Frustrating defeat underlines striking issues - yet Arsenal's healthy PSR allows for big signing

A miserable evening in North London saw Isak showcase his talent but Arsenal's excellent PSR allows the club to spend - if they so desire

Hello,

A Happy Wednesday it certainly isn’t.

Not when Arsenal lost 2-0 to Newcastle in the first leg of the Carabao Cup semi-final at the Emirates on Tuesday evening.

It was an extremely frustrating night in chilly North London that saw Alexander Isak score again, which bitterly underlined just why the misfiring Gunners need a proven striker up front.

Yes, I understand in the age of Profit and Sustainability Rules (PSR) that you can’t simply write a cheque if your numbers don’t stack up - although after delving into the numbers as an MBA in a previous life, the fact is Arsenal actually do have the ability to spend, and spend big if required. (See below)

Alexander Isak: The difference

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However, first things first.

If you’re looking for hysteria you’ve come to the wrong place.

In fact, if you’re one of those “fans'‘ that throws their toys out of the pram every time Arsenal lose, frothing with hateful, incoherent indignation and a shocking self-entitlement, allied with an embarrassing lack of knowledge or awareness, then to be honest, you and me aren’t going to get on.

In fact, I’d like you to leave the room right now.

Current mood…

…….

Ok, now they’ve gone, and I’m talking to adults again, I think it’s fair to say that the defeat to Newcastle was hugely frustrating.

Even if, had, Gabi Martinelli’s thunderous early strike not thudded Martin Dubravka’s near post it could have been a very different match.

While, even boss Eddie Howe admitted the Magpies ‘rode their luck’ at times.

But could’ve/should’ve/wouldn’t doesn’t cut it. Because beaten Arsenal were.

Leaving a big - but not impossible task - to turn around the tie in the North East next month.

(As an aside, I tweeted during the match from the Emirates press box, this tie isn’t over. Not when Newcastle celebrated so wildly at the final whistle as if they thought it was. In a two legged tie, it’s only half time. But that’s for another day nearer the time. I’ll be in the away end at St James’ rather than in the press box, and I’ll be supporting my team for the whole 90 minutes whatever happens. It’s what fans do. And I know so many other loyal Gooner who’ll be doing exactly the same. Don’t believe that the hysterical internet caricatures speak for the majority of true Arsenal fans, because they don’t.)

Although imagine if social media had been around on, say February 7, 1987. How many imbeciles would have been calling for George Graham’s head when Arsenal lost the first leg of their Littlewoods Cup semi-final 1-0 to Spurs at Highbury…

Not the result we wanted. But we’ll be there at St James’ Park loyally supporting our team

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The Difference:

The Difference

What made the difference is that Newcastle had an in-form striker, one that they took a chance on back in August 2022, spending a club record £60m+ on a young Swedish striker of Eritrean heritage, namely Alexander Isak.

The contrast couldn’t have been clearer. Kai Havertz - back battling after missing the last two matches with a debilitating bug - had a clear cut headed chance to reduce the deficit, but, alas he mistimed his jump, his header, and er, his timing to mangle the effort, that saw the ball squirm off his neck and shoulders. And wide.

At this level, it is all about fine margins. Would Isak have made a better fist of it? After scoring ten goals in his last nine matches, you would have said so.

The result didn’t reflect Arsenal’s dominance. But it did reflect the fact that in August 2022 Arsenal went for Jesus, when, admittedly with great dollops of hindsight, Edu should have moved for Isak.

And there lies the rub.

Arsenal with a world class striker wouldn’t have lost to Newcastle 2-0, thereby ensuring Mikel Arteta’s side now have a mountain to climb in the North East in a bid to reach the showpiece final.

It’s as simple, and as complicated as that.

Which leads us to how and why Arsenal actually have money to spend in the transfer market - should they so wish…

What is PSR - and why Arsenal FC have absolutely no PSR concerns - and plenty to play with in terms of possible transfers

The Premier League Profit and Sustainability Rules dictate the amount of money that Premier League clubs are permitted to lose over a specific period.

They determine how much teams can spend on transfers while balancing income and expenditure.

Quite simply PSR allows clubs to lose £105 million over the course of three seasons, or £35m per season, on a rolling basis.

Despite being able to read a balance sheet thanks to my MBA during my career in The City in a previous life, in matters of football business I always defer to the peerless Swiss Ramble

The incomparable Swiss Ramble offers the insight that Arsenal could suffer a £13m pre-tax loss this season (2024-25) - which incidentally, is a huge reduction on the £52m loss relating to season 2022-23 and the £45m from the 2021-22 campaign - due mainly to the return of Champions League football revenues.

But that’s before deductions

As anyone with a decent accountant knows, deductions are important as they come off the bottom line.

So, with clubs permitted to lose £105m over a rolling three-year time frame - with allowable deductions for investment into infrastructure, investment into the academy, investment into the women’s team, as well as cash channelled on worthy community initiatives, not to mention losses attributable to the pandemic also allowed the picture becomes rosy for the Gunners.

Allowable deductions for the club came in at £41m for 2021-22, £40m for 2022-23, while the prediction is £42m for 2023-24.

So, with allowable deductions coming in at £123m over the last three tax year period, the rolling loss stands at £111m.

Therefore Arsenal’s net PSR result, after deductions, for 2021-22 was minus £2m, for 2022-23 it was plus £12m.

By Swiss Ramble’s workings Arsenal are predicted to be PSR net positive for 2023-24 at £29m - all of which means the club’s three-year net PSR position will be £14m.

This essentially means that Arsenal could make an allowable loss for the last season of a whopping £119m.

With the bottom line ensuring that Arsenal FC have absolutely no PSR concerns - and plenty to play with in terms of possible transfers.

Even with the Kroenke’s admirable long-term strategy being clear - basically to become a self-sufficient, self-funding club - it is clear that Arsenal have money to spend on a striker this January, or most likely in the summer of 2025.

All of which doesn’t help the fact that Arsenal have to pull back two goals at St James’s Park next month….

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PS:

Massive thanks to everyone who stopped to buy a Gooner Fanzine off me in the freezing cold before the game last night, or off Alex and Richard. Your support is very much appreciated

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