Feb 222012

Morning all. I’m going to start today with a question. How many times have you heard this debate?

“Arsenal have the fourth biggest wage bill in the Premiership, therefore should be finishing fourth.”

“But we also have a lower net spend on transfers over the past six years than the vast majority of the league. Surely in those terms, anything above 17th is overachieving?”

“No, it doesn’t work like that. It is all about the wage bill. And ours is huge.”

I’m guessing this argument isn’t new to you. The strange thing about it is that, like many other debates in the Arsenal world, it is entirely polarising – most people seem to sit firmly in the ‘our net spend is tiny, therefore Wenger is working miracles‘ or ‘our wage bill is way higher than Spurs, therefore we’re underachieving‘ camp. I know I talk a lot on this blog about middle ground, but it amazes me that it is isn’t found on this one. After all, net spend and wages are the two ways of spending your money. They both count.

Not only do they both count, but they are intrinsically and inextricably linked. Over the past decade in particular, Arsenal have had a very clear strategy when it comes to replacing players – promote from within wherever possible, and recruit from outside when there is no-one of sufficient standing to elevate. That has had two direct results:

  • a focus on investing in the reserves and youths, paying the promising youngsters a salary designed to keep them out of the clutches of our rivals. End result – a higher wage bill, because we have a larger collection of players in development, each on decent money.
  • a higher proportion of departing players replaced from within. End result – a reduced net transfer spend, because incoming fees are not always spent on replacements.

We have a higher wage spend so that we can reduce our transfer spend – they are fundamentally intertwined, and it makes no sense to consider one without the other. You cannot say we are working miracles because our transfer spend is so low without acknowledging that it is our wage bill enabling that, and likewise you cannot judge us against expectations set purely by our wage bill when a considerable chunk of that is not being paid to players who will affect the club this season (it is also true that some of our wage bill is reserved for players not necessarily worthy of their salaries, but you can find examples of that at every club).

There are advantages and disadvantages to the strategy. Promoting from within leaves you less exposed to being ripped off when your rivals know of your desperate need for a player in a certain position (otherwise known as the Andy Carroll effect), and it also means that by the time a player hits the first team, they have already been schooled in the Arsenal way and are settled within the club. You could also argue that players require less gelling with each other than new arrivals, since many of them will have played together at youth or reserve level.

On the flip side, some of the money invested in youngsters is ultimately wasted when they do not come to fruition. Arsenal have historically been very clever with sell on clauses for players they let go, but sometimes three or four years (sometimes more) are invested in a talent who ultimately leaves for nothing before reaching the first team squad. Not only that, but having a young talent pool at your disposal can tempt the manager into promoting too early – if he needs to fill a particular berth in the squad, and has a great talent coming through the ranks, he may take a gamble on a player a year or two before the ideal moment. We’ve seen it happen.

So there are pros and cons, good elements and bad elements to the approach, but it annoys me when people fail to acknowledge what we have tried to do, and point either to the wage bill or transfer spend in complete isolation, and using it as evidence of our over- or underachievement. One affects the other directly.

The other related point is the 71 man playing staff figure that came out this week. It is hardly news – if you go to the dot com and count up the first team squad and reserves, you’ll reach a total of 72 (I assume Benayoun is the additional one, since he isn’t actually ours), so it isn’t as if the club are hiding anything. But this ties in with our strategy once again – if you plan to promote from within wherever you can, you need a decent pool from which to select. Some players are patently a few years from fruition, but they increase the wage bill and player count to the point where people can criticise. For the record, most other top clubs have 55-70, so we aren’t enormously inflated.

Imagine if we changed our strategy tomorrow, let as many of the youngsters go as we could, and recruited purely (or mainly) through the transfer market. In the short term, our wage bill would drop considerably, and the club balance sheet would look healthier. But, a few years down the line, three players might leave at the end of their contracts, with another two sold, and we would have to recruit five players from the market. It doesn’t take a rocket scientist to see that the wages saved are then used to funds the transfers (and associated fees).

Essentially, the club’s plan is to invest in youth, and cash in on that investment by banking a transfer fee for an outgoing player without necessarily having to fritter it away on a replacement. It is a strategy that confuses the media, who believe that every sale should result in a like for like purchase, and it frustrates fans, who don’t see as much spending action going on during a transfer window (incidentally, I am not saying we don’t need to purchase, the strategy is to promote from within where you can, it certainly doesn’t preclude signings when you don’t have someone good enough and ready).

So next time you hear two people debating over whether our expectations should be driven by our net spend or our wage bill, bang their heads together, tell them they are both right and end this most frustrating of cyclical arguments.

  38 Responses to “Arsenal misconceptions – wage bills, net spends and the 71 man squad”

  1. Best piece I have read on The Arsenal for decades.

  2. I think the Flamini situation sort of made Arsenal wary on losing out on young players due to the Bosman ruling. Hence we started doling out long term contracts to players who were showing good early potential. I think what Arsenal are doing now starting with the likes of Djourou is that they are handing out around 2/3 year extensions if the rumors are correct. People label £50K as too much but that’s the rate going around at any top club for an average-good player who is a 4th choice CB.

    A couple of things regarding the youth policy and the scouting system:

    Wenger has always been about good technical football. IMHO English kids previously weren’t as good at least in the 90 min radius that AFC are allowed to scout . This is why I guess AW had to scout more foreign players as they were quite better technically and well… didn’t seem to be overhyped and overpriced. Now this ruling will be taken off from the 2012 season and Arsenal along with other English clubs can go beyond the 90 min limits and sign players before they’ve turned professional thus avoiding the need to pay big transfer fees and wages for them IMO.
    Had this ruling been taken away years ago,we *could* have signed Ramsey or Walcott much cheaper. Of course smaller clubs are being smart as well. They sign players on professional terms as quickly as possible if the player chooses to stay there.

    Yes we need to get rid of players who have not lived upto their potential. But no one could have anticipated their form would go so bad and development hindered. Senderos was being hailed as the next Maldini during the CL run in 2006. Did anyone predict that things could have gone so badly for him?

    • It is a ‘hedging your bets’ approach. We sign all our development players up to long term contracts on good salaries. Some work out, and there may be cases where the way we have treated them is the reason we kept them, and they offset those who fare worse.

      No doubt we have made some mistakes along the way – we’ve let players run down their contracts as they’ve turned good (Flamini) and we’ve offered lucrative contracts to those who perhaps do not deserve them. But those are the risks we take with our strategy – for every overpaid kid who doesn’t make it, there is a transfer fee saved by another who is promoted to replace a sold squad member. At least, that is the intention.

  3. some sense at last – lets hope it gets the readership it deserves

  4. gr8 article. I have been thinking the same thing for quite some time. Some opinions i like to add to ur article:

    Arsene has tried for like for like replacements. Diaby for PV4, although eduardo was different but he was a decent striker replacement for henry, wilshere for fabregase, hleb for pires, then nasri for hleb, then gerviniho for nasri.

    But for one reason(long term injury) or another(better pay cheque) replacements never realized their full potential.

    That is my personal opinion nonetheless.

    In the end arsenal needs to pay best to their best players in order to keep them and their lies my frustration. I know we are in a youth project loop but even that is not fully appreciated by arsenal. May be it’s temporary but it’s frustrating.

    • I think there are two aspects to judge:
      1) How well we build a squad based on the money we spend
      2) How that squad performs.

      For the last few years, I think we’ve been doing 1 particularly well, but have done poorly on 2.

      • How can you separate 1 from 2? If 2 is as you say, that means 1 was not done well.

        • I think they are separate – there is some genuine talent at the club that, for whatever reason, is not reaching their full potential. We’ve donw well to acquire them for a good price, but having done that bit, we’ve not got the best from them.

      • on point 2 tactics play an important role, i have never seen arsenal sitting deep waiting for CA opportunity bar barcelona. It almost paid off if it wasn’t for starry eyed cesc attempting a through ball against arsenal wearing an arsenal Tee.

        Why doesn’t arsene use such tactics more often considering we have gerv, ox and walcott.

  5. You’re right, they are connected. Fact is Wenger hasn’t got the balance right. The current strategy isn’t working, however you try and look at it. Results attest to that. Our resultant decline and downward trajectory attest to that. So it’s about time someone else had a go.

  6. Wow. A blog that makes sense, kudos. It amazes me that so many people are blinkered in the data they take on board to form opinions and then so single-minded in their conclusions; it’s never that simple. It also surprises me how many people can’t see that this is the ONLY way to compete with the top teams, the expense of replacing players from outside with similar levels of ability and experience is currently beyond us, either this works or nothing works for us imo.

    Interestingly, Ozyakup seems to be getting some good coverage from the site this week so I’d say the process of bringing in a few young’uns rather than recruiting the big guys is still going strong.

    • Very much so. The club took the decision that replacing sold player with purchased players was doomed to fail, because you could never spend as much as you bring in (signing on/agent fees etc ensure that). So we promote from within where we can.

      One of the issues is that there has been a talent gap in our kids, as far as I can see. For around a year, everyone (Wilshere aside) was a year or two away from being ready, but forced in. For me, that has been the real issue.

  7. Thats all fine it it’s implemented correctly, but now we have lost our way with it. The contracts are too long and the wages to high to move on the players who are good but not good enough. We end up keeping them, using them in a crisis and further exposing their weknesses and devaluing them. Now we are stuck with the Denilsons and Bendtners of the world. I think these kids should have a year on loan at another prem or championship club to get the work ethic and prove themselves before we even consider the long term highly paid contracts they all seem to be on.

  8. Good unbiased piece but let’s be honest the youth policy has backfired badly due to failure of the management to blend with the experience required to take the first team to the next level and fans anger is rightfully justified as there’s no need of having a massive 71 pros on massive wages and no one to call upon in this time to help solve the defensive crisis while we can actually have a team of around 40-50 pros including the required experience and more ready made players who can have a big impact on the first team than the current 70 on a massive wage bill but having very little impact on the first team.

  9. I believe the gunners are in a crisis because Wenger refused to address the defensive concerns.He thinks football is attack only. He wants to play football like the Harlem globetrotters.The baskeball players had no league to compete. Theirs was a clowning act to amuse fans.
    Wenger was lucky to inherit English backline. He wants football played his way ie ball to feet 99.9% of the time. When teams stops the gunners playing or nullify them ,he calls it anti soccer.But this style can neutralise even a strong team.hence we find lowly teams beating top teams using this tactic. In case he forgets ,Hull wer e pulverised but won 2-1. Who cares a about pattern weaving soccer.
    Until Wenger alters his tactics the gunners will get unstuck against teams that play anti soccer. Btw anti soccer has been discussed by fans.

    • Barca have done this as well .They don’t focus on defenders purely but their entire game is based on possession. If they lose the ball,they won’t stop until they get it. It’s why one sees the likes of Messi running after an attacker to his goal to get the ball back. AW has attempted to instill this but it doesn’t seem to be working out. Also Barca are damn good at possession and if they don’t seem to get a breakthrough by passing,they have Messi who can run at will against 2,3,4 defenders and not only setup chances by creating space but score as well. If one sees Messi’s game ,he very rarely is a player who actually taps in the ball.He more or less creates his own goals.

  10. Very good piece, gets exactly the points that most bloggers/commentators choose to skip.
    I guess Arsenal’s real trouble this season began with them recruiting Fabregas in the first place. He dominated our game and for all that he gave the team he also adversely affected Arsenal’s chances of going on strong without him. When he decided to leave, Nasri seemed to be the best replacement, but the fact is he’s not suited to the role (he’s more effective as an out-and-out attacking midfielder, while here he was expected to congeal with our fluid centre). For whatever reason, and I remain convinced that it wasn’t Wenger’s choice, Arsenal were left without a proper creative outlet, and this was clearly visible in the early games (until Arteta started doing what he was supposed to, most of the action took place on the wings, which made our game perfectly legible and unsurprising). I was strongly against buying a new creative midfielder in the winter – for one, it would not stabilize the squad at all (he’d have to adapt), for another, most of our (reported) targets expressed a desire to stay put until the end of the season. But I don’t think there’s anyone at Arsenal now who could actually serve that designated role. Ramsey can’t, Wilshere could but is better off in a different role, Arteta isn’t good enough. Diaby and Rosicky are practically useless. If we had a real good creative midfielder in our ranks, the question of who would sub for RVP wouldn’t need to be posed as he wouldn’t have to act as playmaker and could just focus on scoring…
    As for the young prospects: they always say they are a decent bunch with some who stand out. Some, like Miquel, have made some appearances, and you can see that Coquelin, Miquel and perhaps Yennaris are already up to it. But it’s hard to predict what will happen to someone like Serge Gnabry or Kristoffer Olsson. I know they’re kids, but at that age, some of them could already be breaking into the squad. Why don’t they?

  11. Also, another popular misconception: that the fact that Arsenal reserve players are loaned out to teams from the Championship or teams like Wolves or Bolton shows that they don’t have quality. Show me a United reserve who plays for Real, or even Bayern. Also, some of our young players did actually go to top European clubs – like Armand Traore last season (Juventus). And how is he doing now, eh?

  12. Great Work … loved it the way you explained the very AFC strength ….

    And I personally think that good players are coming in very fast into the first team we all saw that this season.

    The problem is not with AFC on the pitch its the management and board that is causing the real problem. I think one of the major drawbacks of AFC is marketing, with good marketing we can earn more in no time and hence can have books which are more than adequate by any other football club standard.

  13. Excellent work. You have to also factor in injuries that have majorly set back players or in some cases finished them.
    I am sure there are plans to account for a certain number but we have probably exceeded that in number, seriousness and also concentration (injuries to players in same positions at the same time)

    • Couldn’t agree more.No doubt we’ve certainly played very poorly in a number of games this season, but that shouldn’t shadow the fact that injuries (not just in numbers, but in high concentration at key positions) have been our biggest impediment, and that’s not an excuse but merely the truth.

  14. Good article. The fact remains that the young players bought have not been good enough once they reached maturity and they will see out their contracts because now they are paid more than they will be paid anywhere else. You have people like Nik Bendtner threatening never to play for Arsenal again while at the same time no other club will buy him. The squad is paper-thin. In short the philosophy has failed and there is nothing left in the wage budget to offer improved deals to those players that the club desperately needs to keep. There is also little scope to bring in star players. The future looks bleak.

  15. How can anyone justify Djourou’s new 50K per week deal ? and the likes of the deals Bendtner & Denilson had despite being disappointing & unproven. ManUre don’t pay less & unproven players 50k + per week but pay hugely the star & performing players. It will be ridiculous to lose RVP because a huge chunk of budget is wasted on unworthy players. It comes down to a large extent to Wenger being a control freak who wants players who will feel they owe him & thus toe his line & is less willing to take the chance that Superstar signings who have bigger egos & personalities will challenge him & strongly voice opinions & displeasure.

  16. The problem we have is replacing our top players with the Songs of this world and having to wait 6 to 7 years for them to improve and still not being good enough.
    We are where we are due to the players and the coaching staff not being good enough.

  17. As a life long Arsenal fan, I read a lot of articles .. mostly designed for immediate inflammatory reactions.
    Because of this I rarely if ever comment.
    This is one of the best, concise articles I’ve read in a long time & I wish more people understood the point you are making.

    • Thank you very much! I don’t really go in for inflammatory stuff, which is probably one of the reasons why I don’t have much of a readership, but I would never want to put something in just to get a reaction. I like a healthy debate, mind.

      I just think there is more than meets the eye, and sometimes you can’t just simplify situations down to a single point (e.g. wage bill). The media will, because it suits their desire for drama, but I prefer a bit of truth, personally.

  18. Excellent piece, Pete. I think the one thing about it is that it raises a chiolling question – did the Board lie to us from the day they announced we were leaving Highbury? After the whole premise of our building then Emirates stadium was to be able to compete more financially with at that time manchester United specifically.

    If we are indeed using the Ajax business model which looks to be the case here, then did we ever intend to comepte more financially with anyone or was this all just a profit generation scheme which drove the share prioce sky hogh ahead of selling for an insane profit to the individuals selling to Messers Kroenke and Usmanov?

    I think the premise of this piece should be raised at the next AGM. And probably should have been at the last five AGMs as well…

    • Well, I don’t think it was necessarily a profit making move, at least solely for the directors – after all, the share price is largely dictated by the success of the club, so they go hand in hand.

      I do think though that this is a longer term plan than perhaps we realised. We will still be paying off the debt for around 20 years, and being restricted by commerical deals for two. In the long run, we’re in a great position, but short term, it is a little painful.

  19. Having a big stadium with a big capacity is not guarantee of success. Look at Sheffield Wednesday and Leeds United who both have stadiums with a larger capacity than White Hart Lane but, dare I say, more loyal fans than Arsenal seem to. The stadium is never full now and Arsenal are still in with a chance of a top four finish. In the next few years while the team declines you’ll see half of the seats empty and the stadium is more of a burden than an asset. Success on the pitch must be achieved for the stadium to be of benefit to the club so the long-term plan could fall apart.

  20. […] to stop investing in youth and lower our squad size? That is a heated debate, perfectly stated here. All in all the AST analysis brings up many valid points and us Gunners better start paying […]

  21. Very good piece – our strength and issues are illustrated very well indeed.
    The problem is the balance, isn’t it – it’s a hard one to get it right.

    Like we saw in the Cesc’s case, we invested a lot in him in terms of money and time and we were literally building the team around him when he left. A huge loss for us, but who can blame him? Obviously money isn’t the only factor that would keep top players with the club.
    Without a potential winning team to win big, we cannot keep and recruit best players even with big salaries. Without world class players, young guns will be left with no significant mentors that could help bring them to the next level as well. I know it’s not as easy as we say it but over the next couple of years we probably need to try and keep our real talents by appealing more to what we can achieve as a team. We need to make hard decisions to give up on some players and invest in some key players that could help the team reconstruct after the big changes last summer. And that would probably mean some changes in the way of our funds distribution as well.

    By the way, I introduced your article in my Japanese Arsenal blog. People seemed to have liked it a lot there as well.
    Thanks and keep up the good work!

  22. The arguement that some of the youngsters not turning out to be quality players doesnt hold good. There are players who are less talented than Denilson and Bendtner who perform much much better. It is all about motivation and commitment. I feel that is lacking in our youth players. The long term contracts with blown up wages has a negative effect on the youth’s commitment and motivation. There seems to be no sense of self improvement because they have not earned it rightfully through hardwork. The strategy seems spoiled because of player’s attitudes.

  23. “We will still be paying off the debt for around 20 years, and being restricted by commerical deals for two. In the long run, we’re in a great position, but short term, it is a little painful.”

    That sentence basically tells everything about what to expect from our beloved club. At first, I thought it’s gonna be only 5 years for a transition period. but then after knowing better about our financial restrictions, I believe it’s not until 2014/2015 season that we will start ‘winning things’. Or at least that’s what I believe.

  24. A perfect analysis. I think most gooners agree that in theory they like the model that the club is adhering to. I also think the most fans want to keep that model in some form. We seem to enjoy the moral high ground that comes with it. I know I do. AFC just need to tweak it a little. Did Almunia, Diaby, Denilson ever deserve 65k a week? Redistribute those wages properly. They are no more than 30k -40k a week players. Wenger wanted a wage band that gave parity in the squad. Does parity in wages work? Absolutely not. Pay the top players the money and other players less. The model would still work and AFC could still operate with the same ethos.

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