Arsenal PSR position and £200m sum explained amid Viktor Gyokeres transfer agreement

Closing in on finalising deals for Viktor Gyokeres, Noni Madueke and Cristhian Mosquera, as well as still eyeing a deal for Crystal Palace’s Eberechi Eze, Arsenal have opened the wallet this summer.

Those additions, which will end up coming to a combined £120m before factoring in the possibility of having to pay the £68m release clause that Palace want to see triggered, come on the back of the signings of £61m Martin Zubimendi, £10m Christian Norgaard and £5m Kepa Arrizabalaga. Without Eze the summer outlay is set to stand at £196m.

There has been little in terms of exits, either, with Nuno Tavares’ £6m move to Lazio and Marquinhos’ £2.5m switch to Cruzeiro not scratching the surface when it comes to chipping away at the net spend. Whichever way Arsenal slice it, this summer is going to be impactful to the balance sheet.

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Working without the Eze interest materialising, that £196m would be some £39.2m in annual amortisation charges that would be accounted for. For 2023/24 Arsenal’s amortisation costs stood at £171m, for the 2024/25 financial year, which came to an end for the Gunners on May 31, with additions last summer such as Riccardo Calafiori, Mikel Merino and David Raya, offset by the reduction in book value of a number of players, such as Declan Rice’s falling £20m, meant that the amortisation charges for 2025 are likely to be around £180m.

Already the business in 2025/26 suggests another amortisation cost, wage and transfer debt hike, with wages likely to be over £340m for 2024/25, which hints at this summer being one where the club are willing to spend more to try and close the gap to winning the Premier League and Champions League, especially in the face of likely sterner competition next season from not only Liverpool and Manchester City, but Newcastle United, Tottenham Hotspur and Chelsea.

The second-placed finish in the Premier League in 2024/25 and run to the semi-finals of the Champions League meant that Arsenal pulled in plenty of revenue, close on £100m of it coming from their exploits in European football’s top tier domestic club competition.

Despite rising costs across the board, the club is likely to turn a profit for 2024/25 of some £10m, potentially a little more, with revenues expected to surpass £650m thanks to prize money and commercial activity. Even at a conservative estimate it will be the best financial performance at the club for a number of seasons, and one that has left them with little to no concerns when it comes to the Premier League’s profit and sustainability rules (PSR).

Estimates presented by football finance expert Swiss Ramble pegged Arsenal’s PSR position as net positive at £31m up until the three year cycle ending 2023/24. That meant that, on top of the allowed £105m, Arsenal could have lost £136m and still been compliant.

Using the same assumed allowable deductions for depreciation, youth development, women’s football and the community of £55m, then for the three-year cycle ending 2024/25, which would no longer include the £45m loss from 2021/22, should Arsenal turn a profit of £10m against a PSR limit of £191m including allowable deductions and its previous net positive position, then the Gunners’ actual PSR headroom would be a whopping £201m.

That figure has some room for manoeuvre either side, but the long and short of it is that Arsenal are confident of their compliance to such a degree that they can spend far more because they have been more reserved in the past, with their wage bill and transfer debt not having got out of control like Manchester United’s.

That said, the investment does require continued competitive success, but without said investment then achieving that goal becomes far more difficult. This summer is about building from a position of strength and knowing that they are now in a three-year cycle which won’t include the 2022/23 £52m loss, meaning that their position will be even more greatly improved.

Even factoring in Eze at the release clause of £68m would only add £13.6m in annual amortisation costs, and that is something that the club can absorb, but they will undoubtedly be aware that one area that they have to do better in to offset this kind of spend in future windows is player trading.

Arsenal’s club record sale remains Alex Oxlade-Chamberlain’s £35m to Liverpool in 2017. Only newly-promoted Sunderland’s sale of Jordan Pickford to Everton, and Manchester United’s 2009 £80m sale of Cristiano Ronaldo are Premier League club records to have been set in 2017 or earlier.

For Arsenal, making more of the players coming out of their academy who have been fringe players will be key moving forward, a tactic that has been used to full effect by Chelsea in generating large player trading profits to offset heavy spending, with incoming profit allowed to be booked in its entirety while transfer spend can be spread over the life of a contract, the process known as amortisation.

But that isn’t a pressure on Arsenal right now. They have a lot of headroom when it comes to PSR and they are taking the opportunity to put to work a lot of the dry powder they had built up through sustained success in qualifying and going deep in the Champions League. It has been truly transformational for the Gunners.