"Is It Coming Out of Your Pocket?"

In Defense of Caring What It Costs. On budgets, opportunity cost, and why fee analysis is squad analysis.

When you post any sort of transfer fee analysis that looks at how it compares to previous deals, you can almost guarantee that you will get a few of these responses. "Is it coming out of your pocket?" or "Will your bank account be personally affected?"

These are often designed to end a conversation and make looking at transfer fees paid look like a weird hobby.

I will take these comments bit more seriously than they deserve. Often these are the type of bad faith, net negative commentary that you expect from social media rather than a true sentiment.

There is a kernel of truth in this comment. If you really are a surface-level fan or don’t have a deep connection or care that much about a team, how they act and operate building out the squad for the short, medium, and long term really shouldn’t matter to you. If you only spend a couple hours on a weekend watching Arsenal and then only come back for the next match, this could be exactly the right type of attitude to adopt.

If you’re here reading this, that probably doesn’t describe you.

We may not want to pull on the thread too much but we have all decided to care deeply about a sport and club. How Arsenal performs has massive effects on our moods and it has become a major feature of our day-to-day lives. We plan around being able to watch and then spend probably more time than we’d like to admit to arguing/analyzing/talking about the club and the sport with friends, acquaintances, and strangers on the internet.

Because we care so much about the club and the outlook for the team, we care deeply about how the team that we will watch for the next 10 months and for the subsequent seasons is assembled. One of the major constraints facing Arsenal is that they operate within a budget. That budget has grown significantly, especially after the team posted record revenues, but I think that we all know that even with all of this new money, there is an actual limit to what Arsenal can spend each season.

When you accept that there is a limiting factor, you should also realize that every pound spent has an opportunity cost associated with it. Money spent on one player’s transfer or wages is money that isn’t being spent elsewhere on another player now, a contract extension, or limits what can be spent in the future.

From my own perspective, transfer fee or wage discussions aren’t really about the money but more about what it means for how the squad will be constructed now and in the future. I am not worried about the Kroenkes checking account, I am sure that they will be just fine either way, but I do think it's worth asking whether this is the allocation of money that leads to the most wins and silverware, short term and long.

The spark for this post is the analysis that I posted Friday afternoon as it looked like Arsenal were closing in on a deal for Newcastle’s Bruno Guimarães.

If the final Bruno fee is £77m plus add ons, I don't think that's a great deal (if that matters). A "fair" price is probably 25-30% lower, if you think that he moves the needle on another PL title or winning the CL I think that is just about up to the price that you can justify.

The final years of a 5 year contract might be kind of ugly but if you win titles you are pretty happy to take that trade off. Arsenal's rebuild the midfield project in 2029 could be tough.

I imagine that Arsenal want to reinforce the squad in a number of positions this summer and the players that Arsenal want are going to be expensive. We don’t know what the budget is that the team will be working under, but it is a safe assumption that there is one. This is why cost belongs alongside quality and tactical fit in the analysis for a player addition. I went much deeper on the topic here.

What Is Bruno Guimarães Actually Worth to Arsenal?

I think it is important to think about what matters and the trade-offs that you would be willing to make. There isn’t one right answer here and it can vary from person to person.

The money being spent by the team isn’t coming out of my pocket. It's coming out of the squad, this season's and the next several. That seems worth having an opinion about.