Arsenal: The inevitabilities of financial squeeze

Arsenal’s financial records were released this January. The results showed a squeeze on the club and squad. Here are some inevitable outcomes from the news.

There was a reason that Arsenal were happy to keep Arsene Wenger around a lot longer than he probably should have been. He essentially guaranteed them a finish in the top four and qualification for the Champions League.

Find the latest episode of the Pain in the Arsenal Podcast here — Man. Utd Madness; Transfer Travesty

Wenger may not have been able to build a title team anymore, but he could certainly manage a consistently decent team that could repeatedly finish in the top four. It took him two decades for him to fall out of it.

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It should come as no surprise, therefore, that as soon as it became clear that he could no longer keep the club in the Champions League year-in, year-out, the Gunners made the managerial change. Wenger was asked to resign and after an exhaustive search, Unai Emery was hired as his successor. Emery’s first target? Yes, you guessed it. Get back in the Champions League.

The reason the Champions League is so important is revenue. It provides a substantial windfall of cash that the Europa League simply cannot replicate. It is difficult to put an actual figure on it as the revenue is determined by how far the club goes in the competition, how many wins and losses they record, and their commercial ranking co-efficient, which will be much higher for the same club in the Europa League than the Champions League.

But in very simple terms, let me put it this way: in this current season, in one form or another, the 32 Champions League teams will share £1.71 billion; the 48 Europ League teams will share £490 million. The disparity is clear to see.

And it has led to this nice summary from the Arsenal Supporter’s Trust (AST) on the current financial situation of the club:

"“The AST follows Arsenal financial position closely and it is clear that at present money is tight. The wage bill has grown too big at a time that revenues have fallen due to only qualifying for the Europa League. For this current season (2018-19), we expect Arsenal to make a loss of about £60m. Even more shocking is that our revenue will fall behind Spurs.”"

To put it plainly, the Gunners are losing money hand over fist. Their finances, as this brilliant thread from Swiss Ramble illustrates, are being propped up by player sales, an extremely unsustainable model for a top team that wants to compete at the highest level.

This leads to some inevitable consequences: they must be shrewd in the transfer market; more player departures to ease the wage strain are coming; Champions League qualification is critical and will release substantially more funds; Unai Emery needs years, not months.

Financially, Arsenal are in a mess. A huge mess. The new commercial agreements with Adidas and Emirates will help. Champions League qualification will provide a huge boost. But this project needs time. I just fear that it won’t be given it.