The North London mystery

I have some good friends who are Arsenal fans and some good friends who are Spurs fans and, in any case, I have to be neutral when a North London derby comes along, although I still find it fascinating.

Spurs have spent heavily in this transfer window in anticipation of the sale of Gareth Bale and those who know about things think they have spent the windfall well. Meanwhile, Arsenal are yet to make a marquee signing, although there are reports in the papers today of a last minute effort (probably not the best way to do business as you end up paying top dollar).

I have some good friends who are Arsenal fans and some good friends who are Spurs fans and, in any case, I have to be neutral when a North London derby comes along, although I still find it fascinating.

Spurs have spent heavily in this transfer window in anticipation of the sale of Gareth Bale and those who know about things think they have spent the windfall well. Meanwhile, Arsenal are yet to make a marquee signing, although there are reports in the papers today of a last minute effort (probably not the best way to do business as you end up paying top dollar).

It’s not just neutrals that are perplexed by the strategy being followed at Arsenal, many Gooners seem to be as well. Indeed, many of them are very unhappy and angry. Someone I know occasionally comes over from his home in Bermuda to watch Charlton games (and see his family). He knows an Arsenal fan who also comes over and at the baggage carousel yesterday it was the Gooner who was more down in the dumps, although one club has qualified for the Champions League and the other faces a battle to stay in the Championship.

Arsene Wenger’s message is ‘keep calm, don’t panic’ which I would find a bit worrying if I was an Arsenal fan, even though they have recovered from the opening day defeat. Wenger insisted, ‘We will not panic buy, that is for sure. You can believe me. It is not in my [nature] to panic. If we cannot we will not do anything stupid just for the sake of saying we have done something. We will do what makes sense.’

Wenger argues that Real are paying too much for Bale. He commented, ‘The prices today are just linked with the financial power and the desire of the buyer. But it is impossible to assess a market where you can say “this is the normal price for the player because that is his quality”. That has gone completely because in transfers you go from zero to £10 million and afterwards from £30 million to £80 million but this is not linked with the quality of the players, just the financial power of the buyer.’

Now may I have this wrong, and Wenger has an economics degree, but I would have thought that in situations that tend towards monopsony (i.e., a dominant buyer), the purchaser is able to force the price down. (Just think of Tesco and the UK food market).

Wenger went on to say, ‘there are very few players that you can justify paying over £50 million for.’ I can see where he is coming from. Can you really get a return on an investment of that size, even if the player doesn’t lose form or get injured?

However, a Spurs fan might say it was sour grapes. Also, if have my economics right (and my economics colleagues go up the wall when the media describe me as a football economist) markets where supply is fixed or very limited can behave very oddly. Just think of the price for a painting by a renowned artist when very few ever come on the market.

While Wenger’s philosophy may make a lot of sense both for Arsenal and football in general, I think that he has adopted a rather extreme version of it and has become rigid and obstinate in its defence.

If Arsenal beat Spurs tomorrow, will this vindicate Wenger? In the short run, yes, and many football fans have the memory span of a goldfish where their club is concerned. But the season as a whole looks promising for Spurs and less so for Arsenal. The board at Arsenal needs to reflect on the direction of the club.