Whilst factors such as spend (and net spend) are important, it is a flawed comparison as an indicator to success
Net spend to success does not allow for someone like Lionel Messi, easily the best player in the world over the last 10 years, cost Barcelona nothing. Likewise someone like Sol Campbell cost Arsenal nothing. Yet both of these players were the highest players in their respective leagues at some point.
It also does not indicate teams who spend well on Moneyball type players who cost little, but turn out to be superstars. Eventually these players prove themselves as the best in the world, but cost very little in initial fee.
The likes of Lionel Messi has cost Barcelona in well over £100m in his time at the club.
The best players usually end up on the most money, they did not necessarily cost the most to begin with.
As with any rule, there are exceptions. Leicester City two seasons ago won the league with a very low wage bill. But that is a one off. A once in a lifetime. It had not happened in the previous 30 years of English football, and probably will not happen for another 30 years. It is an abnormally. A single piece of data that does not disprove the rule.
The below is a table which I first read in the book Soccernomics. A brilliant read for stats geeks like me. It shows a clear correlation between average league position and wage expenditure relative to the average. The more you spend, the higher your average league finish.
So it was interesting to see the Daily Mail publish the top wage bills in European football yesterday:
I have always been from the school of thought that the more you spend on wages, the better your chance of success.
Now before I go on, the table is flawed as no one knows exactly what the wage bill is until the accounts is published, and these accounts would be for the previous tax year, which could be a few years old – Arsenal’s latest accounts were for the 2015/16 season.
So it has taken a bit of guess work and research to create the table. And when it comes to the highest paid players, it is clearly based on what is considered, as no one knows the actually figures, and the hidden extras that players get.
As expected, Arsenal feature on the list. And the teams above them are who is to be expected.
What I find interesting is just how far away we are other teams. PSG are funded by a country, they have unlimited finances.
But we are £54m behind Manchester United, and £40m & £34m behind Chelsea and Manchester City respectively.
Our top paid players are also on a lot less – 25% and more – than those clubs relative top players. To make up the difference on the pitch, we clearly need to make up the difference off the pitch.
The more you spend on wages, the better players you have, in theory. And the more better players you have. Again, in theory.
A £34m surplus to Manchester City is the equivalent of £653,000 a week. That is the equivalent of adding Kevin de Bruyne (£160,000pw according to totalsportek), Sergio Aguero (£220,000), Bernando Silva (£120,000) and Fernandinho (£90,000) and leave a little bit over for the taxman.
If Arsenal had those 4 players, alongside the current squad, we would be title contenders.
The £54,000,000 difference between Manchester United and Arsenal is a massive chasm to breach. I really do not understand how they spend so much, but clearly looking at their squad, they have even more average players on high wages than Arsenal. And Paul Pogba and Zlatan Ibrahimovic earning about £30,000,000 between them.
So Arsenal need to spend more on wages. It is not exactly breaking news. But this is the plot twist.
In our last accounts, we made of post-tax profit of £35,286,000 (after player transactions).
So in theory, we could catch up the deficit between our wage bill and Manchester City straight away using the funds we currently self-generate. But then this does not take into account the cost of those players.
The above 4 mentioned players cost in the region of £150m. If you amortised this over a 5 year period, it would work out at £34,000,000 a year.
So whilst staying self-sufficient, and not dipping into our vast cash reserves, we could simply not afford to buy all 4 players in a single season, as it would put us in a loss of £30m+.
Realistically, we can only really afford two more superstar names before Arsenal Football Club start running a loss.
It is not as easy to close up that wage gap as what first appears.
The obvious answer to our problems is that we need to generate more income for the club, which will allow us to spend more on wages.
Now there are two ways to do this:
- Increase match day revenue
- Increase commercial revenue
The first is a no-no. We should not be increasing ticket prices. We already pay too much, more than almost every other club in England (Liverpool, Chelsea and Spurs all per more per game, on average). So we then need to increase commercial revenue.
The brilliant Swiss Ramble provided us with the above beauty.
Manchester United’s commercial income is incredible. £159m more than Arsenal. That explains why they can afford £54m more in wages, and £100m more in transfer fees than us each year. They are an incredible business machine probably the biggest failure in world football at the moment.
All that incoming money, all that outgoing money, to finish 6th.
Manchester City in second does have a caveat.
They are ‘self sponsored’ meaning that Eithad, the national airline of the state that funds them (Abu Dhabi) is circumnavigating Financial Fair Play rules by equalling deals that other clubs sign.
Manchester United increase their shirt sponsorship deal by £20m? Not a problem, Etihad will do the same. They will match it. It is within FFP rules and I have no problems with it.
City recently signed a new £80m a year deal with Eithad for the sponsorship of the shirts, ground and training ground. Manchester United get a little under this for just the shirt and training complex (not the ground naming rights). It is completely legitimate and forcing honours to sponsor clubs with contractually watertight deals, rather than loans, is the right way to go.
Arsenal have a £159m gap to make up on Manchester United. Every time we take one step forward with a new shirt deal, Man U take 5 steps forward and blow us out the water.
They have global deals that we seem unable to reach. The fact Chelsea are also so close to us shows how poorly our commercial department are performing.
Serious questions need to be asked of our commercial department. At the moment, poor deals mean lower revenues. Lower revenues mean lower profits. Lower profits mean lower wage bills. And a lower wage bill means, on average, a lower league finish.
Ultimately, it gets to a point where you have to asked the question.
Ivan Gazidis, what the F do you do?
Note: Before you all say “look what Spurs are doing on a lower wage bill”, look at the averages. Over the last 5 years, they have had, on average, the 6th highest wage bill. Their average league position? 5th. When it comes to analysing data, you need a larger dataset than the last two seasons.