Financial fair Play - Arsenal

FFP - Arsenal

Let’s start off with the poster boys of FFP and the good news for Arsenal fans is that Arsenal will sail through the FFP regulations. Arsenal are in such a good position financially that isn’t even worth going through the figures. The bad news is that if they don’t start spending some serious money and hold onto their best players it may not matter, as the danger is that they may not qualify for the Champions league. I’m sure there are several Arsenal fans out there who will refuse to believe that could happen, but you only have to look at how Chelsea dropped from 2nd to 6th last season as a warning as to how competitive the Premier league is these days.

Many people believe the raison D’être for FFP is to stop people “Buying” success and it’s important to understand how much of an impact being a big spender has on the bigger picture.Between 1998 and 2004 Arsenal and Manchester United either won the title or finished 2nd and the Premiership was in danger of becoming as much of a Duopoly as the Scottish league. The “Invincibles” had just won the title, without losing a game and everything looked rosy in the Highbury garden, looking back Arsenal fans will tell you that those title wins were all the more meritorious as they didn’t buy the titles and many now believe that FFP will be a massive boost to Arsenal’s chances of becoming competitive again.

However, the memory can play tricks; the common perception is that Wenger has always been scrooge like in his dealings, but in the early years of his reign the debit side of the transfer dealings usually heavily outweighed the credit side. The balance sheet showed a deficit in all but one year from 1997 – 2000, and that was due to the very generous fee paid for Anelka by Real Madrid. Arsene Wenger signed a number of players who were to prove remarkable value for money in the long run, but eight figure signings were also commonplace during the early part of his reign and the big money signings often failed to provide value for money, most notably in the case of Francis Jeffers.

The common consensus among Arsenal fans is that Arsenal were never a big spending team; the Arsene Wenger quote is often trotted out: “We don't buy superstars, we make them” but unfortunately, the facts rather than faded memories would suggest otherwise (

Zach Slaton is an Arsenal fan who writes for and using inflation adjusted transfer fees he has created a model which accounts for every team’s transfers in the Premier League era.Using the average of each year’s transfer activity he has shown that a club’s success correlates to how much their players were worth in terms of transfer fees paid. Teams worth the average amount tended to finish mid table, whereas teams that were worth far more than the average finished higher up the table, hardly groundbreaking stuff so far, but Zak took it a step further and put together a comprehensive model that encompassed both transfers and wages, adjusted for the inflation caused by teams like Man City and Chelsea who greatly escalated transfer fees and pay packets.

Zach uses a database on wage data built from public filings with Companies House and combines the inflation adjusted transfer data to create a new model, called “Total Team Value” (TTV)and the “multiple of the Total Team Value” (mTTV). To simplify matters if Everton are worth £200m in TTV and are an average team and Chelsea are worth £800m in TTV then Chelsea have an mTTV of 4. An enormous amount of quality, factual data has gone into the TTV model; this is a professional piece of work compiled with academic rigour using data and analysis that can stand up to the strictest scrutiny.

The TTV model clearly shows that Arsenal were a buying club in the early years of the premiership and this trend that was carried on by AW in his early years. For instance how many people remember, or realise that Bergkamp was purchased for a British record fee, or that Sol Campbell was the first player to earn £100,000 a week when he signed on a free from Tottenham. Arsenal may moan about wages and inflated fees now but they have to accept a degree of responsibility as one of the instigators of the trend.

Arsenal were the second most expensive team in England after Man Utd during the late eighties and early nineties and the model clearly shows that the more that a team spends on players and the greater the difference in their spending than the rest of the League the greater the chance of winning the title.The Gunners have gone from the second biggest net spend team in the League in 2002 to the 6thbiggest net spend team in the League in 2012 and the history of teams with a similar mTTV to Arsenal have a 75% chance of finishing out of the top four.By 2007 Chelsea cost £800m while Arsenal’s cost was declining, and in 2008 dropped below £300m for the first time since 2002. Arsenal had the fifth highest wage bill as of the 2010/11 season, only £30m less than Man U, yet United challenge for the title every year, whereas Arsenal do not.

If you are an Arsenal fan this should have set alarm bells ringing.

There is one ray of sunshine, Arsene Wenger has garnered Arsenal an additional average of 16.8 points per season more than he should have done according to the model and Sir Alex 18.2 points per season. Post-Mourinho Chelsea’s spending dropped drastically for a three year period during which they failed to win the title. Arsene Wenger is almost certainly the main reason why the club has had Champions League football every season under his tenure and he is the human equivalent of adding £100m in players according to the model. However this is a feat that is becoming increasingly more difficult to achieve and the law of diminishing returns will eventually kick in unless the current trend is reversed. Another mantra popular with Arsenal supporters and the media used to be that Arsenal were always just one player short, the problem for Arsenal now is that it isn’t just one player, it’s two or possibly three.

Arsenal can moan as loud as they like about the inequalities of rich benefactors and huge wage packets, but should they fail to qualify for the champion’s league in the future, they will have no one to blame but themselves if they do not drastically improve the squad. If other teams are obeying the rules you can’t complain just because you refuse to strengthen when you have the funds available, by following such a course of action you are voluntarily handicapping yourself. The board's arguement is that current fees and wages are too high, but as the Bergkamp and Campbell signings show Arsenal were part of the problem, so it's a bit rich to now turn around and complain about a situation they helped to create when it suited them, albeit a long time ago. The FFP rules mean Arsenal could spend literally as much as they want to in the next couple of years and the sad thing for Arsenal fans is that it is not as if the finances aren’t available as Alisher Usmanov and Stan Kronke are both fabulously wealthy in their own right.

Common sense dictates that you cannot keep selling your best players ad finitum and remain competitive in the long run if you do not replace them with players of better or at the very least equal quality. Usmanov has voiced his frustration at the board about the lack of spending and he has a point as the horse may well have bolted before the board realise that it is too late to do anything about it.

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CCahill profile image

CCahill 4 years ago from England

this is a very good article, its very easy to get swept up in public opinion and forget that big money was spent by Arsenal too, i had completely forgot that Sol campbell is responsible for starting this whole ridiculous wage inflation and sulking if not getting a ridiculous amount.

markfo profile image

markfo 4 years ago from Middlesex, England Author

Hi Cahill.

Interesting comments coming out of emigrates from Gazidis in recent weeks. Looks like the Arsenal board are still doing a good osterich impression. Reports that £35 m available to spend in January, I'm sceptical.

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