With money in the bank will Arsenal spend? Here’s why not… « Untold Arsenal: Arsenal News, supporting the club, the players and the manager

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Spend some money please?

Richard Bedwell

Following the release of the latest six monthly financial figures the demand to spend it all (couched in less polite terms than used above) is sure to follow.

It may be worth going over three of the reasons why it is very unlikely to happen at anything like the level that the spenders desire.

1.      History tells us that it never has in the past. Under the policy of custodianship (derived directly from the Club’s view of itself as a ‘Sports and Social Club’ (I quote Ivan Gazidis) the Club sets out to invest any profits it makes for the long term benefit of the Club – and playing the transfer market has proved itself to be a poor way of investing any clubs money. If you doubt me, and if you haven’t done already, read Why England Lose by Kuper and Szymanski, and you’ll see the evidence laid out.

Every Arsenal team/squad, certainly since the Second World War, has been developed in the same way, giving priority to home grown players and, by and large, only bringing in players from outside if they represent outstanding value for money and also have the potential for that value to grow. Only in extreme cases have Arsenal ever spent at the top of the market and those occasions tend to be quite a while ago and, with hindsight, of very variable actual value.

Tracking Arsenal’s return on investment across that time, despite the ups and downs that 99% of clubs suffer, it has been a remarkably successful strategy.

It also explains why Arsenal have such a large professional playing staff – the more young players that you have, the better your chances of finding a gem.

For further confirmation of the correctness of this policy of ‘grow your own’ we need look no further than the other end of the Seven Sisters Road. Can you name anything like a full team of home grown Spurs players who made it to the top, either at Spurs or anywhere else in the last half century?

2.      The reason why we have recessions is because people don’t spend money when they think prices are going to fall.

Evidence points to the fact that, as a direct result of UEFA’s efforts to bring in FFP, clubs are not just saying the right things but also acting to move their financial positions towards self sufficiency.  The highest paid players at Chelsea will be phased out over the next year or so and their replacements will be paid much less.

As sugar daddy money gets removed from the transfer market it too will shrink, with the number of free transfers (at the end of contracts) increasing. With less money circulating clubs will need to reduce costs, competing less in the market with each other, and transfer values will plummet.

Arsenal, should they desire to move away from the long term policy (much praised by Kroenke at the time if his take over), will have a much clearer market to work in. But don’t hold your breath. For the reasons stated above, long established strategies that have worked over long periods of time don’t get ditched that readily and I don’t see them changing at Arsenal in the foreseeable future.  The Club, after all, has the highest average attendance at matches ever recorded in London whilst not exactly giving the tickets away for nothing! That represents massive success.

3.      At a point in time when FFP is really looking like its biting Arsenal do not want to lose their position as UEFA’s prime example of how it should be done.

And UEFA want that even less. Today’s announcement that international dates are to be reduced (and player insurance against injury improved) merely goes to emphasise that there is, almost certainly, an overarching agreement between clubs and the authorities to improve things for everyone’s benefit. I’m convinced that this latest move is part of the quid pro quo for helping big clubs come to terms with FFP – a principle that would help Arsenal more than any other club in the EPL with, maybe, the exception of Man Utd.

So what will happen with all that money sitting in Arsenal’s bank accounts? Some will get spent in the market – but only if young players already at the Club aren’t seen to be capable. And they will always be given the chance if it’s felt that they deserve it and so expenditure will, in the eyes of many, appear small/ ‘not enough’. Most of that money will be invested in ways that will lessen the impact of having to meet mortgage repayments – which, of course will enable Arsenal to keep their salaries high and maybe to begin to be even higher than the current, financially doped, clubs.

And that is important because, as it highlights in Why England Lose, the strongest correlation in football is between the relative size of your wage bill and your position in the league.

Remember how well Arsenal did on the pitch before Abramovich vastly accelerated inflation in football?

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Football finance: the AST’s report on Arsenal’s finances analysed:

Part one: The Summer that was: transfer fees, wages and the “best” approach to the market.