual revenue most recently at €605m, it is Liverpool who are the closest to the Bayern powerhouse on €660m. In the Champions League, it was Bayern who were brushed aside by Jurgen Klopp's team in Munich in the last 16 last season.

In the years after 2013, Arsenal did renegotiate those deals with Emirates and switched kit manufacturer twice.

They have been released from the austerity years that followed the stadium move and have spent upwards of £30m on a player more than seven times, including their record £70m signing, Nicolas Pepe. Their annual revenue has increased by €160m since that summer of 2013, compared to Liverpool's growth of €370m in the same period.

What was the difference for Liverpool? You could say just about everything at Anfield, where they have the right manager, with the same box-office appeal in the age of viral digital reach that Wenger brought to the pay-TV coverage of the 1990s. The right player trades both in and out. The single-minded pursuit of the new commercial opportunities that Gazidis espoused in 2013.

The latter is, of course, made much easier when a club are in the throes of success and by 2013, when Arsenal expected to leap forward financially, it was already eight years since their last trophy.

Even so, it was not Liverpool whom Arsenal were glancing at enviously as they tried to make their way back to the top of the English game. Then, as far as Arsenal were concerned, Liverpool were nowhere, as their bid for Suarez suggested.

In the years that have passed, it is the Americans at Anfield rather than the Americans in north London who have proved that it is possible to live within your means and build success. Gazidis was right about the theory - just not about the club.

Telegraph

Telegraph.co.uk