Let’s start with a fact: Arsenal aren’t going to make the Champions League next season. Don’t put your hopes in Brad Guzan. As an American, I know better than anyone outside of the North Yorkshire region what a folly that is.

Arsenal fans have reacted to this inevitability in different ways. Some enjoy the fact that the Gunners will be playing new teams and visiting new cities. Others decry the loss of an elite competition. Most have pointed out that the financial hit to the club will be insignificant due to the increase in Premier League money available to the club. While that may be true from an overall financial sense, it does complicate Arsenal’s ability to increase its wage bill. There is a real chance Arsenal cannot afford to give both Alexis Sánchez and Mesut Özil a raise this summer and attract top new talent.

The sticky wicket is the new Premier League soft salary cap, as explained here earlier this season. To summarize Arsenal’s financial situation briefly, the club cannot increase salary next season by any more than £7m without showing that they’ve covered that increase in salary through an increase in revenue from non-Premier League broadcast payouts compared to the prior season. In other words, they cannot just divert domestic TV money directly to salaries in order to meet or increase payroll.

Arsenal are expected to receive around €62 million in Champions League payouts this season, or roughly £53 million at current exchange rates. Best case scenario for the Gunners, if they follow Manchester United’s path to the finals, would be that they end up with slightly under £40 million in prize money from the Europa League, according to recent calculations. If they drop out of the competition earlier, of course, there’s a significant decrease in income on that front.

Regardless of what the decrease is, it’s going to hurt Arsenal’s ability to increase its stash of non-Premier League broadcast money. Arsenal’s main sources of income outside that broadcast money are commercial deals, retail and licensing, player sales, and property sales.

Unfortunately, unless we start getting an Official Sponsor for every cell in the club, a la Manchester United, commercial revenue will not increase greatly next year as none of the big money deals are set to expire. Retail and licensing tend to be flat year to year so that won’t cover it. There are property sales still to come for Arsenal, as mentioned by Swiss Ramble, which would probably be in the £10 million range, if they happen.

The big key could be player sales. I imagine, since the rules are fairly lax and untested at this point, that for revenue purposes this is not a “net spend” consideration. It would be my guess, through the magic of accounting, that any players purchased over the summer could come from other funds and not count against the increase in revenue from player sales. In 2016, Arsenal reported £2.0 million in player sale revenue. There’s lots of room to grow there!

Players like Kieran Gibbs, Joel Campbell, David Ospina, Mathieu Debuchy, and Carl Jenkinson, among others, are all out the door this summer. Jack Wilshere is another candidate for a departure, as is Olivier Giroud, who has attracted interest in France. Lucas Perez will likely be deemed surplus to requirements as well. On all of these deals, Arsenal will have to balance whether to get as high a fee as possible with payments over a period of time, as is standard practice, or whether to take a lower fee for a higher up front payment.

There is also the fact that there will be no Champions League bonuses to hand out to players, although it is not clear exactly how that “savings” would impact these calculations. Those bonuses would actually have helped on the salary front, as it would inflate this season’s salaries and create less wage increase next season, when we all hope that the bonuses are given again.

In short, Arsenal will need to cover a roughly £15 million loss in revenue from European football, in addition to whatever funds need to be expended to re-sign players and add to the squad.

If we’re looking at what the wage bill might be next season, we have to first consider new signings. The Gunners have already, seemingly, signed Sead Kolasinac on a free transfer on a £120k/week deal. Most observers would say the Gunners need one more standout attacker and, at least, one more central midfielder. If both of those options were signed at a similar deal, that’s an increase of nearly £19 million in salary right there. If a superstar talent was signed, as many Arsenal fans are dreaming of this summer, there is the chance that figure could be even higher.

The Gunners have left it late on the contracts of Alexis, Mesut, Alex Oxlade-Chamberlain, and Jack Wilshere. The first two, if they sign new deals, are looking at, minimally, a combined £240k/week in wage increase. That’s another £13 million on top of the £19 million in new player wages. At this point, with The Ox impressing at RWB in Arsenal’s new formation, you’d expect him to get a new contract as well, with, minimally, a healthy £2 million per annum increase.

Considering the combined loss of CL revenue and the additional salaries needed, there’s roughly £53 million, with the potential for significantly more, to make up, by either increasing revenue or dumping salaries, or some combination thereof. If all the deadweight I listed earlier is sold, that’d save the club about £15 million annually, based on the best info we have available. Wilshere and Giroud are making about a combined £10 million per annum.

It doesn’t appear that Arsenal will have any problems complying with Premier League salary regulations, but it may lead to the club making some surprising decisions this summer. As I mentioned earlier, we may see lower upfront fees, and some bigger names let go, in the summer in the name of progress. If Arsenal are to have the summer their fans desire, which would mean big new deals for two club talismans and, at least, two marquee signings, there will need to be some tough decisions made based on the lack of Champions League revenue.