Why Have Arsenal Got No Money, and What's Their Plan?
When Arsene Wenger left Arsenal in May 2018, a new world was supposed to open up for their supporters.
The protests could finally end, the predictable nature of the club would shift and the glory days might return. That was the dream, anyway. A different reality is already beginning to take hold.
Decisions from the Wenger era have dragged into Unai Emery's reign—and the manager recently revealed the Gunners are at a stage where they can only make loan signings.
His words set off a Twitter explosion as fans far and wide began to release their rage.
At a time when the team are facing a serious challenge to make the top four and qualify for the UEFA Champions League, the club is not able to invest in the squad.
Broke? Arsenal are supposed to be among the world's elite and one of the richest clubs on the planet. It makes little sense that they would suddenly have no money, so here we take a dive into the issues that are holding back their exciting new era.
How's the Spending Gone?
The situation was pretty predictable—top figures at the club knew by the end of last season there was little chance of investment in the winter transfer window, according to B/R sources, because of huge deals being struck in the recent past.
A squad rebuild began under Wenger, and the significant signings of Alexandre Lacazette (£47 million), Henrikh Mkhitaryan and Pierre-Emerick Aubameyang (£57.3 million) enlarged the club's wage bill, with all three taking home six-figure pay packets each week.
Add to that the summer acquisitions of Bernd Leno (£22.5 million), Matteo Guendouzi (£7 million), Lucas Torreira (£27 million), Sokratis Papastathopoulos (£17.7 million) Stefan Lichtsteiner (free), and Arsenal were suddenly staring at severe restrictions when it came to future deals.
The £350,000-per-week Mesut Ozil contract put further strain on their financial outgoings, but the club still felt the investments would pay off and see the Gunners through to the end of the 2018/19 campaign.
But remember that they have had a change at the helm, with Wenger and various members of staff leaving the club. The former manager alone was given an £11 million pay-off.
And on top of that, the club has failed to strike good deals for players who have left.
A report from the Daily Cannon blog explained how the club has brought in a total of just £77 million for Johan Djourou, Denilson, Andrei Arshavin, Andre Santos, Marouane Chamakh, Sebastian Squillaci, Gervinho, Nicklas Bendtner, Lukas Fabianski, Bacary Sagna, Lukas Podolski, Serge Gnabry, Tomas Rosicky, Abou Diaby, Kieran Gibbs, Gabriel Paulista, Wojciech Szczesny, Francis Coquelin, Oliver Giroud, Santi Cazorla, Jack Wilshere, Lucas Perez, Joel Campbell, Mathieu Debuchy and Jeff Reine-Adelaide.
Matthew Wade, who wrote the article, told Bleacher Report: "Incoming and outgoing transfers at the club have been mismanaged in the past five years, paying over the odds for some and letting others go for less than they should have. On the field, we have been in decline, so no extra money has been coming in from prizes or sponsorship. It's hard to grow commercially when not successful."
The Ozil Problem
Mesut Ozil's situation is perhaps the most frustrating. With his contract expiring and speculation growing that he would leave the club at the end of last season, Wenger and then-chief executive Ivan Gazidis agreed to terms that would make him the club's highest-paid player in history.
Traditionally, the Frenchman never would have thought of the deal as good business, but in a fast-moving market it was felt they would not be able to replace him with anyone cheaper.
It was sold as a good piece of business to fans, and the hope was—along with Alexandre Lacazette and Pierre-Emerick Aubameyang—he would have fresh motivation to reach new levels. Yet since signing the deal in January 2018, Ozil has not repaid that faith.
In the Premier League, he has produced three goals and three assists. And Wenger's successor has been far from convinced the former Germany international deserves to be part of his long-term project.
Sources at Arsenal are convinced Emery would be happy for Ozil to leave, but the club will have a problem finding him a new club—particularly as they ideally would not want to subsidise his wage if he departed.
The Deep Issues
In the past, Arsenal could have continued to bring in new talent to make up for their shortcomings, but they have to be wary of the Premier League's updated financial fair play rules now.
Short Term Cost Control is English football's version of UEFA's FFP, and clubs must be careful to abide by the rules. One of the main objectives is to recognise the dangers of wage inflation, and since 2016, sides in the top flight have had to show that wages do not rise by more than £7 million per annum.
Manchester City managed to avoid sanctions because they splashed their cash before the ruling came in, but Arsenal's new wave has come at a more complicated time.
University of Liverpool football finance lecturer Kieran Maguire told B/R: "[Club owner] Stan Kroenke wants the club to be self-financing so is unwilling to underwrite player investment. Arsenal do pay big wages, and for that to be sustainable, they need UEFA Champions League qualification to fall within STCC limits.
"A lack of Champions League football this year, and increasingly remote chances of it for next season too, means they are restricted to a £7 million wage increase—plus anything extra that comes from new sponsor deals. Realistically, it's a one-out, one-in policy to balance the wage bill."
Clearing the Decks
Arsenal are in a situation where they must clear the wages of first-teamers in order to bring in new talent.
Aaron Ramsey, Petr Cech and Danny Welbeck all have contracts expiring in June, and a yearly total of around £14.5 million will be freed up when they leave the club. There is a strong possibility Mohamed Elneny will also depart in January, so we start to get a clear vision of how this is opening up for the club to refresh the squad.
Others could go, and the club would cash in on Ozil if such a chance arose. So far, the only possibilities are coming from Turkish clubs, but there are doubts about how any transfer could be financed.
Emery wants to rebuild Arsenal but is having to be patient—as are the special recruitment team that have been brought to the Emirates Stadium but are unable to strike any major deals this winter.
A further complication has arisen, with head of recruitment Sven Mislintat on the verge of leaving, according to reports. He was brought in from Borussia Dortmund in December 2017 but is already unhappy with the way the club is being run.
Money Saved for Summer Transfer Window?
Arsenal are ranked sixth in the Deloitte Football Money League, and sources within the club are adamant there are going to be funds available at the end of the season. The problem is no one knows exactly how much.
Since Kroenke Sports & Entertainment took full control of the club in August, its financial fine points are no longer known in the detail they once were.
A new sponsorship deal with Adidas kicks in this summer and will boost the coffers by around £20 million initially, but beyond that the main thing that is clear, according to those inside the club, is Champions League qualification is needed to maximise transfer funds.
Not doing so will have a significant impact on the amount available to spend on new talent in the summer.
It is believed the club has been drawing up transfer targets based on two scenarios—with and without Champions League football—and right now it looks clear which list they will be buying from.
Daily Cannon's Wade is trying to find optimism and told B/R: "In the transfer market, we can't compete with the other clubs in the top six when it comes to money spent on fees, and that's before looking at our wage restrictions.
"But what has arisen is that we will need to call on some younger players to step up, and there are some who give impression that, in a year or two, they will be able to contribute as well as some of the highly paid players we have had recently. Beyond that, I don't think a massive amount will change."
Arsenal are not broke, but the club does appear to be breaking. The days of sensible spending under Wenger have not helped their long-term vision, different areas of the club are not running as smoothly in the new era as hoped and the gap—both on and off the pitch—between the Gunners and their elite rivals is beginning to look as big as it ever has.