Can Arsenal spend £55m on Suarez?

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Luis Suarez

Did you ever think Arsenal would bid £40,000,001 for a player? After years of austerity this seems crazy, right? Not crazy because it’s over-valuing the player, we are all well aware that top talent these days come with a pretty hefty premium. No, it’s crazy because it’s well over double what our reported highest ever transfer fee is (£17.5m for Reyes).

What is even crazier is how we have gone from

FFS Wenger, spend some effing money! We need world-class players at Arsenal

To

Stop effing dithering and just give them £50m for Suarez if that’s what it takes. We’ve got the money!

And

Why is it taking so long? Other clubs are buying players so why can’t Arsenal? They are going to stiff us again and not buy anyone.

Putting aside the self-perpetuating unhappiness which Arsenal some supporters have created, it is crazy to think that even with £70m/£100m/£120m (take your pick) in the bank that we can just drop £55m on one player as easy as breathing.

Arsenal transfer kitty

I was genuinely astonished at the sheer volume of people I spoke to who didn’t appreciate that Arsenal have a budget. “But we have £70m to spend”, “We have £100m in the bank” were the responses to me saying “Big deals are easily concluded if you are willing to pay over the odds. Or don’t have a budget” (I paraphrase).

Arsenal do have a budget. It may be a very big budget but it is still a budget nonetheless. I am not pally enough with the Arsenal board or their bank manager to know exactly how much we have to spend or how long it needs to last for but I suspect that our £70-120m isn’t just for this summer. Let’s have a look at Arsenal’s budget using confirmed figures.

We will certainly have more money available to us in 2014/15 but does that mean we can spend all of our money this summer? Or do we need to keep a little powder dry?

Ignoring that even and assuming that we have £100m to spend this summer can it all be spent on transfer fees? What about wages? Let’s say wages don’t factor as we have managed to get quite a lot of non-contributing players off our books. Agents fees and signing on fees cannot be ignored though as that money has to be paid from somewhere and there is no logical reason why it would not come from the transfer kitty as it is a transfer associated cost.

Signing on fees are hard to calculate as it is impossible to know what they are without seeing documentary evidence however agents fees are a little easier to calculate as those figures are released to the Premier League.

Between October 2008 and September 2012 Arsenal spent the following on agents fees

10/2008 – 09/2009 – £4.76m10/2009 – 09/2010 – £3.66m10/2010 – 09/2011 – £4.65m10/2011 – 09/2012 – £5.58mTotal – £18.65m

I am going to be more than generous and work on the basis that £8.65m of that was spent on existing players for contract renegotiation etc which leaves us with £10m paid to agents of new signings.

Between October 2008 and September 2012 Arsenal spent a total of £131.5m on transfers. Now this is a very rough estimate based on reported fees for Arsenal signings as many of them are undisclosed. Accepting these figures as correct that makes Arsenal’s transfer outlay, excluding wages and signing on fees as £141.5m.

Agents are paid to get their clients the best deals possible and one would assume that a player would have something serious to say if their agents fee for their transfer was higher than their own signing on fee. Again, I am going to take the liberty of assuming how much someone gets paid by saying that each signing on fee was equal to the agents fee, no more, no less. So now we are looking at a total outlay of £151.5m on transfer related fees between October 2008 and September 2012.

So agent and signing on fees equates to approximately 15% of the transfer outlay. So assuming our budget is £100m we actually have £87m to spend on actual transfer fees. £87m + 15% = £100.05m.

1. FC Koeln v Arsenal - Pre-Season Friendly

Arsene Wenger

£55m man? Not without a fight

A bid of £40m for Suarez is roughly 46% of our total budget. Now if Suarez is our one and only target then it’s no big deal and we can up the bid without breaking a sweat but I don’t think that is the case. I think we are looking at two more players at the very least. We could easily pay the £55m Liverpool want but that would leave us with a maximum of £32m in which to buy a minimum of two more players. Let’s say that one of those players is Fabregas. Some think he has already signed for Arsenal and others think that those people are nutters. For the sake of this article let us say that Arsenal are serious about buying him.

Could we get him for £32m? Let’s say yes. Barca still owe us around £10m so we’d still have £10m left over. Could we get a top class centre-back for £10m? It would be very tight.

Arsenal probably do have the money to get all of their targets, irrespective of who they are, but we have to make sure we have enough cash just in case the final piece of our puzzle is snatched away from us because the selling club do a Real Madrid and slap an extra £10m on at the last minute.

So, regardless of how much money we have to spend we still have a budget to work with. Manchester City, Chelsea, PSG and Monaco do not have budgets which is why they can conclude deals quickly. Napoli can conclude their deal for Higuain quickly because they made an astonishing amount of money on Cavani. They still have £20m spare, plus whatever they had before and are in desperate need to replace a top striker with a big enough name to appease the fans and someone who will get goals. Higuain is that person and Napoli were willing to pay the price without negotiation.

Do Arsenal have that luxury? I don’t think we do. I believe we have a budget and getting all of the players we want means we have to negotiate to ensure we have enough cash to obtain all of our targets.

Budget

Some may say that transfer fees aren’t all paid upfront so we can exceed that budget but I believe them to be wrong. Arsenal are no different from a salaried man in the sense that they know, or can estimate, how much money they will make every year and need to ensure they can pay all of their bills. If you earn £1500 a month, your rent is £750 and other bills total £600 you don’t sign a car lease for £150 because you aren’t giving yourself any wiggle room if your bills fluctuate. Arsenal won’t spend £70-100m upfront but they won’t exceed their budget because they know if they do they will be eating into future budgets. The funny thing about strengthening a football team is that it is a short-term measure.

Manchester United also have a budget, which is why they haven’t signed anyone yet. If they were able to just drop £50m on Fabregas, who is probably their top target, they would. Barca wouldn’t turn down that sort of money but United can’t do that without attempting to negotiate first because they run their business relatively responsibly.

Arsenal are a responsible club and will work within the confines of their financial ability. Arsenal will get the players they want but it may take a little time to get the deal they can afford.

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Edited by Staff Editor