Due to the recent spike in interest in a post I did way back in October of last year, I’m putting my emeritus status here on TSF to use much more quickly than I expected.

Arsenal were a mess at the end of the transfer window. One of the prevailing themes coming out from the club’s media mouthpieces was that Arsenal didn’t have money to spend. Some specified a wage bill issue. Others spoke more generally and never cared to clarify.

Obviously, this was a bone of contention amongst Arsenal supporters. We’ve all seen the financials which show significant cash reserves. We shouldn’t take the club’s word for it, so let’s do some digging. But before we do, let’s have a quick refresher on the rules, as well as some stipulations on this estimated calculation.

The Premier League regulations are long and boring. Simply put, in Arsenal’s situation, they have to account for any increase in their wage bill over and above £7m with an increase in non-PL broadcast monies (includes gate receipts, commercial deals, European competitions, FA Cup prize money, Emirates Cup prize money etc.). Clear as mud? Good. Time for some stipulations:

Technically, image rights payments are included in the payments to players formula. We have no idea what these are for each player, so basically we have to disregard them. Because a lot of players left, including Alex Oxlade-Chamberlain who was always one of our more heavily marketed players, it probably is a wash and we maybe saved a bit of money on this front. We don’t know if Sead Kolasinac or Alexandre Lacazette received signing-on fees. Those payments would also fall into the wage bill formula. It seems very possible, and extremely likely in the instance of Kolasinac, that there were significant sums paid to the new signings. However, we don’t know that for a fact, so it can’t be a part of this exercise. The club has set aside room in its budget to re-sign, minimally, Alexis Sanchez, Mesut Ozil, and Aaron Ramsey. Even if you think that they won’t re-up, it would be negligent not to have that ability set in place. This reserve would need to be roughly £15m, based on current salaries and reported contract extension offers. We’re going to assume the loan clubs for various loanees paid most of their wages in 2016/17. So Calum Chambers and Jack Wilshere were loaned last season and are still with Arsenal this season. They have to be added to the wage bill. Chuba Akpom is in that same boat but I have never seen even a rumored wage for him. Players who were loaned last season and left this season aren’t going to be considered. We offloaded a significant number of youth players, as well as Yaya Sanogo, this summer. Those players were making relatively little and only a few were sold for a fee. Where the fee is known, we put it in there. For Ismael Bennacer and Donyell Malen, top prospects sold to clubs in top flight leagues, we’ll assume a £2m fee similar to the one we received for Kaylen Hinds. Transfer fees are not typically paid up front. They’re paid over a couple years, at least. Sometimes more. So while we did end up with a positive net spend of a figure approaching £30m, there’s a pretty good chance that net figure on this season’s books is in the £10-20m range. It seems feasible the club may have been asking for more up front payments in these transfers which might’ve led to some of the smaller than expected fees. For simplicity’s sake, we’ll estimate one-half of those fees are going to be paid this fiscal year. We are also, for simplicity’s sake, not going to get into what Southampton may or may not be owed in the Oxlade-Chamberlain transfer. As I mentioned in my first piece on this subject matter, the regulations talk about “revenue” increases. To me, that means gross income coming into the club. If they wanted to say “net income” they could have. They way they word the regulations leads me to believe that outgoing transfer fees paid are not considered in this calculation. We are going to assume gate receipts and commercial deals are going to be roughly the same this year as they were last. We don’t know what Arsenal received in transfer fees from players sold in the past. It is feasible that fees for part of the Thomas Vermaelen, Lukas Podolski, and Serge Gnabry deals all came into the club. (Here is Swiss Ramble’s most recent Arsenal financials post. We won’t have 16/17 official numbers for another month or so.) We know Bournemouth paid roughly £2m in a loan fee for the services of Wilshere. We’re just going to go ahead and estimate last year’s player sales sum as £2m for the Wilshere loan fee. If we’re being consistent and splitting the transfer fees in two, the one-half of Gnabry’s fee paid last year would be canceled out the fee owed this season. Remember, this is about revenue increases over and above the previous year’s revenue. Any player sales sums that could be used would have to be over and above the previous year’s player sales total. Best case scenario: Arsenal lose roughly ~£15m in prize money dropping from the Champions League to the Europa League. That best case scenario is based on us winning the Europa League. That probably isn’t happening! The club would likely budget for a £20-30m loss in income just to be on the safe side. We’ll be playing fast and loose and using a £15m figure. I spoke previously about property sales that the club was expected to make. Swiss Ramble had estimated somewhere around £10m coming into the club. I haven’t read anything about that since then, so I will not be including that in this calculation. This is merely a calculation of Arsenal’s wage bill and what they could spend on wages. It’s safe to assume the Gunners have significantly more they could have spent on transfer fees.

Everybody clear, ok. Now let’s track Arsenal’s summer transfer window.

Arsenal Space to Increase the Wage Bill May 2017: -£37m

Well, dang. That isn’t a good place to start. No Champions League certainly forced some changes in the club, but not the ones we wanted to see (£15m). The reserve set for extensions definitely weighs us down too (£15m). The signing of Kolasinac at a rumored £120k/week (a little over £6m/year) is also taken into consideration. Let us not forget that we also have Wilshere and Chambers back on our books! That’s good for another ~£6m/year. Don’t forget we’re also starting in a £2m hole for player sales totals. We do have that £7m cushion factored in though!

Arsenal Space to Increase the Wage Bill June 2017: -£37m

Yeah, we didn’t do anything in June except go on a wild Mbappe chase. Oops.

Arsenal Space to Increase the Wage Bill July 2017: -£39.5m

We added Alexandre Lacazette (roughly ~£10.5m/yr). Wojciech Szczesny was sold to Juventus for £11m and Kaylen Hinds for £2m. We’ll round up and say that this month was a net -£3m.

Arsenal Space to Increase the Wage Bill When David Ornstein Said We Had No Money to Spend. No Really, He Said That: £0.1m

At this point, Arsenal had reportedly sold Oxlade-Chamberlain for £40m, removing his wages, roughly £3.5m/yr, from our club. We had also sold Gabriel to Valencia for £10m, shedding his roughly £3m/yr wages. Kieran Gibbs was also out, having been sold for £7m to West Bromwich Albion. Gibbs was rumored to be on a roughly £3m/year contract. We also loaned out Damian Martinez to Getafe and we’ll assume they’re covering his £500,000/year wages. Jon Toral was sold to Hull City for £3m. This is where Bennacer’s sale to Empoli is also factored in with a £2m estimate. So at this point in this particular time period’s calculation, we’re looking at reduction in wages of £9.6m and fees attributable to this year at roughly £32m in fees.

Even with taking a rosy approach to Arsenal’s finances this summer, the Gunners really might not have had any significant money to spend under the Premier League wage restrictions when Ornstein said that. £0.1m/yr translated into weekly wages is basically £2k/week. That might not even get you a decent youth prospect.

Arsenal Space to Increase the Wage Bill After Deadline Day: £7.1m

Lucas Perez went back to Deportivo La Coruna with a reported £4m loan fee, which we’ll assume is payable this season. This also takes his ~£2m wages off our books. Malen was sold to PSV Eindhoven for an undisclosed fee we’re estimating at £2m.

Based on my rough estimates, I do not think the club was lying when they spread the message that they did not have money to spend. However, this does not absolve the club of any wrong doing.

They still failed to offload Mathieu Debuchy (£3.5m/yr), Jack Wilshere (£4.7m/yr), and Chuba Akpom. They chose to keep David Ospina (£2m/yr) instead of promoting Martinez (roughly £1.5m/yr in wage difference). They chose to retain the services of two attacking subs that could have netted significant fees as well as cleared significant wages in Olivier Giroud (£5m/yr) and Theo Walcott (£5.5m/yr).

There were a number of ways the Gunners could have opened up “cap space” throughout the summer, but they failed to do so significantly until the day before the transfer window closed. Based on the situation the club was in, that is inexcusable. While in this particular instance they may not have been lying, the club has no one but themselves to blame for the negative narrative surrounding Arsenal and its supporters’ skepticism.