In recent weeks, one thing that has come to mind more often than not when discussing Arsenal finances is how we have criminally undersold players.
There has been a lot of talk about how Stan Kroenke needs to invest in the team – pumping in his own money. Many people are pointing to Liverpool, claiming that they have owners who are bank rolling the club to success.
This is completely fictional. The Liverpool owners are no different to Stan Kroenke. They believe in a self-sufficient model, making the money that the side brings in available for transfers.
The four main sources of income for all clubs are TV revenue, gate receipts, commercial revenue and player sales.
Due to the expansion of their new stadium, Liverpool’s match day revenue would have closed up on Arsenal. Arsenal’s lack of Champions League football would also mean that the TV figure is reversed. Ultimately, over the last 18 months, Liverpool and Arsenal have bought in similar revenue.
So how have Liverpool bank rolled the signings of the likes of Virgil van Dijk and Alisson?
The simple answer is through buying and selling well.
Over the last 5 years, Liverpool have spent nearly £200m more than Arsenal. the total expenditure of both clubs is:
Liverpool: £633m
Arsenal: £434m
It is the net spend which is interesting though, as Arsenal have actually outspent Liverpool:
Arsenal: £255m
Liverpool: £211m
The high spend for Liverpool has been driven by player sales – they have raised £422m over the last 5 years. This is against Arsenal who have raised just £179m.
Liverpool have sold very well. But Arsenal have also sold very poorly.
Selling poorly is not a new thing for Arsenal. It has been going on for over a decade.
Think back to Partick Vieira. We only received £13,700,000 for the club captain when selling him to Juventus. A year later we sold Thierry Henry to Barcelona for just £16,100,000.
We allowed both player to enter the last year of their contract. Both were sold a year too late, reducing their transfer fees from close to £40m to less than £20m.
Then you have Robin van Persie. The Premier League top scorer sold for just £22,000,000 to Manchester United. Again, he was 12 months away from his contract running out.
We then have the likes of Wojciech Szczęsny and Serge Gnabry. We got less than £15,000,000 combined for the pair. Like those before them, both were allowed to leave on the cheap due to their contract situation. Had they not had 12 months left on their contract, we probably could have commanded closer to £50million for the pair (Szczęsny £30m; Gnabry £20m).
We then have even more recent deals.
The club lost Jack Wilshere on a free transfer and are set to lose Aaron Ramsey on the same. We also had to let Alexis Sanchez go to Manchester United last January.
Wilshere, Ramsey and Sanchez gone, and all we got in exchange was Henrikh Mkhitaryan.
That trio is around £100m worth of talent. Lost had they been sold a year earlier. Add in Danny Welbeck and you are talking about over £100m in players over a 12 month period.
There are two main issues the club face. and need to change.
The first is the wage bill.
The total that we spend on wages is not to dissimilar to Liverpool – they spend £210m a year on wage; Arsenal £199m.
Arsenal have the 5th highest wage bill in the league, so reducing it is not really up for discussion if we want to compete.
The problem Arsenal have is that over the last 5-or-so years we have given some very average players a high salary.
Arsene Wenger and Ivan Gazidis had a fairly socialist outlook when it came to the wage bill. They believed that the lowest and highest earners should not differ by too much.
This led to us underpaying the top players (prior to Mesut Ozil) and overpaying poor players – the likes of Carl Jenkinson on £45,000 a week.
This mean that when it came to selling the likes of Lucas Perez, Kieran Gibbs and Francis Coquelin, we were not able to command big transfer fees.
Those players did not want to take a wage drop (for obvious reasons) when leaving the club. This results in the buying club offering Arsenal less in transfer fees so that they can cover the cost of higher wages.
If Arsenal are going to compete again, they need to start making more money from player sales. This can only be done if we have better control over the wage bill.
The second factor is we have let too many players enter the last year of their contract.
From van Persie to Ramsey, allowing a player to enter his last 12 months either means we have to take a reduced fee (in van Persie’s case) or no fee at all (Ramsey, Welbeck, Wilshere).
Poor player sales has cost us big in the last 5 years.
Gnabry, Sanchez, Szczęsny, Wilshere, Welbeck and Ramsey have all left (or are set to leave) the club. Between them we have received less than £15million and Mkhitaryan.
Close to £200m has walked out of the door.
Had we sold a year earlier, got a market-rate transfer fee, we could have gone out and bought Virgil van Dijk, Alisson and Mo Salah.
We did not sell a year earlier, and it has led to an underfunded squad.
It is clearly not good enough.
Back in October Raul Sanllehi spoke about the situation:
“In general, I do believe that a player’s contract should never go to the last year, as a policy,” said Sanllehi in a wide-ranging interview with the Sunday Telegraph. “But I don’t think I am inventing the wheel. Anybody could agree on that. Normally, the contracts of the players are for five years. You need to have a clear idea of what you want to do with that player when he is in the third year, at the latest.”
It is clear that Arsenal are changing, but the damage in the short term has already been done. A lot of these contracts, a lot of the deals, were prior to Sven Mislintat and Raul Sanllehi coming in. But it is time to draw a line in the sand.
We have seen the likes of Bernd Leno and Lucas Torreira come in on fairly low wages. Matteo Guendouzi is reportedly only on £15,000 a week.
It will take a while for Arsenal to turnover the playing staff. We need to cut our losses on the likes of Jenkinson, Welbeck and Petr Cech, and replace them with cheaper, better options.
Moving forward I back Mislintat and Sanllehi to sort out the state of our squad – to stop losing players on the cheap or for free. To sell high and reinvest.
Like Liverpool selling Coutinho and Saurez, we might have to sell a star player or two – the likes of Lucas Torriera – to fund further transfers. To reinvest again.
Poor transfer dealings have led to Arsenal losing up to £200m in revenue over the last 5 years. The past is the past and there is no point dwelling on the mistakes made too much.
Back the new management team to get things right.
Keenos
Follow @KeenosAFC
She Wore A Yellow Ribbon 
Fantastic article. I’ve been saying the same since Pool sold Coutinho. It’s as if Arsenal was run by total idiots. I thought Wenger had a degree in Economy? You don’t need a degree to know you don’t give Jenkinson 45k a week. 35m on Mustafi and Xhaka each, we got mugged right here as well. And now Elneny is still in the squad, stealing a living with no contribution to the team. Start by selling Ramsey this month and Elneny to follow. I’m sure ie. Juve or PSG would be thrilled with having Ramsey now rather than summer.
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well said SHE WORE……….AFC
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Well played Arsene Wenger – aided and abetted by Gazidis. How badly you messed up ! And it is going to take a further period to correct the problems …. Ozil, Mhkitaryan, Ramsey …..
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where have all the in wenger we trust blinkered fans gone? we needed a change and new vision fresh approach years before, wenger should have walked away much sooner. Emery has done well but with the neglect wenger gave our defence over the years has a big task on his hands to get this sorted…..AFC
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Hmmmm.. sounds like the AFC Board are getting jumpy as the “Arsenal Fans” are Not going to take BS from from AFC any more. As “RT” from AFTV said “why are the fans been milked every year with high season ticket prices and AFC go shopping for players at Primark?” And as “Troops” of AFTV said “We have got the banners coming and Kroenke will feel the heat soon”.
I have written on facts too. It was July 2018, when AFC, Stan Kroenke having “Sacked Wenger” officially announced that Arsenal only had £50m budget for transfers in that window. Given that Wenger had left a “leaky defence” and all the fiasco with Sanchez and Ozil; Arsenal could not attract a top end manager, not even the choice of Ivan Gazidis because Arsenal needed upwards of £150m to compete for “Top 4 EPL” in the current transfer market.
Then Gazidis announced that Kroenke had released another £20m and finally Arsenal spent over £72m during that transfer window. Interestingly the “Board of AFC” were chasing “Ousmane Dembele” from Barcelona as Arsenal needed a dedicated top end “Marquee” winger, but Barcelona wanted £109m. Sven Mislintat(head of recruitment AFC), who had arranged Ousmane Dembele transfer to Barcelona and Raul Sanllehi(Head of Football AFC), who came from Barcelona fc used all their contacts and influence and eventually or we were told had agreement with Barcelona for a deal to sign “Ousmane Dembele”; £9m up front and £100m August 2019.
So, the £20m injection by Kroenke (He was only 67% major share holder at the time) and the £100m deal for Ousmane Dembele in August 2018 all were engineered even before the £300m Adidas contract was completed. So, where was the Money coming from? Creative Accounting?
The Ousmane Dembele deal fell through; we are told though all the paper work was completed, unfortunately it did not land on the Barcelona executive desk before deadline!
Now, Stan Kroenke has instructed Unai Emery that he Must get Arsenal in the “top 4 EPL” this season. Brilliant but Emery must have the tools to compete with Man. City, Liverpool, Chelsea. Man. Utd and Tottenham. Stan Kroenke is fully aware of the facts. The facts as we know it are; AFC has £100m (from apportioned for Dembele deal) and £60m from the Adidas contract which is now completed, (i.e.) £160m available for the January 2019 transfer window with some creative accounting and without more Stan Kroenke injections, though Kroenke is now the 100% shareholder of AFC.
Your article is informing and amusing as it is disinformation engineered to obfuscate and dampen the “Fans Wrath” that will culminate in mayhem and disruption at the Emirates and the fans will withhold their funds from AFC and The Players will have negative mentality and chaos at AFC.. Stan Kroenke only has to give instruction to release the funds available now and Arsenal can sign Nicolas Pepe(winger str), Hakim Ziyeck(attacking MF), Keylor Nevas(GK) and possibly Daycot Upamecano(CB) by selling some of the deadwood at AFC Now.
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A hugely arbitrary use of numbers which is subsequently misleading. If you look at spending over the past three years you get a completely different picture. It is quite clear that your choice was designed to prove a point. Anybody with a rudimentary understanding of proper research can pull this story apart in an instant. Completely lacking in credibility for all but the most gullible of readers I’m afraid.
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Go on then…pick it apart…
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Unsurprisingly, spot on!
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Keenos,
I don’t know how young you are but you are right about losing Sanchez, Wilshire and in the future Ramsey and Welbeck. Those last 3 did not cost that much and even Alexis was a good price.
I know this goes a long way back but Arsenal bought Anelka for 500k and sold for 24 million (48 times the buying price).
Kolo Toure for 500k and sold for 16,5M (33 times the buying price). Adebayor 6M and sold for 25M.
Van Persie in for 3,5M, out for 22M.
Fabrecas in for 500k and out for 35M (70 times the buying price althought should have gotten more as money).
The same things for Nasri, Overmars, Petit etc.
So it’s not all that bad.
Moneywise the profit was not that much back then though.
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And wasn’t it also that Arsenal got 20m+20M from olivier giroud plus theo walcott in january when both could have been signed for free in the summer. At least something since neither really played at that moment. Coq was great with Cazorla but without him was not good, 10-15M for him too?
That money for keeping Caz and Tomáš Rosický thought cost a lot when they were injured so much espec. for the last 2 years (plus Merts).
So yeah there’s been a lot of mess ups since David Dein left but you left a lot out.
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