How can Arsenal afford extravagant summer spending?

“We don’t buy superstars,” Arsene Wenger once triumphantly declared as Arsenal manager, “we make them.”

Mikel Arteta has adhered to many of the lessons he learned from Wenger over the years, but the idea of ​​holding back in the transfer market – which was an idealized view of Arsenal’s approach in Wenger’s last year anyway – has not been one of them.

By the end of June, Arsenal had already agreed to transfers worth more than the rest of the division’s outlays combined.

While Liverpool have had to count pennies in recent windows and even Todd Boehly’s free-spending Chelsea have focused on cash-outs before adding to their pile of lucrative assets, how have Arsenal been able to continue to buy superstars?

Kai Havertz was the first name to officially come through the door at Arsenal this summer. The club hijacked Kepa Arrizabalaga’s wedding to film the announcement video which unveiled a move from Chelsea worth up to £65m.

After two rejected bids, Arsenal have belatedly accepted West Ham’s valuation of Declan Rice for a British record fee of £105m. Last time Arsenal broke the British transfer record, Dennis Bergkamp arrived in north London for just £7.5m.

Bergkamp’s compatriot Jurrien Timber is the third striker in Arsenal’s attack in the summer market. Ajax have agreed a package that could rise to £40.5m, taking Arsenal’s total outlay to the table £210.5m before July. There have even been whispers of a potential bid for Southampton youngster Romeo Lavia.

On top of the newcomers, Gabriel Martinelli, Aaron Ramsdale and Bukayo Saka have all penned big contract extensions this calendar year. William Saliba has also agreed in principle to a new four-year agreement.

Wenger was initially one of the strongest proponents of Financial Fair Play (FFP), but became disillusioned with the idea when he believed the new rules “had not been respected” back in 2017. As recently as this year, both Manchester City and Everton have been accused of breaching the updated regulations.

Whether Wenger sticks with them or not, the latest Premier League rules state that no club is allowed to lose more than £105m over three consecutive seasons.

Last term’s runner-up finish may have weakened, but it ensured Arsenal qualified for the Champions League for the first time in six years. UEFA of course have their own set of financial guidelines; namely clubs are limited to not spending more than 90% of their revenue on staff wages and agent fees. This proportion is set to decrease each year, promoting more sustainable models across Europe’s elite.

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Arsenal had a loss of £107.3 million. at the end of the 2020/21 season and had a deficit of £45.5m. last period. Theoretically, the Gunners should have a profit of £47.8m. this year to fall in line with the rules, but it’s not that straightforward – where’s the fun in that?

The 2020/21 season still falls within the framework of a COVID-affected campaign (only three of Arsenal’s home games had any fans in attendance), and any losses caused by the pandemic are overlooked by the Premier League’s bean counters. In addition, Arsenal can write off any costs associated with infrastructure, the academy or the women’s team.

Not only is Arsenal’s financial position far rosier than the top-line figures suggest, but the latest set of accounts available do not take into account the unexpected prospect of flooding the club’s coffers.

In addition to the increased rewards gained by jumping from fifth to second in the Premier League last season, Arsenal are now entitled to a share of the Champions League spoils. The Gunners bowed out in the Europa League round of 16 to Sporting CP in March, pocketing around £30m. The club is expected to earn as much – if not significantly more – just by qualifying for Europe’s premier competition, with bonuses from sponsors and basic competition prize money guaranteed.

Arsenal may have been extravagant with transfer fees in recent windows, but that flair has not extended to the wage bill. The Gunners spend less than half as much as Manchester City on player wages each season. According to CapologyArsenal only had the sixth highest wage bill in the division last term, comparable to Aston Villa and less than London rivals Chelsea and Tottenham – who both failed to qualify for European competition.

This wage bill ensures that Arsenal fly well below UEFA’s income/salary cap.

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On this edition of A Gooner’s Chroniclepart of the 90min podcast network, Harry Symeou react to the latest news on Declan Rice to Arsenal and review the Kai Havertz announcement.

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