Transfer Spend & Wage Comparison
This is part 2.1 of my two parter and it contains lots of financial graphics. I wanted to fit this all in to yesterdays post “Financial Foul Play” which was a very long part two to a very long part one (“It’s In Our Hands“) but it would have been overkill and I appreciate everyone who took the time to read both posts. If you haven’t read them already you should but I suggest getting a cuppa first.
Here are the transfer stats for our glory years 2002-2005
2002-2003
Invincibles season
Last year with a trophy
You can see that Arsenal have a modest transfer spend but haven’t yet started to sell players for profit. Liverpool and Manchester United are buying strong and reasonably big and Tottenham are spending quite big for a mid-table club. Chelsea start off very modestly but then you see the power of the oil money at work. Manchester City have a year of “big” spending as you would expect from most newly promoted sides hoping to stay in the league but then they settle back down.
Next I want to show you the years before the Sheikhs came in.
2006-2007
2007-2008
You can see that Manchester United and Liverpool are still spending strong and Tottenham are on a spending spree partly funded by Manchester United’s pursuits of their best players. Manchester City are starting to spend big with the backing of Shinawatra and Chelsea are reigning in their spending compared to previous years. Arsenal are spending reasonably modestly and there are signs that a selling culture is creeping in.
2008-2009
2009-2010
2010-2011
2011-2012
Until this season Arsenal had been spending quite modestly whilst their top 4 rivals had all been spending handsomely with Manchester City on spending sprees to match those of Abramovichs early days in an effort to break into the top 4.
It is clear that Arsenal had shifted towards selling big and buying modestly.
With the way our rivals had been spending and especially their next spends it is really a miracle that Arsenal have remained in competition for a top 4 finish. The below chart should highlight that.
Net spending since City rejoined the Premier League
It is clear that Arsenal managed to remain competitive for titles even whilst other clubs spent big and have remained in contention for a top 4 finish whilst the likes of Liverpool, City and Spurs have all spent a net in excess of £100m.
What has changed? The ability of other clubs to pay big money for players never bothered Arsenal pre-2006 as Arsene was always able to pick up a bargain.
I believe it to be Arsenal’s ability to compete with top wages. The below chart will show you that in the past our wage structure didn’t match up to other clubs and that was a contributing factor for not being able to pay top dollar, it will also show you that in recent years Arsenal have had the wage bill to cope with big salaries but have been unable to offer them because of our massively flawed system of overpaying young players in order to tie them into long contracts. In a sense it is similar to the commercial deals situation. We accepted poor deals to fund the stadium and have been tied in. The younger players have been offered massively inflated salaries to get an extra 2 or 3 years on top of the standard 4 year contracts most other clubs are content to have their players sign.
Wages 2003-2011
The chart shows that in the years that Arsenal were competitive for titles they were not far off of the wage bill of Manchester United. Since 2007 Arsenal’s wage bill has been dwarfed by that of Chelsea and City and Manchester United have made strides to try and compete with their wage structure as best as they can. Thankfully unlike Liverpool Arsenal have not seen a huge increase in wages coupled with a huge decrease in quality of the playing staff although it goes without saying that Arsenal’s squad is a little thin and there are many players who deservedly do not get a game.
What interested me the most about these figures is that Tottenham have been spending on wages (big transfer spend aside) in the past few years in an attempt to become a top 4 regular similar amounts to what Arsenal were paying for multiple title winning squads and invincibles. The wage landscape has changed and our current spend looks at best to be good enough to challenge for titles if channelled properly and at worst is good enough to guarantee enough quality for a top 4 finish every year. Tottenham on the other hand are showing that it is possible to crack the top 4 on a budget but challenging for titles is way out of their pay grade.
Hopefully this summer will herald a change back towards a more meritocratic wage structure and we’ll be able to attract the few players we need to have a real title challenging squad.
Thanks for reading. Please comment on this post, share with friends and follow me on twitter (@thedanielcowan)
Sources: Club financial reports or Deloitte
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Good article. Especially your wage analysis shows that Arsenal is a great deal less frugal. AW achievements looks less spectacular, also other clubs caught up by hiring continental managers as well. The sponsor deals looks poor now because they were signed 5-10 years ago and the priority at the time was to demonstrate financial stability in order to get funding for the new stadium, but should come up for renewal in the next few years.
Serves only to really highlight our flawed system of wage structure. So frustrating.
Additionally, we used to benefit from Arsenal’s / Arsene’s scouting network and ability to unearth gems, but this, alongside many other areas of Arsenal development, has withered away – when did Alan Pardew / Newcastle develop a better scouting network than us? How can Sp*rs be pushing us for third place and CL qualification with a wage budget of £35m less than us?
Grrrrr.
We do have a massively flawed wage structure, that I do not deny. It winds me up to see someone like RVP on £90k a week and someone like Squillaci on £60k or Denilson on £50k.
Our scouting system hasn’t withered away as such, it’s just that everyone else’s got better. I must say though that someone like Demba Ba was a risk for Newcastle because of his knee problems, it’s why Stoke pulled out but then again do we really want to be competing for the same players as Stoke want?
Cabaye is a great player but would he have been as good at Arsenal, in the Arsenal system? Wenger thought not. Mistake? Maybe. Cisse was a great buy for Newcastle but was any other top 4 club in contention for Cisse? No, so why should we have been? In hindsight these players look like missed opportunities but at the time they are just options we chose not to consider.
Spurs have a good wage structure that’s probably why. It’s not good enough to attract big big players but it is decent for a decent team. They aren’t title contenders and won’t be with that wage bill. Our wage bill should allow us to be title contenders.
Probably worth nothing though that Tottenham’s second highest paid player (Modric) is supposed to be something special but hasn’t made or scored as many goals as Alex Song has since he joined Tottenham.
The club does need to radicalise it’s wage structure if the reported wages for some of our ‘lesser’ players are true.