With all the talk around amortisation, it is easy to forget a key component of transfers – clubs either need to have the cash in the bank of credit / loan facility available to actually pay for the player.
Whilst amortisation allows the cost of transfers to be spread over the length of the players contract within the annual accounts, teams still need to stump on the entire transfer fee upfront. That is, of course, unless they can agree on instalment terms with the selling club. And this is what Arsenal have done with Martin Zubimendi.
Rather than paying the £51 million release clause upfront, Arsenal have agreed a deal in the region of £56 million, spread over a reported 3-years.
That will mean this summer our cash outlay on Zubimendi will be around £19 million. A short-term “saving” of £37 million.
Now some will criticise Arsenal for “overpaying” for Zubimendi and merely “pushing debt down the road”. But there are some important factors to take into account.
Cash balance
Arsenal’s most recent financial results (year ending May 31, 2024) showed a cash balance of £66.8 million.
This is the time of year when our cash balance is at its lowest – almost all costs for the season have been paid for, and the next batch of season ticket money, broadcasting and sponsorship has not yet hit the accounts. However, much of this incoming cash already earmarked for existing costs (next years salary, stadium running costs, existing transfer amortisation costs).
It is easy to say “We can spend £200 million, amortise it over 5-years and it only costs us £40 million”. But whilst this is correct for the accounts, you still need to have the £200 million upfront. And that is a huge chunk of cash to have in the bank.
What about a loan?
Most football clubs have loan or credit facilities that they are allowed to draw down on.
This facility is not like a loan you and me will get, where we need £10k, go to the bank and get given a £10k loan. What clubs have is a loan facility of, say, £100 million. But they do not get given the £100m straight away (like we would in the loan). What they essential get is a line of £100m credit which they can then access as and when they need it.
But that credit is not interest free. And also why use a credit or loan facility if you do not need to?
Often, paying a little bit extra to the selling club can cost less than the interest associated with drawing down on your credit facility.
And likewise, you want to keep a credit facility for “emergencies”. If you can do a deal with the selling club with instalments, you then do not dip into your available facility and still have that available. The next deal you do, the selling club may not wish to do a deal in instalments.
But why would the selling club accept instalments?
It is often asked why selling clubs would sell a player and then receive the money over 3 or 5 years.
The simple version of the article is that the selling club sells the debt to a financing company. The club will usually recieve 5-8% less than the money owed to them, with that margin being the financing companies profit. Therefore the buying club has to pay over the agreed minimum release clause to cover the cost of factoring.
In this case, Real Sociedad would still get their £51m this summer. Arsenal get to spread the deal out over 3 years freeing up cash (and credit facility if reuiqred) to make additional signings, and the factoring company makes a cool £5-6m for servicing the debt.
So when do we expect Zubimendi to be announced? I would either say today or Monday.
Keenos
The full set of 12 Arsenal legends pint glasses is now up on the store!
So news was yesterday that Arsenal’s contract talks with Thomas Partey have broken down.
The feeling is Partey, having seen the money on offer elsewhere (£425k to Leroy Sane in Turkey FFS!) has had his head turned. He is now looking for an increase on his £200k a week wages, despite his role in the team likely to diminish next season.
Now I do not blame Partey, nor will I accept others calling him “greedy”. This is potentially his last big contract and he was always going to see how big of a retirement fund top up he could get. And if we are honest, had a big enough offer came in from Saudi Arabia last summer, we would have been quick enough to dump him.
Partey will likely swan off to Turkey. Play at the last 3 or 4 years of his career and earn in excess of £60m before disappearing back to Ghana in retirement where he will live like a king for the rest of his life.
Arsenal would have been banking on Partey to sign a new contract. A 2+1 year deal was on the table and everything indicated that he was happy having had his best season in a while in 2024/25. The confidence in him staying led us to not even try and keep Jorginho for one more season. The Brazilian-Italian was sent on his way with our best well wishes.
Arsenal were already in the market for a top defensive midfielder. A new striker and left winger were also a priority. These 3 positions will likely cost us close to £200m to recruit for. There would not have been much left in the kitty for a Partey replacement. So what are Arsenal’s options now?
Go big or give up
Last season we missed out on a big opportunity to win the league.
We were tracking 3 main players – Martin Zubimendi, Nico Williams and Benjamin Sesko. Had we got all 3, we would have romped the league. Even just the one additional forward player and we would have pipped Liverpool, in my opinion.
Deals could not be made for any of them and rather than recruit, we kept our powder dry, and in doing so went into last season with cash in the bank and a squad not as strong as it could be.
We would have committed around £200m to this summer’s transfer spending. the new midfielder, striker, winger and keeper. A 2nd defensive midfielder could take that closer to £250m. A huge sum. But that additional £50m could be the difference between us winning the league and finishing 2nd again.
How long will it be until William Saliba, Bukayo Saka, Declan Rice et al begin to get itchy feet? they would have seen the careers of Son and Harry Kane at Tottenham and realise that they missed out on a lot of medals having been sold a dream.
Realistically, this squad has maybe 1 or 2 more years together. We need to win the league in that time to stop our gems getting their heads turned by Barcelona, Real Madrid or Manchester City.
Martin Zubimendi is a done deal at around £52million. We all expect him to join after his holiday (or on 1 July depending on who you believe). But to expect him to hit the ground running in a new league is unreasonable. And if he does not, we could be out of the title race before it has begun.
Partey would have been the perfect foil for Zubimendi whilst he settled. He also offered a more physical, dominating presence to be an alternative to Zubimendi’s guile. And there would also have been plenty of games where both could have played.
If we are looking at “off the shelf Premier League ready”, then we are probably considering one of Aston Villa pair Amadou Onana or Boubacar Kamara.
But would either of them really want to come to play second fiddle to Zubimendi? And are they a better option in that deepest midfield position than Declan Rice? That is the issue with going big.
Internal solution
A lot of the talk elsewhere will be “Arsenal need to replace Thomas Partey”. But actually we do not. We need to replace Jorginho.
Zubimendi is coming in. He will be first choice defensive midfield. He is the man replacing Partey in Mikel Arteta’s strongest XI. And with no Partey, that leaves Arsenal have 3 players for two positions – Zubimendi (yes, I am counting him. The deal is done), Declan Rice and Mikel Merino. Last season we have 4 options, with Jorginho being 4th choice.
For me, if we were to spend £50m+ on a second defensive midfielder besides Zubimendi, they would need to be a better option than Declan Rice.
As it stands, if Zubimendi got injured, Rice would go deep and Merino would play regularly in his more favoured position. A midfield of Rice, Merino and Odegaard is still a title chasing midfield.
I am not sure wether Onana, Rice and Odegaard is a better trio that what is mentioned above. Rice is more of an upgrade on Onana than he is on Merino. So why then do we need to spend £50m to replace Jorginho?
Last season, Jorginho played 705 minutes of Premier League football. That is what we are essentially looking to replace. Not Partey’s 2,800 minutes (of course a better option than Partey could have seen the workload shared more and we might not have run out of steam).
Instead of thinking “who do we need to sign to be 2nd choice defensive midfielder”, everything turns on its head when we change the narrative to “we need a 4th choice midfielder”.
Now if we are looking at 4th choice midfielders, you are looking at the likes of Curtis Jones and Endo at Liverpool. Solid players who can come in and do a job if needed. And the 4th choice midfielder would only need to come in if both Rice and Zubimendi were out. So why not look internally?
The first option if both Rice and Zubimendi were out would be to play Merino deeper, and then move Kai Havertz into the attacking midfield slot. It would certainly be a good option against many teams, but would not perhaps have the defensive solidity against top sides.
We could also look to put on of the full backs there if needed.
Miles Lewis-Skelly is the name I have seen many mentioned – he played a lot of his youth career in the middle. But only 18, he is no Cesc Fabregas in the middle of the park. I would prefer we keep progressing his career at left back then risk destroying it (Rico Lewis style) by chopping and changing him.
You then have Jurrien Timber. He often steps into central midfield from full back, and for Ajax he would often push up from central defensive to create a midfield overload. I am sure if called upon he would represent a solid defensive option in the middle of the park.
Finally, you have a forgotten man (and hear me out) – Albert Sambi Lokonga.
The expectation was Lokonga would depart us this summer. Arsenal triggered a 1-year extension in his contract through to 2026 to cash in on him. But if Partey departs, he could have a role to play as 4th choice defensive midfielder.
Last season Lokonga played nearly 1500 La Liga minutes for a Sevilla side that survived relegation by 1 point. He was a regular starter in midfield when fit.
The year before it was over 1300 minutes for Luton Town, who got relegated. Again, he was a regular starter when fit. Meanwhile his 2022/23 loan spell saw him play 1100 minutes for Crystal Palace.
Whilst not a world beater, Lokonga has played nearly 4000 minutes of top flight football in the last three years in England and Spain. You do not do that if you are a bad player.
My view is that Lokonga could be that cheap option as 4th choice midfielder. He only needs to replace Jorhginho’s minutes, remember. And I am not sure he is much worse than Curtis Jones or Endo.. The big concern, however, is in the last two years he has suffered 4 big hamstring injuries.
There is no guarantee that were Rice and Zubimendi to be out, that Lokonga would still be fit. But regardless, he still needs to be in consideration if you also add in the options of MLS, Timber and Havertz.
Three internal options to the solution rather than spending £50m on one.
Market opportunity
Lastly, we often here the term “market opportunity”. This is when clubs are not overly looking for a player, but suddenly they are approached by an agent with the availability of someone. And it is a deal too good to turn down. Mesut Ozil was certainly a market opportunity.
If we go into pre-season excepting that we will not be spending £50m to replace Jorginho, and are happy for MLS, Timber, Havertz and Lokonga to be our 4th choice midfield, we might decide to take up a market opportunity if one arises.
Now for me, that opportunity would have to be a player around £30m and is someone who is better than being a single season stop gap. No more loan deals please.
If Aston Villa’s finances are to be believed, than the aforementioned Kamara might be available this summer for £30m. That would be a market opportunity.
And a former Villan is also being touted around Europe – Douglas Luiz.
The Juventus player is apparently available as the Old Lady look to raise cash to finance their summer. And the figure being quoted is £30m. He earns around £160 a week for Juve.
Whilst not an out and out defensive midfielder, Luiz played as the deepest midfielder for the majority of his Villa career. Although we must caveat that with he was often part of a defensive midfield two, and sometimes even three.
That being said, he would give us the option of either going with Rice as the deepest midfielder, and either Luiz or Merino further forward, or Luiz deepest and keep Rice in that more advanced position. Luiz and Merino could also co-exist in the same starting XI.
I am sure over the course of the summer, more market opportunities might arise, and we have to be ready to pounce if the deal is good enough.
Whilst losing Partey will be a frustration, we need to ensure that we do not siphon off funds from our main attacking targets to finance a move for a 4th choice central midfielder. Sesko and Rodrygo (if rumours are believed to be true) need to remain our priority.
And if getting both of them means we need to keep Lokonga around as 4th choice midfielder (IMO Havertz and Timber both still start ahead of him), then so be it.
And then if someone like Douglas Luiz does come on the market after we have signed our two primary attacking targets, then we need to free up the funds to get them.
Enjoy your Wednesday.
Keenos
The full set of 12 Arsenal legends pint glasses is now up on the store!
Aston Villa are the worst run club in the Premier League. I am not just talking about in PSR terms, but actually in normal, running a business terms.
Their owners took a huge risk, gambling the clubs future and overspending in the hope they would become regulars in the Champions League.
Last season, their wage to turnover ratio was 96%. That means for every £1 they earned, 0.96p was spent on wages. In comparison, Arsenal’s was 53%, Manchester City 57% and Liverpool 63%. That leaves 4p in the pound to spend on other costs such as transfers and keeping the lights on.
Now some (including Aston Villa fans) will say that this is showing ambition. But what it actually is unsustainable. The owners can only continue to find ways to prop the club up for so long.
And it does not take much for everything to collapse. And that “not much” has happened.
Not getting Champions League football is a disaster for Aston Villa. It will cost them in the region of £100m in broadcasting revenue, sponsorship and gate receipts.
Following last season foray in the Champions League, their owners would have been banking on the club consistently breaking into Europe’s premier competition. And with the consistent additional revenue, that wages to turnover ratio would quickly drop.
Instead, Villa collapsed on the final day and they are facing serious financial trouble. The gamble did not pay off.
Clubs will now be circling around Villa, who clearly have to sell to not only stay within PSR rules, but also just to survive. If they do not bring in quick revenue from transfers and lower that wage bill, they will be in serious trouble. And again, this is not serious trouble due to PSR, it is serious trouble because they can not afford to keep overspending.
I am sure Arsenal will be looking at Villa and considering what bargains we could grab.
Boubacar Kamara
The defensive midfielder signed for Aston Villa in 2022 for around £22m. He currently has a book value of £8.8m – which means that selling him for anything over this figure will be considered profit in the accounts.
The 25-year-old has two years left on his current contract, with talks rumoured to have stalled following Villa’s failure to qualify for the Champions League. Talk is that he could be shipped off to Saudi Arabia.
On a salary of £150k a week, Kamara is one of Aston Villa’s top earners. His high salary combined with his low book value makes him a prime option to be sold.
A solid defensive midfielder, Kamara could be available for as little as £30m if he turns down the advances of Saudi. He could be a viable option to replace Thomas Parety should the Ghanian depart.
Ollie Watkins
The boyhood Arsenal fan.
Watkins was extremely close to joining Arsenal in January. A deal collapsed once Jhon Duran’s move to Saudi Arabia was confirmed.
Now 29, you feel this summer might be the last opportunity for Watkins to get his move to a big club, having seen his career progress from League Two to the Premier League in just 3 seasons.
Watkins joined Villa in 2020 for £28m, and signed a new deal in 2023 taking him through 2028. He currently has a book value of around £7m. Like with Kamara, any sale over this figure would be profit.
The English striker earns around £130k a week, making him Villa’s 6th highest paid player.
Whilst Villa will not want to lose their talisman, having seen Duran also leave in January, they have recently recruited Donyell Malen. And a Watkins departure could free up the cash to bring back Marcus Rashford.
Whilst Rashford may cost Villa more in wages and transfer fee, £30-40m in profit hitting their books would far outweigh what Rashford would cost in a single season (amortised transfer fee + wages). And as we have seen with Villa’s owners, they are short termist and how they afford Rashford from 2026/27 will be “next years problem”.
“Where does Watkins fit is” will be the headache for Arsenal.
Were we to sign Benjamin Sesko or Viktor Gyokeres, we would not necessarily need a 3rd striker (alongside Kai Havertz, and discounting Gabriel Jesus). but that would not mean a deal for Watkins would be off the table.
Watkins has played out left for much of his career, and even as a striker he has tended to drift to the left hand side ala Thierry Henry.
I can certainly see him being a left-sided forward option, playing a little more inside than Gabriel Martinelli, off the big man up top. He would then find that space between centre back and right back and unleash terror as a finisher rather than a creator.
Watkins would also be an option up top. An alternative problem to a Sesko or Havertz.
There would certainly be enough games to accommodate Sesko, Havertz, Watkins and Martinelli in the squad.
Amadou Onana
In Kamara, Onana, John McGinn, Youri Tielemans and Ross Barkley, Aston Villa are well stocked in the central midfield area.
Kamara earns more than Onana and has a lower book value, enabling Villa to clear more profit. He would be their first option to be sold.
However, if Arsenal prefer Onana as a replacement for Partey, a deal could also happen.
Onana only joined Villa last summer for £50m, so still has a book value of £40m. That would mean an offer close to £70m would be needed to give them the same “profit” as what selling Kamara would be.
I would be surprised if Arsenal would stretch to £70m having secured Martin Zubimendi for £50m. Whoever comes in will basically be Zubimendi’s alternative. However, if things get desperate for Villa, they may be forced to sell for closer to £40m just to get Onana’s salary off the wage bill.
Morgan Rogers
The Englishman had his breakthrough season last year, and in the second half of the season he began to get the goals and assists thto back up his dynamic play.
Turning 23 in July, Rogers joined Villa for just £8m 18 months ago, meaning he has a very low book value.
Whilst Villa would not want to see him go – he is deemed the future of the club from an attacking point of view, they might have no choice over the matter. An offer over £60m might be too much for them to turn down considering the considerable profit it will allow Villa to bank.
In terms of fitting in at Arsenal, Rogers best performances have come centrally as a dynamic, ball carrying attacking midfielder. He has bundles of talent and you could certainly see him adapting to playing out wide on the left hand side, with the licence to cut inside and influence the game more centrally.
Mikel Arteta will like Rogers versatility, and he would certainly be an upgrade on Leandro Trossard as a man who can cover all attacking positions – at wide, centrally and up top.
The sticking point would be wether he is enough of an upgrade on Gabriel Martinelli to justify us spending £60m+ on him. I am not sure he is.
Anyone else from the Villa team you would take? Let us know in the comments (just do not reply with the clown of a keeper they have who cost them Champions League football).
She Wore A Yellow Ribbon 