A discussion with some over the Christmas period about just how far behind Arsenal are from Manchester City exposed just how much investment we need in our squad to compete.
The discussion started when Liverpool splashed £75m on Virgil van Dijk. A huge amount on a player who, all of us agreed, was fairly average and we would only consider at half that amount. But what it showed was the Liverpool had money, and were willing to spend it.
But is an overpriced central defender enough to make up the gap between Liverpool and Manchester City? The answer was emphatic. NO. And then the discussion turned to Arsenal.
We all to a man agreed that Manchester City’s squad is awesome, and that Arsenal’s has some talent, but is very average in places. The key difference is what both clubs have invested into their squads, in terms of both transfer fees and wages.
An interesting side note here, the cost of Manchester City’s current squad (£774.8m), is over £100m more than Arsenal have spent in the Premier League era (£639.5m).
We all agree that Arsenal are probably 6 – 7 top players short when compared to Manchester City’s squad. And our squad has cost £397m less than Manchester City. If you are looking at 5 quality players at £40m, and two world class players at £60m, that equates to £320m spent.
If we all agree that we are 6/7 players short, than it is logical that we all agree that we need to find at least £300m in transfer fees. And this figure grows even more when you consider we will need to replace a Alexis Sanchez and Mesut Ozil in the summer.
And this £300m deficit does not even take into account salaries.
At the minute Arsenal’s yearly wage bill is about £40m below both Manchester City’s and Manchester United. Now some of this will be saved as players come in at the top end of the squad and as a consequence leave at the bottom end of the squad.
By the time you add the transfer fees required to buy the players we need, and the increase in salary to pay these top players, we are looking at needing to invest around £350m in the current playing squad to take it from where it is now, to where it needs to be.
£350m is a lot of money to try and find.
Some fans think we have £100s of millions sitting in the bank that we are not spending. This is just untrue. They look at turning a profit on transfers as a stick to beat the club with, and it is partially correct.
But what is more important than how much you have made (or spent) on transfers in a summer is the profit / loss your accounts show. IE if you end up £100m in profit on transfers, this does not mean you have £100m to spend on transfers.
If you only make a £45m profit as a business operation over a year, this is much closer to your surplus, and the reality is that the £100m on transfers you have bought in, over 50% of it has been eaten up by operating costs.
Arsenal Group Profit Before Tax
2016/17 – £44.6m
2015/16 – £2.9m
2014/15 – £18.2m
2013/14 – £4.7m
2012/13 – £6.7m
You can see that over the last 5 years, Arsenal have not exactly made massive profits – £77.1m in total before tax.
Over the above 5 year period, Arsenal have spent £351m on players. In the same time, Manchester City have spent £777.8m. That is an incredible deficit of £426.8m. And yet we only generated £77.1m in profit in that period.
In the two seasons Pep Guardiola has been at Manchester City, he has spent £380m. In the same time, Arsene Wenger has spent just £144m. A difference of £236m over an 18 month period.
The harsh reality is, we simply do not have the money to compete in the transfer market with Manchester City – or Manchester United.
Now this is where you all moan that we were miss-sold a dream. That we moved to compete with the best in the world. You are right to moan, but the truth is that the landscape has changed. We can compete if football stood still. But since the new ground begun getting built, we have seen the rise of billionaire owners.
If we did not move, gate receipts would be ~£50m less. The Emirates Stadium generated around £50m more than Highbury did. So if we stayed at Highbury, we would be even further behind, and either making huge losses, or curtailing our spending further.
I saw on Twitter who do we compete with these days? And the answer is clear. Liverpool.
When you look at the squad values above, Manchester City and Manchester United are out there on their own. Chelsea are in the middle, then Liverpool, Arsenal and Spurs bring up the rear.
At the moment Spurs are doing brilliantly without the income of Liverpool or Arsenal. This is mainly due to bringing through the likes of Harry Kane from the youth system and signing the likes of and Dele Alli for not very much. They also pay wages vastly inferior to what the players could get elsewhere- Toby Alderwield, for example, is reportedly on £50k a week. Virgil van Dijk is reportedly signing a £200k a week contract.
The Spurs model will collapse within the next 24 months, as they can not afford to play the likes of Kane, Alderwield, Alli, Erickson, Rose, etc the money they can command elsewhere. These players will leave and they will be unable to sign similar quality on the same low wages – A player like Jesse Lingard, for example, is paid more than any Spurs player.
So back to the comparison to Liverpool. When you look at the revenue of both clubs, what they bring in from gate receipts, TV money, commercial deals, etc, there is not much in it.
There big difference between the two is gate receipts, but this has closed further this year with the Anfield expansion.
In terms of revenue, Manchester City and Chelsea are a long way behind Manchester United, but they both have the financers using their own cash to service huge debt levels.
So Manchester United self generate their huge revenue through commercial deals. Manchester City and Chelsea have “sugar daddies” financing them.
So where do Arsenal find that £350m investment that we all agree we require?
- Increase commercial revenue – Arsenal generate £168m a year less than Manchester United when it comes to commercial deals (shirt sponsors, etc) – and Man U have not even exploited the lucrative naming rights of Old Trafford yet. £168m a year is a big difference. That is two £70m players a year on £250k a week.
- Become a rich mans play thing – Stan Kroenke will not put his hand in his own pocket – nor should he be forced too – so if you want to take a shortcut to financing the squad, you then want Alisher Usmanov (or someone else) to come in and put in £350m of their own money,
Arsenal and Liverpool have similar American owners who do not put any of their own cash in. At the minute both are trying to grow by increasing commercial revenue. In my opinion, Arsenal’s commercial department is underperforming massively. Ivan Gazidis needs to take the blame for this.
On the second point, do you really want Arsenal to become a rich mans play thing?
- Do you want to be owned by an Arab sheikh who pays for his own banner in Arabic positioned front and centre in the ground, thanking him for his investment?
- Do you want to be owned by shady Russian “businessmen” who made their billions in mysterious ways upon the fall of the Soviet Union?
Personally, I do not want to be owned by a Sheikh or Russian oligarch. It does not sit well with my own values and morals.
The reality is, in our current financial model, we are competing with Liverpool. They spent £75m on Virgil van Dijk, we have about tat much still to spend.
Now you can raise the valid point – and it is valid – that Arsenal had this money to spend in the summer, and that it is a disgrace that Arsenal are not using their resources to the full.
Arsene Wenger needs to take the blame for that, as he always seems reluctant to spend. Hopefully the new Director of football and Head Scout will see a change in direction on this matter.
Taking into account the contract situations of Mesut Ozil and Alexis Sanchez, we do have to be careful .That £75m should be earmarked to be spent on replacing one of then, rather than an error prone centre-back.
We finished a point behind Liverpool last season, and there is not too much between them. We need to sort out our commercial deals to bring us closer to Manchester United.
I would rather not compete for the league, then sell out to someone who I do not want anywhere near my club, being in debt with them.
What is for certain, to compete, Arsenal need to find a £350m investment.
Keenos
Follow @KeenosAFCNote: there is always an exception to the rule. Leicester City won the league in 2015/16. It is a once in 50 years thing. A similar feet has probably not happened since Derby County in 1972, and will probably not happen again in another 40-50 years.
She Wore A Yellow Ribbon 
Brilliant article that sums up the current situation wonderfully. I’d rather maintain our values than sell our souls for a sugar daddy.
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I agree and I disagree, football will never ever be the same again it’s become all about money. I would rather have a rich owner and we can have as much as we can spend on buying players. Look Man City will always be there and have a good squad football players are being over priced so if Arsenal can’t get someone who can give us whatever money we want to buy players then Arsenal will struggle Arsenal and Man Utd where the teams to fight for the league and look at Chelsea at city have been taken over Roman would have been an Arsenal owner But when he saw Arsenal wanted the emirates he said no.
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Daniel,
Might this be of interest…
https://www.irishtimes.com/sport/soccer/ken-early-wenger-goes-from-bust-to-boom-on-financial-doping-1.3216243
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SPOT ON but to gain that extra revenue you need success in order to make more money.Also it attracts better investors, more fans supporting the club,Top players will want to come to the club because we are then competing for the league and champions league!!.At the moment we are way off that and the gap will only get bigger, its the sad state of football today im afraid.Succcess brings MONEY.
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Sorry lads, this article is wrong on so many levels, it’s hard to know where to start although I do appreciate that you need to save face so articles like this help.
However, those pesky facts keep getting in the way.
I note that you put Mendy in there. However, due to injury, he’s only played 4 games so for the sake of accuracy, why not go for the unheralded but magnificent Fabian Delph as he’s been our ‘re facto left back, this season? Cost? 8m. Doesn’t help your article, I appreciate that.
Now, you talk about commercial revenue and I’d agree, Arsenal’s performance is pretty poor. This should be considerably higher as Arsenal fans are obviously loaded. You must be to afford the world’s most expensive season tickets, right? Ticket prices that we couldn’t hope to charge in Manchester. Your geography allows you to have your own form of financial doping, to use one of Arsenal’s favourite phrases. However, back to commercial revenue. You DO know that we have the world’s fifth highest turnover, don’t you? We spend the money we earn, not the Sheikhs money and to assert that he paid for his own banner thanking him is absolutely laughable. That banner was paid for by one of City’s fan groups. More research please, lads! The hypocrisy involved in not wanting a, ahem, “sugar daddy” is breathtaking and yet you just can’t see it. Head in the sand whilst holding hands over your ears, screwing your eyes up and shouting “NONONO”.
In fact, head in the sand appears to be the operatus applied by Arsenal fans. Stop bleating about the fact that you’ve been overtake by others because your club has the means and wherewithal to mix it up. You just choose not to.
Those pesky facts again…you know it.
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Might this be of interest…
“Prof Szymanski…adds a caveat: “When you have a bank like Sheikh Mansour to draw on, why wouldn’t you?”
https://www.ft.com/content/e1961ea2-d6c5-11e7-a303-9060cb1e5f44
Ask yourself this: if HMG stopped countries purchasing English football clubs, where would MCFC be….?
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Despite the best efforts at disinformation, City were a private purchase. Granted, by one of the wealthiest men on the planet and important in their ruling elite, but still a private purchase. That was made very plain at the time. The purchase of PSG was definitely by a sovereign state but you shouldn’t confuse the two. To describe Sheikh Mansour as “a bank” is merely a play on words.
Your poser is not really relevant then. 1. City were not purchased by a country and 2. I suspect that seeing as this Conservative government is perfectly happy to flog the nationally owned assets of this country to any old bugger, I daresay they won’t stop the purchase of a privately owned football club. Think of the tax we cough up for starters…
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So Delph, your left back that cost “just £8m” cost more than all 3 left backs Arsenal have used this year. Your entire squad cost over twice as much as Arsenal’s. The only reason your revneue is so high is because Mansoor’s own companies (or companies owned by relations and friends) pump the cash in through sponsorship (I have no issue with this actually).
Maybe rather than walk around with a chip on the shoulder, you should realise this article was about Arsenal, and what we need to do for success.
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You’re criticising us for having an £8m player? £8m? This is untrue. Something is beginning to tell me that we just can’t win here and is it our fault that you have bumbled along with 3 players costing less than that in total? No. It’s YOUR fault and look at how your refusal to spend even just a little more (when you’ve definitely got the cash) is affecting your standing in the league table and the general public perception of Arsenal. Get a grip.
And as for me having a chip on the shoulder, again, get a grip. I was replying to off repeated inaccuracies about Manchester City which begin to grate when repeated ad infinitum. The author of the original article and some of the following contributors appear to have a branch of Harry Ramsdens on their collective shoulders.
Besides, have you any idea of the jealousy, bitterness, lies and general shite that has been thrown at us for 10 years now? The original article was a study in this. Using YOUR failure as a means to beat us is a sign of a genuine small minded meanness and if I’m a little chippy about it, it’s simply a case of Right Back At Yer!
You won’t like it but tough titty, matey. We’re not going away.
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“You won’t like it but tough titty, matey. We’re not going away.”
…..so long as HH stays in power…..
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Ok, all these £30m and £40m players we have, (City have 3 £40m+ wingers. City have 2 £40m+ strikers. City have 3 £30m+ attacking midfielders. City have 3 £40m+ centre backs) seeing as you’re happy to tell me we have them, please name them and their positions. If you don’t want to, again, please desist in perpetuating these untruths.
According to widely publicised reports today, I agree, you don’t have £500m in the bank. You have a world leading £307m in the bank. Why is that there? It’s not as if you need to spend it in stadium improvements, is it? Frustration at the mean minded way your club is run shouldn’t mean you can spout your mouth off at others. If the purpose of your article was to highlight how far Arsenal have fallen behind, then why misrepresent City? You don’t need to, it’s unnecessary. The facts of the matter speak for themselves.
Plainly, you do care how an Arab oil man spends his billions or this whole thread wouldn’t exist. Btw, they are not ill-gotten. You’re confusing us with Abramovic again.
As for your assertion that your time spent supporting Arsenal means you’ve seen more success than I *ever* will is, frankly, embarrassing. Granted, you won the FA Cup a few times in the last few years and that’s not to be sniffed at. However, as you say, the purpose of your article was to highlight how far behind Arsenal are falling. If that’s the case, then you’ll win bugger all in the future whilst we’ll hoover it all up… so how can you possibly state that you’ve seen more success than I ever will? A truly ridiculous statement. You remind me if a certain statement by Rio Ferdinand when the money arrived….”It won’t affect us….”. How did that go then, Rio??
Finally, I’d like to point out that my support of City isn’t dependant upon success. I’ve sat at Maine Road and heard Lincoln City fans (LINCOLN FUCKING CITY!!!) sing to me that we weren’t famous anymore. I remember when we couldn’t afford 750k for Craig Hignett. When we had to go back to a previous owner for a loan to pay the wages. I’ve sat at Maine Road and watched Arsenal take a 4-0 lead….within 20 minutes. I was there when we kicked off our Division 2 campaign with a game against Blackpool and we still had the 4th highest attendance in England. The point is, City have always been one of England’s big clubs (despite our yo-yo status in the 90’s) and I’m thoroughly enjoying our change in status. Ever since the Sheikh arrived, we’ve worked bloody hard to drag ourselves up in the world, accompanied by lies, suspicion and misrepresentation by the Press, UEFA, other fans and other clubs. As I said earlier, we’re not going away….but your worry is that Arsenal are hence this article…perhaps the Arsenal crowd will then have to drop that sense of self-entitlement and you’d be better off for it. My whole beef here is that the original article perpetuated those lies and untruths. If our name hadn’t been dragged through the mud, I wouldn’t be here now perhaps that’s the most relevant thing of all.
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City have 3 £40m+ wingers. Arsenal have 1.
City have 2 £40m+ strikers. Arsenal have 1.
City have 3 £30m+ attacking midfielders. Arsenal have 1.
City have 3 £40m+ centre backs, Arsenal have 1.
You say Arsenal refuse to spend the cash, you are right, we do not use our finances to the full. but the fact is, City have outspent Arsenal by £770m to £270m. We do not have £500m sitting there in the bank,.
And once again you have missed the point of this article. It is not to slate City. I do not care how an Arab oilman decides to spend his ill-gotten billions.
The article was to highlight just how far we are behind and the main reason why, and that is the funds available for transfer.
As a final thought, I have seen more success in my 33 years as an Arsenal fan then you will see as a City fan in your lifetime, so I have no reason to be bitter.
I would rather see my club win nothing than sell out to an Arab oilman and be a rich mans play thing.
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“I would rather not compete for the league, then sell out to someone who I do not want anywhere near my club, being in debt with them.”
Then we are dead as a major club – I used to think like that when it was just a ‘sugar daddy’ like RA rocking up at CFC but MCFC are to all practical effects, bankrolled by a country.
My own suspicion is that once the stadium debt is fully paid off, Stan K. will put the club up for sale….and that will take some one with very deep pockets to buy us so that means a SWF / SPIV of the sort that obtained MCFC.
Unless HMG steps in and changes the law of the land to prevent financial doping, we’re toast….just as LFC, THFC are.
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There’s an Arsenal fan talking about financial doping again. If the billionaire Slick Stan put his hand in his pocket and flung you a few hundred million, seeing as the initial article referenced your poor commercial activity, this would meam you’re receiving money you haven’t earned yourselves. Would you not consider that to be financial doping? In fact, you’d be no different to City or Chelsea. A rich owner putting his money into his own asset. So I ask again, would you not consider that to be financial doping?
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Thanks…you’ve just made exactly the point I was making….that in the age of financial doping, the only way for AFC to consistently challenge for top honours is to dope financially because when it was MUFC who were the single financial powerhouse in the EPL, that was one thing….now there are three….
– MUFC – kept afloat by the banks and first class merchandising setup;
– CFC – relying in reality on one man underwriting the loans;
-MUFC – to all practical purposes owned by a country…and yes you can talk of MUFC being a ‘private purchase’ but the reality is that the SM was only in the position to purchase MCFC and arrange ‘over-generous’ sponsorship deals because he’s fronting for a state…
.
…that fact may pain some MCFC fans who want to see their club as being successful on its own terms, but I know (and I’m aware anecdote isn’t data) more than a few MCFC fans who go to games and cheerfully admit the obvious…..without SM being connected to the ruling family and govt,, MCFC as we know it today would not exist…but then the owners of MCFC are thinking about a lot more than football….
My opinion is since now that everyone is aware of the MUFC / PSG state supported model and the authorities allow it, then AFC have no choice but to go the same way to cut down on development time.
I wonder if Stan K. is in fact waiting for just that moment….for the debt on the stadium to finally clear and then for a SWF / SPIV from say China to move in and buy the club for a serious amount of money.
Don’t forget at the moment, Ms. Staveley is leading talks for her ME backers to buy NUFC….those backers will clearly be prepared to ‘spend big’ to reap rewards otherwise there is no point in buying NUFC.
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Almost everything you’ve stated there is opinion, not fact and I’m only interested in fact. I say almost because your assertion aboit Chelsea is right and we can all see that Chelsea are less of a force because Abramovic is slowly withdrawing his financial support.
As much as you don’t want to be, you *are* wrong about Sheikh Mansour. He’s a part of the ruling family, yes, but if City were bought as part of a State purchase, others, there, would be entitled to have their say on us and they can’t because City were a private purchase by an extremely wealthy individual. That is the meat of the matter.
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LB,
Your shear defensiveness over the matter makes me wonder if you “doth protest too much”.
Your owner, HH Sheikh Mansour, only gets his cash from state activities that he helps to run, he then uses that cash to fund the purchase of private businesses…..it would be like me becoming PM, appointing you as Deputy PM and also appointing you to manage a vast pile of cash along with allowing you a credit line ultimately underwritten by the UK taxpayer, to go out and make ‘private purchases’.
Of course there is no one speaking out in HH’s home state….the authorities there take an extremely dim view of those who even hint that the actions of any member of the govt. may not be totally appropriate (something I rather suspect you know but can’t mention as it rather hammers the point you were making).
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I’m not especially defensive about this, I’m just ticked off with the inaccurate reporting that we regularly see in the Press. Usually reported by people with an axe to grind so it suits them to misrepresent City and it’s that, that really gets my goat.
Having said that, I do agree with you that the society in many of the Arab countries, including the UAE (no getting away from it) is not right. That culture is not one that we would recognise or condone, here. It’s one country amongst many, worldwide, that needs to take a bloody good look at itself and effect change for the betterment of all its citizens.
It’s curious as to where football discussions can lead.
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What a disingenuous article and I always have a spare chuckle when the morons bring up the word “value” as some sort of tangible quantitative justification of the last 13 years of failure. It comes across as defiant “fans”, disappointed to see their hero fail, found firstly in the hope of FFS and later the excuse of petrodollars an ideological weapon with which to continue the fight.
while you’re here, Spare a thought for Clubs such as Bayern, Juventus and Atletico etc that have out-performed us over the recent past with vastly inferior financials. I wonder why that is? Some may think that indulging an out of date manager would be a good starting point.
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Juventus and Bayern operate in a different world where they are one team leagues and they can cherry pick from their domestic opponents, the best players.
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Bayern, agreed, but how do you explain Bonucci going to A.C. Milan then?
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AC Milan got money this summer. Juventus have had the last 6 years unopposed in the transfer market
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Not a one team league then.
The presence of Inter, Napoli, Roma, etc, also confirms that.
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6 titles in 6 years. It clearly is a one team league
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