For starters, Arsenal are not Real Madrid. When we signed Juninho, Arsenal had just finished 12th in the Premier League under Stewart Houston, who they replaced with Bruce Rioch (the George Graham era was long gone and the Wenger era hadn't started). Plus, I don't believe Arsenal ever made a concrete offer for him, and Juni was clearly keen to get to Europe.
For seconds, we were paying way more (over the odds) in wages than Arsenal at that time, which is how we managed to sign Merson the summer after. I cannot imagine we could have blown Real Madrid out of the water like that, not forgetting Roberto Carlos was already at Inter Milan, who'd paid a reasonable fee for him. We made a club record bid for Roberto Carlos in February 1996 which failed, hence why we signed Branco instead.
Yet people still think he was all set to sign in the summer of 1997, after we'd spent the season battling relegation and failing to qualify for Europe via the cups. I've no doubt there'll always be stories about how we *wanted* to sign these players, but lets face it, the club was a shambles off the pitch at that time, and it all fed into the much more stable 1998-2006 era. I do think we could have maybe signed Romario, whose career was on the rocks, by paying him way more than he was currently on. Batigol was never happening.
Listen to any of our ex-players talk about Keith Lamb though (there are countless podcasts out there, of which I've listened to close to 100%), and its not hard to see why we weren't ready for those kind of players in 1996-1997. I'm sure Lamby was a decent bloke, but he was not popular with the 'famous' players.