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Arsenal Need Champions League Football To Buy Big In Summer

Reading all these stories coming out the Arsenal Supporters’ Trust meeting last night that Arsene Wenger has a £50millon transfer kitty. That is not really true. Yes Arsenal made around £50millon profit, but not qualifying for the Champions League will cost the club £45millon, wiping out the cash balance.

So how did Arsenal make such a large profit? By selling players. Player sales during the summer of 2011 (with estimated fees) were: Fabregas (£29m – initial payment), Nasri (£25m), Clichy (£7m), Eboue (£4m) and Traore (£1m). These transactions will generate substantial profits as the book value of these players would have been limited due to their contract status, and therefore the profit on player trading is likely to be over £55m (£66m gross receipts less £10m book value). In all, Arsenal generated a transfer profit of around £55m.

So the transfer profit is what is “available” to Wenger in the 12 months to May 31, 2011 Arsenal’s football business made a pre-tax profit of only £2m and was basically run at break even off flat revenues of £225m, with £125m spent on wages and £20m on new players and contract renewals.

So to summarize, without Champions League football next season Arsenal does not have the cash to buy new players unless a) hesells first or b) Kroenke invests money in the club that can be used to buy new players. And I don’t envision that second scenario happening.

One other number I found incredible was that Arsenal has 71 players on its wage bill, which is £125m. That is an incredibly high number of players to have under contract. Arsenal’s wage costs are the 4th highest in the Premier League and getting rid of dead weight like Bendtner, Almunia and Vela will allow great flexibility in resigning players to new deals.

This post originally appeared on our Arsenal blog.