Back in February 2018, with a key man seeing his deal run down, the Gunners tied a World Cup-winning player to lucrative new terms.
Keeping Ozil was considered to be a coup at the time, but that agreement has had a knock-on effect in subsequent discussions.
Aaron Ramsey is now heading for the exits after failing to see an extension put in place, as he closes on a move to Juventus, while any top transfer target now expects to get parity with top earners if opting to join the ranks at Emirates Stadium.
“Letting Ramsey leave is just bad, bad club management isn’t it,” Merson told Sky Sports.
“To let player contracts run out in this day and age for how much these players go for and how much they’re worth is criminal.
“To let him leave the club and walk away for free, somebody in his prime leaving for nothing, it’s a football crime.
“Now they have got to replace him and that will cost money but until the Ozil problem gets sorted out they are going to find it difficult to bring in players.
“Because if they bid £50-60m for someone, the first thing the player will say is well I want what Ozil is getting.
“And when the club says you aren’t getting that then the player will just say well I’m not coming then. And that is what happened with Ramsey.”
With Arsenal facing a fight to bring quality performers onto their books, and with Unai Emery being forced to work with a budget much smaller than many of his rivals, there is a fear that those in north London could be left behind.
They have been able to force their way back into top-four contention this season, but Merson believes they are a long way short of challenging for the most prestigious of prizes.
The former Gunners star said when asked how close they are to pushing for the Premier League crown: “What do you think? 20 years.
“They’re a million miles away at the moment and the way it is going right now they probably need seven players to compete.
“I don’t see them winning again for a long, long time.”