Arsenal have already spent a large sum of money this summer, but more could be on the way in the final week of the transfer window.
The Gunners have invested roughly £250 million, with the signing of Eberechi Eze adding another £67.5 million to that total.
It’s been a large spend from Stan Kroenke and co. so far, but transfer interest in Piero Hincapie could well take that number beyond £300 million.
That has many Arsenal fans concerned about their financial position, with both PSR in the Premier League and FFP in UEFA competitions potentially biting them hard.
There is a plan, however, which could navigate past those concerns.
Loan deal for Piero Hincapie can help Arsenal pass UEFA financial test
While Arsenal are pushing to sign Hincapie this summer, there are questions over how that deal could be structured.
Fabrizio Romano claims that the Gunners are looking to make an offer on an initial loan deal with an obligation to buy.
That loan deal could be to help deal with Arsenal’s amortisation numbers, which is the value of a player spread over the length of their contract.
That sat at £171 million in the last financial year, but the loan to buy could help to keep that low and in line with UEFA rules.
Finance expert Adam Williams explained more when he said: “Arsenal are going to be somewhere close to the limit of UEFA’s Squad Cost rules. I don’t think they’ll breach, but they will want to have as much breathing space as possible. And it’s close as things stand.
“These rules are revenue-based as opposed to the Premier League’s system, which is based on a club’s profit or loss for the financial year. UEFA also have another set of rules which are more similar to the Premier League’s, but that’s not the component we’re looking at here.
“The Squad Cost element limits clubs to spending 70 per cent of revenue plus a three-year average on player sale profits on player and manager wages, transfers and agents’ fees. So, for every £100 Arsenal earn or generate in player sale profits, they can spend no more than £70 on first-team football operations.
Ostensibly, the idea from UEFA is to get clubs to a place where they can be consistently profitable and sustainable. Stan Kroenke hasn’t outlined his official stance, but I’d be willing to bet that he backs the rules because they favour clubs with the biggest revenues and – in theory – they could stop the wage and transfer inflation we’ve seen in recent years.
“But at the moment, Arsenal are in a growth phase, so they are pushing the very upper limits of the Squad Cost rules for 2025 – and it’s a calendar-year test, not a season-by-season one.
“A loan with an obligation to buy for Hincapie allows them to push back the start of the transfer fee amortisation process into the summer of 2026. They will only be covering his wages and – if Bayer are receptive to this idea – could even pay a smaller portion of his wages in exchange for a bigger obligated transfer fee.
“Sometimes clubs can also use this route because of cash flow reasons. Arsenal have committed a huge sum already in transfer fees, and we don’t know how much of that is upfront or what the club’s model for cash flow looks like for the rest of the season, but I suspect this is more FFP-based than cash.
“And this isn’t the case here either, but a loan with an obligation can also sometimes be done for tax reasons, if the selling club doesn’t want to book a big profit on a player sale in one financial year because that will push them into an overall profit, which they would have to pay tax on.”
It shows how Arsenal are trying to work around their financial situation, while also looking to strengthen at the same time.
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Arsenal will still look to balance the books with sales this summer
While there will be plenty of effort placed into sealing the Hincapie deal, Arsenal need to focus on sales as well.
The Bayer Leverkusen star is unlikely to join unless Jakub Kiwior leaves the club, as Porto are circling around a potential deal.
Beyond him, Reiss Nelson is linked with Crystal Palace and Fulham, while Fabio Vieira and Albert Sambi Lokonga are free to leave.
It remains to be seen if any offers come in for other players, but the Gunners clearly need to raise some funds to help create some more headroom.
With just days left in the market, it’ll be a big ask to generate some extra money.
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