The Highbury legend believes his old club have fallen too far behind their big-spending rivals.
And he claims his once-great Gunners are now happy to just settle for finishing fourth every season.
Graham — who won three titles with the club as a player and manager — delivered his damning verdict at the end of a disastrous week for the fallen North London giants.
Current boss Arsene Wenger and his stars are licking their wounds after being knocked out of the Capital One Cup quarter-finals on Tuesday by League Two Bradford.
It is now getting on for eight years since Wenger won a trophy and almost nine since he last lifted the Premier League crown.
Graham said: “Whether I like it or not, the club are quite happy to finish in the top four.
“They have been doing that for the last 15 or 16 years. That seems to be the objective.
“Let’s be honest, they are not serious challengers for the Premier League. So finishing in the top four, I think the club are quite happy with that.
“I don’t think Arsenal are ever going to compete with Manchester City, Chelsea and Manchester United.
“I thought they could have competed with United because they don’t spend the money the other two do.
“But Arsenal are not going to compete with them either.
“They have got a structure at the club on transfers and wages. They are very strict on those.
“They have more or less said to fans that is the way they are going to run the club.
“They can still pick up cups and qualify for Europe. But will they win the Premier League title again? I can’t see it.”
Graham was in the Arsenal team that won the Double in 1971. As manager he celebrated titles in 1989 and 1991.
Wenger took over as manager in 1996 and guided them to the Double in 1998 and 2002 as well as a further Prem crown in 2004.
But the trophy cabinet has remained unopened since he led Arsenal to a shootout win over Manchester United in the 2005 FA Cup Final.
Wenger’s prudence may have enabled the Gunners to build a new stadium and state-of-the-art training complex.
But an increasing number of Arsenal fans are becoming fed up with their club’s failure to win a trophy and keep hold of their best players.
Graham added: “When was the last time Arsenal broke the transfer record? I think it was 1938.
“Manchester United seem to buy players at £25-30million and they mix it up a little bit.But Arsenal don’t do that.
“In the past Arsene’s teams have played some of the best football I have ever seen. It was breathtaking.
“But the quality of players there now is inferior to the players he used to have.
“And I don’t care how good a coach or manager you are, you need good players to win things.”
The Sun
