Ivan Gazidis says Arsenal can now compete with most of their rivals when it comes to player wages as contract negotiations with Mesut Ozil and Alexis Sanchez continue.

The former Real Madrid and Barcelona stars are both out of contract in 2018, with Gazidis acknowledging they are "renowned players" the club want to keep.

Arsenal have been locked in lengthy negotiations with the pair which are yet to reach a conclusion, but the chief executive insists they are no longer reliant on selling star names and make the retention of their current squad a priority.

"We have a good track record in recent seasons of retaining our key players, developing young players and attracting new players," Gazidis said at the club's AGM.

"We are now beginning to compete in terms of wages with some of those clubs around us. There is continual growth in investment in wages but also in transfer fees.

"Very importantly our player sales have reduced so we have retained more of our important players. We've had funds available to pay market values and as a result the reliance we have had on transfer revenue has gone down dramatically.

"I can't get into a discussion on individual players but I can assure you we will apply the same focus, rigour and diligence to members of our current squad and I think you can see the direction of travel.

"Overall we have attracted some global talent - Sanchez and Ozil are renowned names.

"We increasingly believe we have constructed a squad that is capable of competing for the very highest honours in the game."

As well as signing the likes of Ozil and Sanchez, Gazidis feels some of the club's successful buys have been players who had not been spotted by many of Europe's other top teams.

He added: "There are many, many players - and I could list them for the next five minutes - who probably weren't on the radar of most clubs and the media.

"But they were players that we believed in and fit with what our club and management believe we needed. I would mention [Shkodran] Mustafi, [Granit] Xhaka, [Lucas] Perez and [Rob] Holding - the squad continues to progress through those investments.

"I'm also convinced that over the next years you will see more young players bursting into our team."