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Arsenal’s net transfer spend is £77.6m per season over the last 3 years. So why just £45m now?

by Sir Hardly Anyone

After Stan Collymore left Talk Sport he said, “I don’t want, nor do listeners or viewers I’d guess, a bedroom set up, ranting at a wall and putting it out as a podcast. They want the technical excellence of traditional broadcast outlets, with the flexibility to watch or listen whenever and wherever they like but also have set times, their times, like MNFN where my idea was simple 7 years ago. You get in from grafting, you run a bath , and have some time to yourself, nodding in approval or shouting at the phone or radio in angry disagreement. That’s why I do it, that’s honestly why I’ve done 500 games on the road in the cold, the snow, the rain , to entertain, hopefully inform and most importantly give people something to feel a part of.”

Fine words indeed, but it seems that over the years the slippage towards what he called “A bedroom set up” is there for all to see.

Now writing for the Sunday People newspaper (I use the “news” element in newspaper without the normal meaning of that word) Collymore said,

““I’m not sure what Arsenal are playing at, offering £40m for Wilfried Zaha. Not when they know he’s valued at double that by Crystal Palace.   It smacks of Arsene Wenger’s days at the club, when he was on a crusade for financial prudence in football and didn’t want to fuel a transfer market fire already burning out of control.”

It seems that one more scribbler has made the fundamental error of believing the gibberish pumped out by other scribblers.  Of course it is just possible that Arsenal has indeed offered £40m for a player whose actual value is closer to £80m.

So what was all this about Wenger offering half a player’s value to make a point about his crusade for financial prudence.  A look at the figures might be helpful.  Because there can be argument about prices of players I have taken all the prices from the same source: those quoted on Transfer Market.

Arrivals 2018/19

Players Club Fee paid
£25.79m
£22.50m
£14.40m
£7.20m
Loan fee: £2.2

Departures 2018/19

Players Club Fee received
£3.96m
£1.35m
£900k
Loan fee: £900k
Loan fee: £450k

Arrivals 2017/18

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Players Club Fee paid
£57.38m
£47.70m
£30.60m
£1.89m
Free Transfer
Players Club Fee received
£34.20m
£30.60m
£20.25m
£15.30m
£12.60m
£10.98m
£9.90m
£6.75m

Arrivals 2016/17

Players Club Fee paid
£40.50m
£36.90m
£18.00m
£3.60m
£2.70m
£36k

Departures 2016/17

Players Club Fee received.
£4.50m

Nett expenditure: £97.24

So the club, in the past three years has spent, in round figures, £97m, £70m and £65m, after deducting the incoming money.  Which leads to the question, why would we suddenly cut the bill for this season down to £45m?

It is of course possible that the tale of £45m is a media invention.  It is notable that none of the papers I have seen have contrasted this sum with the spending of other years.  It is also possible that

a) Arsenal made no bid for Zaha at all, and that it is all make-believe made up by the media, or by Arsenal as a cover for other transfers they are doing.

b) Arsenal made the bid for Zaha and the price is a good one, but Palace think they can squeeze more money out of Arsenal, and so are placing a high fee on the player for publicity purposes.

c) Palace simply don’t want to sell, and so have said, “No, it’s £80m” on the basis that if a club is stupid enough to pay that much, they’ll take it.

Of course I don’t know which one is true, but I think it is viable to stress such options, simply because we know that in each of the last four years in which we have attempted to record all the transfer rumours surrounding Arsenal that only 3% of the rumours turn out to be valid.   So there is a 97% percent chance that some or all of the story concerning Zaha to Arsenal is untrue.

And this is the fundamental problem with most journalists and bloggers concerning transfer rumours.  They don’t start from the premise that there is only a 3% chance of any story being true.   Nor by looking at how much Arsenal has spent each year.

Arsenal do spend money each year.  Not as much as other clubs, but there is a consistent spend.  Yes if we suddenly drop way, way below that this year, there is an issue, but until the window closes, I wouldn’t take that £45m as fact.

11 comments to Arsenal’s net transfer spend is £77.6m per season over the last 3 years. So why just £45m now?

  • Mike T

    Tony

    Not going to point out several missing player movements as you are quoting from a website I would point out however that your assertion that there was a net spend of £70 million in 2016/17 needs to be revisited. Sales as detailed by you amounted to £140.58 and purchases £137.57 giving a profit of £3 million not a net spend of £70 million.

    The story that there is circa £40 million available either comes from or is backed up from a summary provided by AST.

    From my reading the issue is more to do with FFP. Whilst cash reserves at Arsenal are significant the problem revolves around FFP and in particular the sum being charged in respect of player amortisation. Based on previous comments about this accounting process on this site I find the matter quite ironic.

    Back to AST and there suggestion is that for the year just ending there probably will be a reported loss of circa £70 million and that is the issue and yet again the irony is that cash balances at Arsenal will probably grow .

    Some years ago I pointed out FFP was perverse in that it only looked at clubs accounts on a rolling 3 year basis meaning historical financial prudence meant nothing and strangely once profitable years dropped out of that three year cycle then cash reserves can not be spent for fear of falling foul of FFP and that is very much the hole that Arsenal find themselves in.

  • Arsenal is the only that I love all my heart.I think it is time arsenal start competing with the big teams.I have a supporter since 1999.It hurt me to see arsenal going the way they are going.We need to start signing establish serious minded players.

  • Geoff

    We actually made approximately £3m profit in the 2017/18 transfer window, so that doesn’t really tie in with your net expenditure and transfer averages.

    Crystal Palace acknowledged we made a £40m bid for Zaha, but that doesn’t really mean anything, as we are well known for initial low bidding on certain transfer targets. I suspect Kroenke and the board were well aware of Wenger’s prudence and knowledge of buying players at bargain prices without paying over the odds, but unfortunately this just doesn’t really apply in this era now, as inflated transfer fees and high wages are becoming the norm.

    I suspect our high wages might come into play with FFP rather than net spending, as you can’t really say that Arsenal don’t have the cash available, especially after season ticket sales, new sponsorship deals and reaching the final of the Europa League (which prize money was equivalent to going out of the group stage in the Champions League). All this and not to mention our healthy cash reserves sitting in the bank too.

    You can see that people are becoming increasingly frustrated with Kroenke and the board for not showing the same ambition that the fans and media would like to see. We can’t even see a transfer over the line for an 18 year old without a complete drama and a possible sabotage from the Spuds. The same goes with Tierney, I mean why not just wrap these transfers up and get them in the squad to bed in with the rest of the players for pre-season?

    It’s just all becoming too predictable and mundane now, and we wonder why we get so much stick as a club, though it’s all deserved as far as Kroenke is concerned.

  • Robl

    Hi Mike,
    Just to confirm, you are saying that FFP ignores what we have in the bank and only looks at a rolling 3 year set of accounts? So if we had £200m in the bank from for example 5 years ago we can’t use it? Unless Kronke takes it as a dividend then pumps it back in from another of his companies as sponsorship?

  • Maxwell

    Sir HA. Your otherwise thought-provoking article makes no mention of dropping out of the Champions’ League, which loss of income could chime with Mike T’s observations.

  • MikeT

    Robl

    Yep it’s over a rolling three year period. Its what appears in those three years accounts in isolation. Madness I know but that’s as it is.

    As for your idea alas that can’t be done.

    Dividends could of course be declared and indeed taken but another clause within the FFP regulations forbids any sizeable sponsorship from a company owned/ controlled by a football club owner.

    It’s been debated many times on here as to owners financial contributions and love him or hate him Kronke has invested huge sums in Arsenal. Of course none of that has been on players or indeed infrastructure but his expenditure has been on purchasing share capital.

    I just can’t see KSE investing capital to facilitate player purchases it goes against everything that has been put out there regarding the sustainable model deployed at Arsenal.

    The question for me is will the borrowings secured to facilitate that share purchase be funded in full or part from Arsenal earnings. All we do know is that AST some years ago secured an agreement ( which may or may not be still in place) that should KSE gain total control that the wouldn’t use club money to fund the buyout.

  • My figures on expenditure taken from the Guardian’s annual transfer window charts

  • Mike T

    Geoff

    Nett spend really doesn’t mean an awful lot in terms of how things are reflected in accounts.

    When you sell a player the relevant figure reflected in the player trading is more about the profit made and that’s not arrived at by simply taking what he bought for from what you sell them for but what you do is take the amortised value from the sell price.

    Put another way buy a player for £50 million on a five year contract after three years sell him for £30 million and in the accounts you make a profit of £10 million.

    Another problem is that a sell is a one off feature in the accounts but when you buy the cost of the purchase features in one form or another till the day the player leaves.

    Arsenal are carrying a near £95 million pa charge in respect of historical transfers the only ways that can be reduced is either by selling players or extending their contracts.

  • I hate saying I told you so, because that is always accompanied by a bad feeling. The FFP rules state as best I understand that accounting for a forecast over 3 years, a team. Can spend what it earns, this can be forecast. With Arsenal, that is particularly easy with the list for season tickets whic account for the majority of ticket sales at ant game.

    Additionally the club can consider the value of a rolling debt or credit facility. You can over spend by £150m provided that amount doesn’t go beyond that figure based on a 3.year accounting period. Money in situ.

    The abbreviated accounts define the period of note. Wenger made a transfer slush fund to pay off the additional emirates loan brokered inclusive of his contract with the club.

    This was in case the club didn’t generate the CL revenue required.

    He did however manage that frit, we had the revenue. It required small investment, this freed up that extra £100m in reserve, plus the transfer r budget operating profit. Around £200m Chips mentioned every transfer window, killing our purchase opportunities.

    Maintain the asset value and thus share value. Investment and on field improvement would take the total out of the grasp of Stan and prove that a sale was not in shareholder interests.

    Stan mismanaged the company intentionally forcing Wenger to protect the club and use the fund.

    Reducing our income as we offset the loan debt early.

    He kills his onw budget in line with his job description and responsibilities.

    Sven arrives, we sign very well, although the owner won’t facilitate contract renewal, Alexis, Aaron,, Koscielny, and as we’ve seen with Thierry, why we couldn’t sign Messi, Ronaldo l, Bale.

    Missing out on the CL is costly, but we made the final, offset inevitable, especially making the Semi last season.

    Big fish small pond.

    Blaming Wenger and targeting overpriced players is useless, unless you think lose more players, don’t invest unt the sales come and wages are tiny, you still will earn.

    Unai is a puppet, and he still did a deal with the devil, try remember it’s the trustworthy devil.

    ZAHA is worth maybe £40m no more, we probably put feelers out, to target the unlikely. Fan bait, he’s not worth £80m and they’d rather keep him, and he’s earning WELL. That boy is Spurs answer to Eriksen, not our answer to a lack of clinical ability.

    Alexis still remains the best offer, we need only pay the wages.

    Tierney is not ready and injured, Saliba is worth it, we should look at Diallo, Dorund buying Hummels can give us this. LB/CB Sven was interested.

    Mustsrfi and Xhaka are the players we can liquidate. And at reduced value I still would.

    Koscielny does as he pleases, but only al fool looks at this situation and blames the dearly departed.

    Fool me once, fool me twice…..

  • Mikey

    @ David Minten

    I see you became a “fan” of Arsenal at a time when we were winning things (and the big money clubs didn’t exist) and now you’re unhappy because we’re winning fewer things (because we don’t have anywher near as much money as several other clubs). Perhaps you should start actually supporting the club instead of merely wanting to be associated with glory. The clue is in the name “supporter”. Many of us endured many years of supporting the club when we were doing much, much worse than we are now and without complaining about that fact.

  • I agree, Mikey.

    I remember going to a game against Leeds at Highbury when we lost 4 1 and there were only 4,000 people there.

    The Wenger years were a great treat for us all, even the last 10 or so.

    Now we are likely to revert to type.

    My only question is how far will UE drag us down, to the Mee, Wright, Neil or Howe level?

    I hope that I am wrong, but I fear that downwards is where we are going.

    If the normally meek and mild Koscielny is rebelling, perhaps we are going to see some interesting times, but, sadly, off the field.

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