Arsenal chief executive Ivan Gazidis has said the club will be "reinvesting all our available revenue" into players as they pursue major trophies.
According to James Benge of the Evening Standard, Gazidis wrote in the club's financial results:
James Benge @jamesbenge
Gazidis: "We have scaled up our investment in our First Team squad significantly in recent years, spending a net £203 million"2017-9-28 16:08:28
The chief pointed to the captures of Alexandre Lacazette and Sead Kolasinac, keeping Alexis Sanchez and Mesut Ozil, and the club moving on those who were surplus to requirements as evidence the Gunners have improved:
"These decisions, taken as a whole, have again strengthened our squad for this season's competitions. We will continue this long-term approach of progressively reinvesting all our available revenue in our playing resources as we look forward."
Rob Harris of the Associated Press provided the details of Arsenal's financial results:
Rob Harris @RobHarris
Arsenal cash reserves down to £180.1m from £226.5m. Wages up to £199.4m from £195.4m < 47% wages to football revenue ratio2017-9-28 15:49:28
Benge noted the club's cash reserves are still "significant," having "fully self-insured" against the prospect of missing out on the UEFA Champions League, the effects of which will be felt in next year's accounts.
While Gazidis pointed to the Gunners' spending in the last three years, Manchester City spent around £220 million just this summer, and the result is a team that have scored 21 goals and conceded just two in their first six Premier League matches.
Arsenal may not be on the same level financially as the Citizens, but what spending they have done in recent years is not having the desired effect outside of the FA Cup, considering they're in the UEFA Europa League and are still yet to sustain a title challenge.
Lacazette and Kolasinac were strong acquisitions in the summer—Arsenal's "two primary targets," according to Gazidis—but especially given the latter was on a free transfer, there was a great deal more room to improve their options.
That particularly goes for the midfield, even more so after Alex Oxlade-Chamberlain departed to rivals Liverpool.
The Gunners could potentially lose Sanchez, Ozil, Jack Wilshere and Santi Cazorla next year with all their contracts set to expire in the summer, and all four will need replacing if that is the case.
If they're to bring in players of similar quality and make other reinforcements—which they'll need to if they do intend to challenge for top honours beside the FA Cup—they'll need to vastly exceed their current levels of spending.