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Transfers
What Arsenal are telling journalists about £105m transfer issue is ‘not true’
In Stan Kroenke, Arsenal have one of the richest individual owners not just in Premier League football but in world sport – and yet historically they have been relatively conservative in the transfer market.
Yes, they have broken from this approach over the last few seasons with Hollywood signings like Declan Rice, Kai Havertz and Nicolas Pepe.
But their amortisation bill – which is how register signings in their accounts – stood at £139m in the last financial year which was lower than Man City, Chelsea and Man United’s.
Their wage bill of £187m meanwhile was comfortably the lowest of any of the so-called Big Six clubs and only around £20m more than Leicester City’s.
And only North London rivals Tottenham had a lower wages-to-turnover ratio than Arsenal’s 50 per cent.
Granted, these figures will have shifted somewhat after Arsenal‘s return to the Champions League, which will have triggered bonuses, is registered.
But when one zooms out on the graph, the full dataset does not paint a picture of an ownership willing to fund lavish transfer sprees at their own expense.
Instead, Stan Kroenke and his son, Josh, who now appears to control the purse strings at the Emirates, prefer Arsenal to self-fund.
While it is an approach that can at times frustrate supporters, it is entirely rational and one which keeps Arsenal out of trouble when it comes to Premier League and UEFA spending rules.
However, that very fact appears to be at odds with what the club are saying this summer, according to one expert.
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Arsenal’s PSR issues are a myth, says finance insider
Under the Premier League’s current Profit and Sustainability Rules (PSR), clubs are allowed to lose a maximum of £105m over a rolling three-year period.
On paper, Arsenal’s losses of in excess of £200m in their last three years of published accounts put them well over that limit.
However, pandemic-related allowances plus PSR-deductible expenses like infrastructure and youth investment mean that they were comfortably within the limit.
Relative to the Premier League’s own stratospheric standards, it has been a relatively quiet window so far – and PSR issues have been cited by many clubs as a reason for a lack of expenditure.
Arsenal have signed Riccardo Calafiori from Bologna and made David Raya’s move from Brentford permanent.
But Emile Smith Rowe’s move to Fulham plus the impending departure of Eddie Nketiah to Nottingham Forest will more or less balance the scales as far as headline net spend is concerned.
And even if Arsenal’s pursuit of £30m-rated Mikel Merino is successful, their PSR calculation will only suffer by £6m in 2023-24, because of amortisation.
In fact, finance and law expert Stefan Borson, who was previously an adviser to Man City, insists that Arsenal are very comfortable in terms of PSR, despite what they are briefing to journalists.
“[Clubs] like Arsenal and Liverpool do not have PSR issues,” he told talkSPORT.
“Arsenal seem to be quite keen to brief that they do have PSR issues to try and keep their fans in check, but it’s not true.
“They’ve got plenty of capacity on a PSR perspective and Liverpool have got huge capacity.
“Also, if you look at City, they have made profit from player sales.
“A number of clubs are trying to prove out their business models, prove that these businesses can make profit.
“If they restrain their spending in the transfer market and start to take a kind of lower approach, a very different approach to Chelsea, I just wonder whether that is behind it.
“Because it appears to not be PSR-related with some of these big clubs but actually strategic.”
How much can Arsenal spend under PSR?
How much Arsenal can spend and how much they will spend are separate questions, but it is safe to say that the Gunners have plenty of headroom in terms of PSR.
If they choose not to go big in the closing days of the window, it will be because of the ownership approach as opposed to regulatory curbs on their spending power.
Analysis from finance writer Swiss Ramble projected that Arsenal had about £94m in PSR headroom at the end of 2023-24.
Without knowing how their season will pan out and what commercial partnerships they might strike in 2024-25, it is hard to say exactly how much capacity they have for the remainder of the season.
But it is safe to assume that there will only be a handful of clubs in the Premier League who have the wriggle room to spend more – if their owners want to.