This article was commissioned for a charity called Economy, and is also available on their website if you click here.
As he faces calls to resign as manager of Arsenal, we look at the economics graduate turned football manager’s decisions to spend (or not to spend)
Another year, another embarrassing defeat for Arsene Wenger. As his team faced a 5-1 mauling at the hands of Bayern Munich in the Champions League, calls for the manager’s resignation are, once again, everywhere.
Arsene Wenger has enjoyed some memorable moments in his 20-year spell leading Arsenal. Three Premier League title wins and six FA Cup triumphs make him the most successful manager in the club’s history. He was also a huge influence in Arsenal’s big money move from Highbury to the state-of-the-art 60,000 seater Emirates Stadium.
But sixteen points off the leaders in the Premier League and knocked out of the Champions League in the last 16 for the 7th year in a row, it’s not looking good for Arsenal’s long-term boss, who faced protests against an extension of his contract.
As his future at the club hangs in the balance, we take a look back at the economics of Wenger’s time at Arsenal.
In 2006, Arsenal paid £390 million ($475 million by today’s exchange rate) to move from the 38,000 capacity Highbury – where they had played for 93 years – to the 60,000 seater Emirates Stadium.
But this major investment meant that between the years of 2006 and 2013, Arsene Wenger had to be very wary of how he spent his money. In what became known as ‘Wengernomics’, Arsenal went through a period of ‘austerity’ where key players like Robin Van Persie, Cesc Fabregas and Samir Nasri were sold in a bid to balance the books.
It paid off. The increased capacity stadium gave a massive boost to club’s ‘match-day income’ – ticket sales, merchandise, food etc. In 2006 The club’s match-day revenue was $57 million, rising to $130 million in 2014 – a 127% increase – it stayed at that level in 2015 and 2016.
Record ticket prices made up a big part of this income, leaving a lot of Arsenal fans feeling priced out. Since the move to the Emirates, the average cost of Arsenal tickets has increased by 17%, but it’s the increase in ticket prices for the big matches that have shocked most. For a category ‘A’ match against close rivals like Spurs or Chelsea, the cheapest ticket for an adult member is £64, and some tickets can rise to over £100 depending on where you’re sitting.
Wenger’s transfer record at Arsenal polarizes fans. Some of the players he’s signed have been unforgettable, going on to be legends at the club. But Wenger’s reluctance to spend money after the move to the Emirates Stadium left a lot of fans frustrated. By putting financial profit over buying the players he needed to win tournaments, many felt he was on the side of the board. If you look back on Wenger’s 20 years as Arsenal boss, only in the last three or four seasons has he become more willing to spend big on players.
Between the 2006-07 and 2012-13 seasons – when Arsenal were paying off the stadium debt – Arsenal actually made £40 million out of selling players, rather than spending, more than any other club in the Premier League. In the same period, rivals Manchester United spent £88 million, Liverpool spent £124 million, Chelsea splashed out £233 million and Manchester City went all out with a net spend of £427 million as its rich buyer, Sheikh Mansour pumped money into the club.
But since 2012-13, Wenger has spent over £250 million on new players, including the signings of Alexis Sanchez and Mesut Ozil, who were instrumental in the club winning the FA Cup in 2014 and 2015.
Still, Arsenal lag behind both Manchester clubs in terms of spending in the same period. Manchester United and Manchester City have both spent over £500m on new players since 2013.
As well as buying players off their old club, football managers have to offer players a wage that will attract them to stay. If you rank each team in the Premier League by its wage expenditure over the 20 years Wenger has been in charge of Arsenal, he has only underperformed in the league table compared to his ‘wage rank’ twice – once in 2005-06, when the club reached their first ever Champions League Final, and once again the following season, 2006-07. In both of those seasons, Arsenal finished fourth in the Premier League even though it had the third highest wage expenditure.
Wages have seen a drastic increase at Arsenal since Wenger paid off the stadium debt. In the last four years, Arsenal’s annual wage structure has increased by over £50 million and this could soar if Arsenal manage to hold down Ozil and Sanchez in new long-term deals.
It’s been a tough financial period at the club, with fans feeling the brunt of Wenger’s decision making and losing some of their favourite players to Premier League rivals.
But now, with the cash to splash on new players, we could be set to see a new era of superstars at the Emirates, whether Wenger decides to stay or not.
If this is how it ends for Wenger, Arsenal fans will hope that he can bow out in style with another FA Cup win in May what would be a fitting conclusion to one of the most successful managerial reigns in Premier League history.