The sins of wages

Oft injured Arsenal striker Robin van Persie yesterday publicly challenged Arsenal over their wage structure.

Arsenal have a policy in which they will not go over a specific amount of money when agreeing the salary of a player. They won’t pay enormous amounts of money. I think that they should go to a higher level of salary. If you want to keep the group together, you have to keep them happy. If you are 27 or 28, I can understand that you would make the decision to go elsewhere if you can earn three or four times as much. If that sort of money was also paid here, I’m sure that person would stay.

One day, our fair Robin is asking Arsenal to pay more salary and the very next day it’s revealed that Arsenal have the third highest salary behind Man U and Chelsea. I was taken aback by the announcement myself. I know, Fiszman had come out two days ago with a statement that the Arsenal was paying nearly what Man U were in salary and I thought “that’s just Danny talking to the press” he’s probably exaggerating for effect.

Turns out he wasn’t exaggerating at all. Arsenal’s 06/07 salary was just £2.5m below Man U. Which is quite the shock, because I always held that Arsenal’s youth policy and rigid salary structure kept wages low. I guess not. Granted, that salary figure includes the ludicrous £10m salary that Thierry Henry made in his last season (10% of the total was paid to Henry) but it’s still a huge chunk of change for a team full of youngsters. In fact, I speculated publicly that Arsenal’s salary was probably below that of a club like Everton and never once received an odd look, much less a rebuttal. Everyone I know thought Arsenal’s salary was on the low end for a top club.

Though the wage bill is high, there is a great deal of evidence that the club is not overpaying and is, in fact, practicing very prudent fiscal policy unlike almost every other Premiership team. Before I go on, I like this PDF as a visual representation of the things I’m going to talk about.

In that graphic above, you can see that Arsenal may have the third highest wages but that they also have a wage to turnover ratio of exactly 50% (third in the EPL, behind Spuds and MancU). This means that Arsenal paid for exactly half of their salaries with gate receipts. Meanwhile, Chelsea (largely due to their insane salary) are only able to pay 30% of their salary in match day receipts and most teams manage just below 27% (like Everton who are square in the middle at 75%). I think this 50% number is deliberate on the part of the Arsenal board, by the way. Based on the insistence that there is a wage structure and the all too neat 50% number, I suspect that the board wants salary at or around that mark. I would even go one further and wager that next year’s report will be 50% or a little better (due to the dropping off of Henry’s huge salary).

Also, Arsenal only increased their wages 8% over the previous season, while Chelsea increased theirs by a whopping 17%. Interestingly, it looks like Arsenal are bringing their finances in line (with the increased revenue generated by the stadium and a small increase in overall spending) and other teams are spending above and beyond their means. If Chelsea increase their salary an additional 10% and Arsenal stay pat (which is another thing I would put money on seeing in next year’s report) then you can expect Chelsea’s salary to double Arsenal’s in just two years and reach over £160 million pounds per year with gate receipts of just under £40m.   That doesn’t seem logical does it?

Another thing in the report that is oft repeated in the press is that the Bundesliga is the most profitable of all the leagues owing to the fact that their profit to salary ratio is so much higher than the EPL. But I see a small problem there in that Television and “Other Business” account for so much of their profits and gate receipts are so low. Yes, the Bundesliga has the cheapest ticket prices and thus there’s an opportunity for growth there, but Serie A and La Liga must be eyeballing their paltry gate receipts and declining attendances and hoping that they don’t lose out on television revenue or they could fall behind even further.

Which brings us full circle. I can’t for the life of me figure out who Robin van Persie thinks Arsenal need to pay “triple” the salary to; Adebayor? OK, certainly an increase, but triple over a single season of great performances? That’s too much. Ask again next year when you repeat what you did this year. Toure? He’s one of only two players who are 27 (Rosicky is the other and if I heard him asking for a raise, I’d laugh my head off) and he’s one of my favorite players but let’s face it: he had a bad season. Triple? No. Flamini? Triple? Quadruple? What did Robin want them to pay him, £200k/wk? Even I wouldn’t want to see that.

I also have to wonder what team Robin van Persie thinks Arsenal should spend like? They already spend like Man U, so does he mean Real Madrid, Barcelona, Inter, Milan? I’m sure those teams spend a great deal but on average, Arsenal are in that top tier. If Milan wants to pay £120,000/wk for a backup holding midfielder who can’t even make his national team, then that’s their business. I don’t think he’s worth it and clearly Arsenal agree. So, that leaves but one other team that he could possibly be talking about: Chelsea. Spend like Chelsea? No thanks, we’ve been over this and Arsenal are not Chelsea.

1 Comment on The sins of wages

  1. I think people need to realise that football is not just about the money but more about loyalty and trophies.
    I think Arsenal are doing a good job going by what Fizman was saying. But I would still want to see more money paid out to hold on to our key players. But you have got understand that if salaries go up for one person other players will start to raise eyebros and the effect of that might be more disastourus to a buisness tnan the effect of losing one/two palyers who fill they should be paid more.

    Basically keeping the salaries to a sustainable level will be important for Arsenal both now and especially in the long term. You don wanna go into debt just because you hav got a big slaries base pulling you down.

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