Arsenal may be about to exploit a financial fair play loophole that could generate an extra £90m for Mikel Arteta’s transfer budget.
The Gunners are preparing to go again after narrowly missing out on a first Premier League title for 20 years in 2023-24.
That will of course require significant investment in the playing squad.
But, like almost every other Premier League club at the moment, they are grappling with Profit and Sustainability Rules (formerly financial fair play, or FFP).
A new set of rules encompassing a financial anchoring system and squad cost control ratio are set to be implemented over the summer, although it will likely be a phased introduction.
And while the Gunners are not in danger of breaching PSR, they will need to make adjustments if they are to spend big in the coming months.
Enter three Arsenal academy graduates, who could provide a solution.
Emile Smith Rowe, Reiss Nelson, Eddie Nketiah: Arsenal’s PSR game-changers
While Arsenal supporters may be reluctant to let them go, three Hale End products could free up a huge amount of PSR wiggle room because of an accounting quirk.
As revealed by TBR, Brighton are one of several clubs looking at playmaker Emile Smith Rowe, who Arsenal value at £30m.
The Sun meanwhile have reported that the club are willing to let centre-forward Eddie Nketiah exit in the coming weeks.
Finally, it was claimed by TEAMtalk earlier this year that wide man Reiss Nelson is also being eyed by Brighton ahead of a possible exit.
Nketiah and Nelson are also valued at £30m, per the reports.
Because all three are academy products, they could generate £90m of pure profit in terms of FFP/PSR.
Why is this a ‘loophole’? Because if they were signed for, say, £20m each, a £30m sale would show up in the books as £10m profit on each.
And that is the figure that would be deducted against PSR, not the headline transfer fee of £30m.
This is the reason that the likes of Chelsea have elected to offload their academy graduates first in order to reduce their PSR deficit.
Football finance analysis: How much can Arsenal spend this summer?
The imminent introduction of the Premier League’s new Profit and Sustainability Rules means it’s hard to say anything with absolute certainty.
However, while Arsenal have posted losses of over £200m in the last three season and are believed to be somewhere around £50m over the FFP threshold, those figures are based on last season’s accounts.
Their data for 2023-24 will be more favourable thanks to their return to the Champions League and a number PSR-deductible investments.
Commercial income will likely have risen in correlation with sporting performance too, as will matchday income.
This means Arteta will likely be able to spend at roughly the same level that he did in the last summer window – potentially more if they bank £90m in profit from the departures of Smith Rowe, Nketiah and Nelson.