By Andrew Shanoudi
The extremely eventful 2019/2020 season ended with Arsenal’s lowest finish in the league table since 1996, a position highly unusual for the club and the fans. It was followed by a busy summer with the new signings of Gabriel and Willian and plenty of managerial and structural changes. As we start a new season with three weeks remaining in the transfer window questions remain over the long term direction of the club. Optimism or pessimism?
Arsenal is no longer part of Europe’s elite. And the first step towards fixing any problem is acknowledging it exists.The success and failure of football clubs are decided by the slimmest margins and the smallest details. You get a couple of decisions wrong and you’re stuck for years, you get a few right and you have a strong foundation to build on. Arsenal’s problems are multilayered, complex, and trackback years into Arsene Wenger’s centralized era. Where we are now is an aggregate result of decisions made over the past years. Some old, some new. All interconnected in a beautiful, yet disappointing way.
Competing for trophies and subsequently rejoining Europe’s elite is the obvious end goal. But in order to evaluate our strategy and trajectory towards this goal, we must first understand the mistakes which led us to this complicated situation, to begin with. Inspired by Domagoj Kostanjšak (Twitter: @BarcaFront) piece on Barcelona’s recruitment strategy, I will be using simple data and statistical analysis to review our current squad, evaluate Raul Sanhelli’s and Vinai Venkatesham’s management, identify inherited problems, and finally provide a few recommendations on the next phase of our rebuilding process.
How does Arsenal’s squad compare to Premier League rivals?
The success and competitiveness of any business in the world depend first on foremost on the provided quality of its product or service. The world of football is no different. Of course, much goes into a football team to make it greater than the sum of its parts but the idea is to improve the quality of its assets, the players. Better players make better squads and if managed properly by a manager, more usually than not, better chances of winning football games.
A good starting point to evaluate our recruitment strategy is reviewing the actual quality of the current squad we have assembled over the years. Firstly, where does our team rank among our competitors? Secondly, have we over- or underperformed from there?
The market value of a player is typically a reasonable reference to his quality as it incorporates his recent performances, potential, age, previous transactions, and contract lengths. Plotting the total market value of each team (source: transfermarkt.com) in the Premier League versus their points per game in the 19/20 season provides us with an idea of how they performed relative to their actual quality.
Arsenal had the 6th best squad (face value) in the Premier League this season, with all their direct rivals miles ahead. Finishing 8th in the league means the club underperformed, with Leicester and Wolves able to accumulate more points with weaker teams. While the slight underperformance may be explained by the postponement of Emery’s sacking and Ljungberg’s caretaker period, the majority of the problem however is the actual standard of Arsenal players. The problem is not the quality ranking per se, it’s more the massive quality gap to the top four. League leaders Liverpool and City have almost twice as much quality while closer rivals like Chelsea, United, and Tottenham have on average 30% better squads.
Yes, yes, I know. It’s all relative to the club’s financial resources. We don’t have as much as “them”… Truth is, which adds more severity to the problem, Arsenal’s squad was assembled with the 3rd highest net spent since the summer of 2017. Arsenal spent £153mil net but only added a mere £2mil in squad value over the same period. To put matters into perspective, for every million pound Arsenal net spent on their squad, they lost 99% of what that million should’ve added in squad value. It’s the worst possible ROI ratio among the premier league’s top eight teams, utterly unacceptable for a team that is supposedly trying to close the gap.
In comparison, since the appointment of both Jürgen Klopp and Technical Director Michael Edwards in 2016, Liverpool has set a perfect example for the rest of the world in the art of rebuilding a squad. By moving to an efficient data-driven recruitment model, selling well, and using a patient player development strategy, Liverpool improved their overall squad value by almost £500mil using only £80mil net spent. Their impressive 524% ROI is the primary reason they have one of the best teams in the world and their first league title in 30 years. Four years after being in a very similar situation which Arsenal find themselves in now.
Manchester City, on the other hand, has a net spent more than anyone in the Premier League and only added around 4% to their squad on aggregate but has two league titles under their belt during that time. Much has to do with their ability to identify readier players who fit perfectly into Pep Guardiola’s brilliant tactical blueprint.
Leicester’s creative and efficient recruitment strategy which was key to their 15/16 league title is continuing to pay dividends in the long term. With an ROI rate of 360%, the team battling relegation five years ago is making a serious claim to be sustainably among the league’s top six. They have sold extremely well, have replaced even better, and are among the best in developing their assets. Thus, the common narrative that volume spending is the most essential variable to competitiveness is simply wrong. Efficient spending is.
It’s very challenging pinning down one reason why Arsenal has been so inefficiently building a competitive team. Fact is we have spent big and stayed mediocre. How did this happen? A deeper look into the squad and the players may give us further insights.
How did Arsenal build this squad, and exactly what is making it worse?
You can always qualify to the Champions League once by doing a few things right with an average squad, as Unai Emery almost did in his first year at Arsenal. Consistently and sustainably being part of Europe’s elite requires a lot more than that. As a start, you need a young core unit.
Arsenal’s most utilized players last season were Aubameyang (31), Luiz (33), Leno (28), Xhaka (27), and Lacazette (29), a core unit with the average age of 29.2. The age distribution could be slightly misleading as the three different managers (Arteta, Ljungberg, and Emery) have used different players for different tactical purposes. However, we can safely assume that all three managers depended on a core unit in its latter peak or beyond its peak years. This age distribution would make a lot of sense for a team already in the Champions League, already among Europe’s elite. An established team has a core unit built on the readiest players who have had enough time to marinate in both the club’s culture and the coach’s tactical philosophy. It’s where Arsenal would want to be in two to three years, not where it currently is.
Arsenal’s squad is the 7th youngest weighted by playing time, but the problem is that the remaining minutes are scattered around by too many young players making it hard for anyone to really join the core unit. Pepe has taken a lot of time to integrate into the team, Torreira has seemingly fallen off the pecking order for all three managers, Tierney had an injury-plagued year, Guendouzi has had a lot of disciplinary issues off the pitch, Saliba sent back on loan, Bellerin is still finding his feet back after that horrific ACL injury, and Ceballos only starting to really produce in the second half of the season. In order to have an established team in the future, more minutes need to be skewed towards a younger core for the long term.
Taking a further look at the red players (signings made by Raul Sanhelli), we can see that the management was largely targeting players who are either on the verge of not too far off from being effective starters.
However, considering the structure of the inherited squad, short term plugs should’ve been kept at a bare minimum for depth only. The direction of the club is indeed aligned with the longer-term despite one or two mistakes in age profiling, and with the new managerial stability under Arteta, more youngsters will be expected to join the core unit.
Value for Money
Our age profiling for new players may largely be encouraging for the future, but the reality is that our squad quality is still stagnant. Very much similar to the idea of investing in the stock market, a successful portfolio manager aims to select undervalued assets, hold them, and capitalize on realized profits as they grow in value. Using the same concept on Arsenal’s squad should give us an idea of where we have lost value over the years, and where the inefficiencies stem from. Where they inherited or rather mistakes made by the new management?
Using data from transfermarkt.com, we’ll plot our squad player’s debut value (value at purchase) relative to their transfer fee (purchase price), and how much it has developed since (today’s value).
First and foremost, it is essential to understand whether our management, both old or new, has tendencies to over- or underpay. Looking at each player, the gap between the transfer fee paid and the debut market value clearly highlights our purchasing patterns. On average, we overpaid for the squad by around 35%. The biggest contributors to this margin are Chambers, Mustafi, Xhaka, and Lacazette, all signings made in the Wenger era. On the other side of the spectrum, players who were captured at prices below their actual value at that time are Guendouzi, Torreira, Martinelli, and, surprisingly, Luiz, all signings made in the Raul & Vinay era. The rest of the squad is pretty much aligned with their market values (I’ll get to the curious case of Pepe in a bit).
Next, we examine the development of our assets since the signing was made. The Arsenal collective squad’s quality grew only by a mere 17% in the past years, mainly driven by the new Hale End generation. In addition to Bellerin, already an established first-team player coming out of the academy, Nketiah, Maitland-Niles, Willock, Saka, and Nelson have all stepped up and performed well since their promotion. Their development is perfectly reflected in its market value increase. Other big rises can be seen in Guenoudzi and Martinelli. The pair developed their market value by 280% on average having exceeded expectations since their arrival. Torreira had a small, yet steady, 22% growth, and Tierney will be expected to witness a similar upward trend as he finally gets over last season’s injury nightmares.
The biggest drops are Ozil, Pepe, Sokratis, Xhaka, Mustafi, and Luiz. The reasons are mostly a weighted combination between declining output and increasing age. Mustafi and Xhaka were signed at the right age but have underperformed over the years. Luiz and Sokratis have underperformed and are not getting any younger. Ozil has seemingly lost motivation to perform since signing his massive contract, a fatal mistake by Wenger and Gazidis. Pepe’s drop however is neither linked to age nor performance. It’s simply a drop to reflect his true market value, which is still relatively high. Yes, his unique talent will only increase his value as he fully integrates into the country and club’s culture but chances of him ever recouping the full £72mil are extremely low. A risky transfer at a time where Arsenal’s margin of error was already extremely slim.
A team still trying to rejoin Europe’s elite not only has to select assets for the future but also select quality assets who can fully pay off their initial investments. There are no guarantees in the world of football but risk mitigation on age, transfer prices, and wages are essential ingredients for efficiency and sustainability. Most inefficiencies resulting in our stagnant squad quality actually stem from Arsene Wenger’s days. They were simply investments that didn’t pay off on many levels, making the margin of error for Sanhelli extremely slimmer than it needed to be. Of course, Sanhelli did a few mistakes of his own, specifically with Sokratis’ quality, and overpaying for Pepe but he did considerably okay trying to add quality assets with long term value.
How efficiently are we recycling our squad for better quality?
Finally, the club can add young assets with top current and potential ability but mistakes can still happen when players don’t quite fit with the tactical blueprint of the manager. Profitable recycling of players is an essential and effective tool to sustainably rebuild a team.
Since the summer of 2016, Arsenal’s expenditure exceeded income by around £250mil. The only year where we had a positive net spent was in 17/18 when we sold ten first-team players including Alexis, Giroud, Oxlade-Chamberlain, Walcott, and Szczesny. Arsenal used to be experts at the art of recycling during Wenger’s prime years. However, mediocre players, aging players, over-bloated wages, and mistakes with contract lengths have made it extremely hard to move around assets for profits, thus making it almost impossible to recycle the entire team. Did we at least get fairly compensated for the assets we sold?
Arsenal lost around £94mil in overall squad value from its sales operations since 2016. The players we decided to move had a sum market value of £299mil at the time of the sale, but Arsenal was only paid £205mil in fees, a 30% loss.
Chamberlain and Iwobi sales had healthy profits of £25mil combined. Alexis, Wilshere, Ramsey, and Welbeck all left for prices, or for nothing as it is the case for the latter three players, which do not reflect their actual value at that time. The common factor behind all four players was the fact that they had all entered the final year of their Arsenal contracts. Wenger failed to open renewal negotiations two years prior to the expiration dates to preserve their value or sell at profits. Alexis was traded for Mkhitaryan despite being twice as valuable at the time. Almost 68% of the £94mil value loss came from mismanaging our player contracts, mistakes which we simply can’t afford as we efficiently try to rebuild our team.
Vinai and Edu have done well to learn from previous mistakes. With two years remaining on all their contracts, the management decided to cash in on Martinez with optimized returns of £20mil and preserve Aubameyang’s value with a new contract. Lacazette is performing very close to his market value and a swift decision to cash in or preserve his quality is required. The window a decision with optimized returns is now.
Arsenal is no longer part of Europe’s elite and the reasons are so heavily interconnected. Again, the ultimate goal is to rejoin them, and more importantly, stay there. After re-valuating the majority of the variables, here are six simple takeaways for our fans to consider as we embark on a new season.
· Our squad quality is still low.
· Our player ROI is abysmal compared to rivals.
· Our core unit is too old for the long term.
· We overpaid for some assets.
· We recycle badly.
· We mismanage our contracts.
Contrary to the common belief among the Arsenal fans, the post-Wenger management has largely done a fair job given the magnitude of inherited problems. Yes, some mistakes were made but it’s important to aggregate and contextualize facts in order to fully understand our trajectory. Whether it was Sanhelli before, or now Arteta with Edu, there’s a general positive trend towards efficiency and long termism.
We also need to understand that despite the FA Cup win, all the positive developments under Arteta, and the optimism surrounding the club, Arsenal should still respect the massive gap between our direct rivals. The respect is not to tamper our ambition in any way, it is to recognize the complexity of our issues and stay true to all long term phases of the rebuilding process. It’s the only way to rejoin the elite in a sustainable and efficient way.
Arsenal should continue targeting high quality, high potential players in the 20 to 23 years age bracket while making sure they fit tactically into Arteta’s plans. The new recruitment team will benefit from Arteta’s tactical suitability, Edu’s value for money experience, and StatsDNA ability to identify outlying quality. These are the non-negotiable criteria:
1. Young enough to develop, old enough to (soon) join the core unit.
2. The price should not exceed £30mil.
3. Tactical alignment.
4. Cultural alignment.
Ticking those boxes ensures Arsenal has a new young core unit entering their prime years with enough time marinating under the club’s philosophy and DNA. Also, the price range mitigates overall risk by protecting the resale value of our assets and helps us recycle them for high profits if the investment fails. Arsenal’s new signing Gabriel has perfectly exemplified our strategy by meeting all criteria. Thomas Partey wouldn’t. I would recommend reading Ted Knutson’s (Twitter: @mixedknuts) piece on why for more details.
Sometimes, short term solutions like Willian are essential for squad balance. It is of utmost importance to keep those kinds of solutions to a bare minimum cost. Willian will add much-needed depth, experience, and creativity in all three attacking midfield positions, but minutes should be reserved for our younger core unit.
Lastly, sell aggressively to recoup as much possible value from underperforming assets.
Let’s be slightly more efficient, definitely more tenacious, and above all, patient in our long term plan.
Come On You Gunners.
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