Arsenal add £10million to wage bill

After writing a couple of successful financial blogs over the summer, I have had a couple of people ask me about Arsenal’s wage bill going into 2018/19 and how it differs to last year.

A few of these requests came after the news that Arsenal needed to shift Mohamed Elneny off the wage bill to free up space on our wage bill. And the rumours that Aaron Ramsey was unable to get the wage increase he wanted as Arsenal could not afford it.

Firstly lets address Arsenal needing to sell players as we need to “save on wages”.

This is literally a made up story by the media for hits. Arsenal’s wage bill is not a huge issue. In fact, over the years, we have been heavily criticised by the same media for not paying enough, for paying too low.

Now across to the excellent Swiss Ramble:

These are the latest figures of wage to turnover. As you can see, Arsenal are one of the most efficiently run clubs in this regard.

Of course, in 2017/18 and this season we have lost the Champions League income – worth about £20million a season in TV money, prize money and gate receipts (remembering that it is offset against Europa League TV money, prize money and gate receipts).

Also we have increased our wage bill since then with the acquisitions of Alexandre Lacazette, Pierre Emerick Aubameyang & Henrikh Mkhitaryan on higher wages than those we replaced; and Mesut Ozil’s bumper new contract.

To offset this, we have additional income from our sleeve sponsor deal worth about £10million.

A guestimation is that our current wages to turnover is around 55%, which will put us around Liverpool and Manchester City, and still way below Chelsea.

This brings me to my first conclusion – why are stories being written about Arsenal needing to sell a players due to us being able to service our wage bill, but not clubs who have similar (or more) wages to turnover?

It also shows the awesome Manchester United Commercial Machine.

The two Manchester clubs have very similar wages, easily both having the highest in the Premier League. Yet United spend just 45% of their turnover on wages. This is due to their incredible £580m+ turnover – £150million a year more than Arsenal.

Imagine what Arsenal could achieve if we could increase expenditure on transfer amortisation and wages by £150million a year?

Are the media really trying to paint a story that the 6th richest club in the world are having financial problems? Our accounts are made public. We are certainly not over stretching ourselves to the point where we need to sell sell Mohammed Elneny in order to balance the books.

It must also be remembered that Arsenal gave Mohammed Elneny a new deal this year and yet now suddenly we can not afford it?

But what about the £7million rule?

The rule is a load of rubbish and often written about to support poorly researched articles by those who misunderstand the rules.

It is not a line in the sand that you should not cross. It is not FFP where you get heavily fined if you increase your wage bill by more than £7million.

It is a benchmark bought in during the 2012/13 season to stop clubs spending beyond their means. But that means if a club can show that they are still spending within their means, not much can happen.

Remember, Arsenal with the above guestimate have a 55% wages to turnover. There are other sides closer to 70%. Arsenal are clearly spending within their means.

And since 2013, Arsenal have increased their revenue by about £130million. £7million x 5 (the amount of seasons) is just £35million. So we can clearly prove that our revenue has increased enough to increase the wage bill by well over the £7million a year guideline.

But all this does not make good headlines or sell advertising space.

So on to Arsenal’s wage bill.

By my estimation, our wage bill has increased by about £10million against September 1st 2017.

In that time we have sold the likes of Francis Coquelin, Theo Walcott, Alexis Sanchez, Olivieir Giroud, Lucas Perez and Joel Campbell. As well as Per Mertesacker, Santi Cazorla and Jack Wilshere leaving for free.

These guys combined cost the club about £40m in salaries a year. Nearly 20% of the wage bill!

We have then signed Kostadinos Mavropanos, Pierre-Emerick Aubameyang, Henrikh Mkhtaryan, Bernd Leno, Lucas Torreira, Sokratis, Stephan Lichtsteiner and Matteo Guendouzi.

These guys added ~£35million to the Arsenal wage bill.

Than we have the new Mesut Ozil deal. That contract alone would have increase our wage bill by about £8million.

Add new deals for Granit Xhaka, Calum Chambers, Ainsley Maitland-Niles and Mohamed Elneny as well as other smaller increases (including increase in Employers NI) and it equates to about a £10million increase.

Arsenal did not need to sell to buy in the summer. nor do we need to get rid of Elneny to pay what Aaron Ramsey is demanding.

Ignore the press about us being in a financial crisis. We are one of the best well run (financially) clubs in world football.

Now we just need to increase our commercial revenue to enable us to by more Aubameyang’s of this world, and less Danny Welbeck’s.

Keenos

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