The Arsenal new kit deal with Puma is interesting. The reports that they now have a 70 million transfer budget makes sense. They have always had a lot of money in the few seasons before this one, but they chose not to spend. The cash balance in their balances sheets are always impressive (more than United).
But they never really exercised the wealth they have. Even had to sell players in order to balance the books and not make losses.
The now have the new deal with Puma, the new Emirates deal, increase in cash from the new TV contracts, etc. So, it makes sense as to why they are saying that they have a much bigger transfer budget. Maybe its 70 million, but my educated guess is that its a little less than that. Probably between 50-60 million. 70 million is probably pushing it, and would only happen if some brilliant player was available and would cause them to overshoot the budget.
But I don’t think that is the problem. Wenger has always spent decent money in the transfer market. Problem is a lot of that money is wasted on players that arent Arsenal-standard. Park Chu Young, Gervinho, and Andre Santos to name a few. But the biggest problem, is the wage structure.
The “socialist” wage structure, as described by Wenger, is imo, a problem for Arsenal. Their top players are underpaid and average players are overpaid. So top players prefer to leave to make money that they are worth, and average players that Arsenal want to sell can’t be moved on since they are paid more than market value wages, and no other club will pay them even if they want the player. This results in lots of their players being loaned out instead of getting sold. Such as Chamakh, Park Chu Young, Bendtner, Denilson, Djourou, etc.
Other big clubs use the more “capitalist” wage structure, which produces more results based on titles and compare and contrast. Lets look at Spurs for example. They pay around 40 million quid less than Arsenal, but were only 1 point behind them. So, did Arsenal under achieve based on money they spent on wages? Or did Spurs overachieve? The fact that Arsenal has been in recent seasons fighting for 4th spot with Spurs seems to indicate that Arsenal are under achieving.
I am happy to see Gazidis pull his finger out of his as*, and actually do something to make Arsenal’s commercial revenue and deals match their stature. More can be done by Gazidis and co, and recent new deals (like Puma, Emirates, etc) are encouraging to see, as an Arsenal well wisher. But increasing commercial revenue is pretty much the most that he can do. He can increase the transfer budget for Wenger, but the ball is now in Wengers court.
He has to start spending money wisely in the transfer market and cut down the number of bad buys, that after a season or two are termed as “average players” by many football fans, including most Arsenal fans.
But Wenger also has to change the wage structure. Clearly the “socialist” model isn’t working and won’t work. Bayern could be called the leaders when it comes to organising a club and achieving titles and financial results. But they use a capitalist wage structure. So if its good for Bayern, why isn’t it good for Arsenal. To me, this is where Wenger’s arrogance is harming Arsenal, and he doesn’t seem to have learnt. Both Wenger and the Arsenal Board of Directors say that Wenger has full control over the wage structure and he sets the parameters, and rules regarding it. Its high time the wage structure changes to accommodate the realities of the football industry. Overpaying average players is money wasted, and underpaid top players are unsettled employees that will use Arsenal to enhance themselves as players and fly away from the nest when the football world and rival clubs acknowledges them as premier players and are willing to pay market value wages to get them.
For too long Arsenal has hid behind the FFP and said it will level the playing field for them, but the truth is that might be so to an extent. Manchester United and Manchester City seem to acknowledge footballs realities and do things accordingly, such as increasing commercial revenue, using the “capitalist” wage structure, etc. So, Arsenal will not find it easy in the league. Then there are the European rivals. Real Madrid, Bayern, Barcelona, and possibly Dortmund in the near future, are not weak and they arent going anywhere. These clubs will be competing for the very same top players that Arsenal will be trying to get. Difference is, they pay market value wages, but Arsenal don’t. Thus, majority of the top players will go to their major rivals first, and Arsenal second. So, the wage structure is a stumbling block in Arsenals quest to sign the top players, and needs to be sorted out immediately.
But, I don’t think Wenger is going to do that. Gut feeling, that’s all. All these years, he hasnt listened to others on this topic. But the figures prove me and others right, and Wenger wrong. But its shouldnt have been the case. After all, Wenger has a Masters in Economics. At this rate, they can buy good players that other top clubs don’t want, or just didn’t happen to get. Then when they prove themselves further, their major rivals will sign them since Arsenal will underpay them and their rivals will pay the market value wages. As for their average players, they will not be able to sell them easily. Which club wants to buy average players for above market value wages? Since most clubs embrace the realities of the football industry, but Arsenal don’t. Its not that they can’t, its just that they don’t.
So, the bigger transfer budget that Arsenal have this season and future seasons, due to new commercials deals primarily, is a great thing. But pointless if they don’t sort out the wage structure. But this a great time to learn from previous errors that have been repeated for years, due to the Top 3 getting new managers and going through a period of uncertainty (possibly). But Wenger doesn’t seem to me like the guy that is going to change his principles, no matter how flawed. This is one of the biggest difference between Sir Alex Ferguson and Arsene Wenger. One adapts to the changing football environment and evolves, the other doesn’t.
This is the time for Arsenal to change the wage structure and spend some cash on quality players, and push on for a title challenge. If they repeat the same mistakes, I am ready to bet money on Wilshere leaving in the next 2-3 years, and he will have no shortage of admirers, market value wages, and titles whoever he chooses. Personally, I would like him to choose United.
Loyalty doesn’t mean nothing in football nowadays. Would you prefer to stay with your current employer, if some other potential employer offers you double your wages and increased job satisfaction? If you said yes, well, duh. If you said no, I doubt that’s the truth.
Arsenal may buy good players (not world class, not the Falcaos and Cavanis of this world) this summer. Why? Because they have a bigger transfer budget, and maybe even might change their wage structure, maybe. But transfer fees and market wages are all relative are they not? The actions of their rivals too determines the going transfer rate and wage rate of Class A, be, see, etc type players.
For example, Arsenal making 30 million pounds per year from Puma is great business. Its more than Liverpool, who have actually won stuff in the past few years. But experts estimate the upcoming Manchester United kit deal, still being negotiated, to be between 61 and 75 million pounds, after taking into account all the various clauses.
So, with Manchester United, and in the future other clubs making more money than Arsenal, in kit deals, and other commercial deals, they could outbid Arsenal for the top players, not to mention pay them better and keep their best players, as well as poach Arsenals underpaid top talent (the Fabregas’, RVPs, Nasri’s, etc).
So, is this increase in Arsenal’s transfer budget to 70 million, and new deals like Puma, really something to celebrate for Arsenal fans, when looking at the bigger picture at what other top clubs are doing and the type of progress they are making in off the pitch affairs?
khalid7 