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The very last issue Arsenal faces is their wage bill. This is why.

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All talk of the lack of money available to Arsenal this winter deserves a closer look at the source of why that is. And the last thing preventing expenditure is wages.

Fulham FC v Arsenal FC - Premier League

Hi. It’s me, FBJ0 again. Yes, it has been awhile. How are things? Good, good. Well, now that we’ve got that small talk out of the way, we’re all busy here. Down to brass tacks.

Unai Emery’s comments regarding our lack of long-term signings in January has caused quite the commotion. We will only loan, he says. Can’t afford to buy, he says (kinda). This has led to the predictable two reactions: intense anger and apologia. It’s Arsenal Twitter™, there’s no room for middle ground.

In light of recent pieces saying that we couldn’t afford to sign players under the Premier League’s short term cost control rules, I decided to come out of retirement. tl;dr those articles are wrong. If you want to read on, now is time for the boring stuff.

I’ve written about this before. I wrote about it in detail before, and better, than anyone else, if you listen to my mom. That said, even I wasn’t perfect. Those pieces neglect a very key piece that will become clear shortly,

The Premier League Handbook

Exciting reading. Everyone turn your textbooks to page 117. Let’s all read together the E.20. (quote the following):

Where the Club has elected to be assessed on the ‘2012/13 Base Year Basis’, the Club must satisfy the Board of any of the following:

E.20.1. that the sum of the Club’s Player Services Costs and Image Contract Payments has not increased by more than £19m (in Contract Year 2016/17), £26m (in Contract Year 2017/18) or £33m (in Contract Year 2018/19), as applicable, when compared with Contract Year 2012/13; or

E.20.2. that the excess increase, over and above the figures referred to at Rule E.20.1, arises as a result of contractual commitments entered into on or before 31 January 2013, and/or has been funded only by Club Own Revenue Uplift as compared with the like figures in Contract Year 2012/13 and/or Averaged Three Year Player Trading Profit.

I gave this test short shrift in my previous posts. It is very important now! Basically, this provision means the Short Term Cost Control equation starts with our 2012/13 wage bill. Our wage bill in 2012/13, according to the excellent Swiss Ramble, was £154.4m.

The next step is to move to add £33m to that number. Carry the 3...and, uh...£187.5m. That wasn’t so hard! Let’s move to E. 20.2.

Obviously, Arsenal’s wage bill is over £187.5m. Any increase over that amount has to be covered by Club Own Revenue Uplift. If we turn to page 86, we learn that term means any increase in revenue, excluding PL TV money, since 2012/13.

Turnover less Premier League payouts in 2013/14 was ~£230m; specific Premier League payouts in 2012/13. It’s tough to know exactly what our revenue will be this year, but a worst case scenario like has us at £260m sans Premier League payout.

That means minimally, we probably have £220m to spend on our wage bill. Estimates have us around £200m. You can do the math, we have room.

As for doing the calculation under the Prior Year method, pay me Arsenal and then I’ll go to the effort.

The real kicker is, loans count! Wages paid to loanees count as payments to players under the rules. There’s no difference in the eyes of Short Term Cost Control between the loaning of Denis Suarez and buying Nicolas Pepe.

Also, as I’ve written before, these rules are very weakly enforced and can be easily evaded. We have plenty of players we could offload if wages were the issue. They are not.

Even better, next year, the rules are probably gone! They are set to expire at the end of the season. They could always be extended but I have not seen any reports yet. Even if the rules are extended, next year should be no problem with the new, lucrative adidas deal kicking in.

Wages aren’t holding us back from buying players. Dont buy the PR blitz. We have money, Kroenke just doesn’t really want to spend it. This is inarguably true and you can trust me because among Arsenal fans, I’m about as positive as it gets about the American’s ownership of the club. Hopefully Sven and Raul can scrounge a few pennies from the couch cushions in the summer to rebuild this aging and disappointing squad because it seems like we’re stuck with it for the rest of the season.