Arsenal’s unceasing malaise hit a low point this week. They lost, at home, to lower division side Blackburn in the FA Cup. They lost, at home, to purported peer Bayern Munich in the Champions League. Their one competition left is the Premier League, where they sit 21 points behind the leaders, Manchester United, and face an uphill battle to reach the top four.

The club’s stink right now is acute, though it has lingered for a while. Arsenal have not won a thing since the 2005 FA Cup. They have not challenged seriously for a league title since 2008. Each year, they stay in the Champions League, but only through the fortune of having Tottenham be erratic and Liverpool mired in an even worse tailspin. The Gunners don’t even play attractive soccer now, just ineffective. It’s time for a change.

Much will be made about Arsene Wenger’s future. Owner Stan Kroenke will have to reiterate his support. The issue is not the manager, though, it is the players. The foul atmosphere, the wavering commitment and the defensive brainfarts don’t help. But the true reason Arsenal do not compete with the top clubs anymore is simple: they aren’t good enough.

Arsenal don’t spend heavily in the transfer market. Considering the past five seasons, they have turned a $33.5m profit. That comes at a time when Manchester City spent $633m, Chelsea spent $381m and Manchester United spent $100m (offset by the $122m sale of Cristiano Ronaldo). Sixteen clubs spent more than Arsenal over those five years. Only Reading, West Ham and Newcastle spent less.

Spending copious amounts is helpful, but it does not guarantee success. Third, fourth and fifth on the expense table are Liverpool ($153m, 7th in league), Stoke City ($152m, 10th) and Aston Villa ($117m, 17th). It also is not requisite for success. Arsenal built the famed “Invincibles” team without great expenditure.

Arsene Wenger inherited Dennis Bergkamp. He bought Patrick Vieira, Freddie Ljungberg and Robert Pires out of the bargain bin. He picked up Thierry Henry for a reasonable $16m after he bombed out at Juventus. Sol Campbell came on a free transfer. He signed Cesc Fabregas, Kolo Toure and Robin van Persie for around $4.5m combined.

Wenger has spent $20m or more for a player four times before 2012. He hit on Samir Nasri. Andrei Arshavin was a comprehensive bust. Jose Reyes and Sylvain Wiltord never quite panned out.

It’s not the money spent for Arsenal, so much as it is the personnel loss. Two waves of it have devastated the club’s squad.

From 2008 to 2011, Arsenal offloaded a lot of depth. Alex Hleb, Gilberto Silva, Lassana Diarra, Mathieu Flamini, Emmanuel Adebayor, Kolo Toure, Eduardo and William Gallas left the club. None were perennial player of the year candidates. All were serviceable veterans.

Wenger never adequately replaced them. During that period, he brought in two central defenders Thomas Vermaelen and Laurent Koscielny (not quite Toure and Gallas on their best days). Andrei Arshavin ended up being a disastrous signing. Sebastian Squillaci and Marouane Chamakh were complete wastes as well. That’s a net loss of six decent players. It was too much to ask of his highly touted kids to replace them.

Arsenal followed this exodus by selling three superstars and not replacing them. Cesc Fabregas, Samir Nasri and Gael Clichy left in the summer of 2011. It initially looked as though Arsenal would do nothing. The only signings until ate were Gervinho, an attacking winger, and Alex Oxlade-Chamberlain, a 17-year-old. Only an injury crisis and an 8-2 dismantling by Man United led to the panicked buys of Andre Santos, Per Mertesacker and Mikel Arteta.

The Gunners were more proactive the next summer, spending $67m on Olivier Giroud, Lukas Podolski and Santi Cazorla. But they offset that by selling the league’s best player, Robin van Persie, to Man United and by letting their one (at least theoretically) defensive midfielder Alex Song leave for Barcelona.

Arsenal have lost top-caliber quality and depth. Their present roster is composed mostly of okay veterans and talented younger players, Jack Wilshere, with a lot of pressure on them. They don’t bring enough to beat good teams. Any injury creates a crisis.

Why have Arsenal not reinforced when suffering clear personnel losses? There are multiple hypotheses.

One explanation is Arsenal won’t spend any money. The club’s marketing deal is outdated. They are hampered by debt payments on their new stadium. Their business model mandates they turn a profit and subsist without investment from their foreign billionaire owner. The revenue may be substantial. The amount reinvested is minimal.

Another is Arsene Wenger. He may not be willing to spend the money. The Frenchman has made his name as the consummate economist. He thinks long-term. He buys low and sells high. He exploits inefficiencies in the market. He values players at a certain level. He’s too stubborn to pay beyond what he believes a player is worth.

Perhaps the Premier League has caught up with him? In the late 1990s, he capitalized on his knowledge of foreign players, especially those playing in France. He had virtually no competition on that front in England and could buy very good players for relatively cheap. Now, every club has an extensive foreign scouting network. Every club is on to the same players. His rivals at the top are willing to pay a more for them.

The truth may be a combination of the three. Arsenal limit the amount of money Wenger has to spend, significant but not enough to sign a truly world-class player.  Wenger, spurned from signing the $45m player, will not pay $30m for the player he thinks is worth $20m, especially when that guy might not be a pivotal upgrade over what he has. When he does find someone, he faces far more competition than he would have in the past.

The three big signings Arsenal made last summer – Podolski, Giroud and Santi Cazorla – fit within the same portion of a Venn Diagram. All three were good, not great players. None of the three were sought after by Man U, Man City, Chelsea or the big Spanish clubs that could have outbid them. Arsenal also had the leverage to get fair value in all three deals.

Cologne had to cash out on Podolski after getting relegated. Malaga were hurting financially and had to sell Cazorla (Wenger went back to the same club for Monreal). Montpellier were in no financial position to turn down a substantial bid for Giroud. None of the three were the player Arsene Wenger absolutely wanted to sign, Eden Hazard, who ended up at Chelsea.

Arsenal’s inertia has carried them for years. Now seems to be the point where the serious, deep-rooted problems must be addressed. The solution will be more complicated and comprehensive than throwing in a $100m “war chest” and signing a 31-year-old David Villa coming off a broken leg. The club’s board must realize “enough” is not enough. The club’s manager must realize the only principle the club gets rewarded for is winning.

No one is suggesting Arsenal spend wantonly like Chelsea or Manchester City. But they could take a cue from Bayern Munich. Build from a stable core. Supplement when you have to. Be willing to overspend for that one player when prudent. Bayern paid a steep price for Javi Martinez (around $60m) last summer. They aren’t regretting it. Arsenal will get beat for some players they want. They can’t continue getting beat for every player they want.

[Photo via Getty]