‘How would Arsenal make a saving by paying up Mesut Ozil’s contract?’ I saw for a few ask in response to John Cross’s article declaring that “Arsenal offer to pay off Mesut Ozil’s £18m contract to free up funds for new recruits”.
The question is a reasonable one that is worthwhile asking and exploring.
Were Arsenal to just pay off Ozil’s last year of his contract, it would save the club nothing. However if Arsenal can negotiate a pay off, they might be able to free up some cash even if they do end up paying the full value of the contract.
Arsenal could agree with Ozil that he defers some of his salary.
That he takes £10million now to cancel his contract and a further £8million in 12 months time. This would free up £8million in funds this summer, although reduce next summers funds by £8million.
‘But why would Ozil accept being paid late’ you ask. Another reasonable question.
By having his contract cancelled, Ozil would be free to join another side, and drawing a salary from them.
So he could pocket £10million now, sign a £6.5million a year deal with a Turkish side (£125k a week), and pick up a further £8million in 12 months time for Arsenal.
Instead of pocketing £18million over 12 months, he would be picking up £24.5million.
The advantage for Arsenal is it would immediately free up £8million to be invested elsewhere on wages and amortised transfer fees.
For £8million, Arsenal could pay a new signing £75,000 a week (£3.9m a year).
If they secure the new player on a 5 year deal, Arsenal could pay out a £20million transfer fee and amortise it over the length of the contract – meaning that Arsenal only “declare” 1/5 of the transfer fee each year the player is at the club.
So for 2020/21, that new player would cost Arsenal ~£7.9million (£3.9million in salary, £5million in amortised transfer fee).
It might not seem like much, but ending Ozil’s contract and kicking some of his wage down the road would allow Arsenal to sign someone like Gabriel Magalhaes – or the majority of his transfer and salary at least.
Of course, it would impact Arsenal’s transfer budget next season, but the hope would by then fans are back in the ground and Arsenal are back in the Champions League. At which point paying Ozil £8million for 2021/22 would not have the impact on finances it would now.
The other option that is widely known is that Arsenal “top up” his wages.
So lets say he joins Istanbul Basaksehir, who are after a marques player to replace outgoing Robinho, Arsenal would make up the difference between what the Turkish outfit are paying him and what he would have received from Arsenal.
So if he agrees a £125k a week deal with a side, Arsenal pay him £225k a week. The saving is still the same in £8million, but Arsenal would not need to pay him his contract in full. Just the difference.
The financial benefits of getting Ozil off the books are huge, and will allow Edu and Arteta to bring in additional players who and hungry, have the desire to play football and want to be here.
Note: Some will reply to this that “Ozil does not need to agree to end his contract or leave Arsenal”. Those people are right, but they are also not really Arsenal fans. They are more interested in defending Ozil then wanting what is best for Arsenal.